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Motor Accident occurs generally due to the interplay of various factors like (i) human error, (ii) road environment and (iii) vehicular condition and including Traffic rules violations i.e. Rash and Negligent Driving. For remedial actions, which include civil as well as criminal actions under penal law, to compensate the affected parties and their family members, legislative mechanism was incorporated under Motor Vehicle Act 1988, which is complete code in itself.

As per the report ‘Road Accidents in India, 2018’[1] published by Ministry of Road Transport and Highways which reports on accidents, related deaths and injuries, calendar year-wise, based on information supplied by the Police Departments of States and UTs states that about 4,67,044 road accidents in year 2018 and about 151471 persons were killed in 2018.

Under Motor Vehicle Act, on the basis of negligence, third party claim can be filed under damage to other category and self claim can be filed based on comprehensive policy. In a third party claim i.e. who has suffered loss because of someone else’s vehicle, it is necessary to report the accident immediately to the police authorities as well as the insurance company and then injured party file a claim petition before Motor Accident Claim Tribunal for assessment of compensation whereas under Own Damage Claim, in the event of own damage claim, which is where the person’s own vehicle is damaged due to an accident, the person must immediately inform insurance company, wherever required, to enable them to depute a surveyor to assess the loss.

Who can file Claim Petition: Under Section 166 of MV act, injured party should filed the claim petition but if he/she is not alive then legal heirs are permitted to file claim petition. Claim petition can be filed either under Section 166 read with Section 140 of the Act against the owner/insurer of offending vehicle on the basis of the fault liability or under Section 163A either against the owner/insurer of the vehicle being driven by the deceased at the time of accident against the owner/insurer of offending vehicle on the basis of no­fault liability as held by this Hon’ble Court in Reshma Kumari v. Madan Mohan  (2013) 9 SCC 65. For claiming the compensation under Section 163A of the Act, the claimants are only required to prove that the death or permanent disablement is as a result of the accident arising out of the use of motor vehicle and it will cover those who are themselves driving   a  vehicle,  the passengers and also pedestrians whereas application under Section 163A of the Act, fault of the owner of the vehicle or vehicles concerned or of any other person need not be established.

“Duty to furnish Particulars of Vehicle Involved In Accident: Under Section 160 of the Motor Vehicles Act a Police Officer has been directed to furnish all the materials to the claimant. Police Officer should provide all information and other particulars of the vehicles and the name and address of the person who was using the vehicle at the time of the accident or was injured by it and the property, if any, damaged in such form and within such time as the Central Government may prescribe.

Who is Owner:- The said definition of “owner”, the Hon’ble Supreme Court in Naveen Kumar v. Vijay Kumar  (2018) 3 SCC 1 has held the registered owner of the vehicle as per the registering authority liable in respect of the offending vehicle despite sale/purchase of vehicle by him

Claim by Borrower: Question raised is whether claim petition is maintainable only against the owner and the insurance company of another vehicle which was driven by the deceased himself who is not a third party and the deceased being in the shoes of the owner   of   the   vehicle   driven   by   himself,   whether insurance company would be liable to pay the compensation under Section 163A of the Act? This Hon’ble Court in the cases of Oriental Insurance Co. Ltd. V.  Jhuma   Saha  (2007) 9 SCC 263;  Dhanraj  (supra);  National Insurance Co. Ltd. V. Laxmi Narain Dhut (2007) 3 SCC 700 and Premkumari  v.  Prahlad  Dev  (2008) 3 SCC 193, it is ultimately concluded by the Hon’ble Court that the liability under Section 163A of the Act is on the owner of the vehicle as a person cannot be both, a claimant as also a recipient and, therefore, the heirs of the owner could not have maintained the claim in terms of Section 163A of the Act.

Multiplier Method: The multiplier method involves the ascertainment of the loss of dependency. Multiplier method is the accepted method for determining and ensuring payment of just compensation and is expected to bring uniformity and certainty of the awards.

Assessment of Damages:- The damages[2] may vary according to the gravity of the injuries sustained by the claimant in an accident. On account of the injuries, the claimant may suffer consequential losses such as (i) loss of earning; (ii) expenses on treatment which may include medical expenses, transportation, special diet, attendant charges etc., (iii) loss or diminution to the pleasures of life by loss of a particular part of the body, and (iv) loss of future earning capacity. The court while assessing the compensation should have regard to the degree of deprivation and the loss caused by such deprivation to arrive at just compensation.

Pecuniary damages (Special damages)

  1. Expenses relating to treatment, hospitalization, medicines, transportation, nourishing food, and miscellaneous expenditure.
  2. Loss of earnings (and other gains) which the injured would have made had he not been injured, comprising:
  1. Loss of earning during the period of treatment;
  2. Loss of future earnings on account of permanent disability.
  1. Future medical expenses.
  2. Attendant Charges (if required)

Non­pecuniary damages (General damages)

  1. Damages for pain, suffering and trauma as a consequence of the injuries.
  2. Loss of amenities (and/or loss of prospects of marriage).
  3. Loss of expectation of life (shortening of normal longevity).

That Constitutional Bench of the Apex Court in the case of National Insurance Company Limited vs Pranay Sethi and Ors has upheld the Multiplier concept and deduction in personal and living expenses as laid down in the Sarla Verma vs DTC 2009 AIR SC 3104. But in respect of future income assessment following factors to be considered are (i) income of the deceased, (ii) age of the deceased and (iii) number of dependants. While determining the income, if deceased age was below 40 years, then an addition of 50% or 40% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job or self employed or fixed salary respectively. Similarly addition would be 30% or 25% if the age of the deceased was between 40 to 50 years, in case of permanent or self employed respectively. Similarly if deceased was between the age of 50 to 60 years, the addition should be 15% and 10% for permanent and self employed respectively.

In respect of Deduction towards personal and living expenses can be categorised as (i)Where deceased was married– 1/3rd deduction and depending upon the number of dependant it should be 1/4th or 1/5th. If deceased was bachelor then deduction would be 1/2nd (50%) The selection of multiplier shall be as indicated in the Table in Sarla Verma case. The age of the deceased and not the age of dependant should be the basis for applying the multiplier. Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively.

Change in Compensation as per Motor Vehicle Act Amendment Act 2019

  • Increased penalties and mandatory insurance
  • Hit & Run Cases: Central Govt. u/s 161 of MV Act 2019, pay Minimum compensation in case of death in a hit & run case: Rs. 2 lakh and Minimum compensation in case of grievous injury in a hit & run case: Rs. 50,000.
  • No fault Liability Principle: Under Section 164 of MV Act 2019, the owner of the motor vehicle or the authorised insurer shall be liable to pay in the case of death or grievous hurt due to any accident arising out of the use of motor vehicle, a compensation, of a sum of five lakh rupees in case of death or of two and a half lakh rupees in case of grievous hurt to the legal heirs or the victim.
  • Limitation Period Revived: U/s 166(3) of MV Act 2019, No application for compensation shall be entertained unless it is made within six months of the occurrence of the accident
  • New Defence for Insurance Company:- In section 150(2) a ground of defence has been added wherein if there is non-receipt of premium as required under section 64VB of the insurance Act 1938 then the insurer could seek exoneration.


[2] Raj Kumar v. Ajay Kumar and Others  (2011) 1 SCC 343

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