Delhi High Court orders full release of ₹8 lakh railway accident compensation, rejects mechanical 90% fixed-deposit holdback

The husband of Petitioner No. 1 sustained fatal injuries in an untoward railway incident at Hazrat Nizamuddin Railway Station on 14 May 2013 and died on 15 May 2013.

The petitioners’ claim application before the Railway Claims Tribunal (“RCT”) was dismissed on 9 February 2017.

In FAO No. 331/2017, the Delhi High Court allowed the appeal on 7 January 2026 and remanded the matter to the RCT for determination of compensation, directing disbursement within two weeks.

The RCT thereafter awarded ₹8 lakhs but directed that only 10% be released immediately and the remaining 90% be kept in fixed deposits for three years.

The petitioners challenged this restriction, asserting an urgent need for the entire compensation.

Whether the RCT could direct that only 10% of the awarded compensation be released and that the balance be retained in fixed deposits without examining the petitioners’ financial condition, needs, or any disabling factors.

Whether the impugned direction was inconsistent with Rules 5.1, 5.3 and 5.4.1 of the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990, as inserted by the 2020 Amendment Rules.

Rule 5.1 permits the Tribunal to direct disbursement through annuities, fixed deposits or another suitable mode only to protect the claimant’s award, having regard to illiteracy or other disabling factors impairing its judicious use, and only where such direction serves the ends of justice.

Rule 5.3 requires reasons in writing for modifying the mode of disbursement and requires that the modification operate for the claimant’s benefit.

Rule 5.4.1 requires the RCT to examine the claimant’s financial condition, needs, proposed mode of disbursement and the amount to be retained in fixed deposit before or at the time of passing the award.

The Court also relied on Smt. Prema v. Union of India, Writ-C No. 98985/2026, Allahabad High Court, which held that partial release and fixed-deposit directions cannot be applied as a rule of thumb and must be based on the individual facts and practical needs of the claimants.

The Court held that the RCT’s discretion under Rule 5.1 was neither absolute nor mechanical and had to be exercised through an individualized assessment.

The impugned order did not record any finding regarding the petitioners’ financial condition or requirements, identify any illiteracy or disabling factor, explain why retention of 90% would benefit them, or provide the written reasons required under Rule 5.3.

The RCT therefore failed to undertake the examination mandated by Rule 5.4.1.

Further, the incident had occurred in 2013, the petitioners had pursued the claim for over twelve years, and the High Court had already directed prompt disbursement within two weeks in the earlier appeal.

In these circumstances, restricting immediate release to 10% defeated the compensatory purpose of the award.

The Court found the Allahabad High Court’s reasoning in Smt. Prema persuasive: fixed-deposit directions must be adapted to the claimant’s circumstances and cannot be imposed uniformly.

The direction restricting release to 10% and retaining 90% in fixed deposits for three years was set aside.

The Registry of the RCT was directed to release the entire awarded amount of ₹8 lakhs, together with accrued interest, in favour of the petitioners in accordance with the operative directions.

The writ petition was accordingly disposed of.