Motor Accident Claims Tribunal Must Consider Claimant's Need Before Refusing Release Of Compensation Kept In FDR: Delhi High Court

The Delhi High Court has held that the Motor Accident Claims Tribunals (MACTs) cannot mechanically reject applications seeking release of compensation kept in fixed deposits and must consider the genuine requirements of claimants before deciding whether the amount should be released.

Justice Anish Dayal observed that it is not within the remit of MACTs to undertake a “deep-dive investigation” into the reasons furnished by a claimant who seeks release of compensation that has already been awarded and confirmed by the Court.

“MACTs ought to keep in mind that the compensation is meant for claimants and is only deposited before the MACT or the Courts in order to ensure that they are not dissipated, or fall into the wrong hands, or are being withdrawn without proper advice or without appreciating the impact on the future by premature withdrawal,” the Court said.

It added that schemes of disbursement, implemented by Tribunals, are intended to ensure safe custody and regulated availability of awarded compensation to beneficiaries over stipulated periods.

“The vicissitudes of life, throw up myriad situations which require a chunk of money e.g. purchase of property for residential use, educational needs of children, liquidating a mounting debt, a medical situation, a family crisis or any other emergent situation,” the Court said.

“There is no reason why a claimant cannot dip into the deposits of compensation, made on his behalf, before the Tribunals/Courts, considering that it is the claimants' money, at the end of the day. Rejecting their plea summarily, without application of mind or without considering the sensitivity of needs of claimants, is anathema to the whole jurisprudence of motor accidents claims and compensation,” it added.

The observations came while allowing an application filed by a claimant seeking release of Rs. 2.5 lakh from fixed deposits maintained pursuant to the compensation awarded in a motor accident case.

The claimant had suffered 93% permanent disability and sought the limited release of the amount to repay certain loans. His application before the MACT was rejected on the ground that no verifiable material was filed.

The High Court noted that the claimant had subsequently placed a copy of the promissory note on record but the MACT had adopted a “parsimonious” approach in refusing to release the amount.

The Court referred to its earlier orders in which it had expressed concern over MACTs rejecting requests for withdrawal of compensation to claimants.

Justice Dayal observed that there was no rationality or any reason for the MACT to dismiss the claimant's application filed for limited release of money.

The Court observed that frequently rejecting such applications for “flippant reasons” required the approach to be recalibrated.

“The undue paternalistic approach adopted by the MACTs, in this regard, has to be rationalised, and MACTs are well advised to adopt a much more considerate, sensitive and reasonable approach in dealing with applications for release of amount,” the Court said.

It added that depending on facts and circumstances, Tribunals can assure themselves that the claimants are not being mislead by sharks or unscrupulous elements and being forced to withdraw the money to enrich themselves.

“Interaction with the claimant, physically or through VC, by the Tribunal, can mostly achieve that purpose, and ensure some oversight,” it said.

Accordingly, Justice Dayal allowed the application and directed that Rs. 2.5 lakh be released by liquidating the proportionate number of FDRs in the account of the claimant.

“Copy of this order be circulated by the Registry to all the MACTs in our jurisdiction, for their information,” it ordered further.

Title: SANJAY SACHDEVA v. BHOLA MAHATO & ORS (M/S RELIANCE GENERAL INSRUANCE CO LTD)

Click here to read order