Supreme Court of India
IN RE: COMPENSATION AMOUNTS DEPOSITED WITH MOTOR ACCIDENT CLAIMS TRIBUNALS AND LABOUR COURTSversusNA
- Citation
- 2025 INSC 530
- Decided
- 22 April 2025
- Bench
- ABHAY S OKA
Holding
In the absence of State Government rules under Section 176 of the Motor Vehicles Act, 1988, the Supreme Court may direct High Courts to issue practice directions or procedural rules to ensure unclaimed compensation amounts are traced and disbursed, and such directions bind the MACTs and Commissioners until proper rule‑making is effected.
Summary
The Supreme Court, acting suo motu, examined the problem of large sums of unclaimed compensation lying with Motor Accident Claims Tribunals (MACTs) and Labour Courts under the Motor Vehicles Act, 1988 and the Workmen’s Compensation Act, 1923, after an email from a retired district judge highlighted the issue. The Court directed the State of Gujarat and several High Courts to furnish data on the amounts and appointed an amicus curiae to advise on the matter. Noting that many States had not exercised their rule‑making power under Section 176 of the 1988 Act, the Court held that High Courts may issue practice directions or formulate procedural rules to ensure claimants' details, bank information, and timely disbursement are captured. It further ordered the creation of an e‑court dashboard, a massive drive to trace claimants with the help of legal services authorities, and monitoring of compliance by State Legal Services Authorities. The directions bind MACTs and Commissioners under the 1923 Act until proper state rules are made, and the High Courts were directed to report compliance by 30 July 2025.
Issues considered
- Whether the Supreme Court can issue binding directions in a suo motu writ petition to address unclaimed compensation under the Motor Vehicles Act, 1988 and the Workmen’s Compensation Act, 1923.
- Whether High Courts may issue practice directions or procedural rules in the absence of State Government rules under Section 176 of the Motor Vehicles Act, 1988.
- What procedural measures should be adopted to identify, trace and disburse unclaimed compensation, including claimant identification, bank account verification, and creation of a public dashboard.
- Whether such directions remain binding on MACTs and Commissioners until the State Governments exercise their rule‑making power.
Legislation cited
- Motor Vehicles Act, 1988s. 166, s. 176
- Workmen’s Compensation Act, 1923
Headnote
Issue for Consideration Issue arose in this suo motu writ petition with respect to the large amounts of unclaimed compensation lying deposited with MACTs and Labour Courts under the Motor Vehicles Act, 1988 and the Workmen’s Compensation Act, 1988 – ss.166, 176 – Workmen’s Compensation Act, 1923 – Large amounts of unclaimed compensation lying with MACTs and Labour Courts – Email received from a retired District Judge – Suo motu action by Supreme Court – Directions issued: Held: Rules
Subjects
Suo motu Writ PetitionUnclaimed compensationSection 166Section 176Motor Accident Claims TribunalLabour CourtsPractice directionsCompensation dashboardWorkmen’s Compensation ActMotor Vehicles Act
Judgment
[2025] 4 S.C.R. 1613 : 2025 INSC 530
In Re: Compensation Amounts Deposited with Motor
Accident Claims Tribunals and Labour Courts
(Suo Motu Writ Petition (C) No. 7 of 2024)
22 April 2025
[Abhay S. Oka* and Ujjal Bhuyan, JJ.]
Issue for Consideration
Issue arose in this suo motu writ petition with respect to the large
amounts of unclaimed compensation lying deposited with MACTs
and Labour Courts under the Motor Vehicles Act, 1988 and the
Workmen’s Compensation Act, 1923.
Headnotes†
Motor Vehicles Act, 1988 – ss.166, 176 – Workmen’s
Compensation Act, 1923 – Large amounts of unclaimed
compensation lying with MACTs and Labour Courts – Email
received from a retired District Judge – Suo motu action by
Supreme Court – Directions issued:
Held: Rules u/s.176, 1988 Act not made by the State Governments –
Till rules are not framed, High Courts to issue practice directions
or formulate rules of procedure by incorporating the provisions,
as directed, for claims under the 1988 Act and claims for
compensation under the 1923 Act – Central Project Co-ordinator
of e-court project or Registrar (Computer/IT) of the High Courts,
with the help of the State Government, to create a dashboard on
which the information regarding the amounts lying deposited in
connection with the compensation granted under 1988 or 1923
Acts shall be regularly uploaded with all details – High Courts to
issue administrative directions to the MACT and Commissioners
under the 1923 Act 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 – State Governments
to provide assistance to the Legal Services Authorities of the local
police officers/revenue officers of the district and taluka to trace the
claimants who are held entitled to receive compensation – State
* Author
1614 [2025] 4 S.C.R.
