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(NOTE: The Motor Vehicle Act, 1988 is used as Motor Vehicle Act for Accident, 1988 in some places in this Article)

Introduction:

What Motor Vehicle Accident Law? Every year around 1.51 lakh people die in road accidents. This sometimes happens because of their fault, or sometimes because of the fault of others, they have to pay. But when a person suffers a loss due to the actions of others, the Indian legislature provides a remedy for Indian motor vehicle accident law and that remedy is called the Motor Vehicles Act, 1988.

Overview of Motor Vehicle Act, 1988: 

The motor vehicle accident law known as Motor Vehicles Act, 1988 is an inclusive act and was enacted on 1st July 1989. It has replaced the Motor Vehicle Act, 1939. The very first act to govern road transport carriers was the Motor Vehicles Act, 1914. With the change in socio-economic needs, the need to introduce new motor vehicle accident law was felt and led to the enactment of the Motor Vehicles Act, 1988, and the motor vehicle accident law was amended in the year 2019.

The Act has the following features:

• The Act contains 217 sections and 2 schedules.

• The act provides compensation for the victims in a road accident, in case of death and grievous injury.

• It provides for the establishment of a Road Safety Board.

• It provides the establishment of a Motor Vehicle Act Accident Claim(or motor vehicle accident claims act) or Claim Tribunal for speedy disposal of the claim cases in case of death or injury in a roadside accident.

• It imposes fines and penalties in case of drink and drive.

• It also provides for the recall of vehicles.

Insurance Policy under the Motor Vehicle Accident Act:

Section 145 to 164 deals with the insurance of motor vehicle accident act against third party risk. This is also called third party liability where the insurance company indemnifies the insured person when the insured person is sued or is held liable for damages against the third person. In Government national insurance Company Vs Fakir Chand, it was held that the third parties include any person walking on the road, travelling in another vehicle, or is a passenger in the vehicle that has been insured.

Features:

• In G. Govindan v New India Assurance Co. Ltd, it was held that Insurance Policy is mandatory for every vehicle in India under the Motor Vehicle Act, 1988. 

• It does not take into ambit the harm caused to the insured; rather, it covers the harm caused to the third party.

• It is based purely on the fault theory. It means to claim the insurance money; the insured has to establish that it was his fault entirely and also that the injury is caused by the insured fault only.

• This requires a lawyer's help. 

• It is the most unpopular insurance as compared to first-party insurance. 

Motor Vehicle Act Accident Claim( Motor Vehicle Accident Claims Act) under Motor vehicle Act, 1988:

The Motor Vehicle Act for accidents, 1988 provides provisions related to motor vehicle act accident claim(or motor vehicle accident claims act) for losses that occurred due to a motor accident to person (self) or other (third party). In the case where a third party claims the damage, the report of the accident should be reported or given to the nearest police station and then to the insurance company. Whereas, in case of a self claim, as of motor vehicle accident law the person shall have to inform the insurance company and the police before the damage gets fixed. However, an application for motor vehicle act accident claim(or motor vehicle accident claims act) under Motor Vehicle Act for accident, 1988, can be made or filled by the owner himself, or else in case of the death of the owner the nearest kin of the deceased is legally entitled to make such application. Further, the accident victim, having age less than the age of 18 years, cannot go for an accidental claim on its own but can go through a lawyer.

However, Application for motor vehicle act accident claim(or motor vehicle accident claims act) compensation before the Tribunal may be made by the accident victim himself or by the owner of the vehicle or in case death has been caused due to application for motor vehicle act accident claim can be made through the legal heirs of the deceased or all or any person duly authorized by the person injured or by all or any of the legal representative of the injured person. Whereas the person, who himself is responsible for reckless and careless driving, will not be entitled to claim compensation. In the case of Manjuri Bera v. Oriental Insurance Company, the Supreme Court held that the father and the brother would be eligible to ‘motor vehicle act accident claim’(or motor vehicle accident claims act) compensation under section 140 of the Motor Vehicle Act for accident, 1988 as it does not cease because there is an absence of dependency.

Types of accident claims under the Motor Vehicle Accident Act:

There are three types of claims through which one can go for the compensation claim as of motor vehicle act for accident. There are as follows:

1. Hit and Run:

These kind cases shall be dealt with the provisions of section 161 of the Act. In this case, the accused hit the victim through his vehicle and runs away instead of helping him or taking him to the nearest hospital.

