Claims Tribunal must allow partial disbursement of compensation despite pending appeal upon showing financial hardship.

The petitioners/claimants were awarded compensation of Rs. 21,99,840/- by the Claims Tribunal, Gwalior, following the death of Balwant, the family's sole breadwinner.

The respondent-Insurance Company challenged this award in M.A. No. 558/2025.

While an initial interim order for 50% disbursement was vacated on 05/03/2025, a total of Rs. 24,30,819/- remained deposited with the Tribunal.

The petitioners filed an application (Ex. M.J.C. No. 42/2025) before the II District Judge, Dabra, seeking premature disbursement of the FDRs to fund a family marriage and alleviate financial hardship.

The Tribunal rejected the application on 14/10/2025, leading to the current challenge under Article 227 of the Constitution.

1. Whether the learned Claims Tribunal committed a legal error in rejecting the application for premature disbursement of the deposited compensation amount.

2. Whether partial disbursement of the award is permissible while a miscellaneous appeal against the original award is still pending.

The court exercised its supervisory jurisdiction under Article 227 of the Constitution of India.

The court applied the principle of balancing the immediate financial needs of claimants (especially in cases of the death of a sole breadwinner) against the need to protect the interests of the Insurance Company during a pending appeal by requiring undertakings for refund and maintaining partial deposits in Fixed Deposit Receipts (FDRs).

The Court found that the petitioners faced genuine financial hardship due to the loss of their sole breadwinner and the upcoming marriage of petitioner No. 3.

It observed that the Claims Tribunal failed to provide "cogent reasons" for rejecting the disbursement application.

To reconcile the competing interests, the Court determined that the "ends of justice" would be met by allowing a 50% release of the deposited funds.

This was balanced by requiring major claimants to provide a legal undertaking to refund the amount if the Insurance Company's appeal (M.A. No. 558/2025) eventually succeeds, and by ensuring that the remaining 50% and the shares of minor claimants remain secured in nationalized bank FDRs.

The Court ordered: (i) the release of 50% of the deposited amount to the petitioners according to the original award's apportionment; (ii) that major claimants must furnish an undertaking to refund the amount if the appeal is successful; (iii) that the shares of minor claimants must remain in FDRs; and (iv) that the remaining 50% of the total deposit shall stay in FDRs pending the outcome of M.A. No. 558/2025.

No order as to costs was made.