The number of people who get killed or maimed in motor vehicle accidents is growing day by day. The main source of succour to such hapless people and their dependants is the compensation that they are entitled to receive under law. But right from 1956, motor accident compensation law has been in a state of flux. It was in that year that the legislature amended the Motor Vehicles Act, 1939 by inserting several new sections. Over the years, many more amendments followed and in 1988, a new Motor Vehicles Act replaced the old one. This book studies various new rights created by the Motor Vehicles Act, 1988 for claiming compensation in case of any death or bodily injury caused in an accident arising out of the use of a motor vehicle.
Over the years, the judiciary has not only been called upon from time to time to interpret these statutory provisions and apply them to different facts and situations, but also to lay down the legal principles for assessing compensation. The Motor Vehicles Act, 1988 does not provide any guidelines for the identification of the items of loss to be compensated; nor does it lay down any criteria for the computation of the quantum of compensation for each item of loss. The author has successfully dealt with such and other important questions.
An attempt has been made to make a comprehensive review of all aspects of the Motor Accident Compensation Law as per the new Act of 1988. The author has sought to present all the vowed viewpoints on a given aspect with copious references to the case-law. He has not adopted the usual section-wise commentary approach. On the contrary, he felt that a topic-wise discussion would be more appropriate for this subject.
Rules framed by various States under the Motor Vehicles Act, 1988 on accident claims have also been included in the appendix of the book. This book would be of use not only to practising lawyers, but also to legal scholars and legislative draftsmen.
Table of Contents:
TABLE OF CASES XXXVI EXTRACTS FROM MOTOR VEHICLES ACT, 1939 LXVI EXTRACTS FROM MOTOR VEHICLES ACT, 1988 LXXXIV
CHAPTER I : INTRODUCTION Legislative History 1 Common Law 1 Legal Representatives Suits Act, 1855 3 Fatal Accidents Act, 18 4 Advent of the Automobile 6 Additions to the Motor Vehicles Act, 1939 7 Motor Vehicles Act, 1988 8 Summary of the Legal Provisions 9 Statements of Objects and Reasons of Various Amending Acts 10 What Right to choose 16 General overview of the law 16 Injury Cases 19 Death Cases 19 Claim under Section 165 is the Main Claim 20 Conventions used in this book 20
CHAPTER II : RIGHT TO SOLATIUM U/S 161 IN HIT-AND-RUN CASES Nature of Hit-and-Run accidents 21 Salient features of the special provisions 21 Text of sections 23 Text of the Solatium Scheme, 1989 25
CHAPTER III : RIGHT TO FIXED COMPENSATION U/S 140 ON THE PRINCIPLE OF NO-FAULT LIABILITY Normal Rule for payment of Compensation 33 Fault based liability 33 Plight of claimants under the law of torts 33 Criticism of the system of tort compensation 33 Judiciary's call for departure from the normal rule 35 Co-existence of no-fault and fault based systems 38 No-fault systems in other countries 39 New Right to Compensation under No-fault Liability 39 Legislative response 39 Meaning of the term ''no-fault liability' ' 40 Statutory Provisions 41 Scope and ambit of the new provisions 42 Salient features 44 Substantive Nature of No-Fault Liability Provisions 46 New provisions substantive 46 New provisions merely procedural 47 Retrospective Effect of No-Fault Liability Provisions 49 Whether S. 92-A to S. 92-E in the 1939 Act retrospective ? 49 Whether S. 140 to S. 144 in the 1988 Act retrospective? 58 Liability under No-Fault Liability Provisions 62 Liability of the owner 62 When owner denies involvement of vehicle in accident 62 When accident is caused by the composite negligence of two or more vehicles 63 When accident is caused by victim's sole negligence 64 Liability of the insurer 65 Whether the insurer liable at all? 65 Whether statutory defences available to the insurer 67 Nature of Enquiry under No-Fault Liability Provisions 72 Scope of enquiry 72 Speedy trial 73 Interim award 74 Compensation under No-Fault Liability to serve as Minimum in Fault Cases 76
CHAPTER IV : RIGHT TO STRUCTURED COMPENSATION U/S 163-A ON THE PRINCIPLE OF NO-FAULT LIABILITY Statutory Provisions 78 Salient Features 81 A Critical Appraisal 82 Different remedies for the rich and the poor 82 Possibility of increased litigation 83 Ambiguities in the sections 83 Whether right under S. 163-A, additional to right under S. 165 or Not? 83 Unnecessary use of the Term ''Legal Heirs' ' 84 How Application has to be made? 84 Ambiguities in the Table 84 Rationale behind Multipliers not clear 84 Wrong Products of Multipliers and Incomes 84 What about Incomes not mentioned in the Table? 85 Multiplier based only on the Age of the Victim Wrong 86 Ambiguities in the Second Schedule 86 Heads under 'General Damage' 86 Bills for Medical Expenses 86 National income for Victims who were non-earners prior to accident 87
