Gauhati HC issues practice directions for disclosure of details while filing compensation applications under Section 166 (1) MV Act

Gauhati High Court: On 02-05-2025, the Court issued a notification providing practice directions for the disclosure of material details while filing motor vehicle claim (“MAC”) applications under Section 166 (1) of the Motor Vehicles Act, 1988 (“MV Act”) to all Motor Accident Claims Tribunals (“MACTs”) or Courts taking up MAC cases where there are no designated MACTs.

Background

In Compensation Amounts Deposited with Motor Accident Claims Tribunals & Labour Courts, In re, 2025 SCC OnLine SC 876, the Court took note of large amounts payable by way of compensation under the MV Act and the Workmen’s Compensation Act, 1923 (“the 1923 Act”) which were lying deposited with the MACTs and Labour Courts. The Division Bench of Abhay S. Oka and Ujjal Bhuyan, JJ., pointed out that it was not clear how many States had exercised the rulemaking power under Section 176(a) of the MV Act for prescribing the form of the application under Section 166(1) of the MV Act.

The Court highlighted that Section 166 of the MV Act exists for making an application for compensation to the MACT established under the said enactment. Furthermore, under Section 176 of the MV Act 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. The Court stated that in absence of the exercise of the rule making power under Section 176 of the MV 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 MV Act.

Accordingly, the Supreme Court directed the High Courts to frame rules of procedure or issue practice directions.

Directions

Pursuant to these directions, the Gauhati High Court issued the following practice directions for ensuring the disclosure of material details while filing claim applications under Section 166 (1) of the MV Act to all MACTs/ Courts taking up Motor Accident Claims (“MAC”) cases where there are no designated MACTs:

1. While filing claim petitions under the MV Act, the following particulars shall be incorporated:

   1. Names and addresses (local and permanent) of the injured persons or the owners of the damaged property (as the case may be), their Aadhar details, PAN details and email-ID, if any; and

   2. Names and addresses (local and permanent) of all the legal representatives of the deceased victim who are claiming compensation, their Aadhar details, PAN details, and email-ID, if any.

2. Non-furnishing of the aforesaid details should not be the ground for refusal of the registration of the application. However, the MACTs/ Courts may, at the time of issuing notice, direct the applicant(s) to furnish the same and make the issuance of the notice subject to such compliance.

3. While passing an interim or final order for the grant of compensation, the MACTs/ Courts shall call upon the person(s) held entitled to receive compensation, to produce their bank account details along with either a certificate of the banker giving all the bank account details of those entitled to compensation including the IFS Code, or a copy of a cancelled cheque of the bank account. The Tribunal/ Court shall call upon the claimants’ documents within a specified reasonable time.

4. The person(s) entitled to receive compensation shall keep on updating information regarding the bank accounts, email-ID, in case there is any change.

5. If a consent award or order is made, the MACTs/ Courts may direct the deposit of the compensation amount directly to the bank accounts of the persons held entitled to receive compensation. However, the consent terms must contain all relevant account details of such persons in accordance with Clause III. The account details can also be incorporated in the order for the disbursement of the amount based on a compromise between the parties. In case of compromise before the Lok Adalats, the MACT / Court, on the basis of the settlement, shall pass a consequential order in the above terms.

6. It shall be the duty of the Presiding Officers of the MACTs/ Courts to verify from the certificate issued by the banker and ascertain whether the account is of the persons held entitled to receive compensation.

7. The MACTs/ Courts, 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 MACTs / Courts will be required to get fresh account details of the claimants.

8. Whenever the MACTs/ Courts pass an order of deposit of the compensation with the Tribunal/ Court, there shall be a direction 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.

The Court stated that this notification shall come into effect immediately and remain in force till appropriate Rules are framed/ notified by the respective State Governments.