2.

SIGNIFICANCE OF MOTOR VEHICLES ACT,1988 – WITH RESPECT TP

AWARDING OF COMPENSATION IN MOTOR ACCIDENT CASES

Chapter X, XI, XII of the Motor Vehicle Act (hereinafter referred as the MVA, 1988). Under
chapter X their Act deals with the principle of “No Fault Liability” based upon the facts of the
case. Under chapter XI the act covers insurances for motor vehicles especially with respect to
third party risk. While under chapter XII there are provisions regarding the establishment of
claims to tribunal at the same time a provision as to ascertaining any the amount of
compensation to be paid in accident cases from the insurer.

The chapter shall analyse chapter X AND XI of the MVA at the same time study and analyse
the judiciary stand in such claims. Chapter XII of the MVA shall be analysed in the forth
coming chapter

2.1 The Principle of No-Fault Liability

In India there are more than thousands of motor vehicle accidents occurring sometimes the
fault is on one party and sometimes on the other it’s difficult to ascertain as to who committed
the wrong and which party was at fault as ascertaining the fault on the part of a party is
important in order to calculate the compensation and analyse the mitigating factors in the
liability. But in motor vehicle accident cases even though there is no fault on part of the party
that caused the injury yet he or she shall be liable to pay the compensation if he has caused
death or permanent disability of the other party. Therefore, in such cases the compensation is
analysed with help of section 140 to 144 of the MVA. The section deals with the principle of
no-fault liability. If we analyse section.140 the section lays down the liability on part of the
parties to pay compensation when there is no fault principle used. The section establishes there
when there is death or permanent disablement of any person due to the accident that has taken
place while in use of the motor vehicle then the owner of the vehicle shall be liable jointly and
severally to pay the compensation1. Also, the presence of any wrongful act or neglect or default
on part of the individual who is dead or injured leading to permanent disablement shall not be
a ground to deny compensation or decrease the claim amount2. Also, if there is an alternative
remedy of claiming compensation then such right is also allowed to be exercised and the

1
The liability was originally set to Rs.50,000 in case of death and Rs. 25,000 in case of permanent disablement
but is amended recently as death – 5 lakhs, in case of permanent disablement is also 5 lakhs and in no case
should be less than 50,000 and in case of minor injury the compensation is fixed to 25,000.w.e.f 22 nd May,2018
2
Sec. 140(2) of the Motor Vehicle Act,1988
remedy under sec.140 shall not override any alternative remedy available and the compensation
shall be granted by balancing the claims under the MVA and other such alternative claims3.

In order to avail the compensation under the affected party need not given evidences or proofs
as to the causation of the event due to negligence on part of the driver of the vehicle also the
important feature of this section is that there shall be no reduction in the amount of
compensation even if the case is one of contributory negligence. In order to ascertain the
compensation a formula is used as given under schedule – 2 of the Act which is to be read
along with section 163 A of the MVA.

2.1.1 Interpreting the terms ‘has resulted from’ under Sec.140 of the MVA,1988

The Mumbai High Court in the year 2005 has interpreted the term ‘has resulted from’. The Act
allows compensation to be paid when death has resulted from the injury caused due to the
accident hence the terms were interpreted narrowly by the party that caused the accident as
when the death had occurred not at the time accident but on a later date the compensation claim
was challenged. The court in this case established that there is no requirement that the death
should have occurred in the accident itself as the section shall apply even if the death is caused
at a later date as a result of injury due to the motor vehicle4.

3. THE NEED FOR INSURANCE – A SAFEGAURD AGAINST THIRD PARTY RISKS

The chapter XI of the MVA,1988 deals with insuring the motor vehicle in cases against third
party risks for the same section.145 has been drafted. Under this section a Authorised Insurer
is a person who is a part of the General insurance also the certificate of insurance shall mean
any document or cover letter issued by the authorised insurer5 and liability is as established
under section 140. The important definition is that of property which shall include even the
goods that are carried in the vehicle and these goods shall include even livestock and any living
person in the vehicle though personal items6.

3.1 Interpreting the term Third Party

Under Sec. 146 there is a requirement that the owner of the motor vehicle shall not allow any
other person to use the vehicle in any public place unless there is a necessity to allow for the
same the insurance policy therefore ought to abide by the provisions of this section but in cases

3
See, section. 141 of the MVA,1988.
4
SatvantKumar Harjit Singh Vig V. Aarti Jayant Lalwani, 2005 (1) ACJ 255 (Mum) DB.
5
See, section 147 (3) of MVA,1988.
6
National Insurance Company Ltd. V. Phoolan Singh, 2008 ACJ 58.
where the vehicle is allowed to be driven by other person as a paid employee like in ola and
uber there no requirement of policy as there is an implied acceptance when the policy is granted
for such purposes that the policy allows for the same. There has been safeguards taken in cases
wherein, the insured vehicle carries any hazardous goods as there is a mandate to obtain a
public liability insurance for the same.

The requirement of obtaining a insurance policy is dealt under sec.147 wherein, it has been
mandated that the insurance policy must be obtained from an authorised insurer against any
liability incurred by the person