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Synopsis

The Supreme Court has on April 22, 2025 expressed its concern over a huge amount of compensation lying unclaimed before the Motor Accident Claims Tribunal and Labour courts, saying the fact that so many successful claimants have been deprived of compensation is very disturbing. 

"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 Motor Vehicles Act, 1988 and Workmen's Compensation Act, 1923. Though the claimants are held entitled to these amounts, they have not withdrawn the same," a bench of Justices Abhay S Oka and Ujjal Bhuyan observed. 

Holding that it is necessary to find a solution, the court issued a slew of directions to address the situation.

The figures of unclaimed amounts as indicated by the Top Court;

1. In Gujarat High Court, the unclaimed amount in MACT - Rs 2,82,00,37,779.18 and Labour Courts was Rs.6,61,39,777.19;
2. In Allahabad High Court, it was Rs.239 Crores approx and Rs.92,39,02,649.10 respectively;
3. In Calcutta High Court in MACT Rs 2,53,37,676
4. In Bombay High Court Rs 4,59,10,66,846 and in Goa bench Rs 3,61,60,495.        

The court said it is not clear how many States have exercised the rule making power under clause (a) of Section 176 for prescribing the form of the application under Section 166(1); 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. Noticeably, even an agent duly authorised by the person injured or the legal representatives of the deceased can also file a claim petition.

"In absence of the exercise of the rule making power under Section 176 of the 1988 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 1988 Act," the bench said. 

The court directed that till the rules are not framed, the High Courts would either issue practice directions or formulate rules of procedure. While filing claim petitions under the 1988 Act, following particulars shall be incorporated:
(i) 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; and
(ii) 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 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, the court added.

The Top Court also directed that while passing an interim or final order for 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, all within a reasonable period of time.

"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 bench added.

The bench further added that 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, would create a dashboard on which the information regarding the amounts lying deposited in connection with the compensation granted under 1988 or 1923 Acts would be regularly uploaded with all details.  

"We direct the High Courts to take up implementation of the directions at the earliest and submit compliance reports to this Court on or before 30th July 2025, so that further directions, if necessary, can be issued. The Registrar Generals, in their report, shall set out the details of the amounts still lying without disbursement," the bench categorically stated.

Case Title: In Re: Compensation Amounts Deposited With Motor Accidents Claims Tribunal And Labour Courts