In Re Compensation Amounts Deposited With Motor Accident Claims Tribunals And Labour Courts vs. NaN

2025 INSC 530
REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION

SUO MOTU WRIT PETITION (C) NO. 7 OF 2024


IN RE: COMPENSATION AMOUNTS DEPOSITED WITH
MOTOR ACCIDENT CLAIMS TRIBUNALS AND LABOUR
COURTS


ORDER
ABHAY S. OKA, J.

1) An email was received by this Court from Shri B. B.
Pathak, a retired District Judge from Gujarat. In the e-mail
th
dated 25 May 2024, Shri Pathak pointed out that large
amounts payable by way of compensation under the Motor
Vehicles Act, 1988 (for short, ‘the 1988 Act’) and the
Workmen’s Compensation Act, 1923 (for short, ‘the 1923
Act’) are lying deposited with the Motor Accident Claims
Tribunals (for short, ‘the MAC Tribunals’) and Labour
Courts. Hon’ble the Chief Justice of India passed an
administrative order on the basis of information received
Signature Not Verified
Digitally signed by
ASHISH KONDLE
Date: 2025.04.22
16:42:00 IST
Reason:
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 1 of 15


by e-mail from Shri B. B. Pathak for registration of the
present Suo Motu Writ Petition.
th
2) On 8 July 2024, this Court issued notices to the
State of Gujarat as well as the Registrar General of Gujarat
High Court, directing them to produce before this Court
the data of compensation amounts lying deposited with the
MAC Tribunals as well as before the Commissioners under
th
the 1923 Act. By the order dated 26 July 2024, this Court
requested Ms. Meenakshi Arora, the learned senior
counsel appearing for the High Court of Gujarat, to assist
the Court as amicus curiae. On the basis of a preliminary
note containing recommendations submitted by the
learned senior counsel appointed as amicus curiae,
notices were issued to the Registrar Generals of the High
Courts at Allahabad, Bombay, Calcutta, Delhi and Madras
along with copies of earlier orders passed by this Court.
Thereafter, time was granted to the High Courts to file
affidavits/responses.
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 2 of 15


3) Ms. Vishakha, advocate-on-record representing the
High Court of Gujarat, has filed a compilation of responses
received from various High Courts along with suggestions
of the learned senior counsel appointed as amicus curiae.
To understand the magnitude of the problem, in paragraph
5 on page 2 of the compilation submitted by Ms. Vishakha,
the figures of unclaimed amounts have been set out.
Paragraph 5 reads thus:
“At the very outset, the details pertaining
to the unclaimed amounts as provided in
the affidavits received are as under:

4) In the affidavits, the respective High Courts have
given their own suggestions. Different High Courts have
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 3 of 15


adopted different methods to deal with the issue. Some of
the High Courts appointed committees to submit
recommendations. The committee appointed by the High
Court of Judicature at Bombay has given details of the
procedure followed in such cases in different countries.
The report of the High Court of Judicature at Bombay
refers to paragraph 742 of the Civil Manual applicable to
the Courts in Maharashtra, which incorporates the
requirement of deposit of unclaimed amounts into the
treasury of the State Government. We have also carefully
perused the recommendations of the learned senior
counsel appointed as amicus curiae. She has summarised
the best practices followed by various High Courts and has
incorporated the same in her recommendations.

5) The issue arising in this suo motu petition is of great
concern. The amounts represent the compensation
granted to claimants in the claims filed under the 1988
and 1923 Acts. Though the claimants are held entitled to
these amounts, they have not withdrawn the same. The
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 4 of 15


