The Supreme Court of India has directed all High Courts and Motor Accident Claims Tribunals (MACTs) to ensure that compensation awarded to victims of motor accidents is directly transferred to their bank accounts. This step aims to reduce delays, simplify the process, and ensure timely disbursement of compensation to claimants.
“The general practice followed by the insurance companies, where the compensation is not disputed, is to deposit the same before the Tribunal. Instead of following that process, a direction can always be issued to transfer the amount into the bank account(s) of the claimant(s) with intimation to the Tribunal,” the Court stated.
The Supreme Court bench, comprising Justice JK Maheshwari and Justice Rajesh Bindal, emphasized that claimants should provide their bank account details at the initial stage of the claim process. This would allow tribunals to issue directions for direct transfers after awards are passed.
"For that purpose, the Tribunals at the initial stage of pleadings or at the stage of leading evidence may require the claimant(s) to furnish their bank account particulars to the Tribunal along with the requisite proof, so that at the stage of passing of the award the Tribunal may direct that the amount of compensation be transferred in the account of the claimant and if there are more than one then in their respective accounts."
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The Court further stressed that if claimants do not have bank accounts, they must be required to open one individually or jointly with family members. It also mandated that any change in bank account details during the claim process should be promptly updated with the Tribunal.
The ruling comes in response to delays often faced by claimants in receiving compensation. Under the existing system, insurance companies deposit the awarded compensation with the Tribunal, and claimants must file applications for withdrawal. This bureaucratic process is time-consuming and leads to loss of accrued interest.
The Supreme Court recognized these issues and proposed that transferring funds directly into the claimants' bank accounts would prevent unnecessary delays and streamline the entire process.
For cases involving minors or those requiring fixed deposits, the Court clarified that banks must ensure compliance and report to the Tribunal. This prevents misuse and ensures that the funds are utilized for the welfare of the affected individuals.
“The transfer of the amount in the bank account, particulars of which have been furnished by the claimant(s), as mentioned in the award, shall be treated as satisfaction of the award. Intimation of compliance should be furnished to the Tribunal.”
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This significant ruling was made while deciding an appeal in the case of Parminder Singh vs. Honey Goyal & Others. The appellant, Parminder Singh, suffered 100% disability due to a motor vehicle accident in 2006 at the age of 21. Initially, the Tribunal awarded him a compensation of ₹5,16,000, which was later enhanced by the High Court to ₹15,25,600.
However, the Supreme Court further increased the compensation, considering loss of income, medical expenses, special diet, attendant charges, pain and suffering, future medical expenses, and loss of marriage prospects. The final amount awarded to the appellant was ₹36,84,000.
Directive to High Courts and Judicial Academies
The Supreme Court also directed that a copy of this order be sent to:
Registrars General of all High Courts – To ensure compliance by the Chief Justices and respective Tribunals.
Directors of National and State Judicial Academies – To implement training programs for judicial officers regarding the new system.
With thousands of motor accident claims pending across India, the Court acknowledged the increasing backlog. It emphasized that modern banking systems and digital transactions should be leveraged to improve efficiency.
"This is an era of technology where artificial intelligence and digital transactions are transforming financial processes. The banking system is now capable of ensuring instant fund transfers. The same should be applied in motor accident compensation disbursements to benefit claimants."
This judgment marks a significant shift in the way motor accident claims are processed in India. By eliminating unnecessary delays and ensuring direct fund transfers, the Supreme Court has set a precedent that will benefit thousands of accident victims. The ruling not only enhances the efficiency of claim disbursement but also reinforces the principles of justice and fairness in the judicial system.
Case Title: PARMINDER SINGH VERSUS HONEY GOYAL AND OTHERS
