Several people lose their lives in motor accidents every day. India has a terrible track record in this matter and is one of the places recording a very high number of road-related accidents. Earlier, many road accidents were not included under the head of negligence and were not considered for actionable claims. This view has changed now, thanks to the increasing scope of Tort law, coupled with other recent legislation in the country. The Motor Vehicles Act is one such piece of legislation, which has been enacted to regulate all issues concerning road transport vehicles. The earliest legislation on this subject matter in India was the Indian Motor Vehicles Act, 1914. It was applicable in British India; a few princely states also adopted them with certain modifications. It mainly concerned itself with registration and licensing of motorists and vehicles. In 1939, the then legislature enacted a new law to replace this Act. This was the Motor Vehicles Act, 1939. A working group was constituted in 1984 to make the Act more responsive to the present needs. The Supreme Court in M. K. Kunhimohammed v. P.A Ahmedkutty recommended increasing compensation for victims of motor accidents and suggested some other measures about classes of accidents, insurance and so on. Many other different committees and commissions too, gave their own set of recommendations and suggestions. Some of them were the Law Commission of India, the National Transport Policy Committee, Road Safety Committee, Wheelers Committee, etc. These were included in the Motor Vehicles Bill that was about to be enacted. The present Motor Vehicles Act, 1988 came into force in 1989.

The Act extends to the whole of India. The various objects of the Act are-
(1) It takes care of personal and commercial vehicles in the country.
(2) It helps ensure that traffic offenders are punished accordingly.
(3) It takes care of the emerging technology in the field of the automotive sector
(4) It builds comprehensive compensation mechanisms for the victims of road-related accidents.
(5) It provides definitions of various components concerning this subject domain which were earlier not provided for.
(6) It also lays down rules regarding pollution measures.
(7) It provides for stringent procedures for acquiring vehicle licenses.
(8) It lays down the overall guidelines concerning road safety.
(9) MV Act is a social welfare legislation and has been enacted with intent and object to facilitate the claimants/victims to get redress for the loss of a family member or injuries at an early date.

 The Act is a Central Act, and therefore the power of notification date vests with it. The Central Government had issued the same date of notification for all the states.

Section 2, which contains various definitions starts with, that every definition is subject to alteration or change following the context. This is evident in the words “unless the context otherwise requires” in the section. The definition is, therefore, not exhaustive concerning every context. If a particular context warrants departure from the contours of a definition, the Legislature permits such departure to be made.


Who is a driver?
S. 2(9). “driver” includes, in relation to a motor vehicle which is drawn by another motor vehicle, the person who acts as a steersman of the drawn vehicle;
A person who merely holds a learner's licence is also a “driver” within the meaning of the definition.

2 It cannot be held that merely because one has a driving licence, he can drive any class or description of a vehicle.

3 The Supreme Court reported in Ashok Gangadhar Maratha
1 P.V. Said Mohammed v. Rema, 1995 AIHC 5873,
2 Gopal Das Shyamdoss v. Anjalai Ammal, (1970) 1 Comp LJ 209.
3 National Insurance Co. Ltd. v. Shinder Kaur, AIR 1998 P&H 184.
v. Oriental Ins. Co. Ltd4, held that the driving licence which the driver is required to hold when the motor vehicle is used in a public place is the licence to drive the particular type of vehicle and not merely the licence to drive any other type of vehicle.

S. 2(10). “Driving Licence”
means the licence issued by a competent authority under Chapter II authorising the person specified therein to drive, otherwise than as a learner, a motor vehicle or a motor vehicle of any specified class or description;
In so far as LLR (Learner’s license) holder is concerned, the Supreme Court in National Insurance Co. Ltd. v. Swaran Singh,5 that LLR was valid driving licence and that insurer cannot avoid liability on that basis. Even if the LLR had expired, under the present dispensation insurer would have to meet the liability if it could not be shown that the driver was disqualified from holding or obtaining a driving licence.
Exoneration of insurer on the premise that the driver was holding an LLR was set aside and insurer directed to pay and recover in appeal.