fact that so many successful claimants have been deprived
of compensation is very disturbing. It is necessary to find
a solution.
6) There is a provision under Section 166 of the 1988
Act for making an application for compensation to the MAC
Tribunal established under the said enactment. Sub-
Section (1) of Section 166 reads thus:
“
166. Application for compensation
.—(1) An
application for compensation arising out of
an accident of the nature specified in sub-
section (1) of Section 165 may be made—
( a ) by the person who has sustained the
injury; or
( b ) by the owner of the property; or
( c ) where death has resulted from the
accident, by all or any of the legal
representatives of the deceased; or
( d ) by any agent duly authorised by the
person injured or all or any of the legal
representatives of the deceased, as the case
may be:
Provided that where all the legal
representatives of the deceased have not
joined in any such application for
compensation, the application shall be made
on behalf of or for the benefit of all the legal
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 5 of 15


representatives of the deceased and the legal
representatives who have not so joined, shall
be impleaded as respondents to the
application:
Provided further that where a person
accepts compensation under Section 164 in
accordance with the procedure provided
under Section 149, his claim petition before
the Claims Tribunal shall lapse. ”

6.1 Under Section 176, rule making powers has been
conferred on the State Governments to make rules
providing for the form of application for claims for
compensation and the particulars it may contain. Section
176 reads thus:
“
176. Power of State Government to make
rules.—A State Government may make rules
for the purpose of carrying into effect the
provisions of Sections 165 to 174, and in
particular, such rules may provide for all or
any of the following matters, namely—
( a ) the form of application for claims for
compensation and the particulars it may
contain, and the fees, if any, to be paid in
respect of such applications;
( b ) the procedure to be followed by a
Claims Tribunal in holding an inquiry
under this Chapter;
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 6 of 15


( c ) the powers vested in a Civil Court which
may be exercised by a Claims Tribunal;
( d ) the form and the manner in which and the
fees (if any) on payment of which an appeal
may be preferred against an award of a
Claims Tribunal; and
( e ) any other matter which is to be, or may be
prescribed. ”

7) It is not clear how many States have exercised the
rule making power under clause (a) of Section 176 for
prescribing the form of the application under Section
166(1). Applications for compensation can be made by the
persons who have sustained injuries or by the owners of
the damaged property and in case of fatal accidents, by all
or any of the legal representatives of the deceased. Even
an agent duly authorised by the person injured or the legal
representatives of the deceased can also file a claim
petition.
8) In absence of the exercise of the rule making power
under Section 176 of the 1988 Act by the State
Governments, the respective High Courts can either frame
rules of procedure or issue practice directions for ensuring
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 7 of 15


that material details are disclosed while filing claim
applications under Section 166(1) of the 1988 Act.
9) Till the rules are not framed, the High Courts shall
either issue practice directions or formulate rules of
procedure by incorporating the following provisions:

a) While filing claim petitions under the 1988 Act,
following particulars shall be incorporated:
(i) Names and addresses (local and
permanent) of the injured persons or the
owners of the damaged property, as the case
may be, their Aadhar and PAN details and
email-id, if any; and
(ii) Names and addresses (local and
permanent) of all the legal representatives
of the deceased victim of the accident who
are claiming compensation, their Aadhar
and PAN details and email-id, if any;
(b) If the aforesaid details are not furnished, the
registration of the application should not be
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 8 of 15


refused on that ground, but MAC Tribunals at the
time of issuing notice may direct the applicant(s)
to furnish the information and make the issue of
the notice subject to making compliance;
(c) While passing an interim or final order of grant of
compensation, the MAC Tribunals shall call upon
the person or persons held entitled to receive
compensation, to produce their bank account
details along with either a certificate of the banker
giving all details of the bank account of the person
or persons entitled to receive the compensation
including IFS Code, or a copy of a cancelled
cheque of the bank account. The Tribunal shall
call upon the claimants to produce the documents
within a specified reasonable time;
(d) A further direction shall be issued to the persons
entitled to receive compensation to keep on
updating information regarding the bank
accounts, email id, in case there is any change;
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 9 of 15


