Motor Vehicles Accident Compensation under the MV Act

Motor Vehicles Accident Compensation

Motor Vehicles Accident Compensation

Compensatory and penal provisions under the motor vehicles act, 1988

The right to claim damages in case of death was recognized as early as in the year 1846 under the common law. It was in the year 1846 that Fatal Accidents was introduced in England for the first time. Law further developed and Fatal Accidents Act, 1855 got introduced in India. Thereafter Motor Vehicles Act, 1939 was enacted to specifically deal with accidents arising out from Motor Vehicle. Further thereafter, Motor Vehicles Act, 1988 was enacted to consolidate and amend the law relating to accidents arising out of Motor Vehicles.

There has been quite a few amendments in the Act of 1988 in the year 1994, 2000 etc. to make its object and scope wider and to deal with all eventualities arising therefrom.


A bill has been introduced by the Ministry proposing stringent punishment for traffic offences such as drunken driving and an accident in which a child is killed. Fines have also been proposed to the enhanced manifold in order to curb the menace of traffic violation leading to accidents.

Objective of Motor Vehicles Act

The Motor Vehicles Act, 1988 has been enacted keeping in mind the following objectives;

  • To take care of the fast increasing number of both commercial vehicles and personal vehicles in the country.
  • Concern for road safety standards, and pollution-control measures, standards for transportation of hazardous and explosive materials
  • Need for effective ways of tracking down traffic offenders
  • Stricter procedures relating to grant of driving licences and the period of validity thereof.
  • Administration of the Solatium Scheme by the General Insurance Corporation.
  • Provision for enhanced compensation in cases of “no fault liability” and in hit and run motor accidents
  • Provision for payment of compensation by the insurer to the extent of actual liability to the victims of motor accidents irrespective of the class of vehicles
  • Providing adequate compensation to victims of road accidents without going into long drawn procedure
  • Enhancing penalties for traffic offenders
  • Increase in the amount of compensation of the victims of hit and run cases.
  • Removal of time limit for filling of application by road accident victims for compensation.
  • Punishment in case of certain offences is made stringent.
  • Formula for payment of compensation to road accident victims on the basis of age / income, which is more liberal and rational etc.

Compensatory provisions under the Motor Vehicle Act or How to Claim Compensation/damages if a person gets injured or dies in an accident

I. Fixed compensation on the principle of no fault as provided under Section 140 of the Act

  • Where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle be liable to pay compensation in respect of such death or disablement.
  • The amount of compensation which shall be payable in respect of the death of any person shall be fixed sum of Rs. 50,000/- and in respect of permanent disablement shall be a fixed sum of Rs. 25,000/-.
  • Claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners.
  • The claim shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.

After exercise of this option, Claimant cannot opt for compensation under section 163 A based on structured formulas as provided herein below

II. Alternative method of compensation or Payment of Compensation on structured formulae basis – Sec 163 A

The owner of the motor vehicle of the authorized insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim as the case may be.

However where the person is entitled to claim compensation under section 140 and section 163A, he shall file the claim under either of the said section and not under both.

III. Compensation in case of Hit & Run Motor Accidents where identity of vehicle is not traceable

Where the identity of the vehicles is not traceable such cases are called hit and run cases, a  fixed compensation is provided to the victims from the Solatium Fund created by the Government. It must therefore be shown that identity of the motor vehicle which caused the accident could not be traced or ascertained inspite of reasonable efforts, meaning thereby that the accident must be shown to have occurred on account of the victim being hit by some unidentified vehicle which hit him and ran away.
How to Make Application For Grant Of Compensation

How to Make Application For Grant Of Compensation

An application for compensation is made under section 166 of the Motor Vehicles Act and shall be accompanied by a court fee of Rs. 10 in the form of court-fee stamps.

Particulars to the submitted in the Application

Following particulars are required to be provided when a Claimant files application seeking grant of compensation

  1. Name and father’s name of the person injured/dead (husband’s name in the case of married woman and widow).
  2. Full address of the person injured/dead.
  3. Age of the person injured/dead.
  4. Occupation of the person injure/dead.
  5. Name address of the employer of the insured/dead, if any.
  6. Monthly income of the person injured/dead.
  7. Whether the person in respect of whom compensation is claimed pay income tax (to be supported by documentary evidence)
  8. Place, date and time of accident.
  9. Name and address of Police station in whose jurisdiction the accident took place or was registered.

Limitation Period

No application for compensation shall be entertained unless it is made within six months of the occurrence of the accident.


An appeal against the order of the Claims Tribunal lies to the High Court and may be filed within ninety days from the date of the award.

No appeal shall lie against an award if the amount in dispute in the appeal is less than 10,000 rupees.

Who can File an Application for Compensation ?

An application for compensation involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, can be made–

  1. by the person who has sustained the injury; or
  2. by the owner of the property; or
  3. where death has resulted from the accident, by all or any of the legal representatives of the deceased; or
  4. by any agent duly authorized by the person injured or all or any of the legal representatives of the deceased, as the case may be.

Where to File an Application for Compensation ?

Every application shall be made, at the option of the claimant,

  1. To the Claims Tribunal having jurisdiction over the area in which the accident occurred or
  2. To the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or
  3. Within the local limits of whose jurisdiction the defendant resides.

Punitive Provision under the Motor Vehicles Act

The Motor Vehicles Act, 1988 provides for punitive provisions wherein sentence or fine or both is imposed on the violators. Even Criminal Laws deals with a situation when driver of offending vehicle commits accident due to sheer negligent leading to death of the Victim.

The Motor Vehicles Act provides various Rules & Regulations for the public and it has wide importance in our society due to advancement in automobile industry. If any of the rules of the Act are violated, serious punishments are imposed upon the offender. We must understand the object behind the Act and should play vital role in its implementation since we are the sole beneficiaries and violators under the Act.

The above Article is by  Ms. Shweta Kaushik, Advocate, Punjab & Haryana High Court


  1. Sir, My relative met with an accident with a stray animal on main Noida road in 2004. After few days of hospitalisation he expired in the hospital itself. his family members are quite poor and unaware of their rights.
    My question is whether they can file for compensation under MV Act or some other Act so belatedly?
    Pleae Reply.
    With Thanks and Regards.

  2. My relative was died in bike accident when hitting another bike that bike is insured.
    Died pension age is 31 year’s and he is getting salary Rs 21500 p/m in private company.he is unmarried and mother ,father and 3 married sisters are depends.
    In this case what amount is minimum and maximum compensation?
    Please reply my mail-Id

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