Madras High Court Issues Guidelines For Direct Bank Transfer Of Compensation In Motor Accident Cases

The bench of Justice N Sathish Kumar and Justice M Jothiraman directed the Registrar General of the Madras High Court to issue a circular, after obtaining necessary administrative sanction from the Chief Justice, to all Motor Accident Tribunals in the State of Tamil Nadu and Puducherry for strict compliance of the directions to ensure timely disbursement of just compensation to the claimants, in the interest of justice.

The court has directed all insurance companies, transport corporations and others liable for compensation to deposit the awarded/enhanced compensation by Direct Bank Transfer (NEFT/RTGS) into the bank account of the claimant, confirmed and specified by the Tribunal in its award.

The court added that the tribunal should, before passing the award, obtain the particulars of the bank account of the claimant with requisite proof (including the attested first page of the passbook bearing photograph), and should incorporate the verified account details in the award, along with the Tribunal's own e-mail ID for compliance communication.

The court also observed that the account of the claimant should be one pre-existing prior to the date of the claim and situated in the claimant's own territory/place of ordinary residence. The court added that if no such account exists, a fresh account can be opened at a bank branch within the ordinary residence of the claimant and not at a place of convenience of the counsel.

The court also directed the Tribunal to obtain an affidavit from the claimant during the trial affirming that the bank account details furnished are in conformity with the court direction, and the Tribunal shall verify the compliance before conclusion of the trial and passing of the award.

The court added that the bank account should be in the claimant's name, individually or through a guardian if the claimant is a minor. The court made it clear that the account should not be opened as a joint account with anyone who is not a family member. In case of multiple claimants, the court said that the award should be disbursed to their respective individual accounts, as per the shares specified in the award.

The court added that any change in the bank account of the claimant should be promptly informed to the tribunal and the same shall be verified before passing the final award.

With respect to minor claimants, the court said that the tribunal should follow the safeguards stated by the Supreme Court and retain the minor's share in a fixed deposit/tribunal directed investment until the minor reaches majority, or otherwise mentioned in the award, and such details should be communicated with the concerned bank.

The court also clarified that before permitting Direct Bank Transfer, the Tribunal should verify that the deficit or balance of the court fee, payable on compensation, is accounted for. The court added that no Direct Bank Transfer cannot be certified unless the verification regarding pending court fee was completed.

To ensure that the court fee is secured without delaying the disbursal of claim, the court suggested that the court fee could be directly deposited into the bank account of the tribunal, distinct and separate from the net compensation amount and the net compensation alone could be transferred to the claimant. The court added that the court fee amount will include the cost component of the amount, advocate's fee and other expenses as specified in the order.

The court further noted that after the deposit of court fee, the claimant's advocate shall withdraw his/her fee as quantified in the award, as per usual procedure applicable to payment out of tribunal deposits.

The court directed that the Insurer making the deposit as per the court direction shall furnish the UTR number and particulars of deposit to the tribunal by e-mail to the email ID specified in the award, within 48 hours of deposit, followed by a physical proof of deposit on proper acknowledgement.

The court passed the orders in an appeal filed by an insurance company, challenging the quantum of compensation awarded by the MACT, arguing that the tribunal should have deducted 50% towards personal and living expenses instead of 25% since the deceased was a bachelor. Since the claimants did not raise any objection, the court modified the award granted by the MACT.

Counsel for Appellant: Mr. Vijayaraghavan N

Counsel for Respondent: Mr. S. P. Yuvaraj

Case Title: The Manager, The Oriental Insurance Co Ltd v D Salsa and Others

Citation: 2026 LiveLaw (Mad) 360

Case No: CMA No 2064 of 2026