Back
Rule allowing tribunal to withhold compensation based on literacy violates Article 14
In a landmark ruling, the has struck down provisions of the Railway Accidents Compensation Rules that allowed the to release only a fraction of the award amount based on the claimant's literacy and financial status, holding them discriminatory and unconstitutional.
Justice Rohit Ranjan Agarwal, presiding over a batch of 17 writ petitions, read down . The Court directed that the entire compensation be released to all claimants who are majors and not covered by , which deals with minors and persons of unsound mind. Amounts previously kept in fixed deposits are to be immediately released.
The Controversial Rule and Its Origin
The dispute centered on Rule 5, inserted in following orders of the in the case of . The rule empowered the tribunal, while passing an award, to examine the claimant's financial condition and literacy, and then decide to release only a part of the compensation – typically 10 percent – with the remainder parked in an interest-bearing fixed deposit in a nationalized bank. The bank was further directed not to issue a cheque book or debit card without the tribunal's permission.
The petitioners, comprising injured passengers and dependents of those who died in railway accidents, argued that this classification between literate and illiterate, and between financially sound and weak claimants, violated the guarantee of equality under Article 14 of the Constitution. They contended that the railways are used by all citizens irrespective of social or economic standing, and that the tribunal, once it had passed the award, became and could not impose such restrictions on the use of the money.
The Union of India, represented by counsel including , defended the rule, submitting that it was specifically designed to protect claimants from exploitation by touts and middlemen, and that the amounts had already been deposited into the claimants' accounts – the only question was whether the entire sum should be handed over at once or in a staggered manner.
"Rs. 8 Lakh Is Not a Big Amount"
The High Court found no justification for the rule's paternalistic approach. Justice Agarwal observed that in today's digital age, with the success of the Jan Dhan Yojana linking bank accounts to Aadhaar and mobile numbers, it could not be assumed that an illiterate or financially weak person would be unable to manage the awarded amount.
"In today's world, Rs. 8 Lakhs is not a big amount which cannot be managed by an Indian. There appears no justification in only releasing 10 percent of the awarded amount, that is, Rs. 80,000/- to a claimant and keeping rest of Rs. 7,20,000/- in a fixed deposit for a period of three years,"
the Court remarked.
The Court noted that the maximum compensation under of the Rules is Rs. 8 lakh, and that claimants approach the tribunal fully aware of this cap. It further observed that the condition in Rule 5.4.1(ii) – which required banks to cancel existing debit cards and cheque books and not issue new ones without tribunal permission – was excessive.
"Such riders only creates difference in the society as the weaker section finds that such restrictions are to curb their rights in the garb of protection given to them while the literate people with good financial background enjoys the fruits immediately,"
the judgment stated.
to Salvage the
The Court relied on the principle of "", as laid down by the in cases like and , to salvage the provision rather than strike it down entirely. It held that the and are beneficial pieces of legislation, and subordinate rules cannot curtail the compensation they provide.
"Once the intention of the legislature is clear that benefit has to be passed on in case of death or injury of a passenger in a train accident, rules deferring the extension of benefit granted under the Act and discriminating between class of claimants is violative of
,"
the Court declared.
The Court accordingly read down Rule 5.1 to require the tribunal to release the entire awarded sum to all claimants except those covered by (minors and persons of unsound mind). Rule 5.4.1(i) and (ii) were read down to direct that the tribunal shall disburse the award into the claimant's account after verification; if the claimant does not already have an individual savings account in a nationalized bank near their residence, the tribunal may direct the opening of such an account. In a newly opened account, no debit card shall be issued, but the claimant may withdraw money by cheque or withdrawal form.
Implications and Order
The decision effectively removes the barrier that prevented thousands of railway accident victims and their families from accessing their full compensation immediately. The Court directed the tribunal to release all amounts held in fixed deposits to the claimants without delay.
The writ petitions were partly allowed, and the orders of the were modified to the extent indicated. The ruling is expected to provide significant relief to claimants who had been forced to wait for years to access the bulk of their compensation, and reinforces the constitutional principle that must be implemented without discrimination.
