Supreme Court: In the instant suo motu petition, wherein the Court took note of large amounts payable by way of compensation under the Motor Vehicles Act, 1988 (MV Act) and the Workmen’s Compensation Act, 1923 (the 1923 Act’) which are lying deposited with the Motor Accident Claims Tribunals (MACT) and Labour Courts; the Division Bench of Abhay S. Oka* and Ujjal Bhuyan, JJ., pointed out that it is not clear how many States have exercised the rulemaking power under Section 176(a) of the MV Act for prescribing the form of the application under Section 166(1) of the MV Act. Applications for compensation can be made by the persons who have sustained injuries or by the owners of the damaged property and in case of fatal accidents, by all or any of the legal representatives of the deceased. Even an agent duly authorised by the person injured or the legal representatives of the deceased can also file a claim petition.
Till the rules are not framed, the Court stated that the High Courts shall either issue practice directions or formulate rules of procedure by incorporating the following provisions:
-
While filing claim petitions under the MV Act, following particulars shall be incorporated:
-
Names and addresses (local and permanent) of the injured persons or the owners of the damaged property, as the case may be, their Aadhar and PAN details and email-id, if any;
-
Names and addresses (local and permanent) of all the legal representatives of the deceased victim of the accident who are claiming compensation, their Aadhar and PAN details and email-id, if any
-
-
If the aforesaid details are not furnished, the registration of the application should not be refused on that ground, but MAC Tribunals at the time of issuing notice may direct the applicant(s) to furnish the information and make the issue of the notice subject to making compliance;
-
While passing an interim or final order of grant of compensation, the MAC Tribunals shall call upon the person or persons held entitled to receive compensation, to produce their bank account details along with either a certificate of the banker giving all details of the bank account of the person or persons entitled to receive the compensation including IFS Code, or a copy of a cancelled cheque of the bank account. The Tribunal shall call upon the claimants to produce the documents within a specified reasonable time.
-
A further direction shall be issued to the persons entitled to receive compensation to keep on updating information regarding the bank accounts, email id, in case there is any change;
-
In the event a consent award or consent order is made, the MAC Tribunals may direct the deposit of the compensation amount ordered to be released to the claimants directly to the bank accounts of the persons held entitled to receive compensation. However, the consent terms must contain all relevant account details of the persons entitled to compensation in accordance with above clause c. The account details can also be incorporated in the order passed for the disbursement of the amount on the basis of a compromise between the parties. In case of compromise before the Lok Adalats, the MAC Tribunal, on the basis of the settlement, shall pass a consequential order in the above terms.
-
It shall be the duty of the learned Judges presiding over the MAC Tribunal to verify from the certificate issued by the banker and ascertain whether the account is of the persons held entitled to receive compensation;
-
The MAC Tribunals, while passing orders of withdrawal/disbursement, shall, in the ordinary course, pass an order of transfer of the requisite amounts directly to the bank account of the person/s entitled to receive compensation as per the account details furnished. If there is a long gap between the date of furnishing the account details and the date of filing application for withdrawal of the amount, the Tribunal will be well advised to get fresh account details of the claimants.
-
Whenever the MAC Tribunal passes an order of deposit of compensation amount with the Tribunal, there shall be a direction issued to invest the amounts to be deposited in fixed deposit with any nationalised bank and the fixed deposit shall be with the standing instructions to the bank to renew the same after periodical intervals till further orders are passed by the Tribunal.
-
Similarly, practice directions/rules be framed in respect of adjudication made under the 1923 Act. The above directions issued while passing awards in claims under the 1988 Act shall be applied in case of the claims for compensation under the 1923 Act.
-
The Central Project Co-ordinator of e-court project or Registrar (Computer/IT) of the High Courts, as the case may be, with the help of the State Government, shall create a dashboard on which the information regarding the amounts lying deposited in connection with the compensation granted under 1988 or 1923 Acts shall be regularly uploaded with all details. It will help all concerned to implement the directions issued under this order;
-
All the High Courts shall issue administrative directions to the MAC Tribunals and Commissioners under the 1923 Act to initiate a massive drive to ascertain the whereabouts of the persons who have been held to be entitled to receive compensation but have not taken the same. This shall be done by taking the assistance of the District and Taluka Legal Services Authorities and para-legal volunteers;
-
The State Governments shall provide assistance to the Legal Services Authorities of the local police officers/revenue officers of the district and taluka to trace the claimants who are held entitled to receive compensation;
-
The State Legal Services Authorities shall monitor compliance with the directions issued in terms of clauses (k) and (l) above and report compliance within a period of four months from today.
Background:
Retired District Judge from Gujarat, Justice B. B. Pathak, a retired District Judge from Gujarat sent an email to the Supreme Court dated 25-5-2024. The email pointed out that large amounts payable by way of compensation under the MV Act and the 1923 Act are lying deposited with the MACT and Labour Courts. The Chief Justice of India passed an administrative order on the basis of information received by e-mail for registration of the present Suo Motu Writ Petition.
Court’s Assessment:
The Court said that issue arising in the instant suo motu petition is of great concern. The amounts represent the compensation granted to claimants in the claims filed under the MV Act and 1923 Acts. Though the claimants are held entitled to these amounts, they have not withdrawn the same. “The fact that so many successful claimants have been deprived of compensation is very disturbing. It is necessary to find a solution”.
The Court highlighted that Section 166 of the MV Act exists for making an application for compensation to the MACT established under the said enactment. Furthermore, under Section 176 of the MV Act rule making powers has been conferred on the State Governments to make rules providing for the form of application for claims for compensation and the particulars it may contain.
The Court stated that in absence of the exercise of the rule making power under Section 176 of the MV Act by the State Governments, the respective High Courts can either frame rules of procedure or issue practice directions for ensuring that material details are disclosed while filing claim applications under Section 166(1) of the MV Act.
Issuing the afore-stated directions, the Court stated that these directions shall continue to bind the MACT and the Commissioners under the 1923 Act till rule-making power is properly exercised by the Government.
The Court directed the High Courts to take up implementation of the aforesaid directions at the earliest and submit compliance reports to this Court on or before 30-7-2025, so that further directions, if necessary, can be issued.
The Court clarified that if the Rules framed by the State Government or practice directions already issued are consistent with the above directions, then the Rules or the practice directions, as the case may be, shall be followed notwithstanding the instant order. Furthermore, all the High Courts are free to take measures in addition to what is directed under the instant order to ensure that the pending amounts reach the claimants.
[In Re: Compensation Amounts Deposited with Motor Accident Claims Tribunals and Labour Courts, SUO MOTU WRIT PETITION (C) NO. 7 OF 2024, decided on 22-4-2025]
*Judgment by Justice Abhay S. Oka
Advocates who appeared in this case:
Ms. Meenakshi Arora, Sr. Adv. Ms. Vishakha, AOR Ms. Deepanwita Priyanka, AOR Mr. Prashant Shrikant Kenjale, AOR Mrs. Aarti Singh, Adv. Mr. B Dhananjay, Adv. Ms. Charu Ambwani, AOR Mr. Kanhaiya Singhal, AOR Mr. Prasanna, Adv. Mrs. Vani Singhal, Adv. Mr. Ajay Kumar, Adv. Mr. Partha Sil, AOR Ms. Sayani Bhattacharya, Adv. Mr. Srijit Datta, Adv. Mr. Deepayan Mandal, AOR