The Supreme Court has affirmed that the Motor Accidents Claims Tribunal (MACT) retains the authority to decide whether compensation awarded in road accident cases should be released in full or in installments. The Court clarified that such decisions by the Tribunal must be reasoned and aligned with the welfare objectives of the Motor Vehicles Act, 1988.

The Bench of Justice MM Sundresh and Justice Aravind Kumar said, "...it is for the Tribunal in a given case to make a decision as to whether the entire amount has to be released or if it is to be released in part. Suffice it is to state that the Tribunal is expected to give its own reasoning while undertaking such an exercise."

The Court was dealing with a Writ Petition challenging Rule 150A of the Central Motor Vehicles (Amendment) Rules, 2022, along with Annexure XIII, which outlines procedures for investigating road accidents. The petitioner contended that Rule 36 of Annexure XIII, which mandates phased release of compensation through fixed deposits under the MACT Annuity Deposit Scheme, curtails the MACT's powers under Sections 168, 169, and 176 of the Act.

Senior Advocate S. Prabakaran, appearing for the petitioner, argued that Rule 36 is unwarranted as it will not facilitate a claimant receiving the money which he is entitled to, in a lump sum, particularly in a case where the dispute is resolved through mediation.

However, the Court underscored that Rule 36 must be read harmoniously with Rule 35, which grants the MACT discretion in determining the release mechanism of compensation amounts.

Amicus curiae N. Vijayaraghavan, highlighted that Rule 150A primarily governs accident investigation procedures and does not override the substantive provisions of the Motor Vehicles Act.

The Court concurred, noting that Rule 150A should be interpreted in conjunction with the Act's provisions, which are designed to benefit accident victims. The Bench noted, "it has no connection with the parent statutes, namely, Sections 166, 168, 169 and 176 of the Act. The said Rule has got a laudable objective, and has to be read along with Section 159 of the Act by which the information given regarding an accident would be treated as a complaint."

"..the aforesaid position of the compliance of Rule 150A read with Section 159 of the Act being incidental and ancillary in a claim petition has been made amply clear by sub-Section 4 of Section 166 of Act," the Court added.

The Court further explained the relevance of Rule 21, which treats the Detailed Accident Report (DAR) as a claim petition under Section 166(4) of the Act. It outlined procedural aspects such as handling separate claim petitions and waiting for the Final Accident Report (FAR) under Section 173 of the CrPC.

"Therefore, the provisions quoted above are certainly pieces of welfare legislation meant for the benefit of the litigant. Upon material being placed before the Court, a lawyer representing the claimant would be in a better position to seek adequate compensation as the litigant would also get a copy of the DAR Report. Thus, we do not find anything contrary to Act that has been stated under Rule 150A," the Bench held.

Emphasizing the legislative intent behind these provisions, the Court dismissed the petitioner's argument that Rule 150A contradicts the Act. With these clarifications, the Court disposed of the Special Leave Petition, affirming the MACT's discretion in administering compensation awards in road accident cases.

Cause Title: Bajaj Allianz General Insurance Company Private Ltd. v. Union of India & Ors.

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Justice MM SundreshJustice Aravind KumarMotor Accidents Claims Tribunal

Sukriti Mishra