A probe by the Madras High Court has brought to light that a whopping amount of ₹3,524.44 crore deposited towards motor accident compensation claims preferred before 322 tribunals in Tamil Nadu and Puducherry has been lying in fixed deposits for decades together and another ₹1,255.25 crore has been lying in savings bank and current accounts without being parked in fixed deposits.
A special Bench of Justices P.N. Prakash and Abdul Quddhose unearthed the details and observed that such huge sums of money had become a fertile opportunity for misappropriation by dishonest lawyers, court staff and even some judicial officers. Former Chief Justice Sanjib Banerjee had constituted the Bench after a retired court staff in Pattukottai was found to have misappropriated ₹1.51 crore last year.
The Bench appointed nodal officers for all 33 judicial districts under its jurisdiction and issued a slew of directions to inspect the records of the motor accident claims tribunals. Shocked by the revelations of the inquiry, the judges wrote: “We find that the slush money has eaten into the vitals of the court system to such a sad extent that most of our staff are more loyal to the practitioners than to the system as such.”
Though the High Court in 2016 directed insurance companies and transport corporations to make only online transfer of compensation amount to the tribunals and ordered that the latter should also make online transfer to the claimants, the “ambulance chasers” invented ingenious methods to misappropriate funds by opening fresh bank accounts in the names of the claimants in collusion with bank managers and withdrew the monies, the Bench lamented.
For instance, the clients of around 65 lawyers practising in Chennai had opened 1,696 savings bank accounts in the names of various motor accident compensation claimants between 2019 and 2021 and had transacted ₹73.51 crore. Of them, the clients of one legal practitioner alone had opened 210 savings bank accounts for misappropriating the compensation amount, the judges noted with shock and went on to refer to many more instances.
The Bench directed Reserve Bank of India to put an end to the pernicious practice followed by nationalised banks in accommodating opening of bank accounts to receive motor accident compensation. Further, taking note of amicus curiae N. Vijayaraghavan’s submission that the Pattukottai incident could not have occurred without the connivance of State Bank of India officials, the judges asked SBI counsel Chevanan Mohan to respond by April 1.
Since there was no uniform practice followed across the State and the Union Territory with respect to handling of motor accident compensation amount, the judges found that a whopping amount of over ₹40.79 crore had got accrued as interest because of the amounts lying in the savings bank accounts. The judges said that this amount should be handed over to the State as lapse of deposit and could not be allowed to be appropriated by anyone.
Finding that the issue as to whether the tribunals should maintain current or savings bank account was pending before the Supreme Court, the judges directed them to await orders from the apex court. However, since some of the deposits were lying since as early as 1963, the judges said that every effort must be taken to identify the eligible claimants and hand over the money to them as it had been done in Dindigul district on a pilot basis.
The judges also impressed upon the need for the State government to revisit the 1989 rules which state that the compensation amount should not be disbursed immediately to the illiterates, semi-literates and minors. Stating that the literacy as well as awareness level had increased over the years, the judges said, it was best to hand over the compensation to the claimants than let it fall into wrong hands.
Impressing upon the need for the High Court’s audit inspection team to conduct annual auditing of the accounts of all 322 tribunals, the judges made a request to Chief Justice Munishwar Nath Bhandari for issuing administrative instructions in this regard. “The hard reality is that there has not been any audit of the accounts of the Courts in Tamil Nadu and Puducherry for the last several decades,” they wrote.
The Special Bench also made it clear that henceforth all the compensation amount transferred by insurance companies and transport corporations must be promptly parked in fixed deposits so that the claimants were not denied of the interest amount and that those deposits must be renewed periodically. They also said that a fool-proof mechanism should be put in place to ensure that there was no scope for misappropriation.
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