CHAPTER V : JUST COMPENSATION ON THE BASIS OF FAULT LIABILITY Right to Just Compensation 89 Liability for paying Just Compensation 90 Statute silent on the basis of liability 90 Courts apply fault based liability 90 Concept of Negligence 92 Meaning of negligence 93 Ingredients of negligence 93 Duty of Care and its Breach 94 New Duty-Situations 95 Standard of Care 95 Damage 97 Statutory negligence 98 Fault Liability of Owner, Driver and Others 98 Statutory duties of owner and driver 98 Duties under the MV Act, 1988 98 Duties under the Regulations 100 Liability of the owner 106 Liability of the driver 106 Liability of conductors, cleaners etc. 107 Burden of Proof 107 General rule 107 Res ipsa loquitur 108 Meaning of the Doctrine 108 Scope of the Doctrine 108 Applicability of the doctrine 111 Res Ipsa Loquitur and the Evidence Act 112 How the presumption can be Rebutted 114 Illustrative Cases 114 Defences of Owner and Driver 117 Contributory negligence of the victim 117 Common Law Rule of Contributory Negligence 117 Contributory Negligence in India 118 Cases of Contributory Negligence 119 Cases of no Contributory Negligence 120 Contributory Negligence of Children 121 Composite negligence of joint tortfeasors 123 What is Composite Negligence? 123 Apportionment of inter se Liability 124 Instances of Composite Negligence 127 Latent Defect 127 Inevitable accident 130 Act of God 132 Types of Accidents Caused by the Negligence of Owner or Driver 133 Excessive speed 133 Accidents involving children 135 Running over pedestrians 136 Running over Cyclists 136 Going on the wrong side 137 Sudden turn to the right 137 Head-on collision 138 Collision at a road intersection 139 Collision while overtaking 139 Collision from behind 140 Accidents involving unattended vehicles 140 Dashing against a parked vehicle 141 Vehicle grazing against another vehicle, or a tree or the sides of a bridge 141 Travel on the roof of the bus 141 Footboard accidents 141 Mechanical defect in a passenger-carrying vehicle 142 Vehicle washed away in flood waters 143 Sudden application of brakes 143
CHAPTER VI : VICARIOUS LIABILITY OF THE OWNER Types of Owner's Liability 144 Statutory liability 144 Fault liability 144 Vicarious liability 144 Vicarious Liability of the Owner 144 Concept of vicarious liability 145 Owner vicariously liable for acts of his servants 148 When the servant commits an accident negligently 148 When the servant commits a criminal act 148 When unauthorised passenger taken by the servant is injured 148 Owner vicariously liable for acts of persons other than his servants 149 When unauthorised person allowed by servant causes accident with owner's vehicle 149 When stranger without knowledge of servant causes accident with owner's vehicle 151 When servant of mechanic causes accident with owner's vehicle 152 When friend causes an accident with owner's vehicle 153 Owner not vicariously liable for accidents caused with his motor vehicle 154 When vehicle is in possession of transferor under a sale transaction 15 When vehicle is in possession of hirer under hire purchase agreement 156 When vehicle is in possession of hirer under an agreement of lease 157 When vehicle is in possession of government under requisition or other wise 158 Financier under hypothecation agreement not vicariously liable 158 Vicarious Liability of the State 160 State vicariously liable 160 Sovereign Immunity 161 What is a Sovereign Act? 162 Illustrative Cases 165
CHAPTER VII : LIABILITY OF THE INSURER Insurance against Third Party Risks 168 Introduction 168 Statutory provisions 169 Scheme of the statutory provisions 180 Intent of the legislature 182 Public Place 183 Statutory provisions 183 Scope of the definition 184 Illustrative cases 186 Limits of Liability 189 Under the Motor Vehicles Act, 1939 189 Statutory Provision 189 Scope of the sub-section 189 Comprehensive Policy 192 Criticism of the limits under the MV Act, 1939 192 Under the Motor Vehicles Act, 1988 194 Statutory Provision 194 Not Retrospective 194 Defences open to an Insurer 195 Insurer's right to defend 195 Statutory defences only normally available 196 Availability of defences other than statutory defences 197 When the insurer had defended the action before the Tribunal in the name of the Insured as per the Right reserved in the Policy 197 When the Insurer had been impleaded before the Tribunal under S. 170 199 Summing up 201 Statutory Defences 202 Breach of a specified condition in the policy 203 Meaning of 'breach' 205 Breach of statutory rules not a defence 206 Condition excluding the use of vehicle 206 For Hire or Reward without Permit 206 For Organised Racing and Speed Testing 207 For a purpose not allowed by the Permit 207 Condition excluding driving 208 Burden of Proof 210 That the policy is void 212 Commencement of the Policy 213 Transfer of Insurance 214
