Issue Cheques only in the name of claimant victims: Madras HC cautions Motor Accident Tribunals [Read Judgment]

Madras High Court has directed all the Motor Vehicle Claims Tribunals to issue ‘Crossed Account Payee’ cheques favouring only the claimant victims and not in the name of anyone else. Justice Vaidyanathan said that appropriate action will be initiated against the erring officials, if any violation is brought to its notice in future.

The Judge made this observation in a Judgment disposing of an appeal by one N. Dileep, an Engineering student who had met with an accident and sustained grievous injuries while travelling as a pillion rider in a two-wheeler  and abus was coming in the opposite direction, hit the motor cycle.

Enhancing the compensation awarded by the MACT, by almost doubling it, the Court also said “It has been brought to the attention of this Court that in the crossed cheques which are issued to the claimants, it is mentioned as “& Co.” instead of “A/c payee”. Such practice has to be avoided by all the Trial Courts and crossing should be made in the cheques only with the endorsement “A/c payee” and not with the endorsement “& Co.” It is made clear that if any violation of the same is brought to the notice of this Court, appropriate action will be initiated against the erring officials.”

The Court also said that the award amount shall be paid to the claimant by the Tribunal in the form of a crossed Account Payee Cheque, favouring only the claimant and it should not be issued in favour of any other person/Company. Registry was also directed to send a Circular to all the Courts dealing with M.C.O.P. cases, directing them to follow the direction in this order.

Crossing a cheque by making two parallel lines with or without such words as “& co” is general crossing.Section 126 of the Negotiable Instruments Act says that ‘Where a cheque is crossed generally, the banker on whom it is drawn shall not pay it otherwise than to a banker’. It means that the payment would not be made through the counter.In this “A/C payee” crossing, the collecting banker is supposed to credit the amount of the cheque to the account of the payee the name mentioned only.

Read the Judgment here.