Law of Torts
Motor Vehicle Accident Liability: The Fault and No Fault Regimes, Who Answers, and the Motor Accident Claims Tribunal
Motor accident claims are the largest single category of tort litigation in India. The law is statutory in its machinery and tortious in its substance: the Motor Vehicles Act, 1988 supplies the forum, the compulsory insurance and the no fault relief, while the measure of compensation comes from the common law of negligence. The most important recent change is that section 164, in force from 1 April 2022, has replaced sections 140 and 163A and the Second Schedule, and now provides the no fault relief at Rs 5,00,000 for death and Rs 2,50,000 for grievous hurt. Most textbooks are out of date on this point.
The fault and no fault claims, hit and run, who answers, and the Tribunal
1. The Two Regimes
Section 166: the fault claim | Section 164: the no fault claim | |
What must be proved | Rash or negligent driving causing the death or injury | Only the accident, the use of the motor vehicle, and the death or grievous hurt |
Is fault relevant | Yes. It is the foundation of the claim | No. The claimant need not plead or establish any wrongful act, neglect or default |
The amount | No limit. Computed on the ordinary principles | Fixed: Rs 5,00,000 for death, Rs 2,50,000 for grievous hurt |
When it applies | The ordinary claim | Available at once, and adjusted against any larger award later obtained |
In force | Throughout | From 1 April 2022, replacing sections 140 and 163A and the Second Schedule |
- The old structure has gone. Section 140 gave interim no fault compensation of Rs 50,000 for death and Rs 25,000 for permanent disablement; section 163A allowed a structured formula claim under the Second Schedule. Both, and the Schedule, were omitted by the Motor Vehicles (Amendment) Act, 2019 with effect from 1 April 2022.
- Section 164 is a single consolidated no fault provision, and the sums are substantially higher than the old ones.
- The election problem has therefore disappeared. Under the old law a claimant had to choose between section 163A and section 166 and could not pursue both; now the section 164 amount is simply adjusted against a larger award under section 166.
2. Negligence in a Motor Accident Claim
- The duty of care of a driver is to drive with the care and skill of a reasonably competent driver, having regard to the traffic, the condition of the road, the weather, the visibility, and the presence of pedestrians, cattle and other users.
- The standard is higher where the risk is greater: near a school, at a crossing, in a crowded market, at night, and in respect of a child or an elderly person who may be expected to behave unpredictably.
- The standard of proof before a Tribunal is the preponderance of probability, and not the criminal standard. An acquittal in the criminal case arising from the same accident does not bind the Tribunal and does not defeat the claim.
- Strict rules of evidence do not apply, and the Tribunal may act on the police records, the site plan, the mechanical inspection report and the evidence of witnesses without the formality a civil court would require.
- Res ipsa loquitur is frequently applied: a vehicle that mounts a footpath, crosses onto the wrong side, or overturns on a straight road calls for an explanation.
- A police report of an accident may itself be treated as an application for compensation, which relieves an unrepresented claimant of the need to file a formal petition.
3. Who Answers
The defendant | The basis of liability |
The driver | Personally liable for his own negligence |
The owner | Vicariously, where the driver was his servant or agent driving in the course of employment or on the owner's business. Personally, for entrusting the vehicle to an unlicensed, incompetent or intoxicated driver |
The employer | On the ordinary principles of vicarious liability. An unauthorised mode of driving is within the course of employment; a frolic of the driver's own is not; a detour does not take him outside it |
The insurer | Under the compulsory third party insurance required by Chapter XI, and under the statutory obligation in section 149 to satisfy a judgment against the insured |
- A registered owner remains liable notwithstanding a sale, where the transfer has not been recorded under section 50, since a third party is entitled to look to the register.
- An owner who lends his vehicle to a friend to run an errand on the owner's behalf is liable, the friend being his agent for that purpose; an owner who merely lends it for the borrower's own purposes ordinarily is not.
- The vicarious liability principles are examined in TORT 047 to TORT 050.
