Calculating the compensation payable to victims of motor accidents is a pretty straightforward matter for which the Motor Vehicles Act, 1988 makes provision.
Liability to pay Compensation on the Principle of No Fault
Section 140 of the Motor Vehicles Act says that if any person dies or is permanently disabled because of an accident which involves a motor vehicle, the owner of the vehicle is liable to pay compensation. If more than one person owns the vehicle, the owners are jointly and severally liable to pay compensation.
The amount of compensation is fixed at 50000 INR in cases of death and 25000 INR in cases of permanent disablement and is payable on a no fault basis. This means that claimants do not need to prove that the owner or owners of the vehicle or vehicles concerned or of any other person committed any wrongful act or were negligent.
In addition to this, the liability to pay compensation is not affected by any wrongful act, neglect or default of the person who has been injured or killed. In other words, contributory negligence is irrelevant.
Permanent disablement is defined under Section 142 as:
(a) permanent privation of the sight of either eye or the hearing of either ear, or privation of any member or joint; or
(b) destruction or permanent impairing of the powers of any member or joint; or
(c) permanent disfiguration of the head or face.
Payment of Compensation on Structured Formula Basis
Under Section 163A, if any person dies or is permanently disabled because of an accident which involves a motor vehicle, the owner of a vehicle or its authorised insurer is liable to pay compensation to the legal heirs of the victim or to the victim directly, as the case may be. The liability to pay such compensation is independent of any fault on the part of the owner of the vehicle.
Compensation under this Section cannot be less than fifty thousand. The actual quantum of compensation is calculated on the basis of the second schedule by, inter alia, multiplying the age of the victim by a fixed amount of money and taking general damages such as medical expenses into account.
In cases where the victim is below the age of 15, this fixed amount by which the age of the victim is multiplied is 15 INR. However, in May 2008, the Supreme Court decided that 2.25 lakh INR was fair and adequate compensation for permanent disability suffered by a 12 year-old girl in a motor accident.
Permanent disability under this Section has the same meaning and extent as in the Workmen’s Compensation Act, 1923.
Applying for Compensation
Under Section141, the right to claim compensation under Section 140 in is in addition to any other right with one exception.
Both Sections 141 and 163B say that a person who is entitled to claim compensation under both Sections 140 and 163A can file a claim under either of the Sections at his option but not under both.
If compensation is claimed under any other law in addition to Section 140, the compensation payable under Section 140 is reduced from the amount of compensation payable under this Section 140.
Hit and Run Accidents
The Central Government may, under Section 163, make a scheme for the payment of compensation in hit and run cases. The scheme is administered by the General Insurance Corporation.