CHAPTER VIII : THE CLAIMS TRIBUNAL-CONSTITUTION AND JURISDICTION Statutory Provisions 216 Constitution 217 Substantive Jurisdiction 218 Motor vehicle 219 Tractor Trailer 219 Roadroller 219 Overturned petrol tanker 220 Bus being pushed 221 Others 221 ''Arising out of the use of' ' 221 Fall from the footboard of the bus 221 Bus washed away over a causway 222 Collision with a parked vehicle 222 Chain of Causation 222 Moving of an unattended bus 223 Boiling water from the radiator 224 Electrocution while loading a goods vehicle 226 Involvement of an outside agency in the accident 226 Jurisdiction to entertain applications 226 Jurisdiction to fix liability and make award 227 Public place 231 Jurisdiction over uninsured motor vehicles 231 Summing-up 234 Bar on Jurisdiction of Civil Courts 234 Option to Claim under Workmen's Compensation Act, 1923 234 Can a claimant proceed under both the forums? 235 When option is said to have been exercised? 237 Should the Tribunal be guided by Workmen's Compensation Act provisions? 238
CHAPTER IX : THE CLAIMS TRIBUNAL--CLAIM, CLAIMANTS AND OPPOSITE PARTIES Statutory Provisions 240 Application for Compensation 241 Particulars 242 In respect of the Accident 242 In respect of the Accident Vehicle 242 In respect of the Accident Victim Name 242 In respect of the Medical Treatment 242 In respect of the Claimants 242 In respect of the Claim 242 Documents 243 Separate Applications 243 Joint Applications 244 Court Fee 245 In which Tribunal application has to be filed? 247 Limitation 248 Police Report to be treated as Application 248 Application for compensation under S. 140 250 Tribunal's Duty to Act suo moto 251 Formal application not necessary 253 Limitation for compensation under S. 140 254 Persons entitled to make the Application 255 Agent 255 Counsel can be an Agent 255 For Injured Person, Relative can be an Agent 256 For a Minor, Father can be an Agent 258 For mentally unsound person, relative can be an agent 258 Legal Representative 259 Legal representatives who have not joined shall be impleaded as respondents 263 Persons entitled to Compensation 264 Apportionment on the basis of dependancy 264 Non-dependant children not given 265 Non-dependant brothers and sisters not given 265 Non-dependant parent not given 265 Any relative who is a dependant given 265 Apportionment on the basis of personal law 266 Apportionment on the basis of dependancy plus personal law 267 Persons against whom Application has to be made 267 Owner is a necessary party 268 Insurer is a necessary party 269 Driver is a necessary party 270 Driver is not a necessary party 271 Joint tortfeasor is not a necessary party 272 Joint tortfeasor is not a necessary party in S. 92-A applications 274 Effect of non-joinder of joint tortfeasors 275 Practical aspects relating to joinder or non-joinder of joint tortfeasors 277 Position of joint tortfeasors in the State of Kerala 279 Impleading Insurer in certain cases 280
CHAPTER X : THE CLAIMS TRIBUNAL-DUTIES, POWERS AND PROCEDURAL ASPECTS Duties of the Claims Tribunal 281 Powers vested in the Claims Tribunal 282 Outline of the Powers 282 Nature and scope of the powers of the tribunal 283 Power to invoke various provisions of the CPC 283 Power given by the Rules 283 Power recognised by the Courts 284 Procedure provided in the Rules 286 Procedure for adjudicating claims under S. 166 286 Special procedure for adjudicating claims under S. 140 287 Guidelines for proper procedure 289 Steps preliminary to the Enquiry 291 Appearance of legal practitioner 291 Examination of the applicant 291 Summary dismissal of application 292 Notice to parties 292 Statutory Provisions 292 Service of summons/notices is the duty of the Tribunal 294 Order under S92-A passed without notice 295 Appearance and Examination of Parties 296 Steps during the course of the Enquiry 297 Local inspection 297 Inspection of the vehicle 298 Summary examination of persons 298 Co-opting of persons during enquiry 299 Obtaining of information and documents 300 Adjournment of hearing 300 