Supreme Court Issues Additional Directions For Disbursement Of Compensation And Expeditious Adjudication Of MACT Claims

The Supreme Court on Tuesday issued a slew of directions regarding disbursement of compensation and expeditious adjudication of motor accident claims by online mechanism.

The bench of Justices SK Kaul and MM Sundresh hearing the writ petition filed by Insurance Company Bajaj Allianz seeking slew of directions in the matter and had in earlier directed the petitioner, to come up with draft directions and guidelines it sought for facilitating compensation disbursement process and expedition of cases before Motor Accidents Claims Tribunal in terms of previous orders of the High Court.

On February 24, 2021 Top Court had decided to consider the issue of payment of victim compensation online pan India while adjudicating cases under Motor Accidents Claims Act and contemplate on the other issues that would help speed up the adjudication process.

The bench while passing the following directions in their order said,

"We categorically hold that all directions passed today must be duly and properly implemented and post implementation the learned Additional Solicitor General be informed."

A. Format For Payment Advised For Remittance Of Compensation To Be Followed Across Country

Considering that a format for payment advised for remittance of compensation has been devised and followed in the Madras High Court and the Rajasthan High Court which has been extracted from the Madras High Court's judgement dated March 11, 2021 in Divisional Manager vs. Rajesh, 2016 SCC Online Mad. 1913, dated 11.03.2021, the bench directed for following the same format across the country.

B. Interest On Disbursement Of Compensation To Beneficiaries To Be Enured To Their Benefit

While the bench did not agree with the suggestion of Amicus Curiae, Mr N Vijayaraghavan as per which the amounts deposited in the Tribunals that were being credited in savings account should be credited to a current account, it said that it was of the view that the amounts should continue to be credited with the savings account to earn interest.

"But we deem it appropriate to issue a general direction that wherever orders are passed for disbursement of compensation to the beneficiaries, any such interest would enure to the benefit of the beneficiaries and would follow the principal amount," court further added.

C. Insurance Company/Depositor To Communicate Factum Of Deposit Expeditiously To MACT With Copy To Beneficiary

For putting the insurance company's liability to an end, directions were also issued to the insurance company/depositor to communicate the factum of deposit forthwith/expeditiously to the concerned MACT with a copy to the beneficiary on deposit of amount.

D. District Medical Board To Follow Guidelines Issued By Ministry of Social Justice and Empowerment

With regards to issuance of certification on disability of victims, the bench said that, "it is reiterated that the guidelines laid down by this Court in Raj Kumar v. Ajay Kumar and Anr., (2011) 1 SCC 343 mandatorily must be followed by the MACTs, in respect of loss of income due to injury/disablement."

To bring Pan India uniformity, directions were also issued to the District Medical Board to follow the guidelines issued by the Ministry of Social Justice and Empowerment, Government of India vide Gazette Notification S. No. 61, dated 05.01.2018, for issuance of disability Certificate.

"The consequence is that the MACT would ascertain that the permanent disability certificate issued by the District Medical Board or body authorized by it is in accordance with the Gazette Notification alone. Once the certificate is issued in this manner, the same can be marked for purposes of being taken into consideration as evidence without the necessity of summoning the concerned witness to give formal proof of the documents unless there is some reason for suspicion on the document," court noted.

E. Aspect Of Disparity In TDS Certificate Can Be Redressed By Directions To Legal Services Authority Or Any Agency/Mediation Group To Assist The Claimant In Obtaining A Pan Card And Amending The Formats Across The Country

With regards to the aspect of disparity in the Tax Deduction at Source (TDS) certificate in Motor Accident Claims, wherein from 10% to 20% dependent on whether the claimants have a Pan Card or not, the bench said that the same can be redressed by issuance of directions to the Legal Services Authority or any Agency/Mediation Group to assist the claimant for obtaining a Pan Card, where the claimant does not have one, in order to avoid 20% deduction of tax at source.

Noting that the that the format of the applications for compensation and motor accidents claims was being modified by inserting the relevant column just after the requirement to set out whether the claimant:

• Is income tax assessee or not, and

• Has a Pan Card or not and in case has a Pan Card to provide the PAN No. and in case the application is so pending, to provide the application/Reference No

The bench directed for suitably amending the formats of the applications across the country to facilitate this process

F. Registrar General Of High Courts To Show Compliance Of Directions Passed On March 16, 2021

The bench noted that only 13 states have complied with the directions passed on March 16, 2021 for circulation of those directions to the local Police stations, MACT Courts to improve the efficiency.

In view of the recalcitrant attitude of the States, the bench has directed the Registrars General of the High Courts of these States to ensure implementation and submit a compliance report to Additional Solicitor General Mr. Jayant K. Sud.

"It would also be appropriate that the Registrars General would call upon the DGPs. of each State to appoint a nodal officer for submitting the status reports as and when called upon to do so," the bench further noted.

Further directions have also been issued to the Registrars General to interact with the Judicial Academy for conducting training and awareness sessions periodically not only for the Presiding Officers of the MACTs. but also Police Officers, nodal persons of insurer,Presiding Officers of Lok Adalat/ Online Mediation Group etc. to enhance the awareness in implementation of the directions.

G. Insurance Companies To Develop Common Mobile App Within 2 Months From Date Of Order

On the aspect of 26 insurance companies developing a common mobile App, the bench said that, "The insurance company cannot wriggle out of the earlier directions. Either they are able to develop it or we would call upon the Government to develop an App. which would have to be imposed on the insurance companies."

H. Alternative Mechanism To Ensure Availability Of Sufficient Pool With The State Corporations

With regards to the directions passed for the Additional Solicitor General to look into the feasibility of withdrawing exemptions given to the vehicles of the State Corporation(s) for insurance, or in the alternative to create a mechanism to ensure that a sufficient fund pool was available with these corporations for meeting their liabilities towards the claimants, the bench considered ASG's submissions that it was not feasible to withdraw exemptions.

The bench thereafter directed for devising an alternative to create a mechanism to ensure availability of sufficient fund pool with the State Corporations.

Considering any exemptions from operation of u/s 146(1) and (3) of vehicles owned by any of the authorities is coupled with the proviso, the bench directed the appropriate Government 3 months to create the funds to cover the requirement of disbursement of compensation.

The bench further directed for the fund to initially consist of at least as much as the liability which has arisen on account of determination for the last 3 financial years.

"In case, this is not so done, in view of the provision as it stands, we direct that the exemption benefit shall not be made available and the authorities will not be able to claim such exemption," the bench further said.

As ASG apprised the Court that Central Mediation Act was in public domain which held a similar provision, the bench put up on hold the directions of allowing the settlement of claims by online mediation.

"The ADR methodology has been found to be extremely effective in these cases. Some suggested directions have been set out but since deferment is sought in this behalf we will consider the same on the next date," bench said.

The matter will now be heard on January 27, 2021.

Case: Bajaj Allianz General Insurance Company Private Ltd. vs. Union of India [WPC 534/2020]

Coram: Justices Sanjay Kishan Kaul and MM Sundresh

Citation : LL 2021 SC 662

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