PAYMENT OF COMPENSATION IN HIT AND RUN MOTOR ACCIDENT
OBJECTIVES AND METHODOLOGY
1: TO FIND OUT AND STUDY THE PAYMENT OF COMPENSATION IN HIT AND RUN
2: TO DRAW UP THE BASIC TRENDS BY ANALYSING VARIOUS CASES
THE BASIC METHODOLOGY ADOPTED TO PREPARE THIS RESEARCH IS DEDUCTIVE
THAT IS TO STUDY VARIOUS CASES, TO ANALYSE THE LAWS IN THE SAME TOPIC
AND UNDERSTAND THE GENERAL PRINCIPLE TO DRAW A GENERAL CONCLUSION.
The number of people who get killed or maimed in motor
accidents is growing day by day. The main source of succor to such
hapless people and their dependants is the compensation
that they are
entitled to receive under law. But right from 1956, motor accident
compensation law has been in a state of flux. It was in that year that
the legislature amended the Motor Vehicles Act, 1939 by inserting
several new sections. Over the years, many more amendments followed
and in 1988, a new Motor Vehicles Act replaced the old one. This book
studies various new rights created by the Motor Vehicles Act, 1988 for
claiming compensation in case of any death or bodily injury caused in
an accident arising out of the use of a motor vehicle.
Over the years, the judiciary has not only been called upon from time
to time to interpret these statutory provisions and apply them to
different facts and situations, but also to lay down the legal
principles for assessing compensation. The Motor Vehicles Act, 1988
does not provide any guidelines for the identification of the items of
loss to be compensated; nor does it lay down any criteria for the
computation of the quantum of compensation for each item of loss. The
author has successfully dealt with such and other important questions.
COMPENSATION PROVISION OF THE MOTOR VEHICLES ACT
The motor vehicles Act, 1988, like the earlier Act of 1939, makes the
insurance of motor vehicles compulsory. The owner of every motor
vehicle is bound to insure his vehicle against third party risk. The
insurance company, i.e., the insurer covers the risk of loss to the
third party by the use of the motor vehicle. Thus, if there is
insurance against third party risk, the person suffering due to the
accident caused by the use of motor vehicle may recover compensation
either from the owner or the driver of the vehicle, or from the
insurance company, or from them jointly. All such person risk of loss
to whom, on account to the use of thevehicle,is required to be covered
are 'third party' in the sense that they are other than the 'first
party' the insurer and the 'second party' the insured.
Chapter XI of the Act (Sections 145 to 164) contains provisions
concerning "Insurance of Motor Vehicles against Third Party -Risks",
According to section 146, no person can use, except as a passenger, or
cause or allow any other person to use a motor vehicle in a public
place, unless an insurance policy against third party risks, as
required by this Chapter, is in force , in relation to use of the
vehicle. Section 146 (1), which contains the relevant provision is as
"No person shall use, except as a passenger, or cause or allow any
other person to use a motor vehicle in a public place, unless there
is, in force, in relation to the use of the vehicle by that person or
that other person, as the case may be, a policy of insurance complying
with the requirements."
Special provision as to compensation in case of hit and run motor
(1) For the purpose of this section, Section 162 and Section 163
(a) "grievous hurt" shall have the same meaning as in the Indian Penal
Code (45 of 1860);
(b) "hit and run motor accident" means an accident arising out of the
use of a motor vehicle or motor vehicles the identity whereof cannot
be ascertained in spite of reasonable efforts for the purpose;
(c) "scheme" means the scheme framed under Section 163.
(2) Notwithstanding anything contained), in the General Insurance
Business (Nationalization) Act, 1972 ( 57 of 1972 ), or any other law
for the time being in force or any instrument having the force of law,
the General Insurance Corporation of India formed under Section 9 of
the said Act and the insurance companies for the time being carrying
on general insurance business in India shall provide for paying in
accordance with the provision of this Act and the scheme, compensation
in respect of the death of, or grievous hurt to , person resulting
from hit and run motor accidents.