Supreme Court Reports
Legal Services Authorities to monitor compliance with the directions
issued in terms thereof and report compliance within four months –
Directions issued bind the MAC Tribunals and the Commissioners
under the 1923 Act till rule-making power is properly exercised
by the Government – However, if the Rules framed by the State
Government or practice directions issued are consistent with the
above directions, the Rules or the practice directions, as the case
may be, shall be followed notwithstanding this order – Directions
by Supreme Court. [Paras 9-11]
List of Acts
Motor Vehicles Act, 1988; Workmen’s Compensation Act, 1923.
List of Keywords
Suo motu Writ Petition; Unclaimed compensation; Section 166 and
176 of Motor Vehicles Act, 1988; Motor Accident Claims Tribunal
(MACT); Labour Courts; Commissioners under the Workmen’s
Compensation Act, 1923; Practice directions; Directions by Supreme
Court; Compensation dashboard.
Case Arising From
Civil Original Jurisdiction: Suo Motu Writ Petition (Civil) No. 7 of 2024
Under Article 32 of the Constitution of India
Appearances for Parties
By Courts Motion.
Ms. Meenakshi Arora, Sr. Adv./Amicus Curiae, Ms. Vishakha
Advs. for the appearing parties:
High Court of Madras: Deepayan Mandal, Mridul Bansal,
Naman Varma.
High Court of Calcutta: Partha Sil, Ms. Sayani Bhattacharya,
Srijit Datta.
High Court of Delhi: Kanhaiya Singhal, Prasanna, Ajay Kumar.
High Court of Judicature at Allahabad: Ms. Charu Ambwani.
High Court of Bombay: Prashant Shrikant Kenjale.
State of Gujarat: Ms. Deepanwita Priyanka.
[2025] 4 S.C.R. 1615
In Re: Compensation Amounts Deposited with
Motor Accident Claims Tribunals and Labour Courts
Judgment / Order of the Supreme Court
Order
Abhay S. Oka, J.
1) An email was received by this Court from Shri B. B. Pathak, a
retired District Judge from Gujarat. In the e-mail dated 25th May
2024, Shri Pathak pointed out that large amounts payable by way
of compensation under the Motor Vehicles Act, 1988 (for short, ‘the
1988 Act’) and the Workmen’s Compensation Act, 1923 (for short,
‘the 1923 Act’) are lying deposited with the Motor Accident Claims
Tribunals (for short, ‘the MAC Tribunals’) and Labour Courts. Hon’ble
the Chief Justice of India passed an administrative order on the
basis of information received by e-mail from Shri B. B. Pathak for
registration of the present Suo Motu Writ Petition.
2) On 8th July 2024, this Court issued notices to the State of Gujarat as
well as the Registrar General of Gujarat High Court, directing them
to produce before this Court the data of compensation amounts
lying deposited with the MAC Tribunals as well as before the
Commissioners under the 1923 Act. By the order dated 26th July
2024, this Court requested Ms. Meenakshi Arora, the learned senior
counsel appearing for the High Court of Gujarat, to assist the Court
as amicus curiae. On the basis of a preliminary note containing
recommendations submitted by the learned senior counsel appointed
as amicus curiae, notices were issued to the Registrar Generals of
the High Courts at Allahabad, Bombay, Calcutta, Delhi and Madras
along with copies of earlier orders passed by this Court. Thereafter,
time was granted to the High Courts to file affidavits/responses.
3) Ms. Vishakha, advocate-on-record representing the High Court of
Gujarat, has filed a compilation of responses received from various
High Courts along with suggestions of the learned senior counsel
appointed as amicus curiae. To understand the magnitude of the
problem, in paragraph 5 on page 2 of the compilation submitted by
Ms. Vishakha, the figures of unclaimed amounts have been set out.
Paragraph 5 reads thus:
“At the very outset, the details pertaining to the unclaimed
amounts as provided in the affidavits received are as under:
1616 [2025] 4 S.C.R.