4. Compulsory Insurance
Chapter XI, Motor Vehicles Act, 1988 Section 146: no person shall use, or allow any other person to use, a motor vehicle in a public place unless there is in force a policy of insurance complying with the requirements of the Chapter. Section 147: the policy must insure against any liability incurred in respect of the death of or bodily injury to any person, including an owner of the goods or his authorised representative carried in the vehicle, or damage to any property of a third party, caused by or arising out of the use of the vehicle in a public place. Section 149: where a judgment or award in respect of a liability covered by the policy is obtained against a person insured, the insurer shall pay the person entitled to the benefit of the award, notwithstanding that the insurer may be entitled to avoid or cancel the policy, subject to the defences the section allows. |
- Only third party liability is compulsory. Comprehensive cover for the vehicle itself is a matter of contract between the owner and the insurer.
- The object of the Chapter is the protection of the third party victim, who is no party to the contract of insurance and has no means of knowing anything about it. That object governs the construction of the whole Chapter and explains the pay and recover principle, examined in TORT 086.
5. Hit and Run Accidents
- Where the vehicle cannot be identified, the claim is made under section 161, and payment is made from the Solatium Fund rather than by any insurer.
- The Compensation to Victims of Hit and Run Motor Accidents Scheme, 2022 took effect from 1 April 2022 and superseded the Solatium Scheme, 1989.
- The amounts are Rs 2,00,000 in the case of death, raised from Rs 25,000, and Rs 50,000 in the case of grievous hurt, raised from Rs 12,500.
- The scheme is time bound, and prescribes the procedure for the detailed accident report, the verification and the payment.
- If the vehicle is later identified, the ordinary claim becomes available and the amount already paid is adjusted.
6. The Motor Accident Claims Tribunal
- Constituted under section 165 by the State Government, for such area as may be specified.
- Its jurisdiction is exclusive. Where a Tribunal has been constituted for an area, no civil court has jurisdiction to entertain any question relating to a claim for compensation which may be adjudicated upon by the Tribunal.
- The procedure is summary. The Tribunal is not bound by the strict rules of the Code of Civil Procedure or of the law of evidence, and may follow such summary procedure as it thinks fit.
- There is no ad valorem court fee on the amount claimed, which is one of the chief practical advantages of the jurisdiction.
- The claim may be made by the person injured, by the owner of the property, or, where death has resulted, by all or any of the legal representatives of the deceased.
- An appeal lies to the High Court, subject to the deposit required by the proviso to section 173 where the appellant is the insurer or the person against whom the award was made.
- Interest is awarded from the date of the claim petition, and the Tribunal may direct payment within a fixed period with interest on default.
⚠ Why the no fault regime exists alongside the fault regime It is natural to ask why a statute that provides a full fault based remedy should also provide a small fixed sum without proof of fault, and the answer lies in timing rather than in principle. A section 166 claim takes years: liability is contested, the driver and the owner and the insurer each take their own position, evidence must be led, and an appeal usually follows. During those years the family of a deceased breadwinner has nothing, and a person with a serious injury needs treatment at once. The no fault provision exists to put money into their hands immediately, on proof of nothing more than the accident and the injury, and it is deliberately fixed and modest because it is an advance and not an assessment. Understanding it that way explains the two features that otherwise look odd: that the amount bears no relation to the claimant's actual loss, and that whatever is paid is simply adjusted against the final award. |
7. The Position Stated Shortly
1. A claim under section 166 is founded on negligence and is unlimited in amount; a claim under section 164 requires no proof of fault and is for a fixed sum.
2. Section 164, in force from 1 April 2022, provides Rs 5,00,000 for death and Rs 2,50,000 for grievous hurt, and replaced sections 140 and 163A and the Second Schedule.
3. The standard of proof before a Tribunal is the preponderance of probability, and an acquittal in the criminal case does not defeat the claim.
4. The driver is personally liable; the owner is vicariously liable and is personally liable for entrusting the vehicle to an unfit driver.
5. A registered owner who has not recorded a transfer under section 50 remains liable to a third party.
6. Section 146 makes third party insurance compulsory, section 147 states what the policy must cover, and section 149 obliges the insurer to satisfy a judgment against the insured.
7. The object of Chapter XI is the protection of the third party victim, and that object governs the construction of the whole Chapter.
8. Where the vehicle cannot be identified, section 161 and the 2022 Scheme provide Rs 2,00,000 for death and Rs 50,000 for grievous hurt from the Solatium Fund.
9. The Motor Accident Claims Tribunal constituted under section 165 has exclusive jurisdiction, follows a summary procedure, and charges no ad valorem court fee.
10. An appeal lies to the High Court, and interest runs from the date of the claim petition.