In a significant step towards ensuring justice and efficiency, the Supreme Court of India has issued comprehensive directions to guarantee that compensation amounts under the Motor Vehicles Act, 1988 and the Workmen's Compensation Act, 1923 are directly credited to the bank accounts of the rightful claimants.
The Court initiated this action after receiving a letter from BB Pathak, a retired District Judge from Gujarat, highlighting a disturbing trend—large sums of compensation were lying unclaimed in courts. Acting on this, the Court took suo motu cognizance under the case titled “In Re: Compensation Amounts Deposited With Motor Accident Claims Tribunals & Labour Courts.”
"Though the claimants are held entitled to these amounts, they have not withdrawn the same. The fact that so many successful claimants have been deprived of compensation is very disturbing. It is necessary to find a solution."
— Supreme Court Bench of Justice Abhay S Oka and Justice Ujjal Bhuyan
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The Court observed shocking statistics. Over ₹282 crores remain unclaimed in Motor Accident Claims Tribunals (MACTs) and ₹6.61 crores in Labour Courts in Gujarat alone. Similarly, Uttar Pradesh has about ₹239 crores in MACTs and ₹92 crores in Labour Courts. West Bengal, Maharashtra, and Goa also reported significant unclaimed compensation amounts.
To address this issue, the Court has laid down several clear instructions:
Complete Claimant Details: All claim petitions must include names, permanent and local addresses, Aadhaar and PAN details, and email IDs of claimants and legal representatives.
Bank Account Verification: Before disbursing compensation, claimants must provide certified bank account details or cancelled cheques. The MAC Tribunal will verify these details before processing payments.
Direct Transfer Orders: Tribunals must ensure compensation is transferred directly to claimants’ verified bank accounts.
Regular Updates: Beneficiaries must update their bank details and contact information if there are any changes.
Investment of Deposited Funds: If compensation is to be held temporarily, it must be invested in fixed deposits in nationalised banks, with auto-renewal instructions.
Digital Dashboard: A dashboard will be created with help from High Courts and state governments to display real-time data on compensation deposits under the 1988 and 1923 Acts.
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"All the High Courts shall issue administrative directions... to initiate a massive drive to ascertain the whereabouts of the persons who have been held to be entitled to receive compensation."
— Supreme Court
The Court emphasized using District and Taluka Legal Services Authorities and para-legal volunteers to trace the beneficiaries. It also directed State Governments to assist through local police and revenue officers.
High Courts have been instructed to ensure compliance and submit reports by July 30, 2025, while the Registry will forward these reports to Advocate Vishakha. Senior Advocate Meenakshi Arora assisted as amicus curiae.
“Until State Governments make rules under Section 176 of the MV Act, these directions shall guide the MAC Tribunals and Labour Courts.”
— Supreme Court
Case : In Re Compensation Amounts Deposited with Motor Accident Claims Tribunals and Labour Courts