(3) Subject provisions of this Act and the scheme, there shall be paid
(a) in respect of the death of any person resulting from a hit and run
motor accident, a fixed sum of  [twelve thousand and five hundred
(b) In respect of grievous hurt to any person resulting from a hit and
run motor accident, a fixed sum of[twelve thousand and five hundred
(4) the provision of sub- section (1) of Section 166 shall apply for
the purpose of making applications for compensation under this section
as they apply for the purpose of making applications for compensation
referred to in that sub- section.
Refund in certain cases of compensation paid under Section 161.
(1) The payment
of compensation in respect of the death of, or
grievous hurt to, any person under Section 161 shall be subject to the
condition that if any compensation ( hereafter is this sub- section
referred to as the other compensation) or other amount in lieu of or
by way of satisfaction of claim for compensation is awarded or paid in
respect of such death or grievous hurt under any other provision of
this Act or any other law or otherwise so much of the other
compensation has already been paid under Section 161 or an application
for payment of compensation is pending under that section, and such
tribunal, court or other authority shall,-
(a) if compensation has already been paid under Section 161, direct
the person liable to pay the compensation awarded by it to refund to
the insurer, so much thereof as is required to be refunded in
according with the provision of sub-section 91);
(b) I any application for payment of compensation is pending under
Section 161 forward the particulars as to the compensation awarded by
it to the insurer.
Explanation- For the purposes of this sub-section, an application for
compensation under Section 161 shall be deemed to be pending -
(i) if such application has been rejected , till the date of the
rejection of the application, and
(ii) if any other case, till the date of payment of compensation in
pursuance of the application.
Scheme for payment of compensation in case of hit and run motor
(1) The Central government may, by notification in the Official
Gazette, make a scheme specifying, the manner in which the scheme
shall be administered by the General Insurance Corporation, the form,
manner and the time within which applications for compensation may be
made, the officers or authorities to whom such applications may made,
the procedure to be followed by such officers or authorities for
considering and passing orders on such applications, and all other
matters connected with, or incidental to, the administration of the
scheme and the payment of compensation.
(2) A scheme made under sub-section (1) may provide that-
(a) a contravention of any provision thereof shall be punishable with
imprisonment for such term as may be specified but in no case
exceeding three months, or with fine which may extend to such amount
as may be specified but in no case exceeding five hundred rupees or
(b) the powers, functions or duties conferred on imposed on any
officer or authority by such scheme may be delegated with the prior
approval in writing of the Central government, by such officer or
authority to any other officer or authority;
(c) any provision of such scheme may operate with retrospective effect
from a date not earlier than the date of establishment of the solatium
fund under the Motor Vehicles Act, 1939 ( 4 of 1939), as it stood
immediately before the commencement of this Act;
it stood immediately before the commencement of this Act;
Provided that no such retrospective effect shall be given so as to
prejudicially affect the interests of any person who may be governed
by such provision..
Special provision as to payment of compensation on structured formula
(1) Notwithstanding anything contained in this Act or in any other law
for the time being in force or instrument having the force of law, the
owner of the motor vehicle or 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
Explanation - For the purposes of this sub-section, "permanent
disability" shall have the same meaning and extent as in the Workmen's
Compensation Act, 1923 ( 8 of 1923).
(2) In any claim for compensation under sub-section (1), the claimant
shall not be required to plead or establish that the death or
permanent disablement in respect of which the claim has been made was
due to any wrongful act or neglect or default of the owner of the
vehicle or vehicles concerned or of any other person.
(3) The central government may, keeping in view the cost of living by
notification I the Official Gazette, from time to time, amend the
Option to file claim in certain cases
Where a person is entitled to claim compensation under Section 140 and
Section 163-A , he shall file the claim under either of the said
sections and not under both.
The adjudicating authorities in all cases would be Motor Accident
Claims tribunals (MACT). The Government is empowered to revise the
schedule keeping in view the changes in the level of cost of living.
