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 2

B. Statement of Problem 4

C. Aims and Objectives of the Study 13

D. Overview of the Existing Literature 14

E. Research Methodology 19-21

I. Coverage and Sample 20

II. Selection of Cases 20

F. Chapter Scheme 21

CHAPTER II: The Motor Vehicles Act, 1988: 23 - 97

History, Object, Scope

and Salient Features

A. Introduction 24

B. History 26 - 34

I. Pre – 1988 Position 26

II. The Motor Vehicles Act, 1988 27

III. The Motor Vehicles (Amendment) Act, 1994 29

IV. Law Commission’s 119th Report 31

V. The Motor Vehicles (Amendment) Act, 2000 32

VI. The Motor Vehicles (Amendment) Act, 2001 33

C. Objects and Scope 34

D. Definitions – The Genus and Species of Motor Vehicles 37 - 45

I. Area 38

II. Articulated Vehicle 38

III. Axle Weight 38

IV. Certificate of Registration 38

V. Conductor 38

VI. Conductor’s Licence 38

VII. Contract Carriage 38

VIII. Dealer 39

IX. Driver 39

X. Driving Licence 39

XI. Educational Institution Bus 39

XII. Fare 40

XIII. Goods 40

XIV. Goods Carriage 40

XV. Gross Vehicle Weight 40

XVI. Heavy Goods Vehicle 40

XVII. Heavy Passenger Motor Vehicle 40

XVIII. Invalid Carriage 40

XIX. Learner’s Licence 41

XX. Licensing Authority 41

XXI. Light Motor Vehicle 41

XXII. Manufacturer 41

XXIII. Maxi Cab 41

XXIV. Medium Goods Vehicle 41

XXV. Medium Passenger Motor Vehicle 41

XXVI. Motor Cab 41

XXVII. Motor Car 41

XXVIII. Motor Cycle 42

XXIX. Motor Vehicle or Vehicle 42

XXX. Tractor-Trailer 42

XXXI. Omnibus 42

XXXII. Owner 42

XXXIII. Permit 43

XXXIV. Prescribed 43

XXXV. Private Service Vehicle 43

XXXVI. Public Place 43

XXXVII. Public Service Vehicle 43

XXXVIII. Registered Axle Weight 43

XXXIX. Registering Authority 43

XL. Route 43

XLI. Semi-Trailer 44

XLII. Stage Carriage 44

XLIII. State Government 44

XLIV. State Transport Undertaking 44

XLV. Tourist Vehicle 45

XLVI. Tractor 45

XLVII. Traffic Signs 45

XLVIII. Trailer 45

XLIX. Transport Vehicle 45

L. Unladen Weight 45

LI. Weight 45

E. Concept and Meaning of Accident 46 – 51

I. Accident and Other Allied Expressions Like 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 49

F. Salient Features of Motor Vehicles Act, 1988 52 - 94

Relating to Awarding of Compensation in Motor

Accident Cases.

I. Liability to Pay Compensation in Certain Cases 52

on the Principle of No Fault.

II. 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

III. Requirement of Insurance Policy and Limits of 63

Liability Under Such Policy.

IV. Validity of Polices of Insurance Issued in 67

Reciprocating Countries.

V. Liability of Insurer and Defence Available To Insurer. 67

VI. Third Party Insurance : Defence Available to the 72

Insurance Companies

VII. Right of Recovery from Owner to Insurance Company 73

VIII. Insolvency of Insured : Rights of Third Party Against Insurers 73

IX. Duty to Give Information as to Insurance. 75

X. Effect of Settlement Between Insure and Insured. 76

XI. Driving License 77

XII. Gratuitous Passenger 78

XIII. Effect of Dishonour of Cheque of Insurance Premium 80

XIV. Effect of Transfer of Vehicle 80

XV. Saving Clause. 80

XVI. Effect of Insolvency of Insured. 81

XVII. Effect of Death on Certain Causes of Action. 81

XVIII. Effect of Certificate of Insurance. 81

XIX. Effect of Transfer of Certificate of Insurance. 82

XX. Production of Certain Certificates, Licence and Permits etc. 83

XXI. Application for Authority to Use Vehicle: Production 85

of Certificate of Insurance

XXII. Duty to Furnish Particulars of Vehicle Involved in Accident. 86

XXIII. 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. Power of Central Government to Make Rules. 94

G. Review 95

CHAPTER III: Claims Tribunal Under Motor 98 - 156

Vehicles Act, 1988

A. Introduction 99

B. Establishment and Composition of Claims Tribunal 100 - 109

I. Setting up of Claims Tribunal. 101

II. Appointment of Member. 102

III. 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. 105

IV. Qualification for Appointment as Member of Claims Tribunal 105

V. Other Staff of Claims Tribunal. 106

VI. Claims Tribunal: Powers of Civil Courts. 106

VII. Claims Tribunal: A Substitute of Civil Courts for 108

the purpose of Compensation Claims.

