Supreme Court for online mediation to settle motor accident claim cases

The Supreme Court has observed that Alternative Dispute Resolution methodology has proved ‘extremely effective’ in motor accident claim cases, while considering submission for adopting a mechanism for settlement of motor accident claims through online mediation. 

The bench, led by Justice Sanjay Kishan Kaul and Justice MM Sunderesh, will hear the plea tomorrow filed by one of India’s largest insurance firms, Bajaj Allianz General Insurance Company, on the plight of victims who have been waiting for years for compensation. 

The Apex Court had already passed a slew of directions in its previous orders. On November 16, last year the Court had granted 3 months time to Central Govt and State Govt to create a fund pool to meet their liabilities towards the claimants in motor accident claim cases. The Courts direction came after it was informed by the Additional Solicitor General, Jayant K Sud, that it would not be possible for the Centre to withdraw the exemption provided under the Motor Vehicle Act from “Necessity of Insurance against third party risks” for vehicles owned by Government. 

The Court noted in its order that “bare reading of the provision makes it clear that any exemption from operation of sub-Section (1) under sub-Section (3) of vehicles owned by any of the authorities specified therein is coupled with the proviso that no such order would be made in relation to any such authority unless a fund has been established and maintained by that authority in such a manner as may be prescribed by the appropriate Government.”

“The aforesaid

being the position, we grant 3 months’ time to the appropriate Government to create the funds to cover the requirement of disbursement of compensation and initially the fund should consist of at least as much is the liability which has arisen on account of determination for the last 3 financial years. In case, this is not so done, in view of the provision as it stands, we direct that the exemption benefit shall not be made available and the authorities will not be able to claim such exemption. This direction becomes necessary as subSection (1) of Section 146 begins with the clause that no person shall be entitled to use the vehicle in the absence of the same and thus non-compliance would amount to putting the vehicle on stand,” the Court added in its order. 

Follow guidelines issued by Ministry of Social Justice and Empowerment for issuance of Permanent Disability Certificate to bring pan India uniformity: SC

The Court has reiterated its earlier guidelines passed in the matter of “Raj Kumar Vs Ajay Kumar and Anr.” with regard to the issuance of certificate of disability of victims in motor accident claim cases and said it should be mandatorily be followed by the MACTs, in respect of loss of income due to injury/disablement. The Apex Court has further directed the District Medical Board to follow the guidelines issued by the Ministry of Social Justice and Empowerment, Government of India vide Gazette Notification S. No. 61, dated 05.01.2018, for issuance of disability Certificate in order to bring Pan India Uniformity.

The consequence is that the MACT would ascertain that permanent disability certificate issued by the District Medical Board or body authorised by it is in accordance with the Gazette Notification alone. Once the certificate is issued in this manner, the same can be marked for purposes of being taken into consideration as evidence without the necessity of summoning the concerned witness to give formal proof of the documents unless there is a reason for suspicion on the document,” the Court said further. 

On Issue of Tax Deduction 

The aspect of disparity in the Tax Deduction at Source (TDS) certificate in Motor Accident Claims, wherein from 10% to 20% dependent on whether the claimants have a Pan Card or not can be redressed by a direction that the Legal Services Authority or any Agency/Mediation Group should assist the claimant for obtaining a Pan Card, where the claimant does not have one, in order to avoid 20% deduction of tax at source, said the Supreme Court. 

“The format of the applications for compensation and motor accidents claims is being modified by inserting the relevant column just after the requirement to set out whether the claimant is income tax assessee or not and whether the claimant has a Pan Card or not and in case has a Pan Card to provide the Pan No. and in case the application is so pending, to provide the application/Reference No. The formats of the applications across the country be suitably amended to facilitate this process,” the Court added.

The Top Court has also pulled up non complying State Govts and Union Territories which had not followed it previous directions to the local police stations and MACT courts to improve the efficiency in Motor Accident Claim Cases. The Court was informed by the Additional Solicitor General that only 13 states have complied with the directions issued on 16.03.2021 and at present there are 22 non-complying States and Union Territories. On 16.03.2021, the Supreme Court in this matter had issued directions with regard to the “Accident Information Report” in Motor Accident Cases. “The jurisdictional police station shall report the accident under Section 158(6) of the Act (Section 159 post 2019 amendment) (hereinafter “the report”) to the tribunal and insurer within first 48 hours either over email or a dedicated website,” directed the Supreme Court. Further it passed certain directions to States and Union territories with regard to the “Detailed Action Report” and to the Motor accident claims tribunals in order to bring uniformity across the Country. 

“In view of the recalcitrant attitude of the States, we direct the Registrars General of the High Courts of these States to ensure implementation and submit a compliance report to Jayant K. Sud, learned Additional Solicitor General, who would thereafter inform us. It would also be appropriate that the

Registrars General would call upon the DGPs. of each State to appoint a nodal officer for submitting the status reports as and when called upon to do so. The Registrars General would also interact with the Judicial Academy for conducting training and awareness sessions periodically not only for the Presiding Officers of the MACTs. but also Police Officers, nodal persons of insurer,Presiding Officers of Lok Adalat/ Online Mediation Group etc. to enhance the awareness in implementation of the directions,” said the Court in its Order. 

Two months time granted to GIC and Insurance Companies to develop a mobile app: SC 

The Top Court has granted two months time to the General Insurance Corporation of India and the insurance companies to develop a common mobile app. The Courts direction came after it was informed by the Secretary General of GIC that it was willing to develop a mobile application if certain specific direction were given by the Court. 

The Court pulled up insurance companies while noting, “we do not appreciate this approach of the GIC and the Insurance Companies. The directions dated 16.03.2021 and 03.08.2021 are comprehensive enough. The insurance company cannot wriggle out of the earlier directions.”

“Either they are able to develop it or we would call upon Government to develop an App which would have to be imposed on the insurance companies. We thus direct the needful to be done within a period of 2 months,” directed the Court in its order dated 16.11.2021.

Drawing on its “pan-India experience”, Bajaj in its plea has submitted that in many parts of the country, the police took months to even file an accident report for submission before the Tribunal. The report is the first step towards fixing compensation under the Motor Vehicles Act. This delay is often due to chronic shortage of manpower in the police force, unwieldy geography or pure lethargy.

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