Section 163 (A) and163 (B) are newly added by the Amendment Act:
(a) This Section contains special provision as to payment of
compensation on "structural formula basis". This is a new provision
for payment of compensation to road accident victims as per determined
formula. The amount of compensation payable to claimant is calculated
in a tabular form and shown in the Second schedule which appears as an
annexure to the amendment Act, 1994 ( effective from 14th November
(b) In case of fatal accidents a table of compensation is provided
showing the amounts payable depending on the age of the victim and the
multiplier applicable. The amount of compensation so arrived at in
case of fatal accident claims is reduced by one-third n consideration
of the expenses which the victim would have incurred toward
maintaining himself had he been alive.
(c) Under the schedule, the amount of such compensation shall not be
less than a specified amount (currently Rs. 50,0000/-).
(d) Besides the amount of compensation outlined above for fatal cases,
the schedule also indicates;
(i) General Damages of specified amounts payable in case of death for;
Ã¼ Funeral expenses.
Ã¼ Loss of consortium, if beneficiary is the spouse.
Ã¼ Loss of estate.
Ã¼ Medical expenses, that is, actual expenses incurred before death,
supported by bills/ vouchers, not exceeding a specified amount.
(ii) General Damages o specified amount are payable in case of
injuries and disabilities for:-
Ã¼ Pain and suffering for grievous and non-grievous injuries.
Ã¼ Medical expenses, that is , actual expenses incurred supported by
bills/voucher not exceeding, as one time payment, specified amount.
(iii) Disability in non-fatal accidents:
Compensation for loss of Income, if any , for actual period of
disablement not exceeding 52 weeks, PLUS either of the following:
Ã¼ In case of payment total disablement, the amount payable shall be
arrived at by multiplying the annual loss of income by the multiplier
applicable to the age on the date of determining the compensation, or
Ã¼ In case of permanent partial disablement, such percentage of
compensation which would have been payable in the case of permanent
total disablement as specified in the above item.
(e) The Schedule also specifies notional income of non- earning
In any claim for compensation under this Section, the claimant shall
NOT be required to plead or establish that the death or permanent
disablement in respect of which the claim has been made, a due to any
wrongful act or neglect or default of the owners of the vehicles
concerned or of any person.
Thus, the compensation mentioned in the Schedule shall be payable on
the basis of " No Fault". However, the scheme is optional, and if the
claimant feels that the amount prescribed in the schedule is not
acceptable, a claim can be filled under the existing provisions, that
is, under Section 166 of the Motor Vehicle Act.
In the case Guranna Vadi & others v. General Manager, Karnataka State
Roadtransport Corporation and other the Karnataka high Court laid
down the principles with respect to section 163- A based on the
1. Whether section 163- A of the Motor Vehicle Act, 1988 confers
substantial or procedural rights to the claimant?
The Court stated that "Unlike section 140 under which the compensation
is fixed, under section 163-A t is structured. Any law that pertains
to and determines the measures of damage is a substantive law. It is
more so when the damages so determined by the provision is to the
exclusion of all rights of the parties finally. The determination of
the rights under this section cannot be altered or affected by taking
recourse to any other section in the Act as is the case with
section140 of the Act where the compensation awarded can be set off
against an higher compensation that a claimant could receive under
2. Whether the claim under section 163-A of this Act is to be treated
as interim or final?
The Court held that compensation received under section 163-A is final
and not an interim compensation.
3. Whether section 163-A of the Act would be applicable to the Claims
made in respect of the accidents which took place prior to its
introduction, i.e., 14.11.1994?
The application of S. 163-A is prospective and not retrospective . The
fact that the legislature reserved the right to amend the Section
Schedule from time to time keeping in view the cost of living also
manifests the intention of Parliament to give the provision only
prospective effect from the date of the provision or the changed
effected to tit come into force.
4. Whether a claim under section 163-A of the Act is tenable where the
income of the victim was more than Rs. 40,000/- p.a. and where the
actual medical expenses incurred is Rs. 15,000/-?
On this important question the court came to the far reaching
A claim application under section 163-A is not tenable if made by a
person whose income exceed Rs 40,000/- p.a. But , in case the person
with the higher income nationally brings down his income to Rs
40,000/- in order to present his claim under section 163- A the same
can be permitted.
