The Supreme Court on Tuesday asked courts and tribunals to direct insurance companies to transfer claim amounts directly to the claimants' bank accounts to avoid unnecessary delays.

A bench of Justices JK Maheshwari and Rajesh Bindal gave the directions in a motor accident claim matter.

"The general practice followed by the insurance companies, where the compensation is not disputed, is to deposit the same before the tribunal. Instead of following that process, a direction can always be issued to transfer the amount into the bank account(s) of the claimant(s) with intimation to the tribunal," it said.

According to the practice extant, insurance companies, when they are supposed to pay a claim, either deposit the sum with the tribunal, or in some small percentage of cases, transfer it to the accounts of the claimants if directed by the tribunal in the award.

Once the amount is deposited before the tribunal, the claimant(s) must move an application for withdrawal. It is usually not before 15-20 days that claimants get their money.

While ruling on the matter, the bench also referred to the rising number of motor accident cases seeking claims pending before the tribunals.

Citing a PTI report, which attributed the information to an RTI response, the bench said towards the end of 2022-23, 10,46,163 claim cases were pending throughout the country before the tribunals.

The number increased from 9,09,166 towards the end of 2019-20 an increase of 1,36,997 cases within three years, it said.

"This is besides the fact that a large number of cases are regularly filed and decided," it said.

The data cited in the report was furnished by the Insurance Regulatory Development Authority of India.

The bench said that in an era increasingly dominated by artificial intelligence, all transactions can be effected round-the-clock, from anywhere.

"Our country has done wonders in digital payment transactions. As per the website of the Ministry of Finance, Government of India, starting in the FY 2013-14 from 220 crores, the transactions have increased to 18,592 crores in the F.Y. 2023-24. The value of the transaction has grown from Rs 952 lakh crores to Rs 3,658 lakh crores. Unified Payment Interface (UPI) is an indigenous developed digital payment system, which is easy to operate on a mobile.

The bench said that the number of UPI transactions grew from 92 crore in the FY year 2017-18 to 13,116 crore in 2023-24 at a CAGR of 129 per cent, and the number was likely to cross 20,000 crores in the FY 2024-25.

"It is a matter of common knowledge that now under various schemes of the Government, funds are transferred to the beneficiaries directly in their bank accounts. As per the rough estimate, about 80 per cent of the adult population in the country have bank accounts," it said.

The bench added that in some cases where the compensation is awarded to the minor claimant(s), or if the tribunal issues a direction to keep a certain percentage of the amount in a fixed deposit, such directions can always be issued in the award itself to be complied with by the concerned bank.

"When the amount is transferred by the insurance company in the account of the claimant(s), it shall be the responsibility of the bank to ensure that the specified portion thereof is kept in the fixed deposit. Compliance is to be reported by the bank(s) to the tribunal," the bench said.

The top court lamented a substantial amount of compensation in motor accident cases remains deposited in the tribunal as the claimant(s) may not have approached the tribunal for its release.

Though it made the ruling in a motor insurance claim matter, the top court said the courts/tribunals can follow the same process in any matter, whenever any amount is to be paid by one party to another, with proper compliance.

It directed the registry to send a copy of the order to the registrars of all the high courts and tribunals.