S. 2(28): ‘vehicle’ means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding [twenty-five cubic centimeters];
 Any vehicle which is mechanically propelled falls under the definition.
 A road-roller is a motor vehicle.
 Excavators and road-rollers are motor vehicles.
 A tractor is a motor vehicle.

 A scooter comes within the definition of “motor vehicle”.
 A bulldozer is also a motor vehicle.
 Excavators fitted with chains like caterpillars and military tanks which move around only in worksites and not suitable or adapted for use on public roads were not motor vehicles within the meaning of Section 2 (28) of MV Act and therefore not liable for entry tax.


It is very much settled that if there should arise an occurrence of a motor accident, an undertaking is made to put the petitioners in the same position as they were in before. The harms to be granted are to be satisfactory in terms of cash so that the harmed/petitioners are placed similarly situated had they not endured the misfortune by wrong of the respondent, however, no measure of remuneration can reestablish the emotional loss or experience of agony or death toll.


 Fault liability:
The person who brings the petition for compensation must show that the respondent was negligent. The fault has to be proven. There is no statutory definition of negligence, ordinarily, it would mean omission of duty caused either by omission to do something which a reasonable man guided upon those considerations, who ordinarily by reason of conduct of human affairs would do or be obligated to, or by doing something which a reasonable or prudent man would not do.

 In Rathnashalvan v. State of Karnataka, the Supreme Court defined “rashness” as follows-
“Rashness” consists in hazarding a dangerous or wanton act with the knowledge that it is so, and that it may cause injury. The criminality lies in such a case in running the risk of doing such an act with recklessness or indifference as to the consequences.

In State of Karnataka v. Muralidhar, the Supreme Court defined the word “negligence” as follows :
“Negligence means omission to do some-thing with reasonable and prudent means granted by the consideration which ordinarily regulate human affairs or doing something which prudent and a reasonable means guided by similar considerations would not do.”

In Injury Cases, it is the injured, who is the claimant. In Death Cases, the legal heirs of the deceased are claimants. Those who are not dependants but are the legal heirs are also entitled to compensation. But the Legal Representative of a person who is himself guilty of rash and negligent driving, cannot claim compensation.

 Assessment of Compensation
Life can't be valued. Also, no individual can put any money related estimation of his emotional loss. The courts can just concede remuneration for the financial and money related misfortune caused. Mainly pecuniary loss has to be assessed. Nominal damages for funeral expenses, loss of consortium and conventional damages. Long expectation of life is connected with earning capacity.

In its very nature whenever a Tribunal or a Court is required to fix the amount of compensation in cases of accident, it involves some guesswork, some hypothetical consideration, some amount of sympathy linked with the nature of the disability caused.

It has to be kept in view that the Tribunal constituted under the Act as provided in Section 168 is required to make an award determining the amount of compensation which is to be in the real sense “damages” which in turn appears to it to be “just and reasonable”. The expression “just” denotes equitability, fairness and reasonableness, and non-arbitrary, if it is not so it cannot be just.

 Principles to Determine Compensation in Death Cases
The principles about this topic have been elaborately dealt with in the case of Sarla Verma vs. Delhi Transport Corporation,21wherein the following factors have to be considered by the Tribunal while awarding compensation:

The income of the deceased per annum should be determined. Out of the said income, a deduction is to be made regarding the amount which the deceased would have spent on himself by way of personal and living expenses. The balance which is to be considered to be the contribution to the dependant family constitutes the multiplicand.
Having regard to the age of deceased and period of active career, the appropriate multiplier should be selected.
i). the annual contribution to the family (multiplicand) when multiplied by such multiplier gives the “loss of dependency to the family.”
ii). The conventional amount can be added to recoup the loss of estate.
iii). There needs to be no compensation for the legal heirs of the deceased for pain, suffering, and hardships caused to them.
iv). Expenses such as the funeral expenses, treatment expenses before the death of the victim and transportation costs should be added.
v). Expenses which are of personal nature, as well as the living expenses of the deceased, should be deducted from his income.

2 units per adult, one unit per child - divide income by total units, subtract the value of units of deceased. Balance is a datum figure. This method is preferred when income is low.
In Lata Wadhwa vs. State of Bihar and M.S. Aggarwal vs. Deep Chand Sood, compensation in case of death of school children was granted, it was held that in addition to awardingcompensation for pecuniary losses the compensation was also to be granted with regard to future prospects of the child.