Supreme Court Reports
S. High Unclaimed Amount Unclaimed Amount
No. Court in MACT in Labour Courts
1. Gujarat Rs.2,82,00,37,779.18 Rs.6,61,39,777.19
2. Allahabad Rs.239 Crores approx Rs.92,39,02,649.10
3. Calcutta Rs.2,53,37,676/- Not available
4. Bombay Rs.4,59,10,66,846/-
5. Goa Rs.3,61,60,495/-
4) In the affidavits, the respective High Courts have given their own
suggestions. Different High Courts have adopted different methods to
deal with the issue. Some of the High Courts appointed committees
to submit recommendations. The committee appointed by the High
Court of Judicature at Bombay has given details of the procedure
followed in such cases in different countries. The report of the High
Court of Judicature at Bombay refers to paragraph 742 of the Civil
Manual applicable to the Courts in Maharashtra, which incorporates
the requirement of deposit of unclaimed amounts into the treasury
of the State Government. We have also carefully perused the
recommendations of the learned senior counsel appointed as
amicus curiae. She has summarised the best practices followed
by various High Courts and has incorporated the same in her
recommendations.
5) The issue arising in this suo motu petition is of great concern. The
amounts represent the compensation granted to claimants in the
claims filed under the 1988 and 1923 Acts. Though the claimants are
held entitled to these amounts, they have not withdrawn the same.
The fact that so many successful claimants have been deprived of
compensation is very disturbing. It is necessary to find a solution.
6) There is a provision under Section 166 of the 1988 Act for making
an application for compensation to the MAC Tribunal established
under the said enactment. Sub-Section (1) of Section 166 reads thus:
“166. Application for compensation.—(1) An
application for compensation arising out of an accident
of the nature specified in sub-section (1) of Section
165 may be made—
[2025] 4 S.C.R. 1617
In Re: Compensation Amounts Deposited with
Motor Accident Claims Tribunals and Labour Courts
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all
or any of the legal representatives of the deceased; or
(d) by any agent duly authorised by the person
injured or all or any of the legal representatives of
the deceased, as the case may be:
Provided that where all the legal representatives of the
deceased have not joined in any such application for
compensation, the application shall be made on behalf
of or for the benefit of all the legal representatives of
the deceased and the legal representatives who have
not so joined, shall be impleaded as respondents to
the application:
Provided further that where a person accepts
compensation under Section 164 in accordance with
the procedure provided under Section 149, his claim
petition before the Claims Tribunal shall lapse.”
6.1 Under Section 176, rule making powers has been conferred on
the State Governments to make rules providing for the form of
application for claims for compensation and the particulars it
may contain. Section 176 reads thus:
“176. Power of State Government to make rules.—A
State Government may make rules for the purpose
of carrying into effect the provisions of Sections 165
to 174, and in particular, such rules may provide for
all or any of the following matters, namely—
(a) the form of application for claims for
compensation and the particulars it may contain,
and the fees, if any, to be paid in respect of such
applications;
(b) the procedure to be followed by a Claims
Tribunal in holding an inquiry under this Chapter;
(c) the powers vested in a Civil Court which may be
exercised by a Claims Tribunal;
1618 [2025] 4 S.C.R.
Supreme Court Reports
(d) the form and the manner in which and the fees (if
any) on payment of which an appeal may be preferred
against an award of a Claims Tribunal; and
(e) any other matter which is to be, or may be
prescribed.”
7) It is not clear how many States have exercised the rule making
power under clause (a) of Section 176 for prescribing the form of
the application under Section 166(1). Applications for compensation
can be made by the persons who have sustained injuries or by the
owners of the damaged property and in case of fatal accidents, by all
or any of the legal representatives of the deceased. Even an agent
duly authorised by the person injured or the legal representatives
of the deceased can also file a claim petition.
8) In absence of the exercise of the rule making power under Section
176 of the 1988 Act by the State Governments, the respective
High Courts can either frame rules of procedure or issue practice
directions for ensuring that material details are disclosed while filing
claim applications under Section 166(1) of the 1988 Act.
