Motor Accident Claims | Supreme Court Asks High Courts/Tribunals To Direct Transfer Of Compensation To Claimants' Bank Accounts

The Supreme Court today (March 18) emphasized the need for the direct transfer of motor accident claim compensation to claimants' bank accounts to minimize delays and ensure timely payments. “The general practice followed by the insurance companies, where the compensation is not disputed, is to deposit the same before the Tribunal. Instead of following that process, a direction can always be issued to transfer the amount into the bank account(s) of the claimant(s) with intimation to the Tribunal.”, the Court observed. In this regard, the bench comprising Justice JK Maheshwari and Justice Rajesh Bindal streamlined the process for the transfer of the claim amount to the claimant's bank account. It stated that the claimants should provide bank account details at the initial stage of the claim process so that tribunals can issue directions for direct transfers after the passing of awards. Further, for minors or cases requiring fixed deposits, the Court said that banks should ensure compliance and report to the Tribunal. “For that purpose, the Tribunals at the initial stage of pleadings or at the stage of leading evidence may require the claimant(s) to furnish their bank account particulars to the Tribunal along with the requisite proof, so that at the stage of passing of the award the Tribunal may direct that the amount of compensation be transferred in the account of the claimant and if there are more than one then in their respective accounts. If there is no bank account, then they should be required to open the bank account either individually or jointly with family members only. It should also be mandated that, in case there is any change in the bank account particulars of the claimant(s) during the pendency of the claim petition they should update the same before the Tribunal. This should be ensured before passing of the final award. It may be ensured that the bank account should be in the name of the claimant(s) and if minor, through guardian(s) and in no case it should be a joint account with any person, who is not a family member. The transfer of the amount in the bank account, particulars of which have been furnished by the claimant(s), as mentioned in the award, shall be treated as satisfaction of the award. Intimation of compliance should be furnished to the Tribunal.”, the court observed.Notably, the Court urged all High Courts and Tribunals to adopt this practice to ensure timely and efficient disbursement of compensation, and in this regard directed the Registry “to send a copy of this order to (1) the Registrars General of all the High Courts for placing the same before the Chief Justice of the High Court for further circulation and compliance by the concerned Tribunals/Courts; and (2) the Directors of the National Judicial Academy and the State Judicial Academies.”The Court made these pertinent observations while deciding an appeal filed seeking enhancement of compensation for the 100% disability suffered by a claimant due to a motor vehicle accident in 2006, when the claimant was aged 21 years.While enhancing the compensation, the Court said that it needed to make certain observations regarding the mode of payment. The general practice followed by the insurance companies is to deposit the amount before the Tribunal. After that, the claimants are required to file an application to withdraw the amount. This process is time-consuming. Also, no interest is accrued on such a deposit. Further, the process has risks of omissions and errors, since the amounts involved are huge, and there are large number of claims.Case Title: PARMINDER SINGH VERSUS HONEY GOYAL AND OTHERSCitation : 2025 LiveLaw (SC) 318Click here to read/download the judgmentAppearances: For Petitioner(s) Ms. Shashi Kiran, Sr. Adv. Ms. Sadhana Sandhu, AOR Dr. Rau P.S. Girwar, Adv. Ms. Archana Arora, Adv. Ms. K.T. Rau, Adv. Ms. Anju Sen, Adv. For Respondent(s) Mr. Pradeep Gaur, Adv. Mr. Amit Gaur, Adv. Ms. Mansi, Adv. Mr. Rameshwar Prasad Goyal, AOR

Motor Accident Claims | Supreme Court Asks High Courts/Tribunals To Direct Transfer Of Compensation To Claimants' Bank Accounts

Yash Mittal

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