The Madras High Court has ruled that the Direct Benefit Transfer System shall be followed in all forms of compensation, be it in motor accident cases or in land acquisition cases. While hearing a PIL by an Insurance firm, the court said, money should be transferred directly into the bank accounts of the litigant or victim to avoid leakage.
The firm had challenged award of nearly 92 lakh rupees compensation to the family of a software engineer who was killed in a road accident in October 2013.
As on date, cheques issued in the name of claimants are encashed by only opening new accounts for the purpose of encashment, despite the claimants already having a bank account.
The bench said if the claimants already have bank accounts , it would suffice if the particulars are obtained and e-transfer made to their accounts. Such direct transfer would go a long way in avoiding any leakage.