The strict liability rule in Rylands v. Fletcher (The rule of law is that the person who, for his own purpose, brings on his land and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril; and if he does not do so is prima facie answerable for all the damage which is the natural consequence of its escape). was extended by the Supreme Court in Kusuma Begum (Smt.) v. The New India Assurance Co. Ltd. to apply to accidents arising out of use of motor vehicles on the road, in addition to no-fault liability statutorily provided in the Motor Vehicles Act, without the necessity of establishing any negligence on the part of the driver of the motor vehicle causing the accident. But the inputs in this regard were considered as far back as a decade before the current Motor Vehicles Act even came in force. In Manjusri Raha v. B.L. Gupta, Justice Fazal Ali made the following observation:

"The time is ripe for making a serious condition of creating no-fault liability. Having regard to the Directive Principles of the State Policy, the poverty of the ordinary run of victims of automobile accidents, the compulsory nature of insurance of motor vehicles, the nationalization of general insurance companies and the expanding trend towards nationalization of bus transport, the law of torts based on no-fault liability needs reform."

A claimant can claim compensation on no-fault liability under section 140 or section 163A of the Act or under the rule of strict liability of Rylands v. Fletcher. These sections provide for no-fault liability. Under Section 163 A, the fault of the driver need not be proved. The Second Schedule here provides for compensation in a structured manner.
The parties can claim compensation either under Section 163-A or Section 140 of the Act.

Persons who earn an income up to Rs. 40,000 only can ask for compensation under Section 163-A.
Important parts of the said sections are reproduced below:
140. Liability to pay compensation in certain cases on the principle of no-fault.
(3) In any claim for compensation, the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.
(4) A claim for compensation under sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.

Section 140, contained in Chapter X of the act talks about no-fault liability and the payment of compensation in such cases. A vehicle owner will thus be liable to pay in case she causes an accident resulting in disability or death of a person. Sub-section (3) provides that the claimant is not required to prove the fault of the other party. This section can be availed through an interim application or proceedings initiated under Section 166 of the Act. Section 166 postulates that an application for compensation can be made by the injured, the property owner, by the legal representatives of the deceased or any person which is duly authorised by the injured victim.
163A. Special provisions as to payment of compensation on structured formula basis.
(2) In any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement 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 vehicles concerned or of any other person.

The above provision was incorporated under this Act in the year 1994 to provide speedy justice to the victim of a mishap through the payment of compensation which is contained in a well-structured manner in the Second Schedule of the Act. The section will override any other sections of this Act or any other Statute which is in force because the Court has interpreted its non-obstanate clause in a wide manner. Negligence is not needed to be proved by the applicant who is claimingunder this section. It was invoked to help victims get relief quickly, which would otherwise have taken years to settle.

Section 163 A of the Act provides compensation handsomely. The rule earlier was to get relief from either the strict liability rule as was laid down in the landmark judgment of Ryland v Fletcher or under the MV Act. It is hardly arguable that people will take the first course of action wherein certain defenses are available to the other party. Such kinds of defences find no place in the provisions mentioned.

In the case of Deepal Girishbhai Soni v. United Insurance Co. Ltd, a three-Judge bench held that only under sections 140, 163A of the M.V. Act can claim for compensation be effected in absence of fault. Section 166 of the said Act deals with claims of fault liability. This was reiterated by a two-judge bench of the Supreme Court in Oriental Insurance Co. Ltd. v. Premlata Shukla.

Another important factor always to be considered in the cases under this Act is that the act is a social welfare legislation. The MV Act is beneficial legislation intended to place the claimant in the same position that he was before the accident and to compensate him for his loss. Hence, the provisions in this regard ought to be interpreted liberally, to achieve the maximum benefit.

It is this reason that the courts have refused to allow for strict rules of evidence. They will place at the doors of the insured and the insurer a heavy burden to discharge that that there was no negligence of the driver of an offending vehicle or that insurer is not for any reason not liable to offer financial separation to the injured or the representatives of the deceased victim.