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Citation: 2025 INSC 530
Court: Supreme Court of India, Civil Original Jurisdiction
Case No.: Suo Motu Writ Petition (C) No. 7 of 2024
Coram: Abhay S. Oka, J., Ujjal Bhuyan, J.
Date of Order: April 22, 2025
Motor Vehicles Act, 1988 — Workmen’s Compensation Act, 1923 — Unclaimed compensation — Motor Accident Claims Tribunals — Labour Courts — Suo motu writ petition — Practice directions — Claimant tracing — Legal Services Authorities.
Unclaimed compensation amounts under Motor Vehicles Act, 1988, and Workmen’s Compensation Act, 1923 — Suo motu proceedings initiated based on email highlighting large unclaimed deposits with Motor Accident Claims Tribunals (MACTs) and Labour Courts — Directions issued to ensure disbursement to entitled claimants.
Key Points
1. Initiation of Suo Motu Petition: Supreme Court took cognizance of an email from a retired District Judge, Shri B. B. Pathak, highlighting unclaimed compensation amounts deposited with MACTs and Labour Courts, leading to registration of suo motu writ petition.
2. Magnitude of Issue: Affidavits from High Courts revealed significant unclaimed amounts, e.g., Gujarat (Rs. 282 crores in MACTs, Rs. 6.61 crores in Labour Courts), Bombay (Rs. 459.10 crores in MACTs), Allahabad (Rs. 239 crores in MACTs, Rs. 92.39 crores in Labour Courts).
3. Directions Issued:
- High Courts to frame rules or issue practice directions for claim applications under the 1988 Act, mandating disclosure of claimants’ details (name, address, Aadhar, PAN, email, bank account details).
- MACTs to ensure direct bank transfers of compensation, verify bank account details, and invest unclaimed amounts in fixed deposits with nationalized banks.
- High Courts to create dashboards for tracking deposited amounts and initiate drives with Legal Services Authorities to trace claimants.
- State Governments to assist in locating claimants through local police and revenue officers.
- Compliance reports to be submitted by High Courts by July 30, 2025.
4. Interim Measures: Directions to remain in force until State Governments exercise rule-making powers under Section 176 of the 1988 Act. High Courts permitted to adopt additional measures to ensure disbursement.
5. Monitoring and Compliance: State Legal Services Authorities to monitor compliance and report within four months. Matter listed for reporting compliance on August 18, 2025.
Held
The Court expressed concern over claimants being deprived of entitled compensation due to unclaimed deposits. Comprehensive directions issued to streamline claim processes, ensure proper documentation, and facilitate disbursement to rightful claimants, with emphasis on administrative and technological interventions by High Courts and State authorities.
Facts
The Supreme Court initiated suo motu proceedings based on an email dated May 25, 2024, from Shri B. B. Pathak, a retired District Judge from Gujarat, highlighting large unclaimed compensation amounts deposited with Motor Accident Claims Tribunals (MACTs) under the Motor Vehicles Act, 1988, and Labour Courts under the Workmen’s Compensation Act, 1923. The Chief Justice of India ordered the registration of a suo motu writ petition to address the issue. Notices were issued to the State of Gujarat and Registrar Generals of various High Courts, revealing substantial unclaimed amounts, e.g., Rs. 282 crores in Gujarat MACTs, Rs. 459.10 crores in Bombay MACTs, and Rs. 239 crores in Allahabad MACTs.
Issues
- Why are large compensation amounts lying unclaimed with MACTs and Labour Courts?
- What measures can be implemented to ensure these amounts reach the entitled claimants?
Submissions
- Amicus Curiae (Ms. Meenakshi Arora): Submitted recommendations summarizing best practices from various High Courts to streamline claim processes and ensure disbursement.
- High Courts: Provided affidavits detailing unclaimed amounts and their respective procedures. Bombay High Court referenced its Civil Manual and international practices for handling unclaimed funds.
- Court’s Observations: Noted the absence of uniform rules under Section 176 of the 1988 Act by State Governments, leading to inconsistent claim procedures and unclaimed deposits.
Decision
The Supreme Court issued comprehensive directions to address the issue:
- Rule-Making and Practice Directions: High Courts to frame rules or issue practice directions under Section 166 of the 1988 Act, mandating claimants to provide detailed personal and bank account information (name, address, Aadhar, PAN, email, bank details, IFS Code).
- Disbursement Process: MACTs to verify bank account details, ensure direct bank transfers of compensation, and invest unclaimed amounts in fixed deposits with nationalized banks for periodic renewal.
- Claimant Tracing: High Courts to initiate drives with District and Taluka Legal Services Authorities, assisted by State police and revenue officers, to locate claimants.
- Technological Intervention: High Courts to create dashboards for real-time tracking of deposited amounts.
- Compliance Monitoring: State Legal Services Authorities to monitor compliance and report within four months. High Courts to submit compliance reports by July 30, 2025.
- Interim Application: Directions to remain in force until State Governments exercise rule-making powers under Section 176. High Courts permitted to adopt additional measures.
- Next Hearing: Matter listed for compliance reporting on August 18, 2025.
Reasoning
The Court expressed concern over claimants being deprived of entitled compensation due to procedural gaps and lack of claimant traceability. The absence of uniform rules under Section 176 necessitated interim judicial directions to standardize claim applications, ensure secure disbursement, and leverage administrative and technological mechanisms to trace claimants and manage funds.