9) Till the rules are not framed, the High Courts shall either issue
practice directions or formulate rules of procedure by incorporating
the following provisions:
a) While filing claim petitions under the 1988 Act, following
particulars shall be incorporated:
(i) Names and addresses (local and permanent) of the injured
persons or the owners of the damaged property, as the
case may be, their Aadhar and PAN details and email-id,
if any; and
(ii) Names and addresses (local and permanent) of all the
legal representatives of the deceased victim of the accident
who are claiming compensation, their Aadhar and PAN
details and email-id, if any;
(b) If the aforesaid details are not furnished, the registration of the
application should not be refused on that ground, but MAC
Tribunals at the time of issuing notice may direct the applicant(s)
to furnish the information and make the issue of the notice
subject to making compliance;
[2025] 4 S.C.R. 1619
In Re: Compensation Amounts Deposited with
Motor Accident Claims Tribunals and Labour Courts
(c) 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 along with either a certificate of the banker giving all
details of the bank account of the person or persons entitled to
receive the compensation including IFS Code, or a copy of a
cancelled cheque of the bank account. The Tribunal shall call
upon the claimants to produce the documents within a specified
reasonable time;
(d) A further direction shall be issued to the persons entitled to
receive compensation to keep on updating information regarding
the bank accounts, email id, in case there is any change;
(e) In the event a consent award or consent order is made, the MAC
Tribunals may direct the deposit of the compensation amount
ordered to be released to the claimants directly to the bank
accounts of the persons held entitled to receive compensation.
However, the consent terms must contain all relevant account
details of the persons entitled to compensation in accordance
with clause (c) above. The account details can also be
incorporated in the order passed for the disbursement of the
amount on the basis of a compromise between the parties. In
case of compromise before the Lok Adalats, the MAC Tribunal,
on the basis of the settlement, shall pass a consequential order
in the above terms;
(f) It shall be the duty of the learned Judges presiding over the
MAC Tribunal to verify from the certificate issued by the banker
and ascertain whether the account is of the persons held entitled
to receive compensation;
(g) The MAC Tribunals, while passing orders of withdrawal/
disbursement, shall, in the ordinary course, pass an order of
transfer of the requisite amounts directly to the bank account of
the person/s entitled to receive compensation as per the account
details furnished. If there is a long gap between the date of
furnishing the account details and the date of filing application
for withdrawal of the amount, the Tribunal will be well advised
to get fresh account details of the claimants;
(h) Whenever the MAC Tribunal passes an order of deposit of
compensation amount with the Tribunal, there shall be a direction
1620 [2025] 4 S.C.R.
Supreme Court Reports
issued to invest the amounts to be deposited in fixed deposit
with any nationalised bank and the fixed deposit shall be with
the standing instructions to the bank to renew the same after
periodical intervals till further orders are passed by the Tribunal;
(i) Similarly, practice directions/rules be framed in respect of
adjudication made under the 1923 Act. The above directions
issued while passing awards in claims under the 1988 Act shall
be applied in case of the claims for compensation under the
1923 Act;
(j) The Central Project Co-ordinator of e-court project or Registrar
(Computer/IT) of the High Courts, as the case may be, with
the help of the State Government, shall create a dashboard on
which the information regarding the amounts lying deposited in
connection with the compensation granted under 1988 or 1923
Acts shall be regularly uploaded with all details. It will help all
concerned to implement the directions issued under this order;
(k) All the High Courts shall issue administrative directions to the
MAC Tribunals and Commissioners under the 1923 Act 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;
(l) The State Governments shall provide assistance to the Legal
Services Authorities of the local police officers/revenue officers
of the district and taluka to trace the claimants who are held
entitled to receive compensation;
(m) The State Legal Services Authorities shall monitor compliance
with the directions issued in terms of clauses (k) and (l) above
and report compliance within a period of four months from today.
10) These directions shall continue to bind the MAC Tribunals and the
Commissioners under the 1923 Act till rule-making power is properly
exercised by the Government. The Registry shall forward copies of
this order to the Registrar Generals of all the High Courts as well as
the Member Secretaries of the State Legal Services Authorities of
all the States. We direct the High Courts to take up implementation
of the aforesaid directions at the earliest and submit compliance
[2025] 4 S.C.R. 1621
In Re: Compensation Amounts Deposited with
Motor Accident Claims Tribunals and Labour Courts
reports to this Court on or before 30th July 2025, so that further
directions, if necessary, can be issued. The Registrar Generals, in
their report, shall set out the details of the amounts still lying without
disbursement. The Registry shall forward soft copies of the reports
to Ms. Vishakha, AOR.
11) We make it clear that if the Rules framed by the State Government
or practice directions already issued are consistent with the above
directions, the Rules or the practice directions, as the case may be,
shall be followed notwithstanding this order.
12) We make it clear that all the High Courts are free to take measures
in addition to what is directed under this order to ensure that the
pending amounts reach the claimants.
13) List for reporting compliance on 18th August 2025.
Result of the case: Matter to be listed for reporting compliance.
†
Headnotes prepared by: Divya Pandey
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