IN RE: COMPENSATION AMOUNTS DEPOSITED WITH MOTOR ACCIDENT CLAIMS TRIBUNALS AND LABOUR COURTS versus NA

IN RE: COMPENSATION AMOUNTS DEPOSITED WITH MOTOR ACCIDENT CLAIMS TRIBUNALS AND LABOUR COURTS versus NA

Until State Governments properly exercise rule-making power under Section 176 of the Motor Vehicles Act, 1988, High Courts shall either issue practice directions or formulate rules of procedure incorporating specified safeguards (detailed particulars at filing, bank account verification, investment of deposited amounts, dashboard creation, and tracing mechanisms) to ensure unclaimed compensation awarded under the Motor Vehicles Act, 1988 and the Workmen’s Compensation Act, 1923 is traced and disbursed to entitled persons; State Governments and State Legal Services Authorities shall assist and monitor implementation.

Parties
Petitioner: Supreme Court of India; Respondent: State of Gujarat; Respondent: Registrar General of Gujarat High Court
Jurisdiction
India
Judgment Date
22 April 2025
Procedural Posture
Suo Motu Writ Petition (civil) No. 7 of 2024 Under Article 32 / Order and Directions Issued; High Courts Directed to Implement and Report Compliance (reports Due by 30 July 2025); Matter Listed for Reporting Compliance on 18 August 2025
Outcome
Directions issued to High Courts, MACTs and Commissioners under the Workmen’s Compensation Act; matter listed for reporting compliance
Legal Topics
Unclaimed Compensation, Section 166 and 176 of Motor Vehicles Act, 1988, Motor Accident Claims Tribunal (mact), Labour Courts, Practice Directions, Compensation Dashboard
Motor Vehicles Act, 1988 Workmen’s Compensation Act, 1923 Unclaimed Compensation Section 166 and 176 of Motor Vehicles Act, 1988 Motor Accident Claims Tribunal (mact) Labour Courts Practice Directions Compensation Dashboard

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Parties

Supreme Court of India

Petitioner

State of Gujarat

Respondent

Registrar General of Gujarat High Court

Respondent

Procedural Posture

Suo Motu Writ Petition (civil) No. 7 of 2024 Under Article 32 / Order and Directions Issued; High Courts Directed to Implement and Report Compliance (reports Due by 30 July 2025); Matter Listed for Reporting Compliance on 18 August 2025

Legal Issues

  1. 1 Large amounts of unclaimed compensation deposited with Motor Accident Claims Tribunals and Commissioners under the Workmen’s Compensation Act, 1923
  2. 2 Whether State Governments have exercised rule-making power under Section 176 of the Motor Vehicles Act, 1988 and consequences of non-exercise
  3. 3 Whether High Courts can frame rules or issue practice directions in absence of State rules

Ratio Decidendi

Until State Governments properly exercise rule-making power under Section 176 of the Motor Vehicles Act, 1988, High Courts shall either issue practice directions or formulate rules of procedure incorporating specified safeguards (detailed particulars at filing, bank account verification, investment of deposited amounts, dashboard creation, and tracing mechanisms) to ensure unclaimed compensation awarded under the Motor Vehicles Act, 1988 and the Workmen’s Compensation Act, 1923 is traced and disbursed to entitled persons; State Governments and State Legal Services Authorities shall assist and monitor implementation.

Court Disposition

Directions issued to High Courts, MACTs and Commissioners under the Workmen’s Compensation Act; matter listed for reporting compliance

Orders

  • High Courts to issue practice directions or formulate rules until State Governments frame rules under Section 176, incorporating specified particulars to be filed with claims and verification procedures.
  • MACTs to obtain and verify bank account details (bank certificate or cancelled cheque) before disbursing awarded compensation and direct transfer to claimants' bank accounts; direct deposit amounts to be invested as fixed deposits in nationalised banks with standing instructions to renew.