What are the legal guidelines for releasing compensation from MACT-managed fixed deposits?

Read Judgment 

An order issued by Hon'ble Mr. Justice Anish Dayal of the High Court of Delhi on September 16, 2026.

The Court allowed the claimant's application for a partial release of compensation funds, while critically evaluating the "undue paternalistic approach" often taken by lower claims tribunals.

Key Case Details

• Case Number: MAC.APP. 1004/2016.
• Parties: Sanjay Sachdeva (Appellant) vs. Bhola Mahato & Ors. (Respondents, representing M/S Reliance General Insurance Co Ltd).
• The Request: The claimant—who suffers from a 93% permanent disability—sought the release of ₹2,50,000 from his fixed deposit receipts (FDRs) to repay outstanding loans.
• Prior Rejection: The Motor Accident Claims Tribunal (MACT) had previously rejected this request on July 18, 2026, citing a lack of "verifiable material," despite a promissory note being attached.

Court Observations & Jurisprudence

The High Court heavily criticized the mechanical and overly restrictive nature of MACT decisions regarding fund releases:

• Purpose of Oversight: The Court clarified that while tribunals must ensure compensation is not frittered away or stolen by unscrupulous elements, they must not refuse legitimate release requests arbitrarily.
• Precedent Cited: The Court relied on historical Supreme Court rulings like Kerala SRTC v. Susamma Thomas (1994) and A.V. Padma v. R. Venugopal (2012). These emphasize that guidelines to lock funds in FDRs are meant to protect vulnerable claimants (such as minors or illiterate individuals), not to create a rigid barrier for literate claimants with genuine needs.
• Legitimate Needs: The Court pointed out that life events like medical crises, education, debt liquidation, or property purchases necessitate large chunks of cash, and claimants should be allowed to access their own money.

Final Ruling

• The High Court allowed the application and ordered the release of ₹2,50,000 by liquidating a proportionate amount of the FDRs into the claimant's designated account.
• The Registry was instructed to circulate a copy of this order to all MACTs under its jurisdiction to recalibrate and soften their approach toward future withdrawal applications.