An adult claimant cannot be compelled to keep awarded compensation in fixed deposits.

The appellant, Shankara Khatoon, challenged the judgment dated 16 January 2026 passed by the Railway Claims Tribunal, Kolkata Bench, in Claim Application No. OA(IIu)/KOL/0031/2025.

The Tribunal awarded her compensation of ₹8,00,000 and directed the Railway Authority to deposit the amount with the Registrar within 60 days, failing which interest at 6% per annum would accrue from the date of default.

However, the Tribunal permitted her to withdraw only 5% of the compensation, i.e., ₹40,000, and directed that the balance ₹7,60,000 be placed in 76 fixed deposits of ₹10,000 each, maturing over 1 to 76 months.

The Tribunal also imposed restrictions concerning the claimant’s bank account, withdrawals, premature encashment, loans, debit cards and digital transactions.

The claimant, who was a major and over 50 years of age, challenged these directions as unsupported by any statutory provision or factual justification.

Whether the Railway Claims Tribunal could restrict an adult claimant’s access to the awarded compensation by permitting withdrawal of only 5% and directing investment of the balance in fixed deposits.

Whether the Tribunal’s directions regarding fixed deposits and restrictions on withdrawal were legally sustainable in the absence of a specific statutory provision or recorded justification.

Whether the claimant was entitled to direct disbursement of the entire compensation amount after deposit by the Railway Authority.

The Court relied on the principles concerning protective investment of compensation laid down in General Manager, Kerala State Road Transport Corporation v. Susamma Thomas, (1994) 2 SCC 176, including the guidelines approved from Union Carbide Corporation v. Union of India, (1991) 4 SCC 584.

Those guidelines permit protective fixed-deposit arrangements particularly for minors, illiterate or semi-literate claimants, widows, or where the Tribunal records reasons showing that such protection is necessary; they also contemplate liberty to seek withdrawal in emergencies.

The Court also considered H.S. Ahammed Hussain v. Irfan Ahammed, (2002) 6 SCC 52, wherein compensation payable to adult claimants was not directed to be kept in fixed deposit.

The governing principle applied was that an adult claimant cannot be denied direct access to compensation without statutory authority or case-specific reasons demonstrating that protective investment is necessary.

The Court found that the claimant was a major person aged above 50 years and that the Tribunal had not identified any circumstance justifying restriction of her access to the compensation.

Although the Tribunal relied on the Ministry of Railways notification dated 3 June 2024 and directions allegedly issued in Geeta Devi v. Union of India, the Court noted that the relevant directions had been set aside by the Allahabad High Court and, in any event, could not sustain the restrictions imposed on this claimant.

The Tribunal cited no statutory provision and gave no adequate reason for limiting withdrawal to 5% or for placing the remaining amount in 76 fixed deposits.

Applying the principles in Susamma Thomas and H.S. Ahammed Hussain, the Court held that protective investment guidelines could not be mechanically applied to an adult claimant, particularly in the absence of findings regarding illiteracy, vulnerability, incapacity or risk of exploitation.

Consequently, the fixed-deposit directions and related banking restrictions were unsustainable.

The compensation award of ₹8,00,000 itself remained unaltered.

The Union of India/Railway Authority was directed to deposit the awarded compensation together with applicable interest before the Registrar of the Railway Claims Tribunal within six weeks of communication of the judgment.

Upon deposit and completion of necessary formalities, the claimant was held entitled to withdraw the entire amount, and the Registrar was directed to disburse it within four weeks.