(e) In the event a consent award or consent order is
made, the MAC Tribunals may direct the deposit
of the compensation amount ordered to be
released to the claimants directly to the bank
accounts of the persons held entitled to receive
compensation. However, the consent terms must
contain all relevant account details of the persons
entitled to compensation in accordance with
clause (c) above. The account details can also be
incorporated in the order passed for the
disbursement of the amount on the basis of a
compromise between the parties. In case of
compromise before the Lok Adalats, the MAC
Tribunal, on the basis of the settlement, shall pass
a consequential order in the above terms;
(f) It shall be the duty of the learned Judges presiding
over the MAC Tribunal to verify from the certificate
issued by the banker and ascertain whether the
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 10 of 15


account is of the persons held entitled to receive
compensation;
(g) The MAC Tribunals, while passing orders of
withdrawal/disbursement, shall, in the ordinary
course, pass an order of transfer of the requisite
amounts directly to the bank account of the
person/s entitled to receive compensation as per
the account details furnished. If there is a long gap
between the date of furnishing the account details
and the date of filing application for withdrawal of
the amount, the Tribunal will be well advised to
get fresh account details of the claimants;
(h) Whenever the MAC Tribunal passes an order of
deposit of compensation amount with the
Tribunal, there shall be a direction issued to
invest the amounts to be deposited in fixed deposit
with any nationalised bank and the fixed deposit
shall be with the standing instructions to the bank
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 11 of 15


to renew the same after periodical intervals till
further orders are passed by the Tribunal;
(i) Similarly, practice directions/rules be framed in
respect of adjudication made under the 1923 Act.
The above directions issued while passing awards
in claims under the 1988 Act shall be applied in
case of the claims for compensation under the
1923 Act;
(j) The Central Project Co-ordinator of e-court project
or Registrar (Computer/IT) of the High Courts, as
the case may be, with the help of the State
Government, shall create a dashboard on which
the information regarding the amounts lying
deposited in connection with the compensation
granted under 1988 or 1923 Acts shall be
regularly uploaded with all details. It will help all
concerned to implement the directions issued
under this order;
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 12 of 15


(k) All the High Courts shall issue administrative
directions to the MAC Tribunals and
Commissioners under the 1923 Act to initiate a
massive drive to ascertain the whereabouts of the
persons who have been held to be entitled to
receive compensation, but have not taken the
same. This shall be done by taking the assistance
of the District and Taluka Legal Services
Authorities and para-legal volunteers;
(l) The State Governments shall provide assistance to
the Legal Services Authorities of the local police
officers/revenue officers of the district and taluka
to trace the claimants who are held entitled to
receive compensation;
(m) The State Legal Services Authorities shall monitor
compliance with the directions issued in terms of
clauses (k) and (l) above and report compliance
within a period of four months from today.
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 13 of 15


10) These directions shall continue to bind the MAC
Tribunals and the Commissioners under the 1923 Act till
rule-making power is properly exercised by the
Government. The Registry shall forward copies of this
order to the Registrar Generals of all the High Courts as
well as the Member Secretaries of the State Legal Services
Authorities of all the States. We direct the High Courts to
take up implementation of the aforesaid directions at the
earliest and submit compliance reports to this Court on or
th
before 30 July 2025, so that further directions, if
necessary, can be issued. The Registrar Generals, in their
report, shall set out the details of the amounts still lying
without disbursement. The Registry shall forward soft
copies of the reports to Ms. Vishakha, AOR.

11) We make it clear that if the Rules framed by the State
Government or practice directions already issued are
consistent with the above directions, the Rules or the
practice directions, as the case may be, shall be followed
notwithstanding this order.
SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 14 of 15


12) We make it clear that all the High Courts are free to
take measures in addition to what is directed under this
order to ensure that the pending amounts reach the
claimants.
th
13) List for reporting compliance on 18 August 2025.

……………………..J.
(Abhay S. Oka)

……………………..J.
(Ujjal Bhuyan)
New Delhi;
April 22, 2025.

SUO MOTU WRIT PETITION (C) NO.7 OF 2024 Page 15 of 15