COMPENSATION IN MOTOR ACCIDENT CLAIMS: A

STUDY OF EMERGING TRENDS

CONTENTS
Page Nos.
Acknowledgement

i - iii

Abbrevations

i - iv

Contents

i -xvii

Table of Cases

i - xxvii

CHAPTER I:

Introductory

1-22

A. General

B. Statement of Problem

C. Aims and Objectives of the Study

13

D. Overview of the Existing Literature

14

E. Research Methodology

19-21

I.

Coverage and Sample

II. Selection of Cases

F. Chapter Scheme

CHAPTER II:

20
20
21

The Motor Vehicles Act, 1988: 23 - 97

History, Object, Scope
and Salient Features

A. Introduction

24

B. History

26 - 34

Pre 1988 Position

26

The Motor Vehicles Act, 1988

27

III.

The Motor Vehicles (Amendment) Act, 1994

29

IV.

Law Commissions 119th Report

31

V.

The Motor Vehicles (Amendment) Act, 2000

32

VI.

The Motor Vehicles (Amendment) Act, 2001

33

I.
II.

C. Objects and Scope

34

D. Definitions The Genus and Species of Motor Vehicles

37 - 45

I.

Area

38

Articulated Vehicle

38

III.

Axle Weight

38

IV.

Certificate of Registration

38

Conductor

38

Conductors Licence

38

Contract Carriage

38

VIII.

Dealer

39

IX.

Driver

39

Driving Licence

39

Educational Institution Bus

39

Fare

40

XIII.

Goods

40

XIV.

Goods Carriage

40

XV.

Gross Vehicle Weight

40

XVI.

Heavy Goods Vehicle

40

Heavy Passenger Motor Vehicle

40

Invalid Carriage

40

Learners Licence

41

Licensing Authority

41

II.

V.
VI.
VII.

X.
XI.
XII.

XVII.
XVIII.
XIX.
XX.

XXI.

Light Motor Vehicle

41

Manufacturer

41

XXIII.

Maxi Cab

41

XXIV.

Medium Goods Vehicle

41

Medium Passenger Motor Vehicle

41

XXVI.

Motor Cab

41

XXVII.

Motor Car

41

Motor Cycle

42

Motor Vehicle or Vehicle

42

Tractor-Trailer

42

Omnibus

42

XXXII.

Owner

42

XXXIII.

Permit

43

XXXIV.

Prescribed

43

Private Service Vehicle

43

Public Place

43

XXXVII.

Public Service Vehicle

43

XXXVIII.

Registered Axle Weight

43

Registering Authority

43

Route

43

Semi-Trailer

44

Stage Carriage

44

XLIII.

State Government

44

XLIV.

State Transport Undertaking

44

Tourist Vehicle

45

Tractor

45

Traffic Signs

45

Trailer

45

Transport Vehicle

45

XXII.

XXV.

XXVIII.
XXIX.
XXX.
XXXI.

XXXV.
XXXVI.

XXXIX.
XL.
XLI.
XLII.

XLV.
XLVI.
XLVII.
XLVIII.
XLIX.

L.
LI.

E.

Unladen Weight

45

Weight

45

Concept and Meaning of Accident

I. Accident and Other Allied Expressions Like

46 51
47

Act of God, Inevitable Accident, Latent Defect, etc.

II. Defence of Act of God, or of Latent Defect Feeble under

48

Compensation Laws
III. An Accident Arising Out of the Use of a Motor Vehicle
F.

I.

Salient Features of Motor Vehicles Act, 1988

Relating to Awarding of Compensation in Motor
Accident Cases.
Liability to Pay Compensation in Certain Cases

49
52 - 94

52

on the Principle of No Fault.

II.

III.

Necessity of Insurance Against Third Party Risk.

58

(a)

Authorized Insurer

58

(b)

Certificate of Insurance

58

(c)

Liability

59

(d)

Policy of Insurance

59

(e)

Property

59

(f)

Goods

59

(g)

Reciprocating Country

60

(h)

Third Party

60

Requirement of Insurance Policy and Limits of

63

Liability Under Such Policy.

IV.

Validity of Polices of Insurance Issued in

Reciprocating Countries.

67

V.
VI.

Liability of Insurer and Defence Available To Insurer.

67

Third Party Insurance : Defence Available to the

72

Insurance Companies
VII.
VIII.
IX.

