Whether a Motor Accident Claims Tribunal Can Impose Costs on Parties and What the Case Law Actually Says

A recurring objection raised before Motor Accident Claims Tribunals (MACT) across India is that the Tribunal has no authority to impose costs on any party. Insurance companies, in particular, frequently argue that because the Tribunal is constituted under a special enactment — the Motor Vehicles Act, 1988 — it is governed solely by the provisions of that Act and cannot exercise the cost-imposing powers available to ordinary civil courts. So, does the MACT truly lack the power to award costs, or is the position more nuanced?

The Short Answer

The better view emerging from the case law is that the Motor Accident Claims Tribunal does have the power to impose costs in certain specified circumstances, but not as a matter of general or inherent jurisdiction. Its power to impose costs exists only where a specific statutory rule or condition confers that power — most notably where procedural rules such as Order 9 of the Code of Civil Procedure have been made applicable to Tribunal proceedings.

The Leading Authority on Cost Imposition

The key ruling directly addressed this question and held that the provisions of Order 9 of the Code of Civil Procedure, including Rules 6, 7, and 8, are applicable to MACT proceedings by virtue of Rule 21 of the U.P. Motor Accident Claims Tribunal Rules, 1967 1992 0 Supreme(All) 57. On that basis, the Court held that the Tribunal had the jurisdiction to impose a cost as a condition for recalling an ex parte order, and that the impugned order was neither passed in excess of jurisdiction nor illegally 1992 0 Supreme(All) 57.

This is significant because Order 9 Rule 7 of the Code expressly empowers a court to impose costs as a condition for setting aside or recalling an ex parte proceeding. Where the state rules incorporate Order 9 into Tribunal procedure, the Tribunal can legitimately exercise that same power.

Why the Tribunal's Powers Are Otherwise Limited

The MACT is a statutory tribunal, and unlike a regular civil court, it does not possess sweeping inherent powers. Its adjudicatory jurisdiction under the Motor Vehicles Act, 1988 is confined to claims for compensation arising out of motor vehicle accidents — involving death, bodily injury, or damage to third-party property 2007 Supreme(Online)(J&K) 6. Its power of adjudication is restricted to claims arising from the use of motor vehicles, and the Tribunal need not go beyond its primary function of fixing liability and quantum of compensation 2003 0 Supreme(Ker) 593.

This statutory confinement has been consistently emphasised in related contexts:

• No power of substantive review: The Tribunal has not been invested with the power of substantive review given to a civil court under Section 114 and Order 47 of the Code of Civil Procedure. There is even no provision under the Act or the Rules wherefrom such power can be said to be impliedly conferred on the Tribunal 2015 0 Supreme(All) 1021 and 2020 0 Supreme(All) 1100.
• No power to shift burdens without legal basis: The Tribunal cannot put the burden of recovering compensation on a party unless such an order can be passed under some law 2014 0 Supreme(UK) 347.
• No power to fix liability outside the Act: Neither the Tribunal nor the appellate court can fix liability upon the State for dereliction of duty by police officers; such claims must be pursued in a civil suit 2020 0 Supreme(Gau) 107.

Read together, these decisions reinforce a consistent principle: the MACT's powers are strictly statutory, and procedural rules apply only as specifically provided.

The Contested Issue That Remains

The question of costs is not entirely settled. In one matter, the petitioner — an insurance company — raised precisely this legal issue, contending that the Tribunal does not possess any authority to award any costs as incidental to its power over parties or subject matter of litigation and that a Tribunal constituted under a special enactment is governed solely by the Motor Vehicles Act, 1988 2021 0 Supreme(SC) 408. The fact that the High Court was inclined to entertain the special leave petition on this limited issue suggests that the scope of the MACT's cost-imposing power remains a live question requiring careful examination of the applicable rules 2021 0 Supreme(SC) 408.

Practical Observations from the Case Law

Tribunals have, in practice, imposed costs in various situations. In one matter from Assam, the Tribunal imposed a cost of Rs. 20,000 on the Insurance Company for denying the lawful benefit to the claimants for a period of more than three years

ORIENTAL INSURANCE COMPANY LIMITED vs HAFIZA KHATUN AND 4 ORS

Key Conditions for a Valid Costs Order by the MACT

1. A specific enabling provision must exist. The power cannot be assumed from the Tribunal's general adjudicatory role.
2. State rules matter. The applicability of Order 9 Rules 6, 7, and 8 depends on the state-specific MACT rules — for example, Rule 21 of the U.P. Motor Accident Claims Tribunal Rules, 1967 1992 0 Supreme(All) 57. The position may not be uniform across all states.
3. The context must fit the rule. Costs have been upheld as a condition for recalling ex parte orders, mirroring Order 9 Rule 7 1992 0 Supreme(All) 57.
4. Costs cannot be purely punitive. The Tribunal cannot impose costs merely as an incident of its general power over the parties or as a standalone penalty without a rule-based foundation 2021 0 Supreme(SC) 408.

Practical Takeaways for Litigants and Practitioners

• Check the state rules first. Before seeking — or opposing — a costs order, examine whether the state's Motor Accident Claims Tribunal Rules incorporate the Code of Civil Procedure, and to what extent.
• Raise the jurisdictional objection where warranted. When opposing a costs application, the argument that the Tribunal lacks inherent power to award costs is a legitimate line of defence, and the burden rests on the party seeking costs to point to a specific enabling rule 2021 0 Supreme(SC) 408.
• Distinguish procedural costs from punitive costs. Costs tied to procedural events (such as recall of ex parte orders) stand on firmer ground than costs imposed as free-standing sanctions.
• Watch developments in this area. Given that the issue has been specifically raised in pending litigation 2021 0 Supreme(SC) 408, the law on the MACT's cost jurisdiction may see further clarification.

Conclusion

The claim that the Motor Accident Claims Tribunal has no power to impose costs is only partially accurate. While the Tribunal lacks the general, inherent power to award costs that ordinary civil courts enjoy, it can impose costs where a specific rule — such as Order 9 Rule 7 of the Code of Civil Procedure as applied through state MACT rules — confers that power 1992 0 Supreme(All) 57. Outside such enabling provisions, cost orders may be vulnerable to challenge. Because the applicable rules vary from state to state and the issue remains subject to litigation, parties should treat this as general information rather than a definitive statement of the law and verify the position applicable to their own jurisdiction and facts.