This presentation highlights the motor vehicles act, offences and penalties, procedure for filing claims, appeals against the decisions, assessment of claims and case laws

1. MOTOR VEHICLES ACT,1988
(ACT 59 OF 1988)

2. INTRODUCTION
The Motor Vehicles Act, 1988:
• In order to give effective rights to the person injured or expired in an accident, Fatal Accidents Act, 1885 was
enacted in India, then later on The Motor Vehicles Act, 1988 is an Act of the Parliament of India which regulates
all the aspects of road transport vehicles. This Act came into force from 1 July 1989. This act replaced the
previous motor vehicle act 1939 which earlier replaced the motor vehicle act 1914. Motor vehicles act created a
new forum named motor accidents claims tribunals which substituted civil courts in order to provide cheaper
and speedier remedy to the victims of accident of motor vehicles
• It regulates almost all the aspects of road transport vehicles. It provides detailed provision on licensing of the
drivers and conductors, registration of motor vehicles, the provision on controlling their permits, traffic
regulation, related insurance , liabilities ,and penalties.
• This act majorly concentrates on innocent people who are on the road and can get affected by drivers of these
motor vehicles. The motor vehicle act provides a provision for compensation for such helpless people. They are
referred to as "Third Party" and the motor vehicle act revolves around providing safety to these third party
people.
• Extends to whole of India
• No. of Chapters – 14
• No. of Sections – 217

3. PREAMBLE- An Act to consolidate and amend the law relating to motor vehicles and the Act
categorizes motor vehicles into different types. Generally the categorization is based on size,
type and utility of such vehicles.
In Chapter II of the Act(LICENSING OF
DRIVING OF MOTOR VEHICLES) various
provisions discuss the qualification,
disqualification, grant, cancellation of
driving licences.
• The Act makes it compulsory for the
driver to have driving licence (Section 3).
• The Act prescribes minimum age for
holding a driving licence(Section 4).
• The Act asks for maintaining of registers
for Driving Licence by the State
Governments(Section 26).
Chapter VIII of the Act
(CONTROL OF TRAFFIC)
achieves the purpose of
controlling traffic by putting a
limit to the maximum
permissible speed of motor
vehicle(Section 112),
by putting a limit on weight
and limitation of use (Section
113),by laying provisions for
traffic lights, parking places,
halting stations, signals,
signalling devices and other
driving regulations.
Chapter IV of the
Act(REGISTRATION OF
MOTOR VEHICLES) lays
down provisions for
registration of motor
vehicles, cancellation of
registration, renewal of
registrations, transfers
Under the Act registration
of Motor Vehicle is
compulsory(Section 39).

4. Chapter IX of the Act (INSURANCE OF MOTOR VEHICLES AGAINST THIRD PARTY RISKS) lays down
provisions which makes it compulsory to have insurance of a motor vehicle against third party
risk#(Section 146).Other provision of this chapter discuss the limit on liability and other
requirements of the insurance policy.
Chapter X of the Act(LIABILITY WITHOUT FAULT IN CERTAIN CASES) elaborates on cases where
accident causes death or permanent disability. In such cases the victim has right to compensation
even if there was no fault of the defendant.(Section 140). The principle laid down by Section 140 is
termed as ‘no fault liability’.
Chapter XII of the Act(CLAIMS TRIBUNAL) gives us the compositions, powers, appellate and
procedures of the Motor Accidents Claims Tribunal.
Chapter XIII of the Act lays down provisions regarding offences arising in contravention of this Act
and procedure and penalty for the same.

5. OFFENCES AND PENALTIES
Different types of offences and penalties have been enumerated in following provisions of the MV Act.
Sections 3,4,5,6,23,36,39,47,52,66, 93,109,112,113,114,115,124,130,133,158, 178,179,189,197 and 198
etc.
The various offenses and related penalties are mentioned below:
• Under section 3 r/w 181 Motor Vehicle Act, a person driving without a valid license shall have to pay a
penalty of INR 500/- and or imprisonment of around three months.
• Under section 5 r/w 180 Motor Vehicle Act, a person allowing his vehicle to be driven by a person who
do not have a valid license shall have to pay a penalty of INR 1000/- with or without three months of
imprisonment.
• Under section 130(3) r/w 177 Motor Vehicle Act, a person not carrying all the documents required shall
be liable to pay a penalty of INR 100/-.
• Under section 130 r/w 177 Motor Vehicle Act, a person driving without a valid insurance shall be liable
to pay a penalty of INR 1000/- with or without an imprisonment of three months.
• Under section 130 r/w 177 Motor Vehicle Act, a person driving without a valid permit shall be liable to
pay a penalty of INR 5000/- which could not be less than INR 2000/-.

