Premature Withdrawal of Compensation Fixed Deposit Denied Absent Disclosure of Prior Award Disbursement Expenditures

The petitioner, widow of late Satya Dev Joshi, sought the premature release of ₹11,65,252/- held in a Fixed Deposit (FD) at Central Bank of India.

This amount was part of a larger compensation of ₹39,67,583/- awarded by the Motor Accident Claims Tribunal (MACT), Durg, on 03/11/2023.

Under the award, the petitioner received 50% of the total amount, while her two children received 25% each.

A portion of her share was mandated to be kept in an FD for five years starting 20/02/2024 to secure her future.

The petitioner moved a Civil MJC application for early withdrawal to fund her son's marriage scheduled for 26/04/2026, which the MACT rejected on 02/04/2026.

She then challenged this rejection under Article 227 of the Constitution of India.

1. Whether the petitioner established a bona fide necessity for the premature withdrawal of compensation funds kept in a Fixed Deposit.

2. Whether the Claims Tribunal’s refusal to release the awarded amount prematurely warrants interference under Article 227 of the Constitution.

The Court applied the principles governing the disbursement of motor accident compensation, specifically the judicial doctrine that awarding compensation in the form of long-term Fixed Deposits is intended to prevent the "misuse" of funds and ensure the long-term "well-being" and financial security of the claimants.

It also relied on the standard of "bona fide claim" and "specific proof of expenditure," requiring a claimant to demonstrate that liquid funds already disbursed have been exhausted logically before touching the protected principal.

The High Court observed that while the petitioner claimed financial need for her son's marriage, she failed to disclose the status of the initial 50% of the compensation already paid to her in cash/savings account.

The court noted a lack of "specific proof of expenditure" regarding the previously disbursed amounts.

The court reasoned that since the very purpose of the FD is to secure the survivors' future against impulsive or unnecessary spending, it could not allow withdrawal without a clear showing that the move was bona fide and that other available funds were insufficient.

The petitioner’s failure to account for the earlier receipts made it impossible for the Court to deem the current request a genuine necessity.

The Court ruled that the purpose of keeping compensation in Fixed Deposits is to secure the utilization of funds for the family’s future, which the petitioner failed to safeguard. Consequently, the High Court dismissed the writ petition and upheld the order of the Second Additional Motor Accident Claims Tribunal, Durg.