Significance
The order establishes a framework for addressing unclaimed compensation, emphasizing claimant accessibility, procedural uniformity, and proactive judicial oversight. It mandates collaboration between judicial, administrative, and legal aid authorities to ensure justice delivery under the 1988 and 1923 Acts.
Keywords: Unclaimed compensation, Motor Vehicles Act, Workmen’s Compensation Act, Motor Accident Claims Tribunals, Labour Courts, suo motu petition, practice directions, claimant tracing, Legal Services Authorities, compliance monitoring.
Multiple Choice Questions (MCQs)
- What prompted the Supreme Court to initiate the suo motu writ petition in 2025 INSC 530?
a) A public interest litigation filed by an NGO
b) An email from a retired District Judge
c) A report by the Gujarat High Court
d) A parliamentary committee recommendation
Answer: b) An email from a retired District Judge - Which legislation is primarily addressed in the case concerning unclaimed compensation amounts?
a) Consumer Protection Act, 2019
b) Motor Vehicles Act, 1988
c) Indian Penal Code, 1860
d) Companies Act, 2013
Answer: b) Motor Vehicles Act, 1988 - What was the approximate unclaimed amount reported by the Bombay High Court for MACTs?
a) Rs. 282 crores
b) Rs. 459.10 crores
c) Rs. 239 crores
d) Rs. 3.61 crores
Answer: b) Rs. 459.10 crores - What action did the Supreme Court direct High Courts to take regarding claim applications under the Motor Vehicles Act, 1988?
a) Dismiss claims without Aadhar details
b) Issue practice directions for mandatory claimant details
c) Transfer all claims to Labour Courts
d) Reduce compensation amounts
Answer: b) Issue practice directions for mandatory claimant details - By when are High Courts required to submit compliance reports as per the Court’s order?
a) April 22, 2025
b) July 30, 2025
c) August 18, 2025
d) December 31, 2025
Answer: b) July 30, 2025 - Who is responsible for monitoring compliance with the Court’s directions to trace claimants?
a) State Governments
b) Motor Accident Claims Tribunals
c) State Legal Services Authorities
d) Registrar Generals of High Courts
Answer: c) State Legal Services Authorities - What is the Court’s directive regarding unclaimed compensation amounts deposited with MACTs?
a) Transfer to State treasury immediately
b) Invest in fixed deposits with nationalized banks
c) Distribute to legal aid funds
d) Retain in Tribunal accounts indefinitely
Answer: b) Invest in fixed deposits with nationalized banks - Which authority is tasked with assisting in tracing claimants entitled to compensation?
a) Central Bureau of Investigation
b) District and Taluka Legal Services Authorities
c) National Informatics Centre
d) State Transport Departments
Answer: b) District and Taluka Legal Services Authorities
Frequently Asked Questions (FAQs)
- What is the significance of the 2025 INSC 530 case?
The case addresses the issue of large unclaimed compensation amounts deposited with Motor Accident Claims Tribunals (MACTs) and Labour Courts under the Motor Vehicles Act, 1988, and Workmen’s Compensation Act, 1923. The Supreme Court issued directions to ensure these amounts reach entitled claimants through standardized procedures, claimant tracing, and technological interventions. - Why were suo motu proceedings initiated in this case?
The Supreme Court took suo motu cognizance based on an email from Shri B. B. Pathak, a retired District Judge from Gujarat, dated May 25, 2024, highlighting significant unclaimed compensation amounts lying with MACTs and Labour Courts. - What are some of the unclaimed amounts reported by High Courts?
The affidavits revealed: Gujarat (Rs. 282 crores in MACTs, Rs. 6.61 crores in Labour Courts), Bombay (Rs. 459.10 crores in MACTs), Allahabad (Rs. 239 crores in MACTs, Rs. 92.39 crores in Labour Courts), Calcutta (Rs. 2.53 crores in MACTs), and Goa (Rs. 3.61 crores in MACTs). - What key directions did the Supreme Court issue to address the issue?
The Court directed High Courts to:- Frame rules or issue practice directions mandating claimant details (e.g., Aadhar, PAN, bank account).
- Ensure direct bank transfers of compensation and invest unclaimed amounts in fixed deposits.
- Create dashboards to track deposits.
- Initiate drives with Legal Services Authorities to trace claimants, with State Government assistance.
- Submit compliance reports by July 30, 2025.
- What role do State Legal Services Authorities play in this case?
State Legal Services Authorities are tasked with monitoring compliance with the Court’s directions, coordinating with District and Taluka Legal Services Authorities to trace claimants, and reporting progress within four months. - What happens to the unclaimed amounts deposited with MACTs?
The Court directed that unclaimed amounts be invested in fixed deposits with nationalized banks, with instructions for periodic renewal until further orders from the Tribunal. - Can High Courts adopt measures beyond the Court’s directions?
Yes, the Supreme Court permitted High Courts to implement additional measures to ensure pending amounts reach claimants, provided they align with the issued directions. - What is the timeline for the next steps in this case?
State Legal Services Authorities must report compliance within four months from April 22, 2025. High Courts are to submit compliance reports by July 30, 2025, and the matter is listed for reporting compliance on August 18, 2025.