The Supreme Court has ordered all High Courts to issue directions to tribunals handling motor accident cases and labour cases to initiate a massive drive to trace beneficiaries of compensation awards remaining unclaimed in such tribunals (In re: Compensation amounts deposited with Motor Accident Claims Tribunals and Labour Courts).
A Bench of Justice Abhay S Oka and Justice Ujjal Bhuyan added that efforts to implement these directions must begin at the earliest. Compliance reports are to be submitted to the Supreme Court by July 30.
"All the High Courts shall issue administrative directions to the MAC Tribunals and Commissioners under the (Workmen’s Compensation Act, 1923) to initiate a massive drive to ascertain the whereabouts of the persons who have been held to be entitled to receive compensation, but have not taken the same. This shall be done by taking the assistance of the District and Taluka Legal Services Authorities and para-legal volunteers," the Court said.
The Court further directed that State governments shall assist the Legal Services Authorities through local police and revenue officers at the district and taluka levels to trace claimants entitled to compensation.
The State Legal Services Authorities shall monitor compliance with these directions, the Court added.
"We direct the High Courts to take up implementation of the aforesaid directions at the earliest and submit compliance reports to this Court on or before 30th July 2025, so that further directions, if necessary, can be issued," the Court further ordered.
In the reports to be submitted to the Court, the High Courts' Registrars General are also expected to give details of amounts that are still lying unclaimed at tribunals.
The Court passed the order in a suo motu case registered after a retired district judge from Gujarat flagged concerns that massive amounts of money was lying in various tribunals in the form of unclaimed compensation awards. In May 2024, retired district judge BB Pathak sent an email to the Supreme Court highlighting this issue.
The top court proceeded to seek the response of the Registrars General of various High Courts, including the High Courts at Gujarat, Allahabad, Bombay, Calcutta, Delhi, and Madras.
The High Courts were asked to give data on compensation amounts deposited with the Motor Accident Claims Tribunals (MACTs) and before Commissioners under the Workmen’s Compensation Act, 1923.
From the responses received, the Court noted that several crores of compensation money was yet to reach its beneficiaries.
"The fact that so many successful claimants have been deprived of compensation is very disturbing. It is necessary to find a solution," the Court said.
In its April 22 order, the Court has now issued detailed directions for all MACTs and Labour Commissioners to ensure that compensation amounts reach those who are entitled to receive the same.
Among other directions, the Court has made it mandatory to disclose full claimant details (addresses, Aadhar, PAN, email) at the time of filing compensation claims before tribunals.
Other allied directions issued by the top court include:
- While passing an interim or final order of grant of compensation, the MACTs shall direct the successful compensation claimant to produce their bank account or the bank details of persons entitled to receive the compensation.
- It should also be ensured that those entitled to compensation update their bank or contact details, if there is any change.
- The MACT judges have a duty to verify whether the bank account details given are actually those of the beneficiary, by examining the certificate issued by the banker.
- If compensation is awarded based on the consent of both parties, the compensation award can be directly deposited to the bank account of the beneficiary. The bank account details can also be mentioned in the consent order.
- The MACTs, while passing orders of withdrawal/ disbursement, shall ordinarily pass an order of transfer of the amounts directly to the bank account of the person/s entitled to receive compensation. If there is a long gap between the date of furnishing the account details and the date of filing application for the withdrawal of the amount, the tribunals are advised to get fresh account details of the claimants.
- When MACTs pass an order to deposit the compensation amount with the tribunal, there shall be a direction issued to invest the amounts in a fixed deposit with any nationalised bank, with standing instructions to renew the fixed deposit at periodic intervals until further orders. A similar course can also be adopted for workman compensation cases.
- The computer/ IT team of High Courts have been asked to create a dashboard on which information on unclaimed compensation amounts shall be regularly uploaded with all details.
The Court added that MACTs and labour courts under the Workmen's Compensation Act, 1923, are bound to follow these directions until the State may make appropriate rules on these aspects.
The Court further said that all High Courts are free to take additional measures, beyond those directed in the order, to ensure that the pending compensation amounts actually reach the claimants.
The matter has been listed next on August 18.
