Awarded Compensation Cannot Be Withheld By Discriminating Claimants On Ground Of Literacy & Financial Position: Allahabad High Court
The Bench held that the Rule 5.1 and 5.4.1 of the 1990 Compensation Rules discriminate between literate and illiterate, rich and poor claimants, violating Article 14.
Justice Rohit Ranjan Agarwal, Allahabad High Court
The Allahabad High Court has held that the Railway Claims Tribunals cannot withhold a portion of awarded accident compensation in fixed deposits based on a claimant’s literacy or financial status, finding such a classification violative of Article 14 of the Constitution of India, as it creates an artificial barrier.
Reading down Rule 5.1, the Court directed release of the entire award except in cases involving minors or persons of unsound mind, and ordered immediate release of amounts already kept in fixed deposits. The Court also held that Rules 5.1 and 5.4.1(i) and (ii) of the 1990 Rules cannot permit tribunals to assess claimants’ ability to manage their compensation.
A Single Judge Bench of Justice Rohit Ranjan Agarwal observed, “By insertion of Rule 5.1 and Rule 5.4.1(i), a distinction has been carved between claimants on the strength of their literacy and financial position. It was never the intention of legislature in framing Rules of 1990 to give restricted benefit to the claimants. Withholding 90 percent of the awarded amount creates a barrier between claimants, who cannot be discriminated on the ground of literacy and financial position”.
“Act of 1987 is a beneficial piece of legislation while Chapter XIII of Act of 1989 also extends benefit to the claimants and makes railway administration liable for death or injury of a passenger due to an accident. 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 Article 14 of the Constitution of India”, it further noted.
Advocate Pashupati Nath Pandey appeared for the petitioners and Advocate Gaurav Bishan appeared for the respondent.
The petitioners were dependents of deceased railway accident victims or injured passengers themselves, who had been awarded compensation by the Railway Claims Tribunal (RCT). Relying on Rule 5, the RCT had released only ten percent of the awarded sum and directed the remaining ninety percent to be kept in interest-bearing fixed deposits, citing the claimants' illiteracy or financial vulnerability.
Since the challenge in all connected matters raised an identical question regarding the vires of Rule 5, and pleadings had been exchanged in two of the petitions, the Court, with the consent of counsel, proceeded to decide the entire batch at the admission stage.
On the legislative history of the Railway Claims Tribunal Act, 1987 and the Railways Act, 1989, the Court noted that Rule 5 had originated from directions of the Delhi High Court in Geeta Devi v. Union of India, intended to shield claimants from exploitation by touts and middlemen.
“In case of both sets of passengers where either the death is caused or a passenger is injured in a train accident, denial of benefit to claimants granted under Sections 123, 124 read with Section 124A of the Act of 1989 would disqualify a section of the society, which is never the intention of the constitutional mandate under Article 14 or under the Act of 1987 and 1989”, the Bench had noted.
However, the Bench observed that with the spread of the Jan Dhan Yojana and Aadhaar-linked banking, the assumption that illiterate or poor claimants cannot manage a maximum award of Rs. 8 lakhs no longer held good, and that such rules amounted to subordinate legislation curbing a substantive statutory benefit rather than facilitating it.
Cause Title: Ram Naresh Singh and 5 others v. Union of India (Neutral Citation: 2026:AHC:190705)
Appearances:
Petitioners: Ashok Kumar Singh, Bhagwan Dutt Pandey, Brijendra Kumar Srivastava, Gaurav Singh, Lalit Kumar, Mritunjay Verma, Mukti Nath Pandey, Pashupati Nath Pandey, Priyanka Tripathi, Rajesh Kumar, Ram Mani Tripathi, Ram Raj Prajapati, Shambhavi Nandan, Shiv Babu Dubey and Shiv Binayak, Advocates.
Respondents: ASGI along with Ashutosh Srivastava, Gaurav Bishan, Gaya Prasad Singh, Harshita Rani, Krishna Kant, Krit Raj Singh, Om Prakash Mishra, Rajesh Kumar Vidyarthi, Rakesh Kumar Mishra, Raman Saxena, Ravi Prakash Singh, Sujata Choudhary, Ved Mani Tiwari and Vijay Chandra, Advocates.