Motor accidents happen a lot and result in significant loss of life and property damage. The Motor Vehicles Act 1988 (henceforth referred to as the “Act”) is a legislative system that has been established to address such accidents and provide measures for them. Therefore, the car owner, the driver, the insurance companies, and the deceased or injured are the parties engaged in a typical motor accident case that requires judicial dispensation.

This article tries to outline the guidelines for the Court’s compensation decision for claims resulting from car accidents that result in damage or death (Section 166 of the Act). Several of the principal Act sections concerning the aforementioned are addressed as follows:

Legal Provisions
In contrast to Section 166 of the Act, which is for the final determination of the claim, Section 140 of the Act provides interim compensation on a no-fault basis (without requiring the claimant to demonstrate carelessness on the part of the vehicle’s owner).

Section 165 of the Act outlines the procedures for deciding claims for compensation pertaining to incidents in which motor vehicle use results in a person’s death, serious physical injury, damage to a third party’s property, or both.

Section 166 of the Act states who can claim compensation in MACT cases.

with regard to Section 165 on the basis of evidence led This would be by:
(a) By the person sustaining the injury.
(b) By the owner of the property where death has resulted from the motor accident.
(c) By all or any of the legal representatives of the deceased.
(d) By any agent duly authorized by the person injured or all or any of the legal representatives of the deceased as the case may be.

“Owner thus is a person in whose name the motor vehicle stands registered and where such a person is a minor, the guardian of such minor,” according to Section 2(30) of the Motor Vehicles Act. The person in possession of a motor vehicle under the terms of a hire buy, lease, or hypothecation arrangement.

In the event that compensation is awarded by the courts using the structured formula basis outlined in Schedule II of the Act, a claim under Section 163-A of the Act may also be brought. Nonetheless, the Hon’ble Apex Court determined that the Schedule contained numerous obvious errors.

Documents accompanying the Claim Petition
In the decision rendered on December 21, 2009, the MACT, Gurgaon, in the matter of Rajesh Tyagi vs. Jasbeer Singh (FAO 842 of 2003), established the following guidelines regarding the supporting documentation for claim petitions in the event of injury or death.
1) Copy of the FIR registered in connection with the said incident if any-
2) Copy of the MLC/Post Mortem Report/ Death Report.
3) The documents of identity of the claimants and of the deceased in a death case.
4) Original bills of expenses incurred on the treatment along with treatment record.
5) Documents of educational qualification of the deceased.
6) Disability Certificate if already obtained in a injury case.
7) The proof of income of the deceased/injured.
8) Documents as to the age of the victim.
9) The cover note of the third party insurance policy if any.
10) An affidavit in support of the above documents and detailing the relationship of the claimants with the deceased.

Therefore, within 30 days of receiving the aforementioned documents, the police’s investigating officer (I.O.) is required to produce a detailed accident report (D.A.R.).The purpose of this provision is to expedite the payment of compensation to victims of motor vehicle accidents without requiring them to initiate a claim petition.

Petition to be filed within reasonable time.
In the case of M/s. Purohit and Company vs. Khatoonbee (S.L.P NO 25760 of 20), the Supreme Court held that a claim for compensation must be filed with a Motor Accident Claims Tribunal within a reasonable timeframe. It further stated that each case’s unique facts and circumstances would determine the reasonableness of the claim.

Determination of Compensation
On October 31, 2017, a Constitutional Bench of the Apex Court supported the Multiplier concept and deduction of personal and living costs as established in the Sarla Verma case in the matter of National Insurance Company Limited vs. Pranay Sethi and Ors (S.L.P 255290 OF 2014). Nonetheless, the Motor Vehicles Act’s Section 166 will now give compensation based on freshly developed guidelines that adhere to the uniformity concept. The following principles have been laid down :-
-Factors to be determined
The income of the deceased
-The age of the deceased
-The number of dependants

Determination of Multiplier
Regarding cases where the victim is under 15 years old, the Supreme Court decided to follow the multiplier of 15 and the assessment as stated in the Second Schedule, subject to correction as noted in Column (6) of the Table IN Sarla Vermain (S.L.P 8648 of 2007), decided on April 15, 2009, regardless of Section 163-A or Section 166 under which the claim for compensation has been made.

The multiplier as shown in Column (4) of the Table in Sarla Verma applies to all other death cases where the application under Section 166 has been made. The multiplier begins with an operative multiplier of 18 (for the age groups of 15-20 and 21 to 25 Years) and is reduced by one unit every five years, that is, M-17 for 26 to 30 Years, M-16 for 31 to 35 Years, M-15 for 36 to 40 Years, M-14 for 41 to 45 Years, and M-13 for 46 to 50 Years. Thereafter, it is reduced by two units every five years, i.e., M-11 for 51 to 55 Years, M-9 for 56 to 60 Years, M-7 for 61 to 65 Years, and M-5 for 66 to 70 Years.

Deduction of Personal Expenses

In cases where the departed was married, the deduction for personal and living expenses shall be one-third (1/3rd) in cases where the dependent family members range from two to three, one-fourth (1/4th) in cases where the dependent family members range from four to six, and one-fifth (1/5th) in cases where the dependent family members exceed six.

A different principle applies where the claimants are the parents and the dead is a bachelor. Since it is considered that a bachelor would often spend more on himself, 50% of living and personal expenditures are typically subtracted when considering bachelor.

Therefore, only the mother would be regarded as a dependant, and 50% would be handled as the bachelor’s personal and living costs and 50% as the contribution to the family, even if the deceased was survived by parents and siblings. However, in cases where the bachelor’s family is large and dependent on the deceased’s income, such as when he has a large number of younger siblings who do not earn a living and a widowed mother, his personal and living expenses may be limited to one-third, with the remaining two-thirds going toward supporting the family.

Application of Future Prospects
In cases where the dead had a permanent work and was under 40 years old, an addition of 50% of the deceased’s real wage should be made to the income in order to account for future potential. If the deceased was between 40 and 50 years old, the extra should be 30%. 15% more should be added if the deceased was between 50 and 60 years old. Read “actual salary” as “actual salary less tax.”

If the deceased was under 40 years old, an additional 40% of the deceased’s established income—whether they were self-employed or had a set salary—should be the warrant. a 25% increase in cases when the deceased was between 40 and 50 years old.

Insurer’s liability
It is frequently observed that the vehicle’s insurance company contests responsibility for the payment of the insurance sum. The insurance company will not be responsible for payment if the offending vehicle is not covered by insurance. The insurer is also not responsible for payment in the event that the car owner violates the terms and conditions of the insurance policy.

As a result, it is evident that the Hon’ble Apex Court developed the multiplier effect-based guidelines for compensation claims under Section 166 of the Motor Vehicles Act. Particular attention is given to the Lok Adalat, a forum that can be accessed by either side for a mutual settlement after the case is filed and notice is given.

Adv. Khanak Sharma (D\1710\2023)

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