Right of Recovery from Owner to Insurance Company

73

Insolvency of Insured : Rights of Third Party Against Insurers 73

Duty to Give Information as to Insurance.

75

Effect of Settlement Between Insure and Insured.

76

Driving License

77

Gratuitous Passenger

78

XIII.

Effect of Dishonour of Cheque of Insurance Premium

80

XIV.

Effect of Transfer of Vehicle

80

Saving Clause.

80

Effect of Insolvency of Insured.

81

Effect of Death on Certain Causes of Action.

81

Effect of Certificate of Insurance.

81

Effect of Transfer of Certificate of Insurance.

82

Production of Certain Certificates, Licence and Permits etc.

83

Application for Authority to Use Vehicle: Production

85

X.
XI.
XII.

XV.
XVI.
XVII.
XVIII.
XIX.
XX.
XXI.

of Certificate of Insurance
XXII.
XXIII.

Duty to Furnish Particulars of Vehicle Involved in Accident.

86

Special Provisions as to Compensation in Case of

86

Hit and Run Motor Accident.

XXIV.

Refund of Compensation Paid Under Section 161.

88

XXV.

Scheme for Payment of Compensation in Case of

89

Hit and Run Motor Accidents.

XXVI.

Special Provisions as to Payment of Compensation

91

on Structured Formula Basis.

XXVII.
G.

Power of Central Government to Make Rules.

94

Review

95

CHAPTER III:

Claims Tribunal Under Motor 98 - 156

Vehicles Act, 1988

A.

Introduction

B.

Establishment and Composition of Claims Tribunal

I.
II.
III.

99
100 - 109

Setting up of Claims Tribunal.

101

Appointment of Member.

102

Appointment of Member by Name not Necessary

103

(a) Notification of Appointment is Necessary

103

(b) Transfer of Claim Application from District Judge to

104

Claims Tribunal
(c) General Notification designating all the District

104

Judges as Claims Tribunal

(d) Not to Confuse Powers of One Office With Other Office.

IV.
V.
VI.
VII.

105

Qualification for Appointment as Member of Claims Tribunal 105

Other Staff of Claims Tribunal.

106

Claims Tribunal: Powers of Civil Courts.

106

Claims Tribunal: A Substitute of Civil Courts for

108

the purpose of Compensation Claims.

C.
I.

Application for Compensation.

109 - 115

Who can File Claim.

113

Who Can Report to Claims Tribunal in Case of Accident.

113

III.

Essential Documents Required to File Claim.

113

IV.

Court Fees to be Deposited at the Time of Filling Claim.

115

D.

Jurisdiction of Claims Tribunals

II.

I.

Pecuniary Jurisdiction

115 - 129
116

II.
III.

Exclusion of Civil Courts Jurisdiction not Readily Inferred

116

Jurisdiction in Respect of Cases Where Accidents

118

Occurred Prior to Establishment of Tribunal

IV.

Bar on Jurisdiction of Civil Courts

119

V.

Bar on Jurisdiction of Consumer Dispute Redressal Forum

120

VI.

Jurisdiction of Tribunal, Where Collision Between Trains

122

And Motor Vehicle Occurred

VII.
VIII.

Claimant to Choose Place of Jurisdiction

123

Jurisdiction of Tribunal in India, where Accident occurred

124

in Foreign Country
IX.
X.
XI.
XII.

Jurisdiction to Entertain Claim by Indigent Person

124

Death Occurred Due to Heart Attack: No Jurisdiction

126

Transfer of Claims from One Tribunal to Another Tribunal

126

Claimant can Withdraw Applications and File it at

127

Appropriate Place
XIII.

Tribunal Cannot Entertain Application in case of

128

Hit and Run Accident

E. Options Regarding Claims for Compensation in Certain

129

Cases to Claim Compensation in Other Acts.

F. Award of Claims Tribunal.
G. Procedure and Power of Claims Tribunals.
I.
II.
III.
IV.
V.
VI.
VII.
VIII.

Application for Compensation

Amendment of Pleadings: Amendment for Enhancement of
Claim Amount
Notices, Summons, Processes and Service
Written Statement
Summary Procedure for Holding Enquiry
Powers of Court in Respect of Taking Evidence on Oath,
Enforcing Attendance of Witness etc.
Taking of Assistance of Persons Possessing Special
Knowledge
Framing of Issues

130
131 - 140
132
132
133
134
135
135
135
135

Ex Parte Proceedings Dismissal in Default, Restoration etc.

