MACT cases: Supreme Court orders insurance companies to develop common mobile app, issues directions to expedite payment of compensation – 18.11.2021

The Supreme Court said that if the insurance companies fail to develop the app within two months, the Court will call upon the government to do so.

The Bench of Justices Sanjay Kishan Kaul and MM Sundresh also declined the request by the General Insurance Corporation (GIC) seeking certain specific directions from the Court so that it can develop the app.

In this regard, the Court stated that its earlier directions in March and August this year are comprehensive enough while adding that if the GIC and other insurance companies fail to develop the app within two months, the Central government will be called upon to do so.

"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 from today and do not accede to the request of the learned counsel for giving some enlarged time for the said purpose, more so, on account of not having put forth the correct position before this Court," the Court said.

The directions came on a petition by Bajaj Allianz General Insurance Company.

Earlier on March 16, the Court had passed a slew of other directions in the same case with a view to facilitate and make procedures in Motor Accident Claims Tribunal (MACT) cases more smooth and claimant friendly

In its order on Tuesday, the top court apart from the direction on mobile app, also passed following directions:

(i) The Court directed that the format of payment remittance issued by Madras High Court in Divisional Manager v Rajesh Court be implemented throughout the country.

(ii) The Court rejected Amicus Curiae N Vijayraghavan's suggestion to move the amounts deposited in the MACT from savings to current accounts. Instead, it ordered that whenever orders are passed for disbursement of compensation to the beneficiaries, any such interest would enure to the benefit of the beneficiaries and would follow the principal amount.

(iii) Further, the insurance companies were directed to inform the MACT of the payment of the dues along with issuing a copy to the beneficiary. The bench opined that this will end the liability on such insurance companies/depositers.

(iv) The bench also emphasised that the guidelines laid down in Raj Kumar v Ajay Kumar and Anr for the issuance of disability certificate to the victims must be strictly adhered to by the MACT with respect to income lost due to injury/disablement. To bring uniformity across the country, the District Medical Board was instructed to follow the guidelines issued by the Ministry of Social Justice and Empowerment about issuance of disability certificate. This certificate can be used as evidence unless found suspicious.

(v) Further, the Legal Services Authority or the relevant agency/ mediation groups were instructed to assist the claimant-beneficiary in obtaining a Permanent Account Number (PAN) card. The availability of a PAN card avoids 20 percent of tax deduction at the source. The Finance Ministry was asked to pay due attention to the Additional Solicitor General (ASG) Jayant K Sud's communication in this regard.

(vi) The Court was displeased to note that only 13 States and Union Territories had circulated directions issued on March 16, 2021 to the local police stations and MACTs. The Registrar Generals of High Courts of the remaining States and Union Territories were directed to ensure compliance and to inform the ASG of the same. The Registrar Generals were asked to direct the respective Director General of Police to appoint a nodal officer to submit a status report when called for.

(vii) In respect of direction passed earlier for the learned Additional Solicitor General to look into the feasibility of withdrawing exemptions given to the vehicles of the State Corporations for insurance, or in the alternative to create a mechanism to ensure that a sufficient fund pool was available with these corporations for meeting their liabilities towards the claimants, the ASG submitted that on examination, it was found that it was not feasible to withdraw the exemptions.

"If that be the position, then the alternative must come into force to create a mechanism to ensure that a sufficient fund pool is available with these Corporations," the Court directed.

The previous direction of allowing settlement of such claims by online mediation was put on hold as the ASG apprised the court that Central Mediation Act is in public domain which holds a similar provision.

"The ADR (alternate dispute resolution) methodology has been found to be extremely effective in these cases. Some suggested directions have been set out but since deferment is sought in this behalf we will consider the same on the next date," the court said.