COMPENSATION UNDER MOTOR VEHICLES ACT – AMENDMENT IN SECTION 163 A:
Third Party Motor Accident claims can be registered with Motor Accidents Claims Tribunal (MACT) under the following Sections of the Motor Vehicles Act.
Section 140 – This is a No Fault Liability claim under which the compensation payable is as under:
- Rs.50000/- for death and Rs.25000/- for Permanent Disablement. This is fixed amount. No need to prove wrongful act/negligence/default of the owner of the vehicle.
Section 166 – This is a Fault Liability claim – Victim/Legal Heirs of victim have to prove in the Court of Law the wrongful act/negligence/default of the owner causing injury/death. Compensation is based on age/income/dependency etc.
Section 163 A – Amendment was made in the MV Act in 1994 and introduced a new Section 163 A.
- This also is on No Fault Liability basis. However, payment is on structured formula basis. While fixing the compensation, the following parameters are taken into account –
- Age and Income of the victim.
- For calculation of compensation, the maximum annual income is restricted to Rs.40000/-.
- Provision has been made for compensation for Non fatal accidents i.e., Permanent Disablement and Injury claims on formula basis.
- Based on the formula, the maximum compensation for Fatal Accident claim is Rs.537000/- and minimum is Rs.50000/-.
Victim/Legal Heirs can claim under Section 140 on No Fault Liability basis and then can claim under Section 166 on Fault Liability Basis. If Award is passed under Section 166, compensation will be paid after reducing the amount received under Section 140.
If Victim/Legal Heirs claim under Section 163 A, they cannot make a claim under Section 166.
Amendment in Section 163 A –
Now, vide Gazette Notification dated 22nd May, 2018, modification has been made by the Ministry of Road Transport & Highways in the provisions of Section 163 A. Compensation, on No Fault Liability basis, as per amended provisions, is as under:
(a) Fatal Accidents – Rs.5 Lacs (Fixed amount, irrespective of income and age)
(b) Permanent Disablement – Rs.500000/- X percentage disability as per Schedule I of the Employee’s Compension Act, 1923 (8 of 1923). However, minimum liability shall not be less than Rs.50000/-.
(c) Minor Injury – Fixed compensation of Rs.25000/-.
On and from the date of 1st day of Jan., 2019, the amount of compensation specified in clauses (a) to (c) above shall stand increased by 5% annually.
Net effect of Amendment under Section 163 A, which is beneficial to the victim/legal heirs, is as under:
- Earlier, the death compensation ranged from Rs.50000/- to Rs.537000/-. Not it is fixed Rs.5 Lacs.
- For Permanent Disablement, now the % calculation is based on the amount of Rs.500000/- (fixed). Earlier it used to be on the basis of yearly income (which can be any amount less than Rs.500000/-).
- For injuries, the minimum amount of compensation was Rs.1000/- and onwards. Not it is Fixed compensation of Rs.25000/-