Enquiry 301 Framing and determination of issues 301 Provisions in Rules 301 Whether non-framing of issues vitiates the adjudication 302 Whether claim can be dismissed for default after framing of issues 304 Summoning of witnesses 304 Evidence 305 Evidence necessary for the Claimants 305 Evidence necessary for the Respondent 307 Strict rules of Evidence not applicable 307 Evidence beyond or contrary to pleadings 308 Judgment in criminal case 310 Admission of guilt by driver in crimnal case 311 Oral Evidence 312 Method of recording evidence 312 Recording evidence by affidavits 312 Issue of Commission for examination of wit-nesses 313 Re-examination of witnesses 314 Medical Evidence 314 Documentary Evidence 316 Vouchers not objected to by the respondents can be relied upon 316 Documents must be proved before they can be relied upon 316 Documents cannot be received behind the back of an affected party 318 Testimony in criminal case irrelevant 318 Owner's statement to police during criminal case investigation can be relied upon 319 Public documents are admissible 319 Stay of Proceedings 320 Default and Restoration 321 Abatement in Fatal Accident Cases 321 No Abatement on the Death of Claimant 321 No abatement on the death of one of the respondents 323 Abatement in Injury Cases 323 Action does not survive 323 Before the Tribunal 323 Before the High Court 324 Action survives to the extent of loss to the estate 325 Before the Tribunal 325 Before the High Court 327 Survival of action depends on cause of death 328 Position of survival of actions in the State of Kerala 329 Abatement of Claims for Compensation under S. 140 332
CHAPTER XI : THE CLAIMS TRIBUNAL-THE AWARD Award 334 Statutory Provisions 334 Scope of the section 335 Meaning and ingredients of award 336 Whether all issues have to be answered in the Award even when redundant 336 Whether Compensation in excess of the claim can be awarded 337 Excess cannot be awarded 338 Excess can be awarded 338 Award of Interest 341 Statutory Provision 341 Interest on compensation under no-fault liability 341 Scope of the section 342 Reason for awarding interest 343 Specific plea not necessary 344 No plea in the claim petition 344 No appeal or cross-objection 345 Considerations for the award of interest 346 Precedent 346 Inflation 347 Delay in the service of notices 348 Delay in impleading the respondent 348 Delay in the proceedings 349 Default and restoration 350 Past and future losses 350 Penal rate of interest 352 Penal rate justified 352 Not a penal levy, but a rebate 353 Penal rate not justified 354 Award of Compensatory Costs 355 Statutory provision 355 Investment and Disbursement of the Award 356 Guidelines framed by the judiciary 356 Guidelines in State Rules 365 Attachment of the Award amount 365 Power of Review 366 Recovery 371 Statutory Provision 371 Scope of the section 371 Recovery proceedings against a surety 372 Rights of a bona fide purchaser of the property attached 372 Attachment before judgment 373 Recovery by insurer 373 Execution 373 Statutory Provision 373 Tribunal has inherent power to execute Award 374 No conflict between the execution and recovery provisions 375
CHAPTER XII : THE CLAIMS TRIBUNAL-APPEAL AND REVISION Right to Appeal 376 Statutory Provisions 376 Pre-conditions for preferring an appeal 377 ''Person Aggrieved' ' 377 Meaning of 'Person Aggrieved' 377 An owner on whom the Tribunal has not fixed any liability is a person aggrieved 378 An owner on whom the Tribunal has fixed entire liability is a person aggrieved 383 An insurer on whose statutory defences no finding has been given is not a "Person Aggrieved' ' 384 Award for the purpose of Appeal 385 Order refusing to entertain claim petition 385 Order dismissing the claim petition 386 Dismissal on the ground that respondents are not liable 386 Dismissal on the ground that delay in filing claim petition cannot be condoned 388 Dismissal on the ground that legal repre-sentatives cannot be impleaded 389 Dismissal on the ground of default 390 Order condoning delay in filing claim petition 391 Appeal against an order under S. 92-A 391 Appeal against an order under S. 92-A maintainable 391 Appeal against an order under S. 92-A not maintainable 395 Joint Appeal 396 Grounds of Appeal 399 When are grounds other than statutory defences open to an insurer? 399 When the insured had not contested the action before the Tribunal 399 When the insurer had defended the action before the Tribunal in the name of the Insured as per the right reserved in the policy 400 When the insurer had been impleaded before the Tribunal under Section 110-C(2-A) 403 When the amount specified to be