Friday, 7 February 2020

Guidelines of Supreme Court for protection of money paid to victim of motor accident

The tribunal while awarding the compensation had stated
that the amount payable to the share of Kajal would be kept in a
Fixed Deposit till she attains the age of 18 years. The High
Court while enhancing the amount of compensation has directed
that the enhanced amount be paid to the appellant within 45
days. This is totally contrary to the guidelines laid down by this
Court in General Manager, Kerala State Road Transport
Corporation, Trivandrum v. Susamma Thomas and Ors.15 (1994) 2 SCC 176,
wherein it has been held clearly that the amount payable to the
minors should not be normally released. The guidelines in this
case were as follows :
“17….(i) The Claims Tribunal should, in the case of minors,
invariably order the amount of compensation awarded to
the minor be invested in long term fixed deposits at least
till the date of the minor attaining majority. The expenses
incurred by the guardian or next friend may, however, be
allowed to be withdrawn;
(ii) In the case of illiterate claimants also the Claims Tribunal
should follow the procedure set out in (i) above, but if
lump sum payment is required for effecting purchases of
any movable or immovable property such as, agricultural
implements, rickshaw, etc., to earn a living, the Tribunal
may consider such a request after making sure that the
amount is actually spent for the purpose and the demand
is not a ruse to withdraw money;
(iii) In the case of semiliterate
persons the Tribunal should
ordinarily resort to the procedure set out at (i) above
unless it is satisfied, for reasons to be stated in writing,
that the whole or part of the amount is required for
expanding and existing business or for purchasing some
property as mentioned in (ii) above for earning his
livelihood, in which case the Tribunal will ensure that the
amount is invested for the purpose for which it is
demanded and paid;
(iv) In the case of literate persons also the Tribunal may
resort to the procedure indicated in (i) above, subject to
the relaxation set out in (ii) and (iii) above, if having regard
to the age, fiscal background and strata of society to
which the claimant belongs and such other
considerations, the Tribunal in the larger interest of the
claimant and with a view to ensuring the safety of the
compensation awarded to him thinks it necessary to do
(v) In the case of widows the Claims Tribunal should
invariably follow the procedure set out in (i) above;
(vi) In personal injury cases if further treatment is necessary
the Claims Tribunal on being satisfied about the same,
which shall be recorded in writing, permit withdrawal of
such amount as is necessary for incurring the expenses
for such treatment;
(vii) In all cases in which investment in long term fixed
deposits is made it should be on condition that the Bank
will not permit any loan or advance on the fixed deposit
and interest on the amount invested is paid monthly
directly to the claimant or his guardian, as the case may
(viii) In all cases Tribunal should grant to the claimants
liberty to apply for withdrawal in case of an emergency. To
meet with such a contingency, if the amount awarded is
substantial, the Claims Tribunal may invest it in more
than one Fixed Deposit so that if need be one such F.D.R.
can be liquidated….”
These guidelines protect the rights of the minors, claimants who
are under some disability and also widows and illiterate person
who may be deprived of the compensation paid to them in lump

sum by unscrupulous elements. These victims may not be able
to invest their monies properly and in such cases the MACT as
well the High courts must ensure that investments are made in
nationalised banks to get a high rate of interest. The interest in
most cases is sufficient to cover the monthly expenses. In
special cases, for reasons to be given in writing, the MACT or the
trial court may release such amount as is required. We reiterate
these guidelines and direct that they should be followed by all
the tribunals and High Courts to ensure that the money of the
victims is not frittered away.


Deepak Gupta, J.

Dated:February 05, 2020.
Read full judgment here: Click here
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