Judgement Finding on all Issues Necessary
Delivery of Copies of Award to Parties within 15 Days
Person Required to Pay Compensation in Terms of Award
to Deposit the Entire Amount within 30 Days.
XIII. Execution of Award of Claims Tribunal
H. Assessment of Claim.
IX.
X.
XI.
XII.

136
137
138
138
139
140

I. Impleadation of Insurer in Certain Cases.

142

J. Award of Interest Where Any Claim is Allowed.

143

K. Award of Compensatory Costs in Certain Cases

144

L. Tribunals Jurisdiction to Set Aside Award Procured By Fraud

145

M. Appeal against Decisions of Claims Tribunal.

146

N. Recovery of Money from Insurer as Arrears of Land Revenue.

149

O. Power of State Government to Make Rules.

150

P. Insurer and No Fault Liability.

150

Q. No Fault Claim can be Proved at Appellate Stage also.

151

R. Ignoring Multiplier in Second Schedule.

151

S. Duty of Claimant to Choose Claim under Sections 163A or 166.

153

T. Review

154

CHAPTER IV:

Award of Compensation to the 157 - 288

Victims of Motor Accident
in India: Judicial Trends

A. Introduction

158

B. No Fault Liability.

159

C. Vis Major

165

D. Application of Principle of Vicarious and Absolute

169 - 185

Liability in Motor Accident Cases.

I.

Vicarious Liability

170

II.

Absolute Liability

172

III.

Absolute Liability and State.

E. Negligence, Contributory Negligence and Application of

182
186 - 276

Doctrine of Res Ipsa Loquitur.

I.

Contributory Negligence and Composite Negligence.

188

Rule of Last Opportunity

189

III.

Contributory Negligence and Children

190

IV.

Application of Doctrine of Res Ipsa Loquitur in

191

II.

Collision Cases
(a) Light Motor Vehicles Colliding with Light Motor

193

Vehicles.
(b) Heavy Motor Vehicles Colliding with Light Motor

195

Vehicles.
(c) Heavy/ Light Motor Vehicles Colliding with Scooters/

202

Motor Cycles.
(d) Heavy Motor Vehicles Colliding with Heavy Motor

212

Vehicles.
V.

Application of Doctrine of Res Ipsa Loquitur in Non-Collision 220

Cases
(a) Motor Vehicles Hitting Pedestrians.

220

(b) Motor Vehicles Hitting Cyclist.

233

(c) Motor Vehicles Involved in Accident While Trying to

240

Save Cattle.
(d) Vehicles Falling in Ditches, Canals, Washed Away in

243

Floods, Hitting Culverts etc.

(e) Passengers Falling Down While Boarding/ Sitting on

248

the Vehicle.
(f)

Motor Cycle/ Scooter Accident Involving Pillion Riders.

250

(g) Parking Vehicles on Public Places Living the key.

252

(h) Motor Vehicles Dashing Against Trees.

254

(i)

Accident Due to Explosion of Tankers/ Fire in Motor

258

Vehicles.
(j)

F.
I.

Accident Due to Tyre Burst.

260

(k) Accidents Due to Mechanical Breakdown.

265

(l)

271

Motor Vehicles Turned Turtle.

Treatment of Compensation Amount

276- 280

Award of Compensation in Favour of Minor Claimants

277

Compensation Awarded to Illiterate Claimants

277

III.

Compensation to Semi-Literate Claimants

277

IV.

Compensation Amount Awarded to Literate Claimants

278

Award of Compensation Widow Claimants

278

Withdrawal of Amount in case of Personal Injury

278

Withdrawal of Amount in Case of Emergency

279

No Loan or Advance Against the Fixed Deposit

279

II.

V.
VI.
VII.
VIII.

Amount of Compensation
IX.
X.

Duty of Bank to Affix Note on Fixed Deposit Receipt.

279

Cases Settled Outside the Court.

280

G. Driving Licence and Liability of Insurance Company

I.

280 - 282

Driving Licence

280

Forgery of Driving Licence

281

III.

Liability of Insurance Company

281

IV.

Amount paid by Insurance Company

281

Policy of Insurance

282

II.

