Note on Suo Motu W P No. 12935 of 2021. 1. A truly path-breaking judgment has been delivered by Justices P N Prakash and Abdul Qudhhose on 17.03.2022, in relation to Motor Accidents Claims jurisdiction, as it is, in 322 Motor Accidents Claims Tribunals in Tamil Nadu and Puducherry.

Note on Suo Motu W P No. 12935 of 2021

1. A truly path-breaking judgment has been delivered by Justices P N Prakash and Abdul Qudhhose on 17.03.2022, in relation to Motor Accidents Claims jurisdiction, as it is, in 322 Motor Accidents Claims Tribunals in Tamil Nadu and Puducherry.

2. By orders dt.15.06.2021, the then Chief Justice, Madras High Court, had directed constitution of this Special Bench to ‘audit’ this jurisdiction. In the wake of misappropriation of Rs.1,51,30,000/— One crore fifty one lakhs and thirty thousand, committed by a court official, now retired, in Pattukottai MACT,Thanjavur District.,

3. Further to 3 internal committees, the Special Bench did a searching enquiry on MACTs, in the handling of compensation deposited in MACTs by insurance companies, and transport corporations.

4. It was found that there were 2.25 lakhs plus MCOPs pending and Rs.3524 crores ( yes crores) plus lying in Fixed Deposit Receipts. And Rs.40 crores plus as accrued interest in deposits lying in MACTs, belonging to thousands of vritms, over several decades. HC has suggested ‘lapse of deposit’ of such amounts as per TN Finance Code (Art 271).

5. HC has noted that there were frauds committed in Virudhunagar, Pudukottai, Villupuram, Tiruppur etc. Criminal cases have been registered against court officials, practitioners etc and referred to CB-CID including loss of 55 MCOPs from MACTs in Chennai. Arrests have also been made.

6. It was found that the effort to make NEFT transfer to claimants directly, to avoid leakage, was circumvented by practitioners opening 1696 bank accounts in Indian Bank, Nolambur Branch, Chennai, involving Rs.73 crores plus and one practitioner opening 63 accounts. And similarly, in a Union Bonk of India branch in Tiruppur, and across the entire State also.

7. HC has directed enquiry of breach of RBI KYC norms by enquiring with all nationalized banks in Tamil Nadu and Puducherry, to avoid recurrence of the same. RBI has been directed to conduct such enquiry , file a report before Registrar General, within 6 months.

8. It has been made clear that the Tribunals shall strictly apply proof of ‘ordinary residence of victims’ in the matter of filing MCOPs and MACTs should take serious note of jurisdiction issue, to avoid forum shopping for practitioners convenience

9. Equally, MACTs shall ensure that the Bank Accounts details’ submitted by victims, must be pre existing accounts, if they had one on the date of filing the claim, and if they had no such account, it shall be a bank account opened with proof of ordinary residence of claimants, to ensure that NEFT Transfers were not made to accounts of claimants opened for the convenience of the practitioners.

10. MACTs shall avail V-Collect facility as provided by Indian Bank or similar facility offered by other nationalized banks, to ensure that UTR numbers were matched with corresponding MCOP numbers which shall be sent by insurance companies/ transport corporations while depositing the award amounts without fail.

11. HC has directed that MACTs shall deposit in FDRs, immediately on deposit of compensation and only in five select nationalized bank branches within a radius of 5 kilometres from MACTs, including, if there was any branch within court compound.

12. MACTs shall ensure compliance with this choice of nationalized banks in respect of all FDRs maturing after this date also and shall not deposit in any company or cooperative society. This is to avoid banks / branches luring presiding officers to make deposits with them, by even offering gifts etc.

13. The HC has taken serious note of frauds in this jurisdiction in the entire State and has suggested periodical audit of the MACTs accounts, at the instance of the audit team with the HC.

14. HC has lamented that the beneficial jurisdiction has been abused consistently and even newly enrolled practitioners are eager to practise in this jurisdiction, considering the availability of easy and huge sums of money. HC has even noted that the said monies may even be in use for Bar elections, for convenience of practitioners.

15. HC has candidly confessed that the periodical cleaning up of this jurisdiction vide CB-CID investigation, CBI investigation, Expert Body of Justice K Chandru (Retd), Criminal Cases against practitioners, claimants, owners / drivers of motor vehicles and several others, the fraud has not come down significantly.

16. HC has issued a slew of directions to streamline the maintenance of records/ accounts before MACTs and continuing audit to detect frauds, so that immediate remedial action could be taken and to avoid any such occurrences in future.

17. HC has made it clear that its order dated 17.03.2022 would apply only in so far as the present dispensation which would be in place till 31.03.2022, and for all the transactions which take place till that date.

18. This is because Chapter XI of MV Act, 1988 with new CMV Rules, 1989 shall come into force on and from 01.04.2022, including the mandate of Motor Accident Claims Annuity Deposit Scheme (MACAD), as per the new CMV Rules.

19. The HC has pointed that in view of the new dispensation as of w.e.f 01.04.2022, the existing TN MV Act Rules, 1989 may have to be amended to align with the new changes, as of 01.04.2022.

20. HC has noted with sadness and anguish that too much money is available in this jurisdiction for misuse and even court staff and judicial officers may have fallen prey to practitioners’ machinations.

21. HC has picked up the idea from the Supreme Court in Rasmit Biswal decision dated 08.12.2021, on creation of appellate claims tribunals, in the districts, and suggested that it may be fit and proper to take out MACTs from the present system, to form claims tribunals similar to Consumer Disputes Commissions, to be manned by retried district judges . So that, the present presiding officers may be free to deal with civil and criminal cases, which are languishing due to step-motherly treatment, as MCOPs get the pride of place, due to huge monies and to enable subordinate judiciary to achieve norms set for them.

22. HC has concluded the order with a stinging quotation from Gulliver’s’ Travels and the quote vis a vis Lilliputtans, on the impact played by fraud in society and inability to erase, eradicate or even reduce them.

23. HC order makes sad reading on the present status of beneficial jurisdiction relating to motor accidents claims in Tamil Nadu and Puducherry, involving nothing less than Rs.3524 Cr plus and much much more.

24. And the multiple kinds of frauds practiced in this jurisdiction and role of specialist practitioners and inability of all measures to prevent them. So much so, HC has suggested removal MACTs from the present mode of dispensation to protect the presiding officers from falling prey to all the wrongs that are happening.

25. HC has issued multiple directions / suggestions with a longing hope that some good may yet come out of their sincere, painstaking and deep dive, they did in compliance with the mandate from the Learned Chief Justice.
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