Madras HC orders Electronic Transfer of Compensation to Accident Victims [Read 23 Directions]
In a Landmark Judgment a two Judge Bench of Madras High Court has directed that the Compensation to Motor Accident victims/Claimants shall be electronically transferred to the bank accounts of the victims/claimants, as the case may be.
The Division Bench comprising of Justices R.Sudhakar and S.Vaidyanathan observed that in a country where legal awareness is wanting despite best efforts by the Legal Services Authority and other legal forums, the victims/dependants are unable to realize the fruit of judicial decisions granting “just compensation” for years together.
Justice Sudhakar who wrote the concurrent Judgment held that;
“There is a mandate on the Claims Tribunal to deposit the award amount in a Nationalised Bank. Payment out is ordered and cheques are issued to the victims/claimants. These cheques pass through various sieves known and unknown and ultimately, it does not reach the victims/claimants in full measure, less legal expenses and other costs that are justifiable. It was brought to our notice by the Chief Judge, Court of Small Causes and the Registry that in the present system, the insurance companies deposits the cheques with the Claims Tribunal concerned, which in turn deposits the same with the Treasury, and thereafter, it is transferred from the Treasury to a Nationalised Bank by way of fixed deposit. It is thereafter withdrawn for the purpose of settling the award amount. This process consumes a lot of time and leads to delay in disbursal of the award amount. It was stated that this leads to unwanted heartburns at certain quarters and the benefit of the award does not reach the claimants/victims directly in full proportion. The delay in this process, it is stated, is felt more in the Districts. We, inter alia, seek to address the said issue also by way of these directions.”
“The above said difficulty can be mitigated if the victims/claimants are called upon to furnish bank account and PAN Card details, if available, so as to ensure that the compensation is deposited in the existing bank accounts of the victims/claimants in their own territory. It also has another advantage, whereby the compensation awarded can be transferred to the bank account of the victims/claimants through the presently available computerized system, namely, Real Time Gross Settlement (RTGS) or National Electronic Fund Transfer (NEFT), which is slowly becoming very popular for transfer of funds throughout the country. These methods could be used for transfer of the funds to the Claims Tribunals in relation to the cases in question and thereafter by Direct Benefit or Bank Transfer (DBT) the funds can be electronically transferred to the bank accounts of the victims/claimants, as the case may be.”
Considering all the above factors, with the intention to safeguard the interest of the victims/claimants and to ensure that the victims/claimants get full compensation, less the legal costs, certain directions need be issued to the Tribunals to scrupulously follow.
The following directions are issued for the benefit of the victims/claimants;
(i) The Claims Tribunals shall without exception, at the time of commencement of trial and evidence on the side of claimants, obtain and ensure that the bank account details of all the claimants as follows:
|1||Name of the Claimant (s) / Victims (s) with address|
|2||Name of the Bank & Branch|
|3||Bank IFSC Code|
|4||Account No (s). of the Claimant(s) / victim (s)|
The first page of the bank pass-book, which will compulsorily contain the photograph of the claimant(s)/victim(s), duly attested by the Bank concerned, should be made available. Wherever the claimant(s)/victim(s) are impleaded as respondents, before the claims tribunal or the Court, their account details, as above, will have to be furnished.
(ii) In case after disclosure of the bank account details before the Claims Tribunal in terms of Clause (i), a new person is added in the account for any reason whatsoever, it is incumbent on the part of the claimant/victim to disclose the same to the Claims Tribunal, indicating the relationship of the newly added person to the claimant/victim and the purpose.
(iii)The Claims Tribunals shall also obtain and ensure the marking of Pan Card of all the claimants, wherever available.
(iv)If the claimant/victim does not have a Pan Card, the Claims Tribunal shall endeavour to advise the claimant/victim about the importance of having such a card, namely, to avoid higher Tax Deduction at Source, for their own benefit, before conclusion of trial. For this purpose, the District Legal Services Authorities and Taluk Legal Services Authorities can facilitate and provide assistance.
(v) The Claims Tribunals may verify and confirm if the claimant/ victim has an Aadhaar card, and if there is one, he/she may be called upon to mark a self attested copy of the Aadhaar Card.
(vi)In case of minor claimants, their bank account details should be obtained and marked. The name of the guardian has to be specified.
(vii)The Claims Tribunals shall ensure compliance of clause (i) above, before conclusion of trial.
PROCEDURE AFTER PASSING AWARD
(viii) The Claims Tribunals shall, as a matter of rule, direct the insurance companies or transport corporations or such other entities held liable to pay the compensation, to deposit the award sum to the credit of the bank account of the Claims Tribunal directly by NEFT or RTGS mode. The Registry will issue appropriate directions in this regard enabling the respective Claims Tribunal or the District Court concerned to open separate account, which will bear a suffix “ MACT” to identify that the account is in relation to motor accident claims.
