Madras HC Issues Guidelines For Settlement Of Just Accident Compensation Under MV Act

It is most refreshing, most rejuvenating and most remarkable that the Madras High Court most recently on September 23, 2020 has in a well-worded, well-reasoned, well-articulated and well-framed judgment titled Manager, United India Insurance Company Limited vs. Shanmugam and others in CMA No. 2854 of 2016 and CMP No. 20682 of 2016 issued detailed guidelines for the settlement of just compensation. This was considered imperative in order to minimize false claims and illegal practices in the matter of settlement of accident claims. These landmark, laudable and learned guidelines were issued by a Bench of Madras High Court comprising of Justice SM Subramaniam in an appeal pertaining to false claim.

First and foremost, the ball is set rolling in this notable judgment by pointing in para 1 that, “The present Civil Miscellaneous Appeal on hand is preferred against the judgment and decree dated 09.06.2016 made in M.C.O.P. No. 931 of 2013 on the file of the Motor Accident Claims Tribunal, Additional District Judge, Namakkal.”

Briefly stated, the key takeaway from para 2 is:

1.  The United India Insurance Company Limited is the appellant.

2.  The 1st respondent/claimant filed a false Claim Petition.

3.  Fraud was thus played on the Court to grab untenable compensation from the Insurance Company.

4.  There is a time delay in registering the FIR.

5.  FIR too was lodged with malafide motive to grab undue compensation.

6.  Claims Tribunal failed to note that the second respondent’s vehicle was not involved in the accident.

7.  Claimant does not give Registration number of the vehicle in question alleged to have been involved while taking treatment.

8.  Claimant gives wrong Registration number of his vehicle while lodging the belated FIR.

9.  Claimant not produced his correct vehicle to the Motor Vehicle Inspector.

10.                   MV Report not placed before the Tribunal.

11.                   After investigation, police found respondent/claimant’s FIR was false and it filed a final report on this.

12.                   Evidence was also produced through RW1, RW2 and Ex.R1 & ExR2 to establish false claim.

13.                   Fraud was thus committed.

More damningly, the key point that is then underscored in para 10 by the Court is this: “The entire facts and circumstances raises a doubt in the mind of the Court. As far as the accident claims are concerned, the facts must be unambiguous. Even in case, there is a loss of memory of the claimant due to the injury, unable to provide the correct vehicle number, at least the Police Investigation should reveal the accident occurring time and the place specified as in the Claim Petition. If the charge sheet of the Police is not corroborating with the facts stated in the Claim Petition, then the Tribunal ought not to have considered the Claim Petition at all. In most of the cases, the facts stated in the FIR has been taken for consideration to establish the accident. But, in the present case, even after the investigation and filing of the charge sheet, Police officials deposed that the facts stated in the Claim Petition is mistaken facts. This being the Primafacie case established before the Tribunal, the Tribunal has not appreciated the contradiction in the Claim Petition as well as in the FIR and the Charge sheet filed by the Police. The deposition of Mr Raja cannot be taken as a valid defence, in view of the fact that he is an interested witness. However, the FIR and the Charge sheet cannot be neglected and it is to be given due weightage. If the basic facts regarding the accidents are not corroborating with the FIR as well as the charge sheet filed by the Police, then there is every reason to disbelieve the case of the respondent/claimant. This Court is of the considered opinion that many number of false claims are filed, processed and the Tribunals are also awarding compensation in a routine manner.”

Finally and far most significantly, the cornerstone and bedrock of this extremely laudable judgment is as envisaged in para 33 which it is held by the Court that, “In order to ensure effective and efficient implementation of the Detailed Accident Report (DAR) as well as for the settlement of just compensation, this Court is inclined to issue the following directions to the respondents:

(1)         The 3rd respondent / Director General of Police, is directed to issue orders to all the Subordinate Police authorities, so as to ensure that on receipt of information regarding any accident, jurisdictional Police shall register the FIR immediately and upload the same on the Crime and Criminal Tracking Network and Systems (CCTNS) Website without any further delay.

(2)         The 3rd respondent / Director General of Police is directed to issue orders, conduct investigation of the accident without any undue delay and further, all other documents contemplated under the Detailed Accident Report (DAR) as per DGP circular dated 02.01.2017 are uploaded periodically during the investigation. The investigation is to be completed and the Final Report is directed to be uploaded within a period of 90 days from date of accident.

(3)         The documents are directed to be uploaded after verification for authenticity with the concerned Departments / Insurance Companies.

(4)         The 3rd respondent / Director General of Police is directed to ensure the Name, Address, Mobile number of the Victim (in injury cases) or of Spouse/Children (in case of fatal accidents) are uploaded in the website clearly. Aadhaar particulars of Victim/Spouse/Children are also to be uploaded to enable identification of the claimants and avoid multiple claim proceedings.

(5)         The 3rd respondent / Director General of Police is directed to suitably modify/alter, so as to send E-mail notifications to specified Email ID of the respective Motor Accident Claims Tribunals and Insurance companies concerned across the State of Tamil Nadu in respect of the FIR and the other documents uploaded by the Police authorities in order to serve the objective of Section 158(6) of the Motor Vehicles Act.

(6) Proper implementation of the D.G.P. Circular and the directions of this Court is to be reviewed once in a month by the Inspector General of Police concerned and lapses, dereliction of duty by any authority are to be viewed seriously and Disciplinary Proceedings are to be initiated seriously and Disciplinary Proceedings are to be initiated against the erring officials.

(7). The 3rd respondent / Director General of Police is directed, in case, where any vehicle involved in accident does not have insurance, the Investigating Police Officer shall not release and shall impound the vehicle.

