In a recent development aimed at addressing the long-standing issue of unclaimed compensation under the Motor Vehicles Act, 1988 (MV Act) and the Workmen’s Compensation Act, 1923 (WC Act), the Supreme Court has issued a detailed set of directions for ensuring the swift disbursement of compensation amounts lying dormant with the Motor Accident Claims Tribunals (MACT) and Labour Courts across various states. This order was passed in the suo motu petition initiated by the Court after an email submission by retired District Judge, Shri B. B. Pathak, highlighting the large sums of compensation that have yet to be claimed by entitled individuals.
The Court’s concern stems from the fact that substantial amounts, meant to compensate victims or their families under both the MV Act and the WC Act, are sitting unclaimed with the respective tribunals and courts. These funds have accumulated due to a lack of adequate tracking or follow-up, leaving successful claimants deprived of their rightful entitlements. The case highlights a broader issue of procedural inefficiency and the administrative gaps that have hindered the timely distribution of compensation.
In its detailed order, the Court presided over by Justice Abhay S Oka and Justice Ujjal Bhuyan expressed its deep concern over the failure of claimants to withdraw compensation, emphasizing, "The fact that so many successful claimants have been deprived of compensation is very disturbing. It is necessary to find a solution."
To address the situation, the Court directed that the High Courts of Gujarat, Allahabad, Bombay, Calcutta, Delhi, and Madras file affidavits on the measures taken to resolve the issue and provide data regarding the unclaimed compensation amounts. The figures outlined in the affidavits indicate staggering amounts that remain unclaimed across various jurisdictions, with Gujarat alone accounting for over Rs. 288 crore in unclaimed compensation.
The Court has laid down a set of procedural requirements to be followed by the Motor Accident Claims Tribunals and Labour Courts to ensure proper tracking and disbursement of compensation amounts:
- All petitions under the MV Act must include specific personal details such as names, addresses, Aadhar numbers, PAN details, and email addresses of the claimants. "While passing an interim or final order of grant of compensation, the MAC Tribunals shall call upon the person or persons held entitled to receive compensation, to produce their bank account details," the Court directed.
- To minimize delays, the Court mandated that compensation amounts be transferred directly into the bank accounts of the entitled claimants. The compensation process must be streamlined through an e-court project dashboard to ensure transparency and efficiency.
- The Court also ordered that each state’s Legal Services Authorities work in collaboration with local police and revenue officers to trace the claimants who have yet to come forward. "MAC Tribunals and Commissioners under the 1923 Act shall initiate a massive drive to ascertain the whereabouts of the persons who have been held to be entitled to receive compensation," the order noted.
- As an additional safeguard, the Court instructed that any unclaimed compensation deposited with the tribunals be invested in fixed deposits with nationalized banks, ensuring that the funds accrue interest until they are disbursed.
- All High Courts have been directed to submit compliance reports to the Supreme Court by July 30, 2025. This includes details on the progress of implementing the directions and the amounts still lying unclaimed.
In a bid to ensure that these measures are effective, the Court further clarified that any existing rules or practice directions that align with its order should continue to be followed. However, it stressed that additional measures could be taken by High Courts to further expedite the disbursement process.
The Court has scheduled the next hearing for August 18, 2025, to review the progress and to issue further directions, if necessary.
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