V.

H. Third Party and Liability of Insurance Company

I.

Insurance Company cannot Refuse to Meet its Liability

282 - 283
282

Qua Third Party

II.

Fraud Committed by the Third Party

I. Grant of Compensation: Miscellaneous Trends.

I.

Ensuring Compensation to All Victims.

283
283- 286
283

II.

Collection of One Time Life Time Third Party

284

Insurance Premium.
III.

Alternative to Present System of Third Party Insurance.

284

IV.

Establishment of Road Safety Bureau.

285

Unified and Comprehensive Law Required.

285

Rectification of Second Schedule to Motor Vehicles

285

V.
VI.

Act, 1988.
J.

Review

286 - 288

CHAPTER V: Lok Adalats and Motor Accident

289 - 309

Claims
A. Introduction.
B. Establishment, Powers and Jurisdiction of Lok Adalats
I.

290
292 - 296

Organization of Lok Adalats.

292

Cognizance of Cases by Lok Adalats.

293

III.

Award of Lok Adalats

295

IV.

Powers of Lok Adalat/ Permanent Lok Adalats.

295

II.

C. Refund of Court Fee.

297

D. Jurisdiction of Lok Adalats.

297

E. Idea Behind Formation of Lok Adalats.

297

F. Compromise on Behalf of Unsound Mind and Minor Persons.

298

G. Reasonableness of Amount of Compromise Settlements

299

Arrived at Lok Adalats.

H. Validity of Compromise Settlements in Lok Adalats Signed

300

by Advocate on Behalf of Party.

I. Award of Lok Adalats Even Without Compromise.

300

J. Dismissal of Claims by Lok Adalats in Case of Default

301

by Parties.

K. Award of Lok Adalat and Appeal.

301

L. Award of Lok Adalat not Open to Interference Merely

304

Because Amount Awarded was not Adequate.

M. Exemption from Court Fee

304

N. Sanctity of Award of Lok Adalat and Appeal

305

O. Civil Procedure Code, 1908 Dealing With Settlement

306- 308

of Dispute Out of Court.

I.
II.

Settlement of Disputes Outside the Court.

306

Direction of the Court to Opt for Any One Mode of

307

Alternative Dispute Resolution.

III.

Appearance Before the Conciliation Forum, or Authority.

307

IV.

Appearance Before the Court Consequent to the

308

Failure of Efforts of Conciliation.

P. Review

308 - 309

CHAPTER VI: Criminal Liability in Motor

310 - 349

Accidents.
A. Introduction

311

B. Law of Crimes and Motor Accidents

313

C. Tort and Crime Constituted by the Same Set of

315

Circumstances
D. Offences in Relation to Use of Motor Vehicles
I.

317 - 320

Rash Driving or Riding on Public Way

317

Causing Death by Negligence.

317

III.

Act Endangering Life or Personal Safety of Others

318

IV.

Causing Hurt by Act Endangering Life or Personal

319

II.

Safety of Others.

V.

Causing Grievous Hurt by Act Endangering Life

319

or Personal Safety of Others.

E. Proof of Negligence.

320

F. Grant of Compensation Hearing of Accused Necessary

322

G. Criminal Injury or Murder as Accident

324

H. Judicial Application of the Criminal Law in the Motor

326 - 348

Accident Cases
I.

Res Ispa Loquitur: Not a Special Rule of

326

Substantive Law
II.

Mere Careless Not Sufficient

333

III.

Burden of Proof in Certain Cases

336

IV.

Rash and Negligent Driving

339

Culpable Rashness

343

VI.

Proof of Criminal Liability

345

I.

Review

V.

CHAPTER VII :

348 - 349

Conclusions and Suggestions

A. General
B. Conclusions
I.

350 - 386
351
352 - 369

Dubious Distinction.

352

Accident: Pre- Condition in MACT Cases

353

III.

Accident Arising Out of Motor Vehicle

353

IV.

Status of Gratuitous Passenger

354

Claims in Hit and Run Cases

354

Payment of Compensation on Structured Formula Basis

355

MACT is a Tribunal

355

Tribunal to be Deemed as Civil Court

356

Application for Compensation Must be Complete

356

II.

V.
VI.
VII.
VIII.
IX.

and Proper
X.
XI.
XII.

