Motor accidents are a fairly commonplace occurrence in our daily lives. Motor
accidents occur very frequently and lead to considerable loss of life and
property. To cover such accidents and make provisions for them, a legislative
mechanism namely the Motor Vehicles Act 1988(hereinafter referred to as the
‘Act’) has been instituted. The parties thus involved in a typical motor
accident case requiring judicial dispensation include the owner of the vehicle,
the driver the insurers and the deceased/injured.
In this article, it has been attempted to delineate the principles for award of
compensation by the Court in respect to claims arising out of motor vehicle
accidents causing death or injury(Section 166 of the Act). Some of the major
provisions under the Act pertaining to the above are dealt with as below;
Section 140 of the Act augurs for interim compensation on no fault basis(without
proving negligence by the claimant on account of the owner of the vehicle
concerned) vis a vis Section 166 of the Act is for the final adjudication of the
Section 165of the Act stipulates adjudicating upon claims for compensation in
respect of accidents involving the death of, or bodily injury to, persons
arising out of the use of motor vehicles, or damages to any property of a third
party so arising, or both.
Section 166 of the Act states as to who can claim compensation in MACT cases
with regard to Section 165 on the basis of evidence led. This would be by;
(a) By the person sustaining the injury.
(b) By the owner of the property where death has resulted from the motor
(c) By all or any of the legal representatives of the deceased.
(d) By any agent duly authorized by the person injured or all or any of the
legal representatives of the deceased as the case may be.
Section 2(30) of the Motor Vehicles Act defines who the owner is “Owner thus
is a person in whose name the motor vehicle stands registered and where such a
person is a minor, the guardian of such minor. In relation to a Motor Vehicle
which is the subject matter of a hire purchase agreement or an agreement of
lease or an agreement of hypothecation, the person in possession of the vehicle
under that agreement.
A claim under Section 163-A of the Act can be also filed wherein compensation is
granted by the Courts on the structured formula basis as provided under Schedule
II of the Act . However the Honble Apex Court has adjudged the Schedule to have
Documents accompanying the Claim Petition
The MACT , Gurgaon as held in the case of Rajesh Tyagi vs Jasbeer Singh (FAO 842
Of 2003), decided on 21stDec, 2009has laid down the following directions as to
the documents accompanying Claim Petition in the event of injuries/death
1) Copy of the FIR registered in connection with the said incident if any-
2) Copy of the MLC/Post Mortem Report/ Death Report.
3) The documents of identity of the claimants and of the deceased in a death
4) Original bills of expenses incurred on the treatment along with treatment
5) Documents of educational qualification of the deceased.
6) Disability Certificate if already obtained in a injury case.
7) The proof of income of the deceased/injured.
8) Documents as to the age of the victim.
9) The cover note of the third party insurance policy if any.
10) An affidavit in support of the above documents and detailing the
relationship of the claimants with the deceased.
Hence the I.O (Investigating Officer) of the police shall submit a D.A.R (Detailed
Accident Report) along with the aforesaid documents within 30 days.This
provision has been to enable the motor accident victims get the compensation in
a timely manner without having to themselves file a claim petition.
Petition to be filed within reasonable time.
The Supreme Court, in M/s. Purohit and Company vs. Khatoonbee (S.L.P NO 25760 of
20:-to raise a claim for compensation before a Motor Accident Claims Tribunal,
it should be done within a reasonable time. It further held that the question of
reasonability would be with respect to the facts and circumstances of each case.
Determination of Compensation
A Constitutional Bench of the Apex Court in the case of National Insurance
Company Limited vs Pranay Sethi and Ors (S.L.P 255290 OF 2014)decided on October
31st, 2017 upheld the Multiplier concept and deduction in personal and living
expenses as laid down in the Sarla Verma case. However the future aspects in
awarding compensation under Section 166 of the Motor Vehicles Act have been
newly formulated by following the standardization principle. The following
principles have been laid down :-
Factors to be determined
The income of the deceased
The age of the deceased
The number of dependants
Determination of Multiplier
As regard the cases where the age of the victim happens to be up to 15 years,
the Supreme Court was of the considered opinion that in such cases irrespective
of Section 163-A or Section 166 under which the claim for compensation has been
made, multiplier of 15 and the assessment as indicated in the Second Schedule
subject to correction as pointed out in Column (6) of the Table IN Sarla
Vermain (S.L.P 8648 of 2007),decided on 15thApril, 2009should be followed.
In all other cases of death where the application has been made under Section
166, the multiplier as in indicated in Column (4) of the Table in Sarla Verma
which starts with an operative multiplier of 18(for the age groups of 15-20 and
21 to 25 Years) reduced by one unit for every five years i.e M-17 for 26 to 30
years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45
years, M-13 for 46 to 50 years, then reduced by two units for every five years,
that is M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years
and M-5 for 66 to 70 years
Deduction of Personal Expenses
Where the deceased was married, the deduction towards personal and living
expenses of the deceased, should be one-third (1/3rd) where the number of
dependent family members is 2 to 3, one-fourth (1/4th) where the number of
dependant family members is 4 to 6, and one-fifth (1/5th) where the number of
dependant family members exceed six.
Where the deceased is a bachelor and the claimants are the parents, the deduction
follows a different principle. In regard to bachelors, normally, 50% is deducted
as personal and living expenses, because it is assumed that a bachelor would
tend to spend more on himself.
Thus even if the deceased is survived by parents and siblings, only the mother
would be considered to be a dependant, and 50% would be treated as the personal
and living expenses of the bachelor and 50% as the contribution to the family.
However, where family of the bachelor is large and dependant on the income of
the deceased, as in a case where he has a widowed mother and large number of
younger non-earning sisters or brothers, his personal and living expenses may be
restricted to one-third and contribution to the family will be taken as
Application of Future Prospects
While determining the income, an addition of 50% of actual salary to the income
of the deceased towards future prospects, where the deceased had a permanent job
and was below the age of 40 years, should be made. The addition should be 30%,
if the if the age of the deceased was 48 between 40 to 50 years. In case the
deceased was between the age of 50 to 60 years, the addition should be 15%.
Actual salary should be read as actual salary less tax.
In case the deceased was self-employed or on a fixed salary, an addition of 40%
of the established income should be the warrant where the deceased was below the
age of 40 years. An addition of 25% to where the deceased was between the age of
40 to 50 years.
Often, it is to be seen that the insurer of the vehicle disputes liability of
the payment of the insurance amount. In the event the offending vehicle is not
insured then the insurance company is not liable to pay. Whenever the owner of
the vehicles violates the insurance policy’s terms and conditions , then also
the insurer is not liable to pay.
Hence in progression it can be seen that the Hon’ble Apex Court has formulated
the principles for claim of compensation under Section 166 of the Motor Vehicles
Act based on the multiplier effect. A special mention is made to the Lok Adalat
in which forum either party to the case can approach the same for mutual
settlement once the case is filed and the notice is issued.
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analysis of law relating to Accident Claims in India
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Category-wise Analysis of Awarded Cases related to compensation to the Bhopal
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