Basis for Award of Compensation in Motor Vehicle Accident Cases

Posted On : September 19, 2022
Basis for Award of Compensation in Motor Vehicle Accident Cases
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Under the Motor Vehicles Act of 1988, an individual injured in a car accident or the legal representatives of an individual killed in a car accident may claim damages. It is a law made to prevent motor vehicle accidents and compensate victims and punish guilty parties in the event of an accident.There is no time constraint for submitting the claim application. However, trying to claim compensation after a long unusual duration may cause the Tribunal to have reservations. Consequently, while there is no time limit for submitting a compensation claim, it should be completed as quickly as possible.


The Motor Vehicle Act, 1988

The Motor Accident Claim Tribunal was formed to adjudicate disputes under the Motor Vehicles Act of 1988. The Claims Tribunal's primary objective is to ensure that cases are tried speedily and that justice is done. The claimant should submit their claim on time. According to Section 173, Claims Tribunal appeals will be heard in the High Courts. Appeals must have been lodged within 90 days of the date of the judgment. If the claimant is late in submitting his appeal, he must provide a plausible reason for the latency. The appeal will be heard if the Court approves it. The appeal will be rejected if the amount in conflict is less than Rs 10,000/-.The Motor Accident Claim Tribunal supervises cases involving death, property damage, or personal injury. Claims can be submitted to the appropriate Claims Tribunal through Motor Accidents Lawyer. High courts from various states oversee these Tribunals.

Penalties and offences there under the Act of 1988 According to Section 181 of the act, if a person drives a vehicle without a driving license or before having reached the age of majority, he may be penalized up to Rs 5000/- or imprisoned for up to three months, or both.

The Claims Tribunal may grant claims to the claimant in the following situations according to Section 165(1) of the Motor Vehicles Act, 1988:

  • When an individual dies or is injured as a result of an accident
  • When a third party's property is destroyed as a result of the accident
  • When such accidents occur as a consequence of driving a car

The Supreme Court established guidelines in National Insurance Company Limited v. Pranay Sethi for determining the amount of compensation awarded by the offender to accident victims who are self-employed, have a regular wage, or have a fixed salary. The Court believes that "just compensation" should be based on reasonableness, fairness, and equity.


The following parameters were implemented in response to the decision in Sarla Verma v. Delhi Transport Corporation :

  • If the dead had a secure job and were between the ages of 40 and 50, 50% of his annual pay would be added.
  • If the person who died were over 50, there would be no inclusion.
  • If the dead person had a fixed salary or was self-employed at the time of his death, his income was to be considered.

This evaluation of compensation in the event of a car accident death was later discussed in Pranay Sethi's case. The Court determined that only giving an addition to the deceased who had a permanent job was inappropriate. It should be stretched to others as well. "To have the perspective that he (self-employed person) is likely to remain stationary and his income to remain constant is contrary to the basic concept of human behaviour," the Court stated. Furthermore, the Court stated that there is a lack of uniformity when Claim Tribunals use different evaluation methods. As an outcome, when assessing compensation, it is desirable to implement the "principle of standardization," which was used in this case to evaluate the foreseeable prospects of victims killed in car accidents. A new group was also established for those who died while self-employed or on a regular salary.

The individual who files the claim petition must show that the respondent was negligent. It is crucial to prove that he is lawfully accountable for his actions and is at fault for them. Because there is no precise definition of negligence for the reasons of such a proceeding, it would usually mean a violation of obligation caused by an omission directed by a rational man on some grounds that he would normally do or be bound by law to do because of the behaviour of the public interests, or through doing things that a reasonable or considerate man would not do.

The Supreme Court specifies "rashness" as "risking a dangerous or recklessness act with the knowledge that it is dangerous and may cause serious harm." The hazard of committing such conduct with carelessness or indifference to the implications is criminal in such a case." The Supreme Court defined 'negligence' as "the inability to do something with reasonable and responsible means conferred by the considerations that ordinarily regulate human affairs, or doing something that reasonable and prudent means guided by similar considerations would not do."



The issue emerges because payment is to be made in the event of a child's death, even though the child earns nothing and may study. As an outcome, parents cannot be expected to rely solely on their children in such issues. Nonetheless, the parents will endure the loss of their child and receive to be paid fairly for it. The Supreme Court ruled in R.K. Malik v Kiran Paul that claims for the child's future prospects should be permitted in addition to financial damages. In the case of Lata Wadhwa v. State of Bihar, where the accident occurred on March 3, 1989, and many people, including children, were killed in a crash, the Court awarded significant claims.

The Court categorically stated that the children who died were all attending an expensive college or school, had excellent prospects, and came from upper-middle-class families; however, the higher claims awarded cannot be said to be for the adversity of life and the misery and grief endured as a result of the destruction of life as a result of financial state. To receive acceptance for its use, the multiplier method was noted.In the case of children aged 5 to 10, the Court ruled that "a sum of Rs.1.50 lakhs was awarded towards pecuniary compensation and a sum of Rs.50,000/- was awarded towards 'conventional compensation." Compensation of Rs.4.10 lakhs was awarded in the case of children aged 10 to 18 years, including "conventional compensation."

Legislation is passed to help the general public. The Motor Vehicles Act of 1988 was passed to prevent accidents; it is an important law that must be adequately enforced. As a result, the government and the general public must work to see it through. Every person must ensure that he does not infringe its provisions because an accident results from an individual's behaviour.

Written By:
Kishan Dutt Kalaskar Retired Judge

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