Compensation in Motor Accident Cases must be paid through Annuity Scheme, not as lump sum: Madras HC

A case that had its origins in the pernicious issue of duplicate claims filed in motor accident cases has culminated in the Madras High Court issuing a series of directions reforming the field of motor accident insurance claims jurisdiction itself..In the latest and final order passed in the matter, the Court has also directed that motor accident compensation can only be disbursed through annuity schemes, in compliance with the Supreme Court’s directions in MR Krishnamurthy v. New India Assurance Co Ltd..“This Court has a duty to follow the mandate of the Supreme Court. It therefore directs the Registrar General, High Court of Judicature at Madras, to issue a Circular, preferably within two weeks hereof, to all the Motor Accidents Claims Tribunals in Tamil Nadu and Puducherry, to implement the MACAD Scheme [annuity scheme] as mandated by the Supreme Court in the order dated 05.03.2019 in M.R.Krishnamurthy (supra)….…Upon issue of such Circular, it is hereby made clear that all the Claims Tribunals in the State of Tamil Nadu and Union Territory of Puducherry shall strictly abide by the Motor Accidents Claims Annuity Deposit Scheme (MACAD) framework in the matter of disbursement of just compensation to all accidents victims. The implementation of the MACAD Scheme shall be on and from 01.10.2019, to put the logistics in place, for practical and realistic reasons.”.Case background.After an insurance company, Cholamandalam, had approached the High Court seeking an independent probe into a motor accident case involving duplicate claims, the Court had taken note of broader issues concerning litigation in motor accident cases in July last year..Over the course of hearings, the Court had taken it upon itself to address the unofficial turf war amongst lawyers when it comes to motor accident cases. An Expert Body headed by retired Madras High Court Judge, Justice K Chandru was constituted to examine these issues..While passing his final order in the matter on Wednesday, Justice PN Prakash observed,.“Just look at what the Expert Body has collated, compiled and found. And it says, it may be the tip of the iceberg. It boggles the mind that so much money rides in this welfare jurisdiction, in the name of just compensation to accident victims and so much injustice is being perpetrated by the practitioners, in tandem with touts and brokers, with not so little complicity from police and hospital administrations and even ambulance services and drivers. .It is truly staggering that the exposure by the Expert Body in all its reports, has been going on without even a semblance of an attempt at redressal. The practitioners have been one up and ahead of any sort of policing. That only a few of them have been hauled up or have faced the music does not augur well for the disciplinary jurisdiction of the BCTNP.”.To put things in perspective, the judge has noted in his order,.“…it may suffice to extract a Tabular Statement disclosing that 276 [duplicitous] motor accident claim petitions worth Rs.48,22,93,000/- stood withdrawn, thanks to the efforts of the Expert Body and the pendency of these proceedings.“.Seven advocates named in Justice Chandru’s report as being complicit in filing duplicitous motor accident claims had been directed to defend themselves against the allegations. Upon finding their explanations unsatisfactory, the Court had directed the Bar Council of Tamil Nadu and Puducherry to initiate disciplinary action against them..The final order passed in the matter only intimates that a compliance report in this regard is expected to be submitted by the Bar Council by November 2019. The Court has also expressed hope that the Bar Council will also do its part to ensure that delinquent lawyers practicing in the motor accident claims jurisdiction will be weeded out..“The Expert Body has nailed them with facts, figures, records, documents, not the least from the letters and sworn affidavits of practitioners themselves. Hope and trust the BCTNP would be seen to be proactive to cleanse the muck that so rudely stares us from the reports of the Expert Body and goings on in these proceedings. “.This apart, the Court also made note of the progress made in the inquiry ordered into a claim that a lawyer handling motor accident matters had lost 56 case bundles. Justice Prakash observed that the investigation in the matter is yet to reach its logical end..Welfare Measures directed.The matter had further prompted Justice Prakash to earlier direct the implementation of various welfare measures throughout the course of the case, including directions to MCOP (Motor Vehicle Accidents Claims Original Petitions) Tribunals to upload witness depositions online and directions to ensure that the personal appearance of claimants should be insisted upon in motor accident cases..Additionally, Justice Prakash has now also emphasised that the authorities must follow up on the report submitted by the Expert Committee headed by Justice Chandru, including the implementation of reformatory suggestions made therein. Particular directions issued in this regard include the following:.Motor Accident compensation to be paid only through Annuity Scheme.A notable suggestion in this regard pertains to the implementation of the Motor Accident Claims Annuity Deposit (MACAD), whereby claimants would have “total control over the compensation and fate and not suffer leakage.” The direction to implement this measure was made in the Supreme Court case of MR Krishnamurthy v. New India Assurance Co Ltd..In view of the same, the Court has now reiterated that it is mandatory that insurance claim compensation is availed only through this annuity scheme, and not as a lump sum amount. The order states,.“The Registrar General is directed to send the Circular along with a copy of this order and duly annex the documents relating to implementation of the MACAD Scheme as well. The said documents are annexed to this order for ready reference….…There shall be no exception made to this MACAD Scheme compliance, even in claims which are settled by way of compromise by Alternate Dispute Resolution mode, be it in Lok Adalat or Mediation dispensations, except as may be provided for in the Scheme itself, for reasons to be recorded in writing by the Claims Tribunals.”.As noted above, a circular to this effect is expected to be issued and the annuity scheme system is to be implemented by October this year..Strictly ensure that Detailed Accident Report (DAR) is uploaded.As regards earlier concerns that the Detail Accident Report (DAR) is not being uploading on online/digital platforms, the Court noted that the police has now pulled up their socks and implemented the same effectively..All the same, Justice Prakash reiterated that the police authorities must ensure to “strictly upload the name and mobile number of the victim or claimant representing the victim as soon as possible, to enable the victims/claimants to access the records.”.Implementation of 48-Hour Trauma Case may be addressed in PIL on judicial side.Before parting with the matter, the Court also opined that there is a need to ensure that in all motor accident cases, 48 hour emergency care is readily available since this time is crucial to save the victim’s life. In this regard, the Court was apprised that the state has already endorsed the measure and has been conducting meetings to plan its implementation..Additionally, the Court has also directed the General Insurance Council, Mumbai (representing all the licensed general insurers handling motor insurance portfolio) to participate in such meetings..Further the Court has also referred the issue for being addressed on the judicial side as a public interest litigation..“…this Court is inclined to recommend to the Hon’ble Chief Justice, Madras High Court, on the Administrative Side, on this issue of 48 Hour Trauma care, to be addressed, on the judicial side as a public interest litigation, as deemed fit by the Master of Roster of this Court.” .Bar & Bench is available on WhatsApp. For real-time updates on stories, Click here to subscribe to our WhatsApp.