Supreme Court Appoints Amicus To Give Suggestions To Ensure Compensation From MACTs and Labour Courts Reaches Beneficiaries

The Supreme Court on Friday (July 26) sought suggestions to ensure that the compensation awarded by the Motor Accident Claims Tribunals (MACTs) and labour courts across the country is received by the beneficiaries.

A bench of Justice Abhay Oka and Justice Agustine George Masih appointed Senior Advocate Menakshi Arora as Amicus Curiae in a suo moto case regarding substantial amounts of unclaimed compensation lying with MACTs and labour courts.

“Some directions have to be issued. Just find out and assist us. We can apply those directions to all other states. What we are worried is, there may be very genuine claimants who are entitled to these amounts, maybe because of poverty maybe for other reasons they are not able to withdraw”, the court said.

Earlier, the Supreme Court had issued notice to the State of Gujarat and Gujarat High Court in this matter.

During the proceedings today, Senior Advocate Meenakshi Arora and AOR Vishaka appeared for the Gujarat High Court. They submitted an affidavit filed by the Gujarat HC. As per this affidavit, over Rs. 288 Crores are lying unclaimed in the MACTs and Labour and Industrial courts in Gujarat.

The affidavit, sworn by the Registrar General of the HC, states that HC has been issuing communications to concerned authorities regarding the procedure to be followed regarding unclaimed amounts.

Arora explained that tribunals have the details of the claimant's unless they had moved away or were unresponsive. The Gujarat HC has directed district judges to send fresh notices to claimants regarding unclaimed amounts, she said, adding that the HC is consistently following up on the issue.

She highlighted that the Delhi High Court had addressed concerns about claimants' lawyers withdrawing the compensation amounts using powers of attorney.

Justice Oka wondered why claimants did not come forward to claim their compensation and sought suggestions for possible directions that could be issued at the time of disposing of claim petitions to ensure claimants received their dues.

He highlighted that in workman compensation claims, normally the compensation is deposited in the labour court in advance, and there is an appeal period after disposal of the petition.

Arora noted that migration, especially in workman compensation cases, is one of the causes, as migrant workers may move to their parent states and not pursue their compensation.

Regarding the issue of migration, Justice Oka highlighted another problem that before the amendment of Motor Vehicles Act, 1988 the claim was required to be filed in the same place as the incident happened.

The 1994 amendment to the Motor Vehicles Act amended section 166(2) of the Act to provide an option for the claimants to approach the MACT within the local limits of whose jurisdiction they reside or carry on business or the defendant resides.

Arora then suggested that the claimants be required to give alternative addresses.

“This is only thinking aloud, one will have put one's mind to it, that there should be alternative addresses that must be given, permanent place of residence so that there is an alternative way to connect with the claimants”, she said.

The bench appointed Arora as amicus curiae and listed the matter on September 2, 2024.

Background

The Supreme Court initiated a suo moto writ petition after receiving an email by BB Pathak, a retired District Judge from Gujarat, on May 25, 2024, which highlighted the issue of large sums of unclaimed compensation lying with MACTs and labour courts. According to the email, approximately Rs. 2,000 crores were unclaimed in Gujarat alone, with insufficient efforts made to locate the beneficiaries.

The Supreme Court issued a notice to the State of Gujarat through the Secretary of the Department of Law and Justice and the Registrar General of the Gujarat High Court. Additionally, the court directed the Registrar General of the Gujarat High Court and the Law Secretary of Gujarat to take steps to gather data on the amounts of compensation currently deposited with the MACTs and labour courts in the state.

Case no. – SMW(C) No. 7/2024

Case Title – In Re Compensation Amounts Deposited With Motor Accident Claims Tribunals And Labour Courts