The Madhya Pradesh High Court has set aside orders requiring motor accident compensation claimants to open accounts with Union Bank of India (UBI) for receiving their awarded amounts or creating fixed deposits. The court clarified that claimants are free to use accounts maintained with any nationalised bank.
Justice Vinay Saraf of the Indore Bench, in an order dated October 29, held that neither the High Court’s administrative directions nor the procedure governing compensation disbursement mandated opening an account with UBI.
The court further directed Motor Accidents Claims Tribunals (MACTs) to transfer compensation directly into the claimant’s chosen nationalised bank account once the necessary account details are provided.
Tribunal Orders Challenged
The ruling came on petitions filed by a woman and other claimants challenging orders passed by the MACT in Neemuch district on July 31 and August 5.
The tribunal had required the claimants to maintain accounts with Union Bank of India to receive their compensation through fixed deposit receipts (FDRs). It relied on the High Court’s procedure for distributing motor accident compensation through an online dashboard.
Advocate Akhil Godha, representing the claimants, submitted that neither the Supreme Court nor the Madhya Pradesh High Court had imposed any requirement to open accounts exclusively with UBI.
He argued that compensation could be deposited in accounts maintained with any nationalised bank.
Online Dashboard Integration Does Not Make UBI Accounts Mandatory
Examining the applicable administrative instructions, the High Court considered directions issued by the Chief Justice, the procedure communicated by the Registrar General, and clarifications furnished by the Registrar (Judicial) and Registrar (IT).
The court found no instruction requiring compensation recipients to open Union Bank of India accounts, either for direct payment of awarded amounts or for investment in fixed deposits.
It also referred to the Supreme Court’s directions issued in April 2025 concerning motor accident compensation disbursement. Under those directions, compensation deposited with a tribunal should ordinarily be transferred directly to the bank account of the person entitled to receive it.
The High Court acknowledged that Union Bank of India was, at the relevant time, the only bank integrated with the online dashboard for creating fixed deposit receipts.
However, it clarified that this technical arrangement did not make opening an account with UBI compulsory for claimants seeking fixed deposits.
Accordingly, the High Court set aside the tribunal’s orders and directed that claimants be permitted to provide details of accounts held at any branch of any nationalised bank for direct disbursement of their compensation.
