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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.
2.
3.
4.

Introductory
The Motor Vehicles Act, 1988: History, Object, Scope and Salient Features.
Claims Tribunal under Motor Vehicles Act, 1988
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

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.

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.