Supreme Court’s Landmark Decision: Direct Bank Transfer for Road Accident Compensation
In a significant move aimed at expediting compensation for road accident victims and their families, the Supreme Court of India has ordered the implementation of a Direct Bank Transfer (DBT) system for payouts in such cases. With over five lakh individuals affected by road accidents annually—resulting in numerous compensation claims filed before tribunals—this decision seeks to minimize delays and streamline the process.
Understanding the Current Compensation Process
Traditionally, when compensation claims are filed, insurance companies deposit the awarded amounts with the Motor Accident Claims Tribunal (MACT). Unfortunately, this often leads to delays as many claimants remain unaware of the deposits made by insurers. For instance, in a recent case, the Supreme Court enhanced the compensation from ₹12 lakh to ₹36.8 lakh, underscoring the urgent need for a more efficient payout system.
How Direct Bank Transfer Works
The Supreme Court has directed that MACTs can request claimants to provide their bank account details at the initial stage. Consequently, insurers are required to directly transfer the undisputed compensation amounts into the claimants’ accounts, ensuring quicker access to funds. This DBT method will not only apply to initial claims but also be adopted once the tribunal makes a final award.
Statistics Highlighting the Need for Change
The bench’s decision comes in light of alarming statistics from the last five years, revealing a high number of road accident fatalities and injuries. For example, in 2022 alone, there were 1.6 lakh deaths and 4.4 lakh injuries, emphasizing the urgent need for efficient compensation mechanisms.
Embracing Digital Payments
With India making significant strides in popularizing digital payments, the court advocates for a similar approach in the insurance sector. By adopting DBT, claimants no longer have to endure lengthy waits for their rightful compensation.
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