6. Procedure for filing claims
I) APPLICATION FOR COMPENSATION: First step at
claims tribunal is application for compensation by
either the victim of motor vehicle accident or his legal
heirs or legal representative. Application for
Compensation has been studied in detail earlier in this
chapter under para C with heading - Application for
Compensation.
II) AMENDMENT OF PLEADINGS: Amendment for
Enhancement of Claim Amount-An amendment in claim
petition for enhancement of amount of compensation
can be sought before the Tribunal but not before the
appellate court
III. NOTICES, SUMMONS, PROCESSES AND SERVICE ON
RECEIPT OF CLAIM APPLICATION :
Claims tribunal is duty bound to ensure service of summons
on owner and driver of the vehicle. Where a notice has been
sent in regular course as also through Registered Post, AD,
but could not be served on one of the two owners and there
is nothing to show that said owner was avoiding service or
that claimant had made efforts to give correct address of
said owner, In that case ex-parte order shall be made.
Puttamma & Ors. Vs. K.L. Narayana Reddy & ANR.
21. For complying with Section 166(4) of the Act, the
jurisdictional Motor Accidents Claims Tribunals shall initiate the
following steps:

7. Documents required while filing the claim application-
• FIR copy which is reported to nearest police station.
• Copy of Medico Legal Certificate/Post Mortem Report/Death Report.
• The documents of identity of claimants as required.
• Original Bills of expenses as incurred on treatment
along with treatment record.
• Documents of education qualification of the deceased.
• Disability Certificate as applicable.
• Proof of income of the deceased or injured.
• Documents related to age of victim.
• Cover note of third party insurance policy.
• Declaration of facts detailing the relationship of claimants with the deceased.

8. IV. WRITTEN
STATEMENT: The
provision of Rule 1 of
Order 1 Civil
Procedure Code lays
down that written
statement should be
filed within 90 days
from date of service is
directory and court
can grant permission
to file written
statement even
beyond period of 90
days if a case in this
regard is made out.
V. SUMMARY
PROCEDURE FOR
HOLDING ENQUIRY:
In holding any
enquiry under Section
168 of the Motor
Vehicles Act, 1988,
the Claims Tribunal
may, subject to any
rules that may be
made in this behalf,
follow such summary
procedure as it thinks
fit.
VI. POWERS OF COURT
IN RESPECT OF TAKING
EVIDENCE ON OATH,
ENFORCING
ATTENDANCE OF
WITNESS ETC.: The
claims tribunal shall
have all the powers of
a civil court for the
purpose of taking
evidence on oath and
of enforcing the
attendance of witness
and all compelling the
discovery and
production of
documents and
material objects
VII. TAKING OF
ASSISTANCE OF
PERSONS POSSESSING
SPECIAL KNOWLEDGE:
The Claims Tribunal
may, for the purpose of
adjudicating upon any
claim for compensation
choose one or more
persons possessing
special knowledge of
any matter relevant to
the inquiry to assist it
in holding the inquiry

9. VIII. FRAMING OF ISSUES: On receipt of application for compensation
and written statement, it is the duty of the claims tribunal to frame
issues involved in the matter.
IX. EX PARTE PROCEEDINGS – Dismissal in Default, Restoration etc.
Where defendants failed to submit written statement as well as
failed to appear before the tribunal either personally or through
authorised representatives or submit written statement but
subsequently failed to appear, the tribunal may record the
defendants as ex-parte.
X. JUDGEMENT – Finding on all Issues Necessary On receipt of an application
for compensation made under section 166, the Claims Tribunal shall, after
giving notice of the application to the insurer and after giving the parties
(including the insurer) an opportunity of being heard, hold an inquiry into the
claim or, as the case may be, each of the claims and, subject to the provisions
of section 162 may make an award determining the amount of compensation
which appears to it to be just and specifying the person or persons to whom
compensation shall be paid and in making the award the Claims Tribunal shall
specify the amount which shall be paid bythe insurer or owner or driver of the
vehicle involved in the accident or by all or any of them, as the case may be.

