Sunday 15 September 2024

Supreme Court: Legal Services Authority or any Agency/Mediation Group should assist the claimant of motor accident for obtaining a Pan Card

 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. 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.

 S U P R E M E C O U R T O F I N D I A

 RECORD OF PROCEEDINGS

Writ Petition(s)(Civil) No(s). 534/2020

BAJAJ ALLIANZ GENERAL INSURANCE COMPANY PRIVATE LTD. Vs UNION OF INDIA & ORS. 

Date : 16-11-2021 The matter was called on for hearing today.

CORAM :

 HON'BLE MR. JUSTICE SANJAY KISHAN KAUL

 HON'BLE MR. JUSTICE M.M. SUNDRESH


 UPON hearing the counsel the Court made the following

 O R D E R

We have perused the report dated 21.10.2021

submitted by Mr. Jayant K. Sud, learned Additional

Solicitor General in compliance of our order dated

03.08.2021 and he has made certain suggestions. He

has also sought directions from this Court. We

consider it appropriate to issue the following

directions:

i) A format for payment advised for remittance

of compensation has been devised and followed in the

Madras High Court and the Rajasthan High Court and

the same is extracted from the judgment of the

Madras High Court in Divisional Manager vs. Rajesh,

2016 SCC Online Mad. 1913, dated 11.03.2021. We

thus direct that the same format will be followed

across the country;

ii) A linked issue pointed out by Mr. N.

Vijayaraghavan, learned Amicus Curiae is that the

amounts deposited in the Tribunals are being

credited in savings account with the result that

there is accrued interest which keeps lying

unattended. The suggestion is that the amount

should be credited to a current account. We,

however, do not agree with this solution but are of

the view that the amounts should continue to be

credited with the savings account to earn interest

but we deem it appropriate to issue a general

direction that whereever 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) In order to put the liability of the

insurance company to an end, on deposit of the

amount, the insurance company/depositor will

communicate the factum of the deposit

forthwith/expeditiously to the concerned Motor

Vehicle Accident Claims Tribunal with a copy to the

beneficiary;

(iv) As far as the aspect of the issuance of

certificate on disability of victims is concerned,

it is reiterated that the guidelines laid down by

this Court in Raj Kumar v. Ajay Kumar and Anr.,

(2011) 1 SCC 343 mandatorily must be followed by the

MACTs, in respect of loss of income due to

injury/disablement. The District Medical Board is

also directed 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 authorized 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 some reason for

suspicion on the document;

(v) 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. 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.

Learned Additional Solicitor General appears

to have addressed a communication in the larger

context to the Finance Minister and we would expect

the Finance Ministry to bestow urgent consideration

on the same;

vi) On the issue of the direction passed on

16.03.2021 for circulation of those directions to

the local Police stations, MACT Courts to improve

the efficiency, learned Additional Solicitor General

submits that on verification, it is found that only

13 States have complied with the same. There are 22

non-complying States and Union Territories in this

behalf which are as under :

S. NO. NATEM OF STATE

1. State of Chhattisgarh

2. State of Gujarat

3. State of Maharashtra

4. State of Meghalaya

5. State of Tamil Nadu

6. State of Telangana

7. U.T. of Delhi

8. State of Puducherry

9. State of Uttar Pradesh

10. State of Kerala

11. State of Karnataka

12. State of Andhra Pradesh

13. State of Himachal Pradesh

14. State of Bihar

15. State of Jharkhand

16. State of Madhya Pradesh

17. State of Sikkim

18. State of Uttarakhand

8

19. U.T. of Daman and Diu and Dadra and

Nagar Haveli

20. U.T. of Jammu and Kashmir

21. U.T. of Ladakh

22. U.T. of Lakshadweep


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 Mr. 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;

(vii) On 03.08.2021, we were assured that all 26

insurance companies were on board to develop a common

mobile App. Learned counsel had entered appearance

for GIC and it appears that on enquiry by the learned

Additional Solicitor General, a response was received

from the Secretary General of the GIC on 20.09.2021

now stating that the GIC was willing to develop a

mobile App. if certain specific directions were given

by this Court.

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;

(viii) In respect of direction (VI) passed earlier

for the learned Additional Solicitor General to

look into the feasibility of withdrawing exemptions

given to the vehicles of the State Corporation(s) 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, learned Additional

Solicitor General submits that on examination, it

has been 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;

In respect of the aforesaid Mr. N.

Vijayaraghavan, Amicus Curiae has drawn our attention

to Section 146 of the Motor Vehicles Act, 1988,

which reads as under :

“146. Necessity for insurance against

third party risks.-(1) No person shall

use, except as a passenger, or cause or

allow any other person to use, a motor

vehicle in a public place, unless there

is in force, in relation to the use of

the vehicle by that person or that other

person, as the case may be, a policy of

insurance complying with the

requirements of this Chapter:

Provided that in the case of a

vehicle carrying, or meant to carry,

dangerous or hazardous goods, there

shall also be a policy of insurance

under the Public Liability Insurance

Act, 1991 (6 of 1991).

Explanation- For the purposes of this

sub-section, a person driving a motor

vehicle merely as a paid employee, while

there is in relation to the use of the

vehicle no such policy in force as is

required by this sub-section, shall not

be deemed to act in contravention of the

sub-section unless he knows or has

reason to believe that there is no such

policy in force.

(2) The provisions of sub-section(1)

shall not apply to any vehicle owned by

11

the Central Government or a State

Government and used for purposes not

connected with any commercial

enterprise.

(3) The appropriate Government may, by

order, exempt from the operation of subsection(1), any vehicle owned by any of

the following authorities, namely:-

(a) the Central Government or a State

Government, if the vehicle is used for

purposes connected with any commercial

enterprise;

(b) any local authority;

(c) any State Transport Undertaking:

Provided that no such order shall be

made in relation to any such authority

unless a fund has been established and

is maintained by that authority in such

manner as may be prescribed by

appropriate Government.

Explanation- For the purposes of this

sub-section, “appropriate Government”

means the Central Government or a State

Government, as the case may be, and-

(i) in relation to any corporation

or company owned by the Central

Government or any State Government,

means the Central Government or that

State Government;

(ii) in relation to any corporation

or company owned by the Central

Government and one or more State

Governments, means the Central

Government;

(iii) in relation to any other State

Transport Undertaking or any local

authority, means that Government which

has control over that undertaking or

authority.”

A reading of the aforesaid provision makes it

clear that any exemption from operation of sub-

12

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, and

(ix) In respect of direction (VII) for settlement

of motor accident claims through online Mediation,

it has been proposed by learned Additional Solicitor

General that consideration of this direction may be

deferred for the time being as the Central Mediation

Act is in public domain which includes the process of

online mediation and objections/suggestions are

invited for the same. In fact, the illustration

available from the State of Maharashtra itself shows

that Motor Vehicles Act cases constitute 35% of the

break up of pending cases in a representative civil

cases in that State and that National Judicial Data

Grid reveals that 25% of the motor accident claims

are pending for 3 years or above before MACT. There

is also further appeal to the High Court. The ADR

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.

We categorically hold that all directions

passed today must be duly and properly implemented

and post implementation, the learned Additional

Solicitor General be informed.

List for further directions on 27.01.2022.


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