Tuesday 21 May 2024

How the new amendment Act 2019 will change motor accident claim litigation in India?

1) The Motor Vehicles (Amendment) Act, 2019 was published in the Gazette of India on 09.08.2019. Reference to section 1 of the Amendment Act shows that its sub section 2 provides that it shall come into force on such date as the Central Government may by notification in the official gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act, shall be construed as a reference to the coming into force of that provision. Vide the notification No.SO 859(E) dated 25.02.2022 Section 53 of Motor Vehicles Amendment Act came into force w.e.f. 01.04.2022 which received accent on 9th August 2019.

2) Chapter X which dealt with no fault liability containing Sections 140 to 144 has been deleted, so also, section 163-A which made special provisions as to payment of compensation on structured formula basis alongwith schedule II as amended by notification dated 22.05.2018 is deleted. In its place, a new Section 164 under chapter XI is introduced on no fault liability and the amount received under the same is full and final.

Old provision New provision

Death : Rs. 500000/- Death : Rs. 500000/- Permanent Disability : Rs. 500000/- Grievous hurt : Rs. 250000/-

Percentage of disability as per Schedule I of the Employees 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 :

Minor Injury : Rs. 25000/-. : None

1. Thus, permanent disability is replaced by grievous hurt and minor injuries totally deleted. Now, Section 145 provides for various definitions. It also introduced this new term “grievous hurt” and it provides that grievous hurt means as defined under section 320 of I.P.C.

2.The third party insurance policy covers injury, death as well as third party property damage. Now, the term ‘third party’ is also changed by present amendment. The definition is not exhaustive. Earlier also it was not exhaustive. It is inclusive and indicating definition.

3. If any petition for compensation is filed, claimant always prefer to move application for compensation on the principle of no fault. In the principal Act, claim under Section 140 of the Motor Vehicle Act, 1988, here-in-after referred as “Principal Act” was included under Section 165 of the Principal Act. As per Section 50 of the Motor Vehicle (Amendment)Act, 2019 Chapter X prescribing provisions for “No Fault Liability” is omitted. Consequential amendment also made in Section 165 of the Principal Act.

Old Section 165 of Chapter XII of the Motor Vehicle Act, 1988 prescribed provisions regarding claim tribunals. As per said Section State Government is authorized by notification in official gazette to constitute one or more Motor Accident Claims Tribunal as specified in the notification for the purpose of adjudicating account claim for compensation in respect of accident involving death or bodily injury to persons arising out of use of motor vehicle or damage to any property of third party so arising or both. As per old Section 165 claim under Section 140 and Section 163A was covered under the term claim for compensation in respect of accident as mentioned in section 165.However, by Section 52 of the Motor Vehicle (Amendment) Act, 2019 Section 165 of the old Act is amended. In Section 165 of the Principle Act, in the explanation column for the words, figures and letters “Section 140 and Section 163A” the word and figure “Section 164” is substituted. Thus, now claim for no fault liability under Section 140 and payment of compensation on structured formula basis under Section 163A cannot be entertained under Section 165 of the Motor Vehicle Act, 1988. This claim is not tenable as Chapter X is deleted and entire Chapter XI is substituted. Thus, by virtue of amendment claim under Section 140 and Section 163A of the Motor Vehicle Act cannot said to be within purview of Section 165 of the Act. As per Section 51 of the Motor Vehicle (Amendment) Act, 2019 entire Chapter XI in the Principal Act (Section 145 to 164) is omitted and new chapter XI prescribing provisions (Section 145 to 164-D) regarding insurance of motor vehicle against third party risk is substituted.