C. Application for Compensation. 109 - 115

I. Who can File Claim. 113

II. 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 115 - 129

I. Pecuniary Jurisdiction 116

II. Exclusion of Civil Court’s Jurisdiction not Readily Inferred 116

III. 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. Claimant to Choose Place of Jurisdiction 123

VIII. Jurisdiction of Tribunal in India, where Accident occurred 124

in Foreign Country

IX. Jurisdiction to Entertain Claim by Indigent Person 124

X. Death Occurred Due to Heart Attack: No Jurisdiction 126

XI. Transfer of Claims from One Tribunal to Another Tribunal 126

XII. 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. 130

G. Procedure and Power of Claims Tribunals. 131 - 140

I. Application for Compensation 132

II. Amendment of Pleadings: Amendment for Enhancement of 132

Claim Amount

III. Notices, Summons, Processes and Service 133

IV. Written Statement 134

V. Summary Procedure for Holding Enquiry 135

VI. Powers of Court in Respect of Taking Evidence on Oath, 135

Enforcing Attendance of Witness etc.

VII. Taking of Assistance of Persons Possessing Special 135

Knowledge

VIII. Framing of Issues 135

IX. Ex Parte Proceedings – Dismissal in Default, Restoration etc. 136

X. Judgement – Finding on all Issues Necessary 137

XI. Delivery of Copies of Award to Parties within 15 Days 138

XII. Person Required to Pay Compensation in Terms of Award 138

to Deposit the Entire Amount within 30 Days.

XIII. Execution of Award of Claims Tribunal 139

H. Assessment of Claim. 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. Tribunal’s 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. 182

E. Negligence, Contributory Negligence and Application of 186 - 276

Doctrine of Res Ipsa Loquitur.

I. Contributory Negligence and Composite Negligence. 188

II. Rule of Last Opportunity 189

III. Contributory Negligence and Children 190

IV. Application of Doctrine of Res Ipsa Loquitur in 191

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) Accident Due to Tyre Burst. 260

(k) Accidents Due to Mechanical Breakdown. 265

(l) Motor Vehicles Turned Turtle. 271

F. Treatment of Compensation Amount 276- 280

I. Award of Compensation in Favour of Minor Claimants 277

II. Compensation Awarded to Illiterate Claimants 277

III. Compensation to Semi-Literate Claimants 277

IV. Compensation Amount Awarded to Literate Claimants 278

V. Award of Compensation Widow Claimants 278

VI. Withdrawal of Amount in case of Personal Injury 278

VII. Withdrawal of Amount in Case of Emergency 279

VIII. No Loan or Advance Against the Fixed Deposit 279

Amount of Compensation

IX. Duty of Bank to Affix Note on Fixed Deposit Receipt. 279

X. Cases Settled Outside the Court. 280

G. Driving Licence and Liability of Insurance Company 280 - 282

I. Driving Licence 280

II. Forgery of Driving Licence 281

III. Liability of Insurance Company 281

IV. Amount paid by Insurance Company 281

V. Policy of Insurance 282

H. Third Party and Liability of Insurance Company 282 - 283

I. Insurance Company cannot Refuse to Meet its Liability 282

Qua Third Party

II. Fraud Committed by the Third Party 283

I. Grant of Compensation: Miscellaneous Trends. 283- 286

I. Ensuring Compensation to All Victims. 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

V. Unified and Comprehensive Law Required. 285

VI. Rectification of Second Schedule to Motor Vehicles 285

Act, 1988.

J. Review 286 - 288

CHAPTER V: Lok Adalats and Motor Accident 289 - 309

Claims

A. Introduction. 290

B. Establishment, Powers and Jurisdiction of Lok Adalats 292 - 296

I. Organization of Lok Adalats. 292

II. Cognizance of Cases by Lok Adalats. 293

III. Award of Lok Adalats 295

IV. Powers of Lok Adalat/ Permanent Lok Adalats. 295

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. Settlement of Disputes Outside the Court. 306

II. 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 317 - 320

I. Rash Driving or Riding on Public Way 317

II. 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

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

V. Culpable Rashness 343

VI. Proof of Criminal Liability 345

I. Review 348 - 349

CHAPTER – VII : Conclusions and Suggestions 350 - 386

A. General 351

B. Conclusions 352 - 369

I. Dubious Distinction. 352

II. Accident: Pre- Condition in MACT Cases 353

III. Accident Arising Out of Motor Vehicle 353

IV. Status of Gratuitous Passenger 354

V. Claims in Hit and Run Cases 354

VI. Payment of Compensation on Structured Formula Basis 355

VII. MACT is a Tribunal 355

VIII. Tribunal to be Deemed as Civil Court 356

IX. Application for Compensation Must be Complete 356

and Proper

X. Amendment in Claim Application 357

XI. Jurisdiction of Claims Tribunal 358

XII. 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

(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

XVI. Treatment and Disbursement of Compensation Amount. 365

XVII. Liability of Insurance Company 365

XVIII. Lok Adalat and Motor Accident Cases. 366

XIX. Motor Accident as Crime: Liability to Pay Compensation 367

XX. Felonious Tort 369

C. Suggestions 369 - 386

I. Grant of Compensation and Treatment Thereof 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 373

i. No Loan or Advance Against the Fixed Deposit 373

of Amount of Compensation

ii. Bank must Affix Note on Fixed Deposit Receipt 374

(g) To Ensure Just and Fair Compensation in case of 374

out of Court Settlement

(h) To Ensure the Application of Principle of Structural 374

Compensation Formula

(i) Compensation in Hit and Run Cases 374

II. 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. Amendment to Existing Law 379

VII. 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

XI. 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

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