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The Motor Vehicles Act, 1988: No fault liability

Ubi jus ibi remedium the latin maxim states that, where there is wrong, there is remedy. It is an essential maxim of law of torts , where one's right has been invaded, the law provides for the remedy to safeguard the right of the aggrieved. It was in the case of Ashby V. White , where the court held that:
When a person is rested with a right , he must have a means to safeguard and have a remedy if someone violates it, and is a useless to think of a right without providing from any remedy for its violation.

The Motor Vehicle Act, 1988 was enacted on July 1, 1988. The original Act, i.e. The Motor Vehicle Act, 1939 was amended numerous time to keep it according to the phase of technology and development. Later , a committee was set up in to draft a comprehensive legislation as per the various suggestion. In amended act, Section 140 to section 144 under chapter-X lays the provision for no fault liability.

Section 145 to 164 under Chapter -XI deals with the insurance provision pertaining to third party claims, and Section 165 to 176 , Chapter XII, deals with claims tribunals. This act was said to be great benefit to society as it primarily aimed to provide the relief to persons who encounters the accidents and then are not paid adequate compensation , that they should have to make good to their damages.

To point out some of the welfare provisions , the act provided the driving license to be mandatory to drive a motor vehicle , and registration of the vehicle to be valid only for the period of fifteen years , which can be further renewed for another five year. The act also includes various other provision for the benefit of the road accidents victims.

The Non- Fault Liability
It was brought to the bench of Acting Chief Justice A. Sambasiva Rao , in the case of Haji Zakaria V. Naoshir Cama, whether the liability to pay the compensation can be levied upon owner , even when there was no fault on his behalf or negligent act. This was over-ruled b the hon'ble Supreme Court of India, it was of the opinion that, where there is no fault or negligence by the owner, there could be no liability be imposed upon him.

Anyhow, the principle of No Fault was developed to provide the victim with some sort of relief incase of hit and run and such cases. Being welfare state, denial of the compensation over the fact that:
There was a contributory negligence on part of the victim or where the negligence of the driver of a vehicle was not established beyond the reasonable doubt, defeats the idea of social justice, and so the provision was made that driver or the owner should be held without taking the fact of contributory negligence into consideration.

There was doubt as to in which way does the principle of No-fault liability differs from the principle of Strict liability. In the case of the No-fault liability the compensation is fixed, on the other-hand , in the case of Strict liability liability is not fixed, but is upon the discretion of the court. The former principle is different from the common law principle which says that the claimant should establish the act of negligent and rash driving on the part of owner or the driver to claim the compensation. However, the section 140 to section 144 of the Motor Vehicle Act, 1988 provides exception to such rule.

In case of Minu B. Mehta V. Balkrishna, the apex court overruled the verdict of the Andhra Pradesh High Court and Bombay High Court , and ruled that the of the owner of the vehicle or the company of the vehicle insurer can not be held liable unless there's a negligence on the part of the owner or the driver of the vehicle.

In Shridhar V. United India Insurance Company, the apex court was of view that where an accident is caused due to oil spilled on the road, negligence would be on the part of the driver only , not upon the owner , or the other . In such a circumstances, the insurer would not be liable, the computation of the liability shall be on the basis of no fault principle.

While adjudicating in the case of Ishwarappa v/s. C.S. Gurusthanthappa, the court held that section 140 of the act in intended to provide an immediate relief to the victim or heirs and legal representative of the deceased person in an event of an accident. And so the claim under section 140, is paid at the threshold of the case proceedings.

Section 140 of The Motor Vehicle Act 1988
The act provides the provision for the payment of the compensation to the aggrieved , in case of death or permanent disability by the vehicle of defendant , by himself or the driver of any such vehicle. According to section 140, No fault liability is to be invoked when a death or permanent disability has been resulted from an accident arising out of a motor vehicle.

In any claim made under this act, the amount of compensation be payable as follows:
  1. Where the accident causes the death of the a person, a fixed sum of Rs. 50,000/- &
  2. If causes permanent disability of any person, a fixed sum of Rs.25,000/-

The sub-section (3) of the act makes it clear that, the burden of the pleading and fact whether or not wrongful act, negligence, or default was committed by the claimant or his heir or representative , the compensation under this section is not subjected to any burden of proof on the shoulders of the claimant. The compensation under this section is governed by No fault liability principle.

By reading section 140 and 163-A together , the intent of the act is crystal clear , that any claim raised under the section 163-A of this act, need not be subjected to be examined based on any proof or pleading at the hands of the claimants , and shall be provided relief under section 140.

Is the Section 140 to be applied retrospectively?
The matter of consideration regarding date for the determination of the compensation is the date of the accident. The amendment to increase the amount payable under the act was increased on 14/11/1994 from Rs.25,000/- to Rs.50,000/- for causing death. The following provision is not retrospectively, and so if any accident occurs before 14/11/1994 , the compensation shall be paid Rs. 25,000/- only.

