The Supreme Court of India has set a significant precedent in the case of Parminder Singh v. Honey Goyal & Others (Civil Appeal No. ___________ of 2025, arising out of S.L.P. (C) No. 4484 of 2020). The judgment, authored by Justice Rajesh Bindal and Justice J.K. Maheshwari, mandates the direct transfer of compensation amounts in motor accident cases to the claimants’ bank accounts, eliminating procedural delays and bureaucratic hurdles.
Background of the Case
The case pertains to an accident that occurred on June 3, 2014, in which appellant Parminder Singh, a 21-year-old veterinary student and state-level volleyball player, suffered quadriplegia after being hit by a car (PB-03-X-0169). As a result of the accident, he was declared 100% disabled and sought compensation from the Motor Accident Claims Tribunal (MACT), Bathinda.
The MACT awarded him a compensation of ₹5,16,000, which was later enhanced by the Punjab and Haryana High Court to ₹15,25,600. Dissatisfied with the quantum of compensation, Singh moved the Supreme Court seeking further enhancement.
Legal Issues Involved
The core legal questions before the Supreme Court were:
Assessment of Income and Loss of Future Earnings: Whether the High Court erred in taking an unduly low estimate of Singh’s potential earnings.
Entitlement to Future Prospects: Whether Singh, despite being a student at the time of the accident, should be granted additional compensation for lost future prospects.
Adequacy of Compensation for Disability, Medical Expenses, and Pain and Suffering: Whether the previously awarded compensation accounted sufficiently for Singh’s long-term medical and personal care requirements.
Mode of Compensation Payment: The larger issue of streamlining the disbursement of compensation in motor accident cases.
Key Observations of the Court
Enhancement of Compensation
The Supreme Court found the compensation awarded by the lower courts to be inadequate, ruling that:
The High Court’s assessment of Singh’s income at ₹5,600 per month was unjustifiably low. The Court revised his monthly income to ₹7,500, considering his educational background and sports achievements.
Future prospects should be included, enhancing the loss of income calculation by 40%, bringing his assessed monthly earnings to ₹10,500.
Compensation under various heads was re-evaluated, with key enhancements:
Loss of income: ₹22,68,000
Medical expenses: ₹2,66,000
Attendant charges: ₹5,00,000
Special diet: ₹1,00,000 (enhanced from ₹25,000)
Pain and suffering: ₹1,00,000 (enhanced from ₹15,000)
Future medical expenses: ₹2,00,000
Loss of marriage prospects: ₹2,00,000
Physiotherapy expenses: ₹50,000
The total compensation was thus increased to ₹36,84,000.
Mandate for Direct Bank Transfers in Motor Accident Cases
The Court took a progressive step by directing that all future compensation in motor accident claims should be transferred directly into the claimants’ bank accounts. The Court noted:
“This is an era of technology, where artificial intelligence and digital banking have simplified financial transactions. Depositing compensation in courts leads to unnecessary procedural delays and financial loss for claimants. Henceforth, insurance companies must transfer awarded amounts directly into beneficiaries’ bank accounts.”
This directive aims to address the systemic delays in disbursement, wherein insurance companies often deposit compensation with Tribunals, requiring claimants to file separate applications for withdrawal.
The Supreme Court directed all Motor Accident Claims Tribunals (MACTs) to obtain bank account details from claimants at the outset of proceedings, ensuring that funds are credited immediately upon adjudication.
Additionally, it suggested that this process be extended to all cases involving monetary awards, including maintenance payments under family laws and land acquisition compensations. The judgment cited Haryana State Industrial Development Corporation v. Pran Sukh (2010) and Haryana State Industrial & Infrastructure Development Corporation Ltd. v. Smt. Krishna Rani (2011), where similar measures were recommended to prevent exploitation of claimants by intermediaries.
