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2025 Supreme(SC) 675

SUPREME COURT OF INDIA
ABHAY S. OKA, UJJAL BHUYAN, JJ.
In Re: Compensation Amounts Deposited With Motor Accident Claims Tribunals And Labour Courts
Suo Motu Writ Petition (C) No. 7 Of 2024
Decided On : 22-04-2025

Advocates appeared:
For the parties: By Courts Motion Ms. Meenakshi Arora, Sr. Adv. Ms. Vishakha, AOR
For the parties: (State of Gujarat) Ms. Deepanwita Priyanka, AOR
(High Court of Bombay) Mr. Prashant Shrikant Kenjale, AOR Mrs. Aarti Singh, Adv. Mr. B Dhananjay, Adv.
(High Court of Judicature at Allahabad) Ms. Charu Ambwani, AOR
(High Court of Delhi) Mr. Kanhaiya Singhal, AOR Mr. Prasanna, Adv. Mrs. Vani Singhal, Adv. Mr. Ajay Kumar, Adv.
(High Court of Calcutta) Mr. Partha Sil, AOR Ms. Sayani Bhattacharya, Adv. Mr. Srijit Datta, Adv.
(High Court of Madras) Mr. Deepayan Mandal, AOR
(High Court of Gujarat) Ms. Vishakha, AOR

IMPORTANT POINT
Disbursement of amount of Compensation - Application for compensation can be made by persons who have sustained injuries or by owners of damaged property and in case of fatal accidents, by all or any of legal representatives of deceased - Even an agent duly authorised by person injured or legal representatives of deceased can file claim petition.

Headnote:

Motor Vehicles Act, 1988 - Sections 166 and 176 - Workmen's Compensation Act, 1923 - Section 10 - Disbursement of amount of Compensation - Applications for compensation can be made by persons who have sustained injuries or by owners of damaged property and in case of fatal accidents, by all or any of legal representatives of deceased - Even an agent duly authorised by person injured or legal representatives of deceased can also file claim petition - While passing interim or final order of grant of compensation, MAC Tribunals shall call upon person or persons held entitled to receive compensation, to produce their bank account details - In the event a consent award or consent order is made, MAC Tribunals may direct deposit of compensation amount ordered to be released to claimants directly to bank accounts of persons held entitled to receive compensation - State Governments shall provide assistance to Legal Services Authorities of local police officers/revenue officers of district and taluka to trace claimants who are held entitled to receive compensation - These directions shall continue to bind MAC Tribunals and Commissioners under 1923 Act till rule-making power is properly exercised by Government - Registry shall forward copies of this Order to Registrar Generals of all High Courts as well as Member Secretaries of State Legal Services Authorities of all States. (Paras 5, 7, 9 and 10)

Facts of the case:

Issue arising in this suo motu petition is of great concern. Amounts represent compensation granted to claimants in claims filed under 1988 and 1923 Acts. Though claimants are held entitled to these amounts, they have not withdrawn the same. Fact that so many successful claimants have been deprived of compensation is very disturbing. It is necessary to find a solution.

Findings of Court:

Whenever MAC Tribunal passes an order of deposit of compensation amount with Tribunal, there shall be a direction issued to invest amounts to be deposited in fixed deposit with any nationalised bank and fixed deposit shall be with standing instructions to Bank to renew the same after periodical intervals till further orders are passed by Tribunal.

Result : Directions issued.

Judgement Key Points

Key Points: - The Supreme Court issued directions to address the issue of large unclaimed compensation amounts deposited with Motor Accident Claims Tribunals (MAC Tribunals) and Labour Courts under the 1988 and 1923 Acts (!) (!) . - Applications for compensation can be made by injured persons, property owners, or legal representatives of deceased victims, including duly authorized agents (!) (!) . - MAC Tribunals must direct claimants to produce bank account details (including cancelled cheques or banker certificates) before passing interim or final orders (!) (!) . - In cases of consent awards or compromises, tribunals may direct the direct release of compensation amounts to the claimants' bank accounts (!) . - State Governments are directed to assist Legal Services Authorities, police, and revenue officers in tracing claimants who have not withdrawn their compensation (!) (!) . - Unclaimed amounts deposited with tribunals must be invested in fixed deposits with nationalized banks with standing instructions for renewal (!) . - High Courts are directed to create dashboards to monitor unclaimed amounts and submit compliance reports to the Supreme Court by July 30, 2025 (!) (!) . - These directions remain binding on MAC Tribunals and Commissioners under the 1923 Act until rule-making power is properly exercised by State Governments (!) .