10. XI. DELIVERY OF COPIES OF AWARD: to Parties within 15 Days Section
168(2) of the Motor Vehicles Act, 1988 provides that the Claims
Tribunal shall arrange to deliver copies of the award to the parties
concerned expeditiously and in any case within a period of fifteen days
from the date of award.
XII. PERSON REQUIRED TO PAY COMPENSATION IN TERMS OF
AWARD TO DEPOSIT THE ENTIRE AMOUNT WITHIN 30 DAYS. Section
168(3) states that when an award is made under this section, the
person who is required to pay any amount in terms of such award shall
within 30 days of the date of announcing the award by the Claims
Tribunal deposit the entire amount awarded in such manner as the
Claims Tribunal may direct.
XIII. Execution of Award of Claims Tribunal-Executing court
is not empowered to reconsider any aspect of award afresh
but is required to execute it as passed by trial court.
Execution of award if taken out after twelve years is not
permissible. The award if not executed within twelve years
becomes inoperative and unenforceable.

11. Appeal against the decision
Appeals Against the Decisions of Claims tribunal Section 173 makes
provision for appeal to High Court by the aggrieved against the orders
of Claims tribunal and where the person aggrieved is the person who
has to pay the compensation such person shall deposit 50 percent of
the amount awarded as directed by the High Court.
Provided that :-
1. Person aggrieved by the award, within 90 days prefer an appeal to
High Court.
2. Provided that no appeal by the person who is required to pay any
amount in terms of such award shall be entertained by the High
Court, unless he has deposited with it twenty-five thousand rupees
of fifty per cent, of the amount so awarded, whichever is less, in the
manner directed by the High Court
3. After 90 days entertain the appeal if sufficient cause shown
4. No appeal shall lie against any award of a Claims Tribunal if the
amount in dispute in the appeal is less than ten thousand rupees

12. Assessment of claims

14. Sarla Verma vs. Delhi Transport Corporation , (2009) 6 SCC 121 the honourable court has laid the
method of assessing the claim or determining the compensation
So following are the method is as follows in cases of fatal accidents:
A) I ) Determining the income of Deceased XXXX
II) Deducting the income spent by the deceased on personal life and expenses) (XXX)
MULTIPLICAND XXX
B) ASCERTAINING THE MULTIPLIER
age of the deceased or of the claimant whichever is higher XXXX
C) CALCULATIONS
MULTIPLICAND X MULTIPLIER = Loss of dependency of family
D) To the loss of dependency all the mentioned amount in schedule II of MV ACT,1988 Regarding
fatal accidents will be added and after adding all the amounts, the total amount of compensation
shall be derived.

15. Multiplier table in case of Sarla Verma

16. In case of National Insurance Co. Ltd vs Pranay Sethi on 31 October, 2017 the court reiterated the
words of Sarla verma case by making certain additions to the method of assessing the claim.
I) While determining the income of the deceased
• If below 40 years of age + had a permanent job = addition of 50% of actual salary to the income of the
deceased towards future prospects.
• If btw 40-50 years= The addition should be 30%.
• If btw 50- 60 years of age =the addition should be 15%. Actual salary should be read as actual salary
less tax.
(II) In case the deceased was self-employed or on a fixed salary
• If below 40 years of age = an addition of 40% of the established
• If btw 50- 60 years of age =the addition of 10%
should be regarded as the necessary method of computation. The established income means the income
minus the tax component.
(III) For determination of the multiplicand, the deduction for personal and living expenses, the tribunals
and the courts shall be guided by Sarla Verma.
(IV) The selection of multiplier shall be as indicated in the Table in Sarla Verma read with paragraph 42 of
that judgment.
(V) The age of the deceased should be the basis for applying the multiplier.
(VI) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral
expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The aforesaid amounts
should be enhanced at the rate of 10% in every three years.

17. Claims and compensation
Motor Accidents Claims Tribunal (section 165)
Motor Accidents Claims Tribunal has been created by the Motor Vehicles Act, 1988.It has been
constituted to provide speedier remedy to the victims of accident by motor vehicles.
The Tribunals takes away jurisdiction of Civil Courts in the matters which concerns the Motor
Accidents Claims Tribunal.
WHEN COMPENSATION CAN BE CLAIMED:
According to Section 165 of the Motor Vehicles Act,1988 – the Tribunal can adjudicate upon
claims for compensation:-
1. When the accident involves death of the person, or bodily injury to the person; or damage to
any property of the third party; or both.
2. When the accident arises out of the use of motor vehicle
Limitation-There is no time limit for filing motor vehicle accidents claim. But an unusual delay will
demand an explanation by the Tribunal.

