Motor Accident Claims: Supreme Court Asks Centre To Consider Withdrawing Insurance Exemption For State Public Transport Corporations

Supreme Court has recently asked the Central Government to examine the possibility of withdrawing exemption from insurance for State Corporations that run public transport, who are unable to pay compensation for a long period of time and running in losses.

As an alternative, the Bench has asked the Government to examine the possibility of having a mechanism to ensure that a sufficient fund pool is available with these Corporations for meeting their liabilities towards the claimants.

"In fact, there are numerous illustrations where the vehicles had to be attached for coercive recovery from the Corporations to make payments to the claimants. Learned ASG would examine the possibility of either withdrawing the exemption or for a mechanism to ensure that sufficient fund pool is available with these Corporations for meeting their liabilities towards the claimants." the Bench said.

A Division Bench comprising Justice SK Kaul and Justice Hrishikesh Roy issued directions while hearing a matter pertaining to speedy disbursal of compensation to victims by the Motor Accidents Claims Tribunal.

The Bench has also granted two months' time to the government to submit the progress made in developing an online platform accessible to the tribunals, police authorities and insurers throughout India, for handling accident reports and claims.

The time was granted after ASG Jayant Sud informed the Court that practically all the 26 insurance companies have come on board so that a common App is developed.

ASG has been asked to respond to the following two aspects as recorded by Supreme Court in its previous order dated 16th March:

• Tamil Nadu and NCT of Delhi have already progressed from having email accounts for submission of accident reports by the police to the tribunal and the insurer to operating an online platform/website for submission of accident reports under Section 159. These online platforms/websites shall be suitably be modified for submission of claimants' application for compensation under Section 166 of the Act as well insurers' response to the accident report or the claim petition as the case may be.

• Each State having an independent online platform for submission of accident reports, claims and responses to claims, will hamper efficient adjudication of claims, especially where the victim of the accident is not a resident of the State where an accident has occurred. Therefore, Central Government shall develop an online platform accessible to the tribunals, police authorities and insurers throughout India.

The Bench has also asked the States to communicate to the Government in a month if the directions issued by the Court have been circulated to the local police stations and the MACT Court.

The Bench further asked the ASG to examine and make suggestions on the aspect of having a certificate of disability of victims through the district medical board to bring some uniformity into it and to keep out stock witnesses as medical experts.

Suggestions for Online Mediation: The Bench also made note of suggestions made by Senior Counsel N.L. Raja that online mediation for the settlement of motor accident claims through the web portals is also a way forward. Further, the Senior Counsel submitted that he would like to make suggestions which will be forwarded to the ASG within two weeks for consideration by the Government.

The Bench observed that,

"What appears from his submission is that the online mediation groups would be advising the insurance companies and it would be binding on the insurance companies while the claimant has the option to accept it or not to accept it. Since this will be backed by reasons through these online mediation organisations, the chances of the claimants accepting it are quite high."

The Bench also directed the intervening applicants "who claim to have expertise in MACT matters" to make their suggestions to the Additional Solicitor General within 10 days and refused to permit intervention in the present matter.

The Bench has said that the Additional Solicitor General may examine whether they have any merits or not and whether the further restructuring of directions is required.

Case Title: Bajaj Allianz General Insurance Company Private Limited v. Union of India & Ors.

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