Govt. Amends 2nd Schedule of Motor Vehicle Act

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May 24, 2018

The Ministry of Road and Transport on May 22 issued a notification amending the Second Schedule of Motor Vehicle Act, 1988.

Also read Important Judgments on Compensation in Motor Vehicle Accident Cases

The New Second Schedule is reproduced below

“THE SECOND SCHEDULE (See Section 163A) SCHEDULE FOR COMPENSATION FOR THIRD PARTY FATAL ACCIDENTS/INJURY CASES CLAIMS

(a) Fatal Accidents: Compensation payable in case of Death shall be five lakh rupees.

(b) Accidents resulting in permanent disability: Compensation payable shall be = [Rs. 5,00,000/- × percentage disability as per Schedule I of the Employee’s Compensation Act, 1923 (8 of 1923)] : Provided that the minimum compensation in case of permanent disability of any kind shall not be less than fifty thousand rupees.

(c) Accidents resulting in minor injury: A fixed compensation of twenty five thousand rupees shall be payable:

On and from the date of 1st day of January, 2019 the amount of compensation specified in the clauses (a) to (c) of paragraph (1) shall stand increased by 5 per cent annually”. 3. This notification shall come into form on the date of its publication in the Official Gazette.”

The notification can be accessed here.

In the case of National Insurance Co. Ltd. v. Pranay Sethi, the Five-Judge Constitution Bench of the Supreme Court has issued guidelines for computation of compensation under the Motor Vehicle Act, 1988.  Read more here.

In the case the Apex Court enumerated the manner for calculating the compensation in case of death or permanent disability due to Motor Vehicle accident, however the Central Government by virtue of this amendment has fixed the compensation to Rs. 5,00,000 in case of fatal accidents resulting in death.

The notification mentions that the Central Government has brought about the amendment in view of cost of living of people. The amended Schedule additionally mentions that the amount of compensation increased by 5 per cent annually from January 01, 2019.

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