In a recent case, United Indiainsurance Co. Ltd., v. Patricia Jean
Mahajan & Ors, the Court considered the application of the multiplier
method of awarding compensation. Though the court held that while the
multiplier method is a safe guide in arriving at just compensation, it
is permissible to deviate from the table provided in the Second
schedule based on the facts of each case.
It may be mentioned that in above case while the multiplier was fixed
at 10, the dependency income was compensation 26297 far above Rs
40,000 per annum.However this case was a claim under Section 166 of
the Motor Vehicle Act 1988 and requires further analysis as to its
implications in the future.
5. As to whether a claimant, during the pendency of the proceeding a
the original or the appellate stage can amend his claim petition under
section 166 as a petition under section 163-A of the Act?
The Court answered in the affirmative provided that the accident took
place on or after 14.11.1994 when section 163-A and 163-B came into
force , provided the claimant satisfies other conditions such as the
income factor etc.mentioned in the second schedule.
Under Section 164 of the 1988 Act, the central government has now been
empowered extensively to frame rules with regard to the implementation
of the provision s of chapter XI of the Act. Wider power are given to
the Central government who may now provide rules for the records to be
maintained by insurers of policies of insurance issued under Chapter
X(insurance against third party risks).
SECTION 163 (B)
When a person is entitled to claim compensation under section 140 and
Section 163 (A), he shall file the claim under either of the said
section and not under both.
The adjudicating authorities in all cases would be Motor Accidents
Claims Tribunals (MACT). The Government is empowered to revise the
Schedule keeping in view the changes in the level of cost of living.
SOME IMPORTANT LEGAL DECISION
1. The Bombay high Court has held that damages should be awarded to a
Injured in an accident originating in a vehicle even if it is not in
state of locomotion.
The High Court came to this conclusion while party allowing an appeal
filed by the original insurance Co. Ltd. Against the order of the MACT
awarding Rs. 47,175/- in damages to Suman Navanth Rajguru, widow of an
accident victim and others. Their Lordships reduced the quantum of the
award to Rs. 45,000/-.
Mr. N.A. Rajguru, a 21 year old cobbler was walking to his residence
along the Sion -Trombay Road on May 27, 1979. When he sustained fatal
injuries following the explosion of a tanker parked along the footpath
outside Bharat Petroleum's petrol pump, his body was found at a
distance of ten feet from the tanker.
It was company's contention that the Insurance Policy covered
liability which may be incurred by the owner in respect of death to a
third party, caused by or arising out of the use of a vehicle in a
public place. During the material time, the vehicle was not 'in use'
much less in a public place. As the accident did not occur when the
vehicle was in a state of locomotion, but allegedly due to the
bursting of the container containing petrol, the Company could not be
Their Lordship stated that generally a tanker does not burst into
flames but if t did, then the owner of the vehicle could prima-facie
be considered guilty of negligence. The cobbler had no reason to
suspect that there was danger lurking in the vicinity nor was there ay
suggestion of arson.
In the Court of the Motor Accident Claims Tribunal Delhi
Claim Petition No. _______
_________________________________ â€¦ Petitioner
_________________________________ â€¦ Respondent
Application under the Section 166 & 140 of the
Motor Vehicle Act 1988 for grant of Compensation
1. Name & Father's Name of the person
injured/dead (Husband's Name in case
of married women & widow) :
2. Full address of the person injured/dead:
3. Age of the person injured/dead. :
4. Occupation of the person injured/dead:
5. Name & address of the employer of
the injured / dead. :
6. Monthly income of the person injured/
7. Does the person in respect of whom
compensation is claimed pay income
tax? If so state the amount of the
income tax (to be supported by document) :
8. Place, date and time of accident :
9. Name & Address of Police Station in
whose jurisdiction the accident took
place & FIR was registered. :
10. Was the person in respect of whom
compensation is claimed traveling by
the vehicle involved in the accident ?