How to ensure compensation amounts are disbursed directly to claimants' bank accounts?

What are the rights of legal representatives to file compensation claims?

How to trace claimants who have been held entitled to compensation but have not withdrawn the amount?


ORDER :

(ABHAY S. OKA, J.)

1) An email was received by this Court from Shri B. B. Pathak, a retired District Judge from Gujarat. In the e-mail dated 25th May 2024, Shri Pathak pointed out that large amounts payable by way of compensation under the Motor Vehicles Act, 1988 (for short, 'the 1988 Act') and the Workmen's Compensation Act, 1923 (for short, 'the 1923 Act') are lying deposited with the Motor Accident Claims Tribunals (for short, 'the MAC Tribunals') and Labour Courts. Hon'ble the Chief Justice of India passed an administrative order on the basis of information received by e-mail from Shri B. B. Pathak for registration of the present Suo Motu Writ Petition.

2) On 8th July 2024, this Court issued notices to the State of Gujarat as well as the Registrar General of Gujarat High Court, directing them to produce before this Court the data of compensation amounts lying deposited with the MAC Tribunals as well as before the Commissioners under the 1923 Act. By the order dated 26th July 2024, this Court requested Ms. Meenakshi Arora, the learned senior counsel appearing for the High Court of Gujarat, to assist the Court as amicus curiae. On the basis of a preliminary note containing recommendations submitted by the learned senior counsel appointed as amicus curiae, notices were issued to the Registrar Generals of the High Courts at Allahabad, Bombay, Calcutta, Delhi and Madras along with copies of earlier orders passed by this Court. Thereafter, time was granted to the High Courts to file affidavits/responses.

3) Ms. Vishakha, advocate-on-record representing the High Court of Gujarat, has filed a compilation of responses received from various High Courts along with suggestions of the learned senior counsel appointed as amicus curiae. To understand the magnitude of the problem, in paragraph 5 on page 2 of the compilation submitted by Ms. Vishakha, the figures of unclaimed amounts have been set out. Paragraph 5 reads thus:

“At the very outset, the details pertaining to the unclaimed amounts as provided in the affidavits received are as under:

S.No.

High Court

Unclaimed Amount in MACT

Unclaimed Amount in Labour Courts

1.

Gujarat

Rs.2,82,00,37,779.18

Rs.6,61,39,777.19

2.

Allahabad

Rs.239 Crores approx

Rs.92,39,02,649.10

3.

Calcutta

Rs.2,53,37,676/-

Not available

4.

Bombay

Rs.4,59,10,66,846/-

5.

Goa

Rs.3,61,60,495/-

4) In the affidavits, the respective High Courts have given their own suggestions. Different High Courts have adopted different methods to deal with the issue. Some of the High Courts appointed committees to submit recommendations. The committee appointed by the High Court of Judicature at Bombay has given details of the procedure followed in such cases in different countries. The report of the High Court of Judicature at Bombay refers to paragraph 742 of the Civil Manual applicable to the Courts in Maharashtra, which incorporates the requirement of deposit of unclaimed amounts into the treasury of the State Government. We have also carefully perused the recommendations of the learned senior counsel appointed as amicus curiae. She has summarised the best practices followed by various High Courts and has incorporated the same in her recommendations.

5) The issue arising in this suo motu petition is of great concern. The amounts represent the compensation granted to claimants in the claims filed under the 1988 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.

6) There is a provision under Section 166 of the 1988 Act for making an application for compensation to the MAC Tribunal established under the said enactment. Sub- Section (1) of Section 166 reads thus:

“166. Application for compensation.

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