(ix) The Insurance Companies and Transport Corporations shall instruct their banks to ensure deposit of the award sums by way of Direct Bank Transfer to the specified bank account of the Claims Tribunal containing the following information in the prescribed format, by way of compliance of the award.
|2||On the file of (Claims Tribunal Name)|
|3||Date of award|
|5||Income Tax Deduction at Source|
|6||Bank Transaction Reference No. / Unique Transaction Reference (UTR) No.|
(x) In turn, the bank of the Claims Tribunal shall receive the deposited sum and capture the above information and furnish a statement of account on a daily basis to the Registry of the Claims Tribunal to enable the said Registry to reconcile the deposits of compensation and the respective MCOPs towards which such deposits were made. (xi) On such deposits being made, the insurance companies and transport corporations shall submit a letter to the Registry of the Claims Tribunal enclosing a copy of the said bank advice, in prescribed format as above, as per which the deposit was made to the bank account of the Claims Tribunal, to enable the Claims Tribunal to keep tab on the deposits made and the MCOPs for which they were made, which is a fundamental need for a smooth implementation of this well intentioned scheme. The Payment advice for remittance of compensation is as under:
PAYMENT ADVICE FOR REMITTANCE OF COMPENSATION
........................ We confirm remittance of compensation as follows on instructions of ................................... (insurance company/transport corporation):-
|2||On the file of (Claims Tribunal Name), Place|
|3||Date of award|
|5||Income Tax Deduction at Source, if any|
|6||Unique Transaction Reference (UTR) No.|
(xii)The Insurance Companies, Transport Corporations and such other entities making such deposit, shall also send a copy of the payment advice in Clause
(ix) to the Claims Tribunal concerned and serve a copy of the same on the claimants or their counsel as the case may be.
(xiii) Insofar as tax deduction at source is concerned, Form 16-A of the IT Act should be provided to the claimant/victim on whose behalf the deduction has been made so as to enable him/her to seek refund of tax deducted.
(xiv) The Claims Tribunals shall ensure that the benefit of details of such bank account of the Claims Tribunal concerned are identified in the award itself, for compliance by those required to satisfy the award.
(xv) The Claims Tribunals shall ensure that as and when an order is passed for disbursal of compensation amount, it will ensure that such disbursal of compensation shall be made directly to the credit of the bank account of the claimant/victim, as the case may by NEFT or RTGS. The bank account details of the claimant/victim(s) shall be stated in the award/order of the Claims Tribunal.
(xvi) The Claims Tribunals shall, in case of minor claimants, retain the amounts in court deposit until they attain majority. Thereafter, the Claims Tribunal shall ensure deposit of their shares by Direct Bank/Benefit Transfers to the accounts of the parties, who were minors. Wherever the Claims Tribunal feels it appropriate to direct withdrawal of interest for the benefit of the minor, interest shall be paid by direct transfer to the account of the minor.
(xvii) The Claims Tribunals shall also ensure that in case the claimant or claimants die pending proceedings and legal representatives are brought on record, the same procedure as above in respect of claimants shall be strictly adhered to in respect of impleaded legal representatives also.
(xviii) The Claims Tribunals shall also ensure that in case of compromise being recorded in Lok Adalat proceedings, at the time of such compromise, the details of bank accounts, Pan Card (if available) of the claimant or claimants and/or legal representatives shall also be obtained and disbursal of the amount compromised shall also be only by way of NEFT/RTGS. In cases where the claimants or victims have Adhaar Cards, a self attested copy of the same may also be obtained.
(xix) The High Court Registry is directed to place the matter before the Hon'ble Chief Justice so that appropriate circular can be issued to all the District Judges and the Claims Tribunals to publish the above interdict, as it needs to be widely publicized and displayed in the notice board and also by way of intimation to insurance companies, transport corporations and other departments that they are required to follow these instructions.
(xx) The District Judges concerned shall ensure strict compliance of the above directions.
(xxi) The Claims Tribunals are hereby instructed to abide by the above direction without any let or hindrance, scrupulously and in case they find any procedural difficulty while implementing the same, it can be brought to the attention of this Court through the Registry.
(xxii) We hereby hold that these directions shall come into force for strict implementation and compliance on and from 1.8.2016 so as to enable the Claims Tribunal concerned to take suitable steps and provide the logistics for complying with the above directions.
(xxiii)A flow chart depicting the mode in which the transactions, namely deposit and payment of compensation, are to be made is annexed to this judgment.
Read the Judgment here.