If so, give the name & place of starting
the journey and destination. :
11. Nature of the injuries sustained. :
12. Name & Address of the Medical
Officer/Practitioner, if any who
attended to the injuries. :
13. Period of treatment and expenditure. :
14. Registration No. & Type of vehicle
involved in accident. :
15. Name & address of the owner of
offending vehicle. :
16. Name & address of the driver of
offending vehicle. :
17. Name & address of the insurer of
the vehicle. :
18. Has any claim been lodged with
the owner/insurer, if so, with what
19. Name & address of the applicant. :
20. Relationship with the deceased /
21. Title of the property of the deceased/
22. Amount of compensation claimed. :
23. Any other information that may be
necessary and helpful in the disposal
of the case. :
Verified at Delhi on this the ________ day of _________ 200__ that the
contents of the above application are true and correct to my knowledge
Following documents should accompany the petition:-
1. Copy of the FIR registered in connection with said accident, if
2. Copy of the MLC/Post Mortem Report/Death Report as the case may be.
3. The documents of the identity of the claimants and of the deceased
in a death case.
4. Original bills of expenses incurred on the treatment along with
5. Documents of the educational qualifications of the deceased, if
6. Disability Certificate, if already obtained, in an injury case.
7. The proof of income of the deceased/injured.
8. Documents about the age of the victim.
9. The cover note of the third party insurance policy, if any.
10. An affidavit in support of the above documents and detailing the
relationship of the claimants with the deceased.
Rita Devi (SMT) And others
New India Assurance Co.Ltd. And Another
STATEMENT FO FACTS
1. D was the driver of an autorickshaw owned by another person and
registered as a public carrier vehicle for hire by passenger. It
was insured with the respondent also.
2. On 22-3-1995 some unknown person hired the autorickshaw but
subsequently stole away the same and killed D.
3. D's legal representatives filed a claim petition under Section
163-a of the Motor Vehicle Act, 1988 claiming damages for the
death of D caused during the course of his employment under the
owner of the said autorickshaw as a death caused in an accident
arising out of the use of Motor vehicle.
4. The claims tribunal allowed the claim against the owner of the
autorickshaw and also fastened legal & statutory liability on the
insurer. The insurer, respondent herein, preferred an appeal
before the High court which allowed the same on the ground that
the case was one of murder & not of an accident.
QUESTION BEFORE THE COURT
Whether the insurance company is liable to pay compensation?
JUDGEMENT OF THE COURT
The owner of the vehicle was liable to compensate the death of the
driver in money value. Since there was an agreement between the
vehicle-owner & the respondent Insurance Company to compensate the
employer of the vehicle with sum of Rs. 281500
If the dominant intention of the Act of felony is to kill any
particular person then such killing is not an accidental murder but is
The compensation paid in hit and run motor accident are very less and
according to me the amount of compensation paid should be raised so
that the affected person feel satisfied with it any provision thereof
shall be punishable with imprisonment for such term as may be
specified but in no case exceeding three months, or with fine which
may extend to such amount as may be specified but in no case exceeding
five hundred rupees or with both; the powers, functions or duties
conferred on imposed on any officer or authority by such scheme may be
delegated with the prior approval in writing of the Central
government, by such officer or authority to any other officer or
Ã˜ V.A.Pai & H. Ananthakrishnan (eds.), Motor Insurance (Insurance
Institute of India, Mumbai,2003).
Ã˜ Motor Vehicle Act 1988 (CapitalLaw House, New Delhi, 2001).
Ã˜ SUPREME COURT CASES
Ã˜ ALL INDIA REPORTER
WEB SITES USED:
 Kishore v. Chairman, Tribal Service Co-operative Society Ltd.,
A>I.R. 1988 M.P. 38 , at 41.
 Earlier it was chapter VIII to the 1939 Act..
 Section 146 of the 1998 Act corresponds to Sec. 94 of the 1939
 Subs. By Act 54 of 1994, w.e.f. 14th November, 1994..
 cited from Motor Vehicle Act 1988 at 115.
 cited from Motor Vehicle Act 1988 at 116.
 cited from Motor Vehicle Act 1988 at 117.
 Supra note at
Ã˜  V.A.Pai & H. Ananthakrishnan (eds.),Motor Insurance( Insurance
Institute of India, Mumbai,2003.
 (2001 ACJ 1528)
 (2000)5 SCC 113.