Everyday Law

Compensation In Motor Accident Cases

Motor accidents cause disruption to economic life of families of victims of Motor Accidents. Laws have been enacted to provide compensation in case of motor accidents. Supreme Court and High Courts have also provided additional guidelines for providing compensation to the victims of motor accidents.

Under which act claim for compensation can be made in case of motor accidents ?

Claim for compensation can be made under Section 166 of Motor vehicles Act, 1988 in case of motor accidents. In case of injury a victim can file claim for compensation. In case of death, legal representatives of the victim can file claim of compensation. Legal representatives have been interpreted widely by the courts. Legal representative not only includes legal heirs but also persons who were dependents on the deceased.

Before which authority claim for compensation can be filed ?

State Governments have created specific Tribunals called Motor Accident Claim Tribunals under Section 165 of the Motor Vehicles Act, 1988 for determination of claims for compensation.  Section 166 (2) provides for jurisdiction of Motor Accident Compensation Tribunal. A claimant can file claim petition before –

  • Claim Tribunal having jurisdiction over the area wherein motor accident has occurred
  • Claim Tribunal within whose jurisdiction the claimant resides
  • Claim Tribunal within whose jurisdiction the claimant carries on business
  • Claim Tribunal within whose jurisdiction the defendant resides

How much claim is awarded by the Motor Accident Claim Tribunal ?

Section 168 of Motor Vehicles Act, 1988 provides for award of just compensation after making an inquiry. Section 168 does not provide detailed provision for determining compensation amount. This void has been filled by the judicial guidlines The Supreme Court and the High Court has provided details guidelines for computation for compensation.

In death cases,  the Supreme Court has provided the detailed procedure in Sarla Varma Vs. Delhi Corporation (2009ACJ1298SC). One of the major component  of compensation is loss of dependency. For loss of dependency firstly income of the deceased is determined and expenses towards personal and living expenses are deducted. Then on the basis of age of the deceased a multiplier is selected. The lesser the age of the victim the higher will be multiplier. The income of the deceased after deduction is multiplied with the multiplier. Loss of dependency is major component of compensation. Other than that the Tribunal awards compensation for funeral of the deceased, loss of estate etc.

In injury cases, compensation are awarded against pecuniary and non-pecuniary damages. The heads of pecuniary damages can be (i) loss of earning (ii) medical expenses (iii) loss of earning capacity etc . The heads of non-pecuniary damanges can  be (i) damages for physical and mental shock, pain, suffering etc.   (ii) Loss of amenities  (iii) loss of life expectation etc.

Can a victim claim interim compensation ?

Interim compensation can be awarded under Section 140 of the Motor Vehicles Act. Such compensation in case of death is Rs. 50,000/- and in case of permanent disablement is Rs. 20,000/-.

What is difference between compensation under Section 163 A and Compensation under Section 166 ?

There is also provision of compensation under Section 163 A. This is based on no-fault liability. The Victim does not need to prove negligence on the part of the Accused to be eligible for compensation. On the other hand  negligence of the accused has to be proved to be eligible to get compensation under Section 166.

Who is liable to pay compensation?

Insurance Company with which the offending vehicle is insured is liable to pay compensation awarded by the Tribunal under Section 149 of  Motor Vehicle Act, 1988.  In case vehicle is not ensured, the owner will be personally liable to pay the compensation.

Mukesh Kumar Suman is an advocate and legal author based at Delhi. He regularly appears before various Judicial Forums including NCLT, NCLAT, High Courts and the Supreme Court. He can be approached at mukesh_suman@outlook.com or +91 9717864570.

Mukesh Kumar Suman

Mukesh Kumar Suman

Mukesh Kumar Suman is an advocate based at Delhi. He has rich experience in civil, criminal, commercial, arbitration and corporate insolvency matters. He regularly appears before District Courts, NCLT, NCLAT, High Court and the Supreme Court. He can be approached at mukesh_suman@outlook.com or +91 9717864570.

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