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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