Motor Accident Claim Tribunal Cases: Supreme Court Calls for Timely Compensation to Avoid Financial Loss

Introduction

The Supreme Court has ruled that any delay in releasing compensation in motor accident cases results in a financial loss to the claimant due to the loss of interest. The judgment, delivered by a Bench comprising Justice J.K. Maheshwari and Justice Rajesh Bindal, emphasized the necessity of timely disbursement of compensation to accident victims in accordance with the Motor Vehicles Act, 1988.

The ruling came in response to a Civil Appeal against the Punjab & Haryana High Court's decision, where the claimant sought an enhancement of compensation for injuries sustained in a motor accident. The Supreme Court disposed of the appeal while issuing directives to ensure compliance by all courts and tribunals regarding compensation payments.

Supreme Court emphasizes timely compensation in Motor Accident Claim Tribunal cases to prevent financial loss for claimants.

Facts of the Case

The appellant, Parminder Singh, was involved in a road accident in 2014 when his motorcycle was hit by a car coming from the opposite direction. As a result, he suffered grievous injuries leading to quadriplegia (paralysis of all four limbs). At the time of the accident, he was 21 years old and pursuing studies to become a veterinary doctor. A criminal case was registered against the driver of the car. The appellant incurred medical expenses amounting to ₹2,66,000 and was declared 100% disabled by an orthopedic surgeon.

The Motor Accident Claims Tribunal (MACT) assessed his total compensation at ₹5,16,000, including ₹2,00,000 for 100% disability. Dissatisfied with this award, the appellant filed an appeal before the Punjab & Haryana High Court.

The High Court enhanced the compensation from ₹5,16,000 to ₹15,25,600. However, the appellant remained dissatisfied and approached the Supreme Court for further enhancement.

Supreme Court’s Observations on Motor Accident Claim Tribunal Cases

The Supreme Court stressed that delays in releasing compensation deposited in tribunals lead to a direct financial loss for the claimant.

Issues with Delayed Compensation

The Court observed that substantial amounts remain deposited with tribunals as claimants often do not approach them for release due to various reasons. This issue is particularly common in Motor Accident Claim Tribunal Cases, where victims suffer financial hardships due to delayed compensation.

The bench noted:

"Substantial amount of compensation in motor accident cases remains deposited in the Tribunal as the claimant(s) may not have approached the Tribunal for release thereof for various reasons. Delay for any reason in release of compensation in motor accident cases by the Tribunal to the claimant(s), where the amount is deposited in Tribunal, as directed, results in loss of interest to the claimant(s). In case the aforesaid process is followed, the gap would be bridged."

Purpose of the Motor Vehicles Act

The Court emphasized that the compensation under the Motor Vehicles Act is intended to provide financial support to accident victims and their families. Delayed disbursement defeats the primary objective of this beneficial legislation.

The Court observed:

"The real object of this beneficial legislation, namely to compensate for the loss of an earning member of the family or for the injuries suffered by the claimant(s), will be achieved and compensation can be disbursed without any delay."

Directions to Banks

The Supreme Court also directed that when compensation is transferred to a claimant's bank account, a specified portion should be kept in a fixed deposit to protect the claimant's long-term financial security. The bank must report compliance to the tribunal. This process should be followed in all cases where compensation payments are made.

The bench further stated:

"We may add that directions are being issued for bank transfer of the amount of compensation in motor accident cases, but the Courts/Tribunals can always follow this process in any matter, whenever any amount is to be paid by one party to another, however, ensuring proper compliance."

Supreme Court’s Directions in Motor Accident Claim Tribunal Cases

Timely compensation is crucial in Motor Accident Claim Tribunal Cases, as delays can lead to financial loss for claimants. The Supreme Court has issued strict directives to ensure tribunals release compensation without unnecessary delays.

Supreme Court’s Directions

1. Timely Release of Compensation - All tribunals must ensure that compensation is released without undue delay.

2. Compliance by Banks - Banks must ensure compliance with deposit guidelines when transferring compensation to claimants.

3. Protection of Claimant’s Interest - A portion of the compensation must be kept in a fixed deposit to secure the financial future of the claimant.

Supreme Court's Holding

The Supreme Court disposed of the appeal while reaffirming the claimant’s right to full and timely compensation. The ruling establishes strict accountability on tribunals and banks to ensure that claimants receive their rightful compensation without financial loss due to delays.

Referred Judgments

Haryana State Industrial Development Corporation v. Pran Sukh & Others (2010) 11 SCC 175

The Supreme Court held that compensation amounts should be directly transferred to the landowners' bank accounts to avoid unnecessary delays and exploitation by middlemen.

Haryana State Industrial & Infrastructure Development Corporation Ltd. v. Smt. Krishna Rani & Another

The Punjab & Haryana High Court, following the Supreme Court's ruling in Pran Sukh's case, directed that compensation be transferred directly to the beneficiaries' accounts instead of the traditional deposit-withdrawal method.

Case Details

Case Title: Parminder Singh v. Honey Goyal and Others Arising out of: S.L.P. (C) No. 4484 of 2020

Conclusion

The Supreme Court’s ruling reinforces the principle that compensation under the Motor Vehicles Act must be disbursed efficiently and without unnecessary delays. The judgment ensures that claimants are not deprived of their rightful compensation due to procedural delays and emphasizes the accountability of tribunals and banks in upholding the financial interests of accident victims. This ruling is a crucial step toward improving the justice system for victims of motor accidents.

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