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.
Mar 19, 2025, 05:07 IST
In a landmark decision aimed at expediting the disbursement of motor accident compensations, the Supreme Court of India has directed insurance companies to transfer claim amounts directly into the bank accounts of claimants, bypassing traditional tribunal deposits. This directive seeks to minimize delays and streamline the compensation process for victims.
Current Practice and Identified Delays
Traditionally, when compensation is undisputed, insurance companies deposit the awarded amounts with the respective tribunals. Claimants are then required to file withdrawal applications, often leading to delays of 15 to 20 days before funds are accessible. The Supreme Court highlighted that such procedures contribute to unnecessary postponements in delivering rightful compensations.
Supreme Court's Directive
A bench comprising Justices JK Maheshwari and Rajesh Bindal emphasized the need for a more efficient system. They proposed that insurance companies should directly transfer compensation amounts to the claimants' bank accounts, with appropriate notifications sent to the tribunals. This approach aligns with India's advancements in digital transactions and aims to ensure timely financial relief to victims.
Rationale Behind the Decision
The court's decision is underscored by the significant backlog of motor accident claim cases. As of the end of the 2022-23 fiscal year, there were 10,46,163 pending cases, marking an increase of 1,36,997 cases over three years. The bench noted that in an era dominated by digital transactions, where funds can be transferred instantaneously, the existing procedural delays are unwarranted.
Implementation and Compliance
To facilitate this directive, the Supreme Court has advised that claimants provide their bank account details at the initial stages of the claim process. This ensures that tribunals can issue precise instructions for direct transfers upon awarding compensations. In cases involving minors or where fixed deposits are mandated, banks are instructed to ensure compliance and report back to the tribunals accordingly.
Broader Implications
This directive not only pertains to motor accident claims but also sets a precedent for other monetary compensations. By leveraging India's robust digital payment infrastructure, the judiciary aims to enhance efficiency and reduce procedural bottlenecks, ensuring that beneficiaries receive timely financial support.
The Supreme Court's proactive approach reflects a commitment to adapt judicial processes in line with technological advancements, ultimately prioritizing the welfare and rights of claimants.