Amendment in Claim Application

357

Jurisdiction of Claims Tribunal

358

Claimant can Withdraw Applications and file it at

359

Appropriate Place
XIII.

Award of Claim Tribunal and Appeal

359

XIV.

Execution of Award and Recovery of Amount as

360

Land Revenue.
XV.

Principle of Tortious Liability and Motor Accident

361 - 364

Cases

XVI.
XVII.
XVIII.
XIX.
XX.

(a) No Fault Liability

361

(b) Act of God

362

(c) Vicarious Liability

362

(d) Strict and Absolute Liability

363

(e) Negligence and Contributory Negligence

363

(f) Res Ispa Loquitur

364

Treatment and Disbursement of Compensation Amount.

365

Liability of Insurance Company

365

Lok Adalat and Motor Accident Cases.

366

Motor Accident as Crime: Liability to Pay Compensation

367

Felonious Tort

369

C. Suggestions
I.

Grant of Compensation and Treatment Thereof

369 - 386
370- 374

(a) Ensuring that all accident victims get compensation

370

(b) Payment of Compensation Without Delay

370

(c) Securing compensation to all victims

371

of accidents involving uninsured vehicles

(d) Disbursement of Compensation

371

i. Minors

371

ii. Illiterates

372

iii. Semi-Literates

372

iv. Literates

372

v. Widows

373

(e) Withdrawal of Amount of Compensation in Certain Cases

373

i. Withdrawal in case of Personal Injury

373

ii. Withdrawal in Case of Emergency

373

(f) Disbursement of Compensation: Duties of Banks

i. No Loan or Advance Against the Fixed Deposit

373
373

of Amount of Compensation
ii. Bank must Affix Note on Fixed Deposit Receipt
(g) To Ensure Just and Fair Compensation in case of

374
374

out of Court Settlement

(h) To Ensure the Application of Principle of Structural

374

Compensation Formula

II.

(i) Compensation in Hit and Run Cases

374

Functioning of Insurance Company

375

(a) Payment of Compensation as per Standard Formula

375

(b) Treatment of Injured of Motor Accident

375

(c) Lodging of Criminal Complaint for Fake / Forged

376

Driving Licence
(d) Mitigation of Fake Cases

376

III.

Lok Adalats

376

IV.

To Ensure Effective Functioning of Police Authorities

377

V.

To Ensure Speedy and Effective Functioning of Claims

378

Tribunals
(a) To Treat Reports of Accident as Application for

378

Compensation
(b) Determination of Compensation where no Dispute

378

by Insurer
(c) To Dispose of the Claim Application within a Time Frame

378

(d) Not to treat Motor Accident Cases as Regular Civil Matters 379
VI.
VII.

Amendment to Existing Law

379

Rectification of Second Schedule to Motor Vehicles

379

Act, 1988
VIII.

Modification in Insurance Policies

380

IX.

Limitation to File Claim for Compensation

381

X.

Drunken Driving: Prevention and Control

381

Road Safety Policy : Planning and Execution

381

(a) Regular Check up and Inspection of Vehicles

382

(b) Strict Procedure for Allotment of Driving Licence

382

(c) Prohibition of Entry of Animals on Public Road

382

(d) Supervision and Control of Speed of Vehicle

382

(e) Ban on Plying of Old Vehicles

382

(f) Road Safety Bureau

382

(g) Literacy Programs Regarding Rules of Road

383

(h) Reduction of Number of Vehicles on Road

384

(i) To encourage Public Transport system

384

(j) To encourage pooling

384

(k) Permits to Taxis or Autos should be Allotted to

384

XI.

Ply the same on Alternate Days

(l) To Discover Alternate of Road Transport

385

(m) To Establish Trauma and First Aid Centres

385

for Accident Victims

(n) Tracking Down Traffic Offenders

385

(o) Deterrent Punishment

385

(p) Inference of Negligence by applying principle of

386

Res Ispa Loquitur

(q) Strict Application of Section 196 of Motor Vehicles

386

Act, 1988
Appendix I

Format of Application for Compensation

387 - 390

in Motor Accident
Appendix II

Glossary

391 - 398

Appendix III

Traffic Offences and Penalties in India

399 - 407

Appendix IV

Ten Tips for Road Safety

408 408

Appendix V

Traffic Police Signals

409 - 410

Bibliography

411 - 413