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The Motor Vehicle Act, 2019 provides provisions regarding compensation for losses a person or others (third parties) suffer as a result of a motor vehicle accident. These losses can be categorized as damages to third parties or damage to self including one's own vehicle. The Motor Accidents Claims Tribunal is responsible for efficiently hearing these cases and ensuring that justice is delivered.

Basic Rules Under Motor Vehicles Act :

The Motor Vehicles Act, 2019 outlines several basic rules for operating vehicles. Under Section 3, it is illegal to drive a vehicle without a valid driving license. Additionally, individuals must be at least 18 years old to legally operate a vehicle (Section 4). The Act also includes provisions for the registration of vehicles (outlined in Sections 39 to 65) and requires vehicle owners to obtain third party insurance (as specified in Sections 145 to 164).

Who can apply for compensation?

According to Section 166 of the Act, an application for compensation may be made-

a)      by the person who has sustained the injury; or

b)      by the owner of the property; or

c)      where death has resulted from the accident, by all or any of the legal representatives of the deceased; or

d)      by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be.

When can compensation be claimed? 

Under section 165(1) of the Motor Vehicles Act 2019, the Claims Tribunal may award compensation to the claimant in the following cases:

i.        When the accident involves death or bodily injury to a person.

ii.      When such accidents arise out of the use of motor vehicles.

iii.     When the accident results in the loss of any property of a third party. 

There is no specific timeframe within which a claim for compensation must be filed, however, it is advisable to file the claim within a reasonable period of time. Filing a claim after an extended period may raise doubts in the mind of the tribunal.

Where can compensation be claimed?

The claim can be filed in any of the following Motor Accidents Claims tribunals:

a.       The Claims Tribunal in the jurisdiction where the claimant reside.

b.       The Claims Tribunal in the jurisdiction where the owner of the vehicle resides.

c.       The Claims Tribunal where the accident occurred.

Documents required while filing the claim application:

The following documents are required when filing a claim application:

Ø  A copy of the FIR reported to the nearest police station

Ø  A copy of the Medico Legal Certificate/Post Mortem Report/Death Report

Ø  Identity documents for the claimants as required

Ø  Original bills and treatment records for medical expenses incurred

Ø  Educational qualification documents for the deceased (if applicable)

Ø  Disability Certificate (if applicable)

Ø  Proof of income for the deceased or injured party

Ø  Age-related documents for the victim

Ø  Cover note for the third-party insurance policy

Ø  Declaration of facts outlining the relationship between the claimants and the deceased.

Appeals

According to Section 173, appeals against decisions of the Claims Tribunal can be filed with the High Court within 90 days from the date of the decision. If the claimant is unable to file the appeal within this timeframe, then he must provide a valid reason for the delay. The Court may admit the appeal if it finds the reason for the delay to be reasonable. If the amount in dispute in the appeal is less than INR 100,000, the Court will not consider the appeal.

Determination of Compensation :

Section 168 of the Motor Vehicles Act provides the concept of "just compensation," which should be based on fairness, reasonableness, and equitability as it is not possible to determine an exact amount. This section also requires the Claims Tribunal to conduct an inquiry into the claim petition and follow a summary procedure as deemed appropriate. This inquiry is distinct from a civil trial. The purpose of this provision is to ensure that victims of road accidents are not left at their own mercy.

In Yadav Kumar Vs. Divisional Manager, National Insurance Company Limited & others, Civil Appeal NO.7223 of 2010, the Supreme Court held that “it goes without saying that in matters of determination of compensation both the tribunal and the court are statutorily charged with responsibility of fixing “ Just Compensation”. It is obliviously true that determination of just compensation cannot be equated to a bonanza. At the same time the concept of “ Just Compensation” obviously suggests application of fair and equitable principles and a resonable approach on thee part of tribunals and the courts. This reasonableness on the part of the tribunal and the court must be on a large peripheral field.”

The Supreme Court in National Insurance Company Limited vs Pranay Sethi, SLP (civil) No. 25590 of 2014 held that “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 age of the deceased was 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.” It was further held that “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% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.” 

On the issue pertaining to award of compensation under conventional heads, the Bench held that “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” however “the aforesaid amounts should be enhanced at the rate of 10% in every three years.”

Accident caused by an underage driver: 

If an accident is caused by an underage driver, the insurance company is not responsible for compensating the victim. Instead, the parents or legal guardian of the child will be held liable.

Can a bus passenger claim compensation in case of a bus accident?

The Madras High Court in Venkataswami Motor Service v. C.K Chinnaswamy And Ors, I (1988) ACC 571, held that “ The fundamental duty of both the driver as well as the conductor is to verify specifically, whether any passenger is getting into the bus or is getting down from the bus, before actually the bus is moved from the bus stop where it is stopped, irrespective of the fact whether that place of stopping is a bus stop or not.” Thus, it can be said that in case of an accident of a bus passenger, it will be the duty of the owner or the insurance company to compensate the victim.

Can a Pillion Rider or Co-passenger Claim Compensation in case of Two-wheeler or Car Accident due to negligence of driver?

The Supreme Court in Oriental Insurance Co. Ltd v. Sudhakaran K.V. ,Civil Appeal No. 3634 of 2008 where this issue was raised, held that, “(i) the liability of the insurance company in a case of this nature is not extended to a pillion rider of the motor vehicle unless the requisite amount of premium is paid for covering his/her risk (ii) the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of vehicle or the pillion rider; (iii) the pillion rider in a two wheeler was not to be treated as a third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle.”

References:

https://taxguru.in/corporate-law/compensation-motor-vehicles-act-1988.html

https://blog.ipleaders.in/road-accident-claim-compensation/

https://www.latestlaws.com/articles/all-about-law-relating-to-motor-accident-claims-and-the-compensation

https://www.taxmann.com/post/blog/561/claims-under-motor-vehicle-act-1988/?amp