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February 8, 2022

SC: Govt must Look into TDS deducted from Motor Accident Compensation Awards & lying as Unclaimed

SC: Govt must Look into TDS deducted from Motor Accident Compensation Awards & lying as Unclaimed

Fact and Issue of the case

The Court is spending valuable judicial time to streamline the system only because a very large part of pendency of litigation is in the field of motor accidents claims compensation and the beneficiaries do not get the amounts in time. What is really the administrative tuning required between different stakeholders, has come in the lap of the Court and the Court is only endeavouring to coordinate and give a nudge to the stakeholders to ensure that system works in an efficient manner. We say so as once again the report filed by the learned ASG is not on record and one of the aspects pointed out by him is that everything comes a day before. We cannot, but castigate all concerned persons for believing they have a walk in time anytime they want to give inputs. we expect the inputs to be given in time stipulated by the learned ASG and not a day before the Court hearing so that we have the benefit of the report. Our patience on this issue is running thin and thus we make it clear that henceforth if time schedules are not followed, they will be visited with exemplary costs which will not be small amounts. We in fact call upon learned ASG on the next date to point out with every report henceforth as to who are the parties who have not responded in time and we will accordingly impose exemplary costs on them. So all stakeholders please take notice of this fact.

Observation of the Tribunal

An additional report has been filed by Mr. N. Vijayaraghavan, learned Amicus curiae expressing some difficulties arising from directions given by us on 16.11.2021 for maintenance of Savings Bank Accounts instead of current accounts. He say so on the basis of some difficulties experienced. These difficulties in turn have arisen from some unfortunate aspects which have come to notice on enquiry in the State of Tamil Nadu of misuse of funds and Madras High Court is in seisin of the matter.

In view of the inevitable time lag between deposit of the award and actual disbursement, it is stated that accrued interest arising in savings Bank Accounts (something which we intended to benefit the claimants), there appears to be a stated problem in coordinating the exact accrued interest amounts with the claims and it is submitted that the total accrued interest in 328 MACTs in the State of Tamil Nadu and Puducherry is more than Rs. 40 crores. This fund is thus stated to be just lying in the account which is not disbursed and there is lack of proper identification as to whom the amount should be disbursed. Misuse of these amounts has come to light to the extent of 1.5 crores and 33 lakhs in two MACT courts and the matter as stated above is being investigated under the supervision of the Maras High Court.

On the reading of the aforesaid suggestion it thus appears that the MACT Court seems to be seeking to wash their hands off because of the amounts being deposited in the Courts. That itself cannot require a change of direction as responsibilities have to be performed. However, the alternative suggestion made is that if the amounts can be kept in a current account but with general directions that they should be placed in FDR initially for 91 days to be kept renewed (practice followed in many Courts), it will be easier to identify the interest with the claimants amount. This is an aspect which will be examined by learned ASG who would revert to us on the same.

In order to speed up the progress, in para 23 of this report three suggestions have been made by learned Amicus curiae for disbursement of the amounts:

a) claims settled by way of Lok Adalat or Mediation compromise without any minor’s interest, it can be directed that amounts should be directly disbursed to the savings account details of the claimants ;

b) in case of contested awards where the insurance company/transport corporations/others accept the awards and no appeal is filed, with no minor’s interest involved, a direction to deposit the awarded sum by way of Direct Bank Transfer (NEFT/RTGS) the bank accounts of claimants.

c) Where minor interest is involved or where the MACT is inclined to secure compensation by way of deposits, the MACT may direct deposit of awarded sum in current account of MACT along with standing instructions to place them in a fixed deposit. It is his submission that the aim is to obviate the need for deposit in accounts with the MACT.

This methodology is something which in the aforesaid conspectus learned Amicus Curiae will examine and come back to us on this issue. In view of the directions aforesaid, except of creating of a fund, requiring about two months time, list for further directions on 31.03.2022.


The court has listed the above case for further dicrecton on 31/03/2022

Read the full order from below


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