2. Structured formula basis:

The claim was introduced in the year 1994 after amending the Act. This amendment has brought a new provision, i.e. section 163A. As per this section, no necessity to prove the fault of the driver. The owner or the issuer has to give compensation to the claimant after the identification of the accused is made.

Procedure for claiming compensation:

Where the accident has resulted in the damage of its own vehicle( as of motor vehicle accident act, the person has to inform the police and the insurance company before fixing the damages. When it is a case of third party claims, then first it should be reported to the police, and after that, the insurance company is concerned.

The owner has to apply to claim damages, or in the case of death of the owner, the nearest relative shall apply. In case of death of the third party, the application for claiming compensation can be filed by the legal heirs of the deceased.

The application shall be filed with other documents such as:

• FIR copy

• Documents showing the age of the victims

• Copy of Medico-Legal Certificate/ Death Report/ Post-mortem Report, as the case may be,

• Proof showing income statement of the deceased or injured,

• Proof of Identity of Claimant,

• Cover note of third party policy, etc.

Procedure for Calculating Compensation:

While calculating compensation, the tribunal has to keep in mind various factors. The Court, through each case, has widened its scope.

In Sarla Verma v Delhi Transport Corporation, the Court explains the multiplier effect while awarding compensation. The Court, in this case, takes into consideration the net annual value of reliance on the date of death of the deceased. The net annual loss is evaluated, keeping in mind the age of the deceased and not the age of the parents. To compensate for the loss, this amount is then multiplied by the multiplier, and the resultant is awarded as compensation. The multiplier represents the number of years' purchase on which the loss of dependency is capitalized.

Also, the multiplier is fixed for the computation of loss depending upon the age of the deceased. 

Age of the deceased.          Multiplier

15 to 25 years                        18

26-30                                     17

31-35.                                    16

36-40.                                    15

41-45.                                    14

46-50.                                    13

51-55.                                    11

56-60.                                    9

61-65.                                    7

Above 66 to 70.                     5

In National Insurance Company Limited v Pranay Sethi, the Supreme Court laid down guidelines for assessing compensation concerning the prospects of the deceased where the deceased is self-employed or has a fixed or permanent salary. It was held that compensation should be just in nature and shall be equity, fair, and reasonable.

The guidelines given in the Sarla Verma case were analyzed, and the Court added a wide perspective in this. The additions were extended to the deceased not having permanent jobs also. The Court focuses on the need for a uniform principle of standardization for the assessment of compensation.

However, the Court ruled the benefits to others also, like, 

In the case of the deceased who had a permanent job (salaried) then if his age is below 40 years, between 40-50 years, and between 50-60 years the additions of 50%, 30%, and 15% were to be made to the prospects of the deceased respectively.

If the deceased was self-employed or had a fixed salary, then if his age is below 40 years, between 40 and 50 years, and between 50-60 years the additions of 40%, 25%, and 10% were to be made respectively.

In the case, if there was any loss of consortium, loss of estate, or funeral, then he should be awarded 40,000, 15000, and 15000 respectively.

Further, the Court decided that the amounts shall be increased every 3 years at a rate of 10%.

Motor Vehicle Accident Act claim Tribunal:

To file the claims under the Motor Vehicles Act for accident, 1988( Motor Vehicle Accident Act), a tribunal has been established called Claims Tribunal( as of  Motor Vehicle Accident Act). The main motive or reason behind the establishment of the tribunal is to ensure the speedy trial of the cases and to ensure justice to be delivered.The Tribunal looks into those cases where a matter is related to the loss of life, property, or in case of any injury.The act also provides appeal provision under section 173, which states that the appeal against the claims Tribunals will lie before the High Court.

 Webliography:

1. Legal services India, Retrieved from http://www.legalserviceindia.com/article/l264-Third-Party-Insurance.html.

2. Claims under Motor Vehicle Act, 1988, Retrieved from https://www.taxmann.com/blogpost/2000000563/claims-under-motor-vehicle-act-1988.aspx#:~:text=One%20where%20damage%20is%20done,to%20his%20or%20her%20property.&text=A%20victim%20can%20file%20his,or%20carries%20out%20his%20business

3. Road Accident Claim Compensation, Retrieved from https://www.google.com/amp/s/blog.ipleaders.in/road-accident-claim-compensation/amp/