18. WHO CAN CLAIM THE COMPENSATION
According to Section 166 of the Motor Vehicles
Act,1988 ,compensation can be claimed –
1. By the person who has sustained injury;
2. By the owner of the damaged property;
3. By all or any legal representative of the deceased who
died in the accident;
4. By duly authorised agent of the injured person or all or
any of the legal representatives of the deceased who
died in the accident.
HOW AND WHERE CAN COMPENSATION BE CLAIMED
Claim Petition can be filed –
1. to the Claims Tribunal having jurisdiction over the
area in which the accident occurred or,
1. to the Claims Tribunal within the local limits of whose
jurisdiction the claimant resides, or carries
on business or,
2. within the local limits of whose jurisdiction the
defendant resides

19. Compensation
• Chapter 10 with Sections 140 to 144 provides for interim compensation on No Fault' Basis. According to this
provision Rs. 50,000/- is to be given to the kith and kin of the deceased and Rs. 25,000/- to the grievously injured
victim. The compensation under Section 140 is made payable if prima facie evidence of following is available;
(1) Accident by the offending vehicle;
(2) Offending vehicle being insured;
(3) Death or grievous injuries have been caused.
• Unlike to main claim petition, negligence is not required to be proved and this compensation is not refundable
even if negligence is not proved in the main claim application. Under Chapter 10 for interim award insurer is not
even permitted to raise any defence relating to negligence of applicant or permitted under Section 149 of Motor
Vehicle Act. But, if ultimately it is held that insurer is not liable to pay compensation victims can receive it from
owner.
• Chapter 11 (Section 145 to 164) provides for compulsory third party insurance, which is required to be taken by
every vehicle owner. It has been specified in Section 146(1) that no person shall use or allow using a motor
vehicle in public place unless there is in force a policy of insurance complying with the requirement of this
chapter.
• Supreme Court in C.K.Subramonia Iyer v. T. Kunhikuttan Nair case has stated that there is no exact uniform rule
for measuring the value of human life and measure of damages cannot be arrived at by a mathematical
calculation but the amount recoverable depends upon life expectancy of legal representative beneficiaries

20. Third party insurance
In Motor Vehicle Act 1988, there is provision for claim of
losses to Self or Other (Third Party) due to a motor
accident. There could be two kinds of injuries -
1. One where damage is done to Third Party, in terms of
injury or damage to his or her property.
• A third party insurance policy is a policy under which
the insurance company agrees to indemnify the
insured person, if he is sued or held legally liable for
injuries or damage done to a third party.
• The insured is one party, the insurance company is
the second party, and the person you (the insured)
injure who claims damages against you is the third
party.
2. Second where damage is done to self, which includes
damage to insurer’s own vehicle.

21. Salient features of third party insurance
• .
• . Third party insurance is compulsory for all motor vehicles and Third party
insurance does not cover injuries to the insured himself but to the rest of the world
who is injured by the insured.
Third party insurance is almost entirely fault-based.(means you have to prove the
fault of the insured first and also that injury occurred from the fault of the insured to
claim damages from him)
Beneficiary of third party insurance is the injured third party, the insured or the policy holder is only
nominally the beneficiary of the policy. In practice the money is always paid direct by the insurance
company to the third party (or his solicitor) and does not even pass through the hands of the insured
person

22. Defences of Insurance company
Defences are available in section 147- 149 of the act.
(1) Use of vehicle for hire and reward not permit to ply such vehicle.
(2) For organizing racing and speed testing;
(3) Use of transport vehicle not allowed by permit.
(4) Driver not holding valid driving license or have been disqualified for holding such license.
(5) Policy taken is void as the same is obtained by non-disclosure of material fact.
The Insurance Company cannot avoid the liability except on the grounds and not any other
ground, which have been provided in Section 149(2).

23. conclusion
• The law of accident claims is fast growing and the amendments to suit the
requirement of the object are necessitated but at the same time interest of those
should be watched who are disbursing the compensation i.e. Insurance
Companies. Without affording them right to contest, imposing liability to make
payment cannot be approved by law.
• Presently because of increasing scale of compensations almost 10 to 15% or even
more cases presented to the Claim Tribunals are fake or the other accidents have
been converted into road accidents with connivance of the police authorities.
• It is necessary that while increasing the burden of the Insurance Companies they
must get a right of proper contest to mitigate fake cases and also the quantum.
The intention of legislation is to provide just compensation and not exorbitant
compensation. This should always be kept in mind.