As per amended Section 164, there are provisions regarding payment of compensation in case of death or grievous hurt. As discussed above, explanation appended to Section 165 covers only Section 164 therefore, it can be conclude that claim   under Section 164 can be entertained under Section 165 only.(Section 164) Payment of Compensation in case of death or grievous hurt, etc. 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 grievous hurt due to any accident arising out of the use of motor vehicle, a compensation, of a sum of five lakh rupees in case of death or of two and a half lakh rupees in case of grievous hurt to the legal heirs or the victim, as the case may be. In any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or grievous hurt 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 of the vehicle concerned or of any other person. Where, in respect of death or grievous hurt due to an accident arising out of the use of motor vehicle, compensation has been paid under any other law for the time being in force, such amount of compensation shall be reduced from the amount of compensation payable under this section. Thus, amount of compensation is prescribed under Section 164(1). The claimant is not under procedural obligation to plead or established the wrongful act or neglect or default of the owner of the vehicle or of the vehicle concerned or of any other person. Moreover, in case of death or grievous hurt there is no bar to claim compensation under Section 165, though it is granted under any other law. Said amount of compensation can be taken into consideration and deducted out of total amount of compensation adjudicated. As per Section 150 of the Motor Vehicles Act, the insurer is duty bound to satisfy the judgments and awards against person insured in respect of third party risks. However, according to Section 150(2) the insurer can defend the action on any of the grounds mentioned therein: In Section 169 sub section 4 is incorporated. As per said sub section for the enforcement of its award, the Claims Tribunal shall also have all the powers of Civil Court in the execution of decree under the Code of Civil Procedure, 1908 as if the award were a decree for the payment of money passed by such court in civil suit. Though, Section 140 under Chapter X is omitted there is provision under section 164A of the newly amended Act prescribing scheme for interim relief for claimant. The Central Government may make scheme for the provision of interim relief to claimants praying for compensation under this Chapter. Second schedule in the Principal Act prescribe multiplier according to the age of victim and his annual income for third party fatal accident / injury cases claim. As per Section 93 of the Motor Vehicle (Amendment) Act, 2019 the second schedule in the Principal Act is omitted. It is important to note here that second schedule was appended in pursuance of Section 163A of the Principal Act. Section 163A of the Principal Act was prescribed under Chapter XI. As per Section 51 of the Motor Vehicle (Amendment) Act, 2019 entire chapter XI in the Principal Act is omitted. As claim under Section 163A of the Principal Act cannot entertained being omitted, assistance of second schedule cannot be there. Consecutively, second schedule of the Act is not in force. There is amendment in Section 166 of the Motor Vehicle Act. Section 166 speaks about application for compensation. Now sub section 3, 4 and 5 is added to Section 166. As per sub section (3) thereof no application for compensation shall be entertained unless it is made within six months of the occurrence of incident. As per newly inserted sub section 4 claim tribunal shall treat any report of accident forwarded to it under Section 159 as an application for compensation under this Act. Thus, by way of this amendment, claimant need not make any application. Accident report forwarded under Section 159 can be treated as an application for compensation. By incorporation of sub section 5 if the injured died his right to claim compensation for injury in an accident shall survive to his legal representative, irrespective of whether the cause of death is relatable or had any nexus with the injury or not.

The major changes brought by amendment Act 2019 can be summarized as under.

A. No fault liability has been omitted therefore, no interim compensation is payable. Upon receipt of information of accident either from claimant or through A.I.R. Insurance Company shall designate an officer to settle the claim within 10 days.

B. Insurance Company has to make an offer of settlement before Claims Tribunal within 30 days in terms of procedure prescribed by Motor Vehicle Rules. In case of acceptance of offer the Claims Tribunal shall record the settlement and pass an Award and Insurance Company shall make the payment within 30 days from recording the settlement. In case of rejection of offer the Claim Tribunal shall fix the date of hearing to adjudicate the claim on merit.

C. The Insurance Company has to pay the amount of compensation notwithstanding that the insurer may be entitled to avoid or cancel the policy. The death of insuredafter an accident shall not be a bar to the Motor Accident Claim.

D. The driver of vehicle is duty bound to produce certificate of insurance, registration certificate of pollution control, driving license, fitness permit before police officer.

E. In case of failure of driver to produce those documents, owner is bound to produce the same.

F. The police officer shall file the accident information report before Claim Tribunal within three months of accident.

G. The police shall furnish all the relevant particulars relating to the accident to victim or claimant upon payment of prescribed fee.

H. The compensation of hit and run has been enhanced up to Two Lakhs in death cases and Rs.50,000/- in grievous hurt cases.No Fault Liability compensation is enhanced up to Rs.5,00,000/- in death cases and Rs.2.5 Lakhs in grievous hurt cases, without any need to prove the negligence of driver.

I. State Government has to make rules for interim relief. Central Government constitute a Motor Vehicle Accident Fund for providing compulsory insurance covered to all road users in India.

J. Central Government has to make rules to carry into effect the provisions of chapter xi.

K. The period of limitation of six months from the accident for filing an application for compensation has been introduced in section 166(3).

L. Legal Representatives of the injured are entitled to pursue the claim after the death of injured.

M.No appeal shall lie against the Award of a Claim Tribunal in case Award is of less than Rs.1,00,000/-.

Time limits fixed by new Act:

1) The police has to file FAR before M.A.C.P. within 48 hours of the accident.

2) The police has to inform the victims of their right within 10 days of accident.

3) The driver of offending vehicle has to submit driver's form III to the police within 30 days.

4) The owner of offending vehicle has to submit driver's form IV to the police within 30 days.

5) The police on verification of driver and owner's form has to submit IAR before M.A.C.T. within 15 days of the accident.

6) The victims have to submit victim's form VI and VI-A to the police within sixty days of the accident.

7) The police has to submit DAR, form VII before M.A.C.T. before 90 days of accident.

8) The Insurance Company on verification of victim form and DAR has to submit offer of settlement within 30 days from receipt of DAR. In case of acceptance of offer by the claimant, the claim tribunal shall pass the consent award within six months of the accident.

9) If the Insurance Company accepts the liability but the amount of fund is not acceptable to the claimant   the tribunal shall hear the argument with respect to quantum of compensation and pass an award within 9 months of the accident. If the Insurance company dispute a liability, the claim Tribunal shall conduct the inquiry to be completed within 12 months of the accident.

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