New India Assurance Co. Ltd. vs Gangaiah and Another

S. Dasaradharama Reddy, J.—It is represented that the appellant has already deposited the amounts awarded and that they have already been withdrawn by the respondents even before the appellant could get the orders on the stay petition. Hence, the stay petitions have become infructuous.

In number of awards, I find that the Commissioners for Workmen''s Compensation are directing payment of the compensation straightaway to the claimants without noticing the guidelines laid down by the Supreme Court in General Manager, Kerala State Road Transport Corporation, Trivandrum Vs. Mrs. Susamma Thomas and others, . The relevant portion of the Judgment is extracted hereunder:

"In a case of compensation for death it is appropriate that the Tribunals do keep in mind the principles enunciated by this Court in Union Carbide Corporation, etc., etc. Vs. Union of India, etc. etc., in the matter of appropriate investments to safeguard the feed from being filtered away by the beneficiaries owing to ignorance, illiteracy and susceptible to exploitation. In that case approving the judgment of the Gujarat High Court in Muljibhai and Another Vs. United India Insurance Co. Ltd. and Others, , this Court offered the following guidelines:

"(i) The Claims Tribunal should, in the case of minors, invariably order the amount of compensation awarded to the minor 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 The expenses incurred by the guardian or next friend may however be allowed to be withdrawn;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 semi-literate 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 the 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 so order;

(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 be;

(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 should be borne in mind by the Tribunal in the case of compensation in accident cases"

Though this case arises under the Motor Vehicles Act, yet, the guidelines laid down therein are equally applicable to the cases of compensation awarded under Workmen''s Compensation Act.

It is also brought to my notice by the Counsel for the appellant that the remedy of obtaining stay by the Insurance Company is being frustrated by the Commissioners for Workmen''s Compensation by directing immediate payment of the amount which the appellant is required to deposit under the proviso to Section 30(1) of the Workmen''s Compensation Act at the time of preferring appeal, without giving opportunity to the appellant to obtain stay from this Court.

Commissioners have to direct deposit of the amount awarded in a nationalised bank in fixed deposit with a direction to pay interest to the claimants, as per the guidelines stated by the Supreme Court in the cases cited (1) supra and in the cases where payment can be made straightaway, they may withhold payment till the appeal time is over.

As this is recurring in number of cases, the office is directed to send a copy of this order to the Commissioner of Labour, Hyderabad who shall give suitable instructions to the Com-missioners for Workmen''s Compensation in the State in the light of the observations made in this order.