1

COMPENSATION IN MOTOR ACCIDENT

CLAIMS: A STUDY OF EMERGING TRENDS

SUMMARY

Newspapers in every metro city in India give a daily report of people killed and injured in

traffic accidents. As a response to this heightened awareness, NGOs have come up in

many cities to deal with this increasing urban epidemic of death and destruction. Police

departments also hold road safety weeks, painting competitions, zero tolerance drives and

demand greater powers to fine and punish. This has gone on for the last two decades.

However, the killing and the maiming continue unabated.

A look at some of the statistics on road safety presents a very grim picture worldwide and

especially in developing countries like India. Road fatalities now leads the list of

accidental deaths in India much more than any other such as by drowning, fire, rail or air

mishaps. The magnitude of road accidents in India is increasing at an alarming rate.

About 60,000 people are killed every year in India and top the world in the number of

road fatalities. National level of fatalities per kilometer is 0.025.

For the purpose of systematic study, the present research work is divided into 7 chapters.

These are as under:

1. Introductory

2. The Motor Vehicles Act, 1988: History, Object, Scope and Salient Features.

3. Claims Tribunal under Motor Vehicles Act, 1988

4. Award of Compensation to the Victims of Motor Accidents in India: Judicial

Trends

5. Lok Adalat and Motor Accident Claims

6. Criminal Liability in Motor Accidents

7. Conclusions and Suggestions

The first chapter as usual is Introductory. This chapter covers statement of problems,

Aim and Objective of the present study, review of existing literature in the field of grant

of compensation and research methodology.

The second chapter deals with History, Object, Scope and Salient Features of the

Motor Vehicles Act, 1988. In this chapter history of the Motor Vehicles Act, 1988 and

2

various definitions of the terms used in the Act have been discussed. Award of

compensation on no fault liability basis, requirement of insurance against third party risk,

liability of insurer and defence available to insurer, rights of third party against insurers

on insolvency of insured, duty to give information as to insurance, duty to furnish

particulars of vehicle involved in accident, special provisions as to compensation in case

of hit and run motor accident, special provisions as to payment of compensation on

structured formula basis and power of central government to make rules etc., are also

discussed in this chapter.

The Claims Tribunal, Its Establishment, Composition, Jurisdiction and Procedure

have been discussed in third Chapter. In this chapter, an attempt has also been made to

discuss the application for compensation, options regarding claims for compensation in

certain cases under other Acts, procedure and power of claim tribunals, award of claim

tribunal, appeal against decisions of claim tribunal, recovery of money from insurer as

arrears of land revenue, bar on jurisdiction of civil courts and consumer forums, etc.

Further, this chapter also covers, who can file claim, who can report to claim tribunal in

case of accident, essential documents required to file claim, court fees to be deposited at

the time of filling claim etc.

In the fourth chapter, Judicial Trends in Awarding Compensation to the Victims of

Motor Accident have been discussed. This chapter also throws light on the application of

various principles like, No Fault Liability, Act of God, Absolute and Vicarious Liability,

Negligence, Contributory Negligence and application of doctrine of res ipsa loquitur etc.

in the matters of grant of compensation.

The fifth chapter deals with role of the Lok Adalats in awarding compensation in motor

accident cases. In this chapter, relevant provisions of Legal Services Authority Act, 1987

and Civil Procedure Code, 1908, etc. are also examined. This chapter also throws light on

powers, jurisdiction and finality of the awards of Lok Adalats.

The sixth chapter deals with Criminal Liability in Motor Accidents. In this chapter an

attempt has been made to study the nature and scope of penal liability of owners, agents

and drivers of vehicles involved in accidents. This chapter also explains the relevant

provisions of Indian Penal Code, which have direct bearing with the cases involving

motor driven vehicles.

The last chapter as usual is of Conclusion and Suggestions. Some conclusions based on

the study are drawn. At the end of this chapter, some useful and realistic suggestions have

been made. Some of the suggestions are as under:

1. It is to be ensured that all accident victims including victims of uninsured vehicles

get compensation.

3

2. Payment of Compensation to accident victims should be without delay.

3. Full amount of compensation awarded should not go directly in the hands of the

victim, instead should be deposited in fixed deposits with banks.

4. Just and Fair Compensation, in cases of out of Court Settlement must be ensured.

5. Award of compensation must be determined by applying the principle of structural

compensation formula in motor accident cases like railways (where a fixed

compensation of Rs. 4.00 Lakhs is paid for loss of life) irrespective of social status

and earning capacity of the victim.

6. All types of Vehicles should be regularly checked up and inspected by authorised

mechanics like checking of air pollution.

7. Driving Licence should be allotted by following strict procedure and after

considering health and mental status of the person.

8. Entry of Animals on Public Roads should be prohibited

9. Supervision and Control of Speed of Vehicle should be ensured strictly.

10. There should be ban on plying of old vehicles.

11. Where the liability of the insurer is not disputed, the insurance companies should

pay compensation as per the standard formula developed by the decisions of the

Courts.

12. Insurance companies should provide for treatment of victims of motor accident in

the same manner as is provided to medi-claim policy holders.

13. There is need to bring some mechanism to ensure that the compensation awarded

by Lok Adalats is Just and Fair.

14. There is need to organise literacy programs regarding rules of road, traffic signals

etc., through mass media.

15. Road Safety Bureau must be established to lay down Road Safety Standards and

norms, enforce Road safety measures and ensure maintenance of Public Roads in

general.

16. Some effective mechanism must be devised to reduce number of vehicles on road,

including encouragement to travel by public transport system.

17. Ensuring effective functioning of Claims Tribunals, Police Authorities and

Insurance Companies.

18. Enacting a comprehensive and unified statute for dealing with motor accidents.

19. The central government may consider amendment of the Second Schedule to the

Act to rectify the several mistakes therein and rationalize the compensation

payable thereunder.

20. Trauma and First Aid Centres for Accident Victims must be established

immediately.

21. There should be deterrent punishment to traffic offenders.

22. There should be some limitation period to file claim for compensation.

23. Ensure strict punishment for drunken driving.