Amicus Curiae Submits Suggestions To Supreme Court On Effective Disbursal Of MACT Compensation; HCs Give Data On Unclaimed Funds

Senior Advocate Meenakshi Arora on Friday (January 10) submitted her suggestions to the Supreme Court to ensure compensation from Motor Accident Claims Tribunals (MACTs) and labour courts reaches beneficiaries.

A bench of Justice Abhay Oka and Justice Aravind Kumar was hearing a suo moto case concerning substantial amounts of compensation remaining unclaimed in Motor Accident Claims Tribunals (MACTs) and Labour Courts across India.

During the proceedings, Amicus Curiae Senior Advocate Meenakshi Arora proposed that the Court pass three sets of directions.

The first suggested set of suggested direction would be to ensure proper recording of accounts and mobile numbers of claimants, which would be maintained throughout the course of the matter.

Arora recommended that the court issue directions for intimations to be sent directly to claimants via WhatsApp to keep them informed about the proceedings as a safeguard against abuse in MACT matters.

“The first to have some kind of proper recording of accounts, mobile numbers which will be maintained through the length of the matter that will have to be filed along with the application. With some counselling to the persons that they will have to maintain these accounts so that the credits can come. Keep the litigants connected with the proceedings through intimations on WhatsApp on their number”, she said.

The second set of directions would be related to disbursement of compensation amounts at the conclusion of the proceedings, such as what should be done if claimants are untraceable, and whether there are means to locate them.

The third set of directions would be to deal with the situation where claimants remain untraceable, and the funds remain unclaimed.

Justice Oka expressed concern that if the funds were diverted to other causes, claimants could still come forward later and assert their entitlement.

Arora noted that the Bombay High Court had considered international practices on this issue and that Madras and Allahabad High Courts had provided a mechanism that would allow claimants to reclaim funds, even if they had been allocated elsewhere.

Justice Oka further noted that claimants may sometimes be unaware of the proceedings and.

Arora highlighted the issue of misuse, referencing concerns from the Madras High Court and Delhi High Court regarding lawyers who had allegedly diverted compensation funds into their own accounts without distributing them to clients. She said that safeguards would need to be put in place to prevent such misconduct.

The matter was adjourned and listed for further hearing on February 3, 2025.

Affidavits from High Courts

As per the compilation filed by Advocate of Record Vishakha, High Courts of Gujarat, Bombay, Delhi, Allahabad, Calcutta, and Madras submitted affidavits detailing unclaimed amounts and proposed measures:

• Gujarat High Court reported Rs. 282 crores in unclaimed MACT and Rs. 6 crores in unclaimed Labour Court funds, highlighting efforts like issuing notices to claimants and implementing procedural reforms.
• Delhi High Court reported Rs. 289 crores in unclaimed MACT and Rs. 92 crores in unclaimed Labour Court funds outlined an existing scheme mandating detailed case information formats and enhanced digital initiatives, including SMS and WhatsApp updates for claimants.
• Bombay High Court reported Rs. 459 crores in unclaimed MACT and Labour Court funds in Maharashtra and Rs. 3 crores in Goa and referred to international practices from countries like the United States and Germany to improve the disbursal system.
• Madras High Court reported Rs. 289 crores in unclaimed MACT and Rs. 92 crores in unclaimed Labour Court funds emphasized safeguards against misuse of funds by legal representatives and streamlined disbursal mechanisms, including mandatory bank details for claimants.
• Calcutta High Court reported Rs. 2 crores in unclaimed MACT funds and recommended DLSA involvement for tracing claimants and consolidating public notices to reach beneficiaries.
• Allahabad High Court reported Rs. 289 crores in unclaimed MACT and Rs. 92 crores in unclaimed Labour Court funds. It proposed utilizing sub-accounts for direct claimant deposits and awareness campaigns through legal aid centres.

Suggestions by Amicus Curiae

• Claim Filing Process: The Amicus recommended the mandatory submission of claimants' bank account details, mobile numbers (and alternate numbers), and both current and permanent addresses along with the claim petition. Self-attested identification documents would be accepted to reduce procedural burdens, while police officers would be required to upload relevant accident-related documents.
• Judicial Measures: Immediate creation of Fixed Deposit Receipts (FDRs) for amounts deposited. The Amicus suggested a more efficient adjudication process, with judges or court staff explaining the claims procedure to litigants. Legal aid counsels may assist in smaller claims (below Rs. 10,000).
• Digital Initiatives: A dedicated digital platform should be created to track unclaimed deposits and provide necessary claimant information. A notification system be created via SMS, WhatsApp, and email to keep claimants informed about their claims.
• Administrative Steps: Disbursements should be processed on all working days. Audits of deposit accounts and collaborations with local banks, financial institutions, and NGOs should be implemented to assist in locating claimants.
• Awareness Campaigns: Lists of unclaimed amounts should be displayed in courts and bar rooms. Public notices and awareness programs should be organized to inform claimants of the process.

Background

The Court initiated the suo moto case after a retired District Judge, BB Pathak, highlighted the issue in an email, indicating that around Rs. 2,000 crores were unclaimed in Gujarat. The court subsequently directed authorities to gather data on the unclaimed amounts.

On July 26, 2024, the Court appointed Senior Advocate Meenakshi Arora as Amicus Curiae sought suggestions to ensure that compensation awarded by the MACTs and labour courts across India is properly received by beneficiaries. The court expressed concerns about genuine claimants being unable to access compensation due to various barriers, such as poverty.

Earlier, the court had issued notice to the State of Gujarat and the Gujarat High Court. Arora presented an affidavit from the Gujarat High Court, reporting over Rs. 288 Crores lying unclaimed in MACTs and labour courts in the state. The affidavit outlined steps taken to communicate with authorities about the unclaimed amounts, including issuing fresh notices to claimants.

Case no. – SMW(C) No. 7/2024

Case Title – In Re Compensation Amounts Deposited With Motor Accident Claims Tribunals And Labour Courts