For filing claim under sec. 140 , it is not mandatory for precedent that the primary claim petition under section. 166 be filled. Even though the the claim petition is not filled under or if the claim is dismissed failing the limitation period, an application for claim under sec. 140 cannot be dismissed on the similar ground.

Manjit Singh Vs. Rattan Singh, the court in the following case held that amended section.140 w.e.f. 14/11/1994 which has raised the amount of the compensation is applicable retrospectively. And so, for an accident leading to death, before the amended was made, the compensation was computed by the Tribunal for Rs.30,000/- was raised to Rs. 50,000/-. This verdict however needs reconsideration. The compensation shall be payable as per the law applicable as the time of accident took place.

Case Law:
The Oriental Insurance Co. Ltd. Vs. Seela Ratnan And Ors

  1. The issue was brought to the bench regarding amendment made to Section 140 in year 1994 in The Motor Vehicles Act, 1988.
  2. The amendment aim to increase the compensation of accidental death and permanent disability.
  3. The accident in the concerned case took place before the date of the amendment came to force.

It is before the Hon'ble bench to decided that whether, Section 140 of the Motor Vehicles Act is applicable retrospectively?

The court in the above case ruled that , Section6(c) of the General Clause Act would be applied in the concerned case and the amendments made as in Section 140 of the Motor Vehicles Act, 1988 cannot be applied in the case retrospectively. And so any claim made before the amendment came into the force shall not be governed as per the amendments made, meanwhile shall be subjected to the compensation as per earlier provisions. "When an accident has occurred before the commencement of 1988 Act no fault liability can be granted as per Section 92-A of the repealed Act and not under Section 140 of the 1988 Act.

Supreme Court had considered the applicability of Section 6 of General Clauses Act to the provisions of the repealed Act in Gurcharan Singh Baldev Singh Yashwant Singh (1991) 6 JT (SC) 256 : (AIR 1992 SC 180). An application was filed by an operator for renewal of his permit under Section 58 of the Motor Vehicles Act, 1939.

The question then arose was whether, after coming into force of Motor Vehicles Act, 1988, the application became extinct and was rendered non-existent, in the eye of law, or whether it being a right within the meaning of Clause (c) of Section 6 of the General Clauses Act survived and continued despite repeal of Motor Vehicles Act, 1939, It was observed that the objective of Section 6(c) is to ensure protection of any right or privilege acquired under the repealed Act.

United India Ins. Co. Ltd. Vs. Kuldip Kaur
The issues was brought to the bench on Hon'ble bench of High Court of Punjab Vs. Haryana, that whether the liability be imposed under Section 140 The Motor Vehicle Act, 1988 when an offending vehicle in not identified.

The court referred to section 140 (liability to pay the compensation in accident resulting death or permanent disability with no faults and section 161(special provision for payment of the compensation in case of hit and run case with a motor vehicle of the Motor Vehicle Act, 1988 . The high court of Punjab & Haryana adjudicated that, no liability can be imposed under the aforesaid section , where the offending vehicle is unidentified.

The no fault liability under section 140 , of the Motor Vehicle Act , 1988, intend to provide the immediate relief to the aggrieved victim , or the heir or legal representative of the victim , of the accident caused by the Motor vehicle, resulting death or permanent disability. The compensation under section 140 of the act is Rs.25,000/- for the accident resulting permanent disability and Rs.50,000/- for the accident resulting death. It is noteworthy , that no burden of proof is laid upon the victim of the aggrieved party, neither the fact that they were negligent shall be subjected to decide the compensation.

While dealing with the claims under section 140 , of the Motor Vehicle Act, 1988 the court shall not consider whether the defendant was not negligent , and have taken due care to avoid the accident , or the fact that, the accident was not inevitable. It is also the matter of great relevance that, no claim can be filed under this act where the vehicle which caused the accident was not identified, meaning that no claim can be filed until the vehicle is well identified and known.

The court, on the various claims under this act, were of the view that increased claim shall be payable under this act shall not be paid retrospectively . The accident took place before the amendment brought to the force, shall not be paid with the increased compensation. The claim tribunal to deal with the claims under Motor Vehicle Act was also established to enable the cost-effective and speedy remedies to the loss of the victim.

The act was considered to be an assets in the regime of motor laws in India. With the introduction of the third party insurance clause and compensation under the provision of no-fault liability, the precedent that were set of the long years showed the widening of the various provision , intended to benefit the aggrieved parties , who made the claims under the act.

  1. Law of Torts : Dr. R.K. Bangia: compensation under the motor vehicle act
  2. A.I.R 1977 S.C. 1248.
  3. A.I.R 2001 S.C. 3833.
  4. Indra Devi Vs. Bagada Ram , A.I.R 2010 S.C. 2913
  5. A.I.R 1997 H.P. 21.

Written By: Siddharth Gupta
, BBA. LL.B (Hons), Amity Law School, Noida

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