COMPENSATION U/S 163A OF MOTOR VEHICLES ACT
The section under perusal in this article is section 163A of the Motor Vehicles Act (MV Act), 1988. The section heading reads as “Special provisions as to payment of compensation on structured formula basis” and is one of the most important sections of the MV Act as it current stands. This section provides for compensation to the victim/applicant/claimant in the case of death or permanent disablement due to accident arising out of the use of motor vehicle. Such compensation shall be paid by the owner of the motor vehicle or the authorized insurer of the motor vehicle that caused such accident.
The highlight of section 163A of the MV Act is that under this section, the claimant is not obligated to establish that such death or permanent disablement had happened owing to the wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person. Hence, the no-fault liability principle applies here.
The amount of compensation is governed by a notification by the Ministry of Road and Highways. Currently, these are- for fatal accidents the amount of compensation awarded shall be Five Lakh Rupees; for accidents resulting in permanent disability, the amount of compensation awarded shall be Rs. 5,00,000/- percentage disability as per Schedule I of the Employee's 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; for accidents resulting in minor injury, a fixed compensation of twenty five thousand rupees shall be payable.
Moreover, it was also specified in the above notification that the amount of compensation fixed as per clauses a, b and c shall be increased by 5% on and from 1st January, 2019.
In Shivaji v. United India Insurance Co. Ltd. 2019, the SC has categorically held that the insurer cannot be allowed to take the plea of negligence by the claimant because that would destroy the very intent behind section 163A of the MV Act that aims to provide a final compensation within a limited time frame. In Ramkhiladi v. United India Insurance Co. 2020, the SC held that the deceased has to be a third party and not the supposed owner of the vehicle himself to claim compensation under this section.
Hence, it can be rightly concluded that section 163A is one of the most benefitting section of the MV Act in granting the compensation to the victims or their families. The only thing that has to be ensured by the law makers vigilantly is that the amount of compensation should always be pre-determined in the act as per the prevailing cost of living, inflation, and other relevant determinants so that a final compensation can be awarded to the victim or his/her legal heirs in the fastest possible time frame.
REFERENCES
· The Motor Vehicles Act, 1988.
· Ministry of Road Transport and Highways [Noti. No. S.O. 2022(E)] Dated May 22, 2018.
· Shivaji v. United India Insurance Co. Ltd., (2019) 12 SCC 395.
· Ramkhiladi v. United India Insurance Co., (2020) 2 SCC 550.