(8) The 5th respondent / The Director of Medical and Rural Health Services is directed to maintain Accident Registers in all the Government Hospitals across the State for Road Traffic Accidents in a specific colour with continuous running numbers and upload the accident particulars in the Medical Department official website. The uploading of the information is directed to be made within a period of seven (7) days from the date of receipt of information regarding the accident.

(9) The 5th respondent / The Director of Medical and Rural Health Services is directed to ensure Blood Tests are conducted in required Road Traffic Accident Cases under Sections 185 and 204 of the Motor Vehicles Act, 988.

(10) Necessary directions are to be issued to all the Government Hospitals across the State of Tamil Nadu.

(11) The 5th respondent / The Director of Medical and Rural Health Services is directed to ensure that the competent Medical Board examine the referred accident victims and issue ‘Disability Certificate’ within a period of thirty (30) days from the date of such reference.

(12) The Motor Accident Claims Tribunals across the State of Tamil Nadu are directed to follow up the cases uploaded by the Police authorities in Crime and Criminal Tracking Network and Systems (CCTNS) by downloading the FIR along with the relevant documents. Thereafter, the FIR shall be numbered under Section 166(4) of the Motor Vehicles Act, 1988, within a period of fifteen (15) days from the date of intimidation and the CCTNS website is to be followed up for downloading the complete set of documents from the concerned Police authorities. The Police authorities are already directed to complete the investigation and submit the final report within a period of 90 days from the date of accident.

(13) The Motor Accident Claims Tribunals across the State of Tamil Nadu are directed to issue notice to the victims and the concerned Insurance Companies / Transport Corporations / Owners as the case may be, within a period of fifteen (15) days from the date of numbering the FIR and take initiative/consider settlement of claims to the victims on the specified date recording the Aadhaar number of the Claimant, so as to enable verification of proceedings at the later date.

(14) If the parties had reached a settlement, then the Motor Accident Claims Tribunal shall record the same, pass award in terms of the settlement and direct payment of the agreed compensation as per the prevailing procedures followed by the Tribunal in passing awards.

(15) If no settlement is concluded on the notified date or any further adjourned date, within a specified time by the Tribunal on account of any specific dispute with regard to liability, then the Pre-Litigation file may be closed by the Tribunal.

(16) If the Victim/Claimants desire to conduct the Pre-Litigation proceeding before any other Motor Accident Claims Tribunal (having jurisdiction under Section 166 of the Motor Vehicles Act) those claimants may be permitted to inform the Tribunal about their willingness in the form of an affidavit/letter and on receipt of the same, the Tribunal is directed to transfer the Pre-Litigation proceedings to the Tribunals opted by the Victim/Claimants.

17. If there is no settlement arrived between the parties in the Pre-Litigation proceedings, the Claimant shall have the right to pursue a claim under Sections 166 or 163-A of the Motor Vehicles Act.

18. With reference to the Motor Accident Claims Tribunal may take a decision and refer the proceedings to the Legal Services Authority for dealing with the same and in case, there is a settlement, the proceedings can be reported back to the Tribunal for passing award or in case, no settlement, for closing the Pre-Litigation Proceedings. In this regard, the Legal Services Authorities have been provided access to DAR Online and thus involve in the scheme of relief to victims.

19. The Motor Accident Claims Tribunals are directed to readily use the informations and documents uploaded in the Detailed Accident Report (DAR) in all pending trials to avoid delay in disposal of the claims cases.

20. The Motor Accident Claims Tribunals having special and direct access to the documents through Detailed Accident Report (DAR), is directed to use the same, if there is no dispute regarding the documents uploaded by the Police authorities. Those documents shall be relied upon for the purpose of disposal of the Claim Petition as the entire procedure require to be summary in nature. The online documents being authenticated with water mark, would satisfy Section 65(B) of the Evidence Act mandate and may be marked as Exhibits. Thus, Trial can be shortened to avoid delay and prejudice to claimants.

21. The Motor Accident Claims Tribunals are directed to ensure with reference to Pay and Recover rule, that the victims do not suffer lengthy trials and erring owners/drivers do not escape liability, despite flouting the statutory provisions in use of motor vehicles.”

For the sake of clarity, it is then made clear in para 34 that, “The above directions are issued for efficient and effective process to settle the compensation to the Accident Victims. It is made clear that though there are provisions in Motor Vehicles Act and Tamil Nadu Motor Accident Claims Tribunal Rules with regard to the application to be filed by the victims for compensation, enquiry by Tribunal and passing of award, those provisions would neither affect the jurisdiction of the Tribunal to act under Section 166(4), nor can be construed as any bar against the formulation of any mechanism for settlement of Pre-Litigation or the use of DAR Online, in the light of the march of the law since Rajesh Tyagi’s judgment as affirmed by the Hon’ble Supreme Court in Jai Prakash and M.R. Krishnamoorthy’s cases.”

Be it noted, it is then made clear in para 35 that, “The Respondents R3, R4 and R5 are directed to submit their Compliance Report on or before 18.01.2021.”

Finally, it is then held in the last para 36 that, “Accordingly, the judgment and decree dated 09.06.2016 passed in the M.C.O.P. No. 931 of 2013 is set aside and the Civil Miscellaneous Appeal in C.M.A. No. 2854 of 2016 stands allowed with directions. No costs. Consequently, connected miscellaneous petition is closed.”

No doubt, these guidelines that have been given by the Madras High Court must be implemented in letter and spirit. It would be best for efficient and effective process to settle the compensation for the accident victims. It would also check the false claim of compensation in cases of accidents to a great extent which is the crying need of the hour also! There can be no denying or disputing it!

Sanjeev Sirohi