Summary
In a suo motu writ petition prompted by a retired District Judge's email about large compensation amounts under the Motor Vehicles Act, 1988 and the Workmen's Compensation Act, 1923 lying unclaimed with Motor Accident Claims Tribunals and Labour Courts, the Court, noting that few States appear to have framed rules under Section 176 of the 1988 Act, directed all High Courts to issue practice directions or rules requiring claimants' identification and bank details, direct bank transfer of compensation, fixed-deposit investment of deposited amounts, a dashboard of undisbursed amounts, and a drive with the Legal Services Authorities to trace claimants.
Issues
- What measures should be adopted so that compensation awarded under the Motor Vehicles Act, 1988 and the Workmen's Compensation Act, 1923, but lying deposited with Tribunals and Labour Courts, actually reaches the successful claimants.
- Whether, in the absence of State rules under Section 176 of the 1988 Act prescribing the form and particulars of claim applications, High Courts may frame rules of procedure or issue practice directions to that end.
Provisions considered
- Section 166(1), Motor Vehicles Act, 1988Identifies who may apply for compensation (the injured person, the owner of damaged property, the legal representatives of the deceased, or their authorised agent). The directions require claim petitions under this provision to carry the names, addresses, Aadhaar, PAN and email details of all such claimants. (¶¶ 6, 7, 8, 9)
- Section 176, Motor Vehicles Act, 1988Confers rule-making power on State Governments, including as to the form and particulars of claim applications (clause (a)). It being unclear how many States had exercised this power, the Court held that until rules are framed the High Courts shall issue practice directions or rules of procedure, and that its directions bind Tribunals until the rule-making power is properly exercised. (¶¶ 6.1, 7, 8, 9, 10, 11)
- Adjudication by Commissioners (general), Workmen's Compensation Act, 1923Unclaimed compensation under this Act lying with Labour Courts formed part of the problem; the directions framed for Motor Accident Claims Tribunals were extended to claims under the 1923 Act and to the Commissioners under it. (¶¶ 1, 5, 9, 10)
Held
- The deposited amounts represent compensation awarded to claimants under the 1988 and 1923 Acts which the claimants, though held entitled, have not withdrawn; that so many successful claimants have been deprived of compensation is very disturbing and a solution is necessary. (¶¶ 3, 5)
- It is unclear how many States have exercised the rule-making power under Section 176(a) to prescribe the form of claim applications under Section 166(1). In the absence of such rules, High Courts may frame rules of procedure or issue practice directions to ensure that material details are disclosed when claim applications are filed. (¶¶ 7, 8)
- Until rules are framed, High Courts shall issue practice directions or rules incorporating: (a) names, local and permanent addresses, Aadhaar, PAN and email details of all claimants in claim petitions; (b) registration not to be refused for want of these details, but notice may be made subject to compliance; (c) at interim or final award, claimants to furnish bank account details with a banker's certificate (including IFS code) or a cancelled cheque within a reasonable time; (d) claimants to update bank and email details; (e) in consent awards, including Lok Adalat settlements, compensation may be directed to be deposited directly into the claimants' accounts, with account details recorded in the consent terms or disbursement order; (f) presiding Judges to verify from the banker's certificate that the account belongs to the person entitled; (g) withdrawal/disbursement orders to ordinarily direct transfer straight to the claimant's account, with fresh details taken if there has been a long gap; (h) amounts ordered to be deposited with the Tribunal to be placed in fixed deposit with a nationalised bank with standing instructions for periodic renewal; (i) the same directions to apply to adjudications under the 1923 Act. (¶ 9)
- Further directions: (j) the e-courts project coordinator or Registrar (Computer/IT) of each High Court, with State help, to create a dashboard regularly updated with details of amounts lying deposited; (k) High Courts to direct Tribunals and Commissioners to launch a massive drive, with District and Taluka Legal Services Authorities and para-legal volunteers, to trace persons held entitled who have not collected compensation; (l) State Governments to assist the Legal Services Authorities through local police and revenue officers; (m) State Legal Services Authorities to monitor compliance with (k) and (l) and report within four months. (¶ 9)
- These directions bind the Tribunals and the Commissioners under the 1923 Act until the rule-making power is properly exercised by the Government. Where existing State rules or practice directions are consistent with them, those rules or directions prevail; High Courts are free to take additional measures to ensure the pending amounts reach claimants. (¶¶ 10, 11, 12)
Result
Directions issued; Registry to forward the order to the Registrar Generals of all High Courts and the Member Secretaries of all State Legal Services Authorities; High Courts to implement the directions at the earliest and file compliance reports by 30 July 2025 setting out the amounts still lying undisbursed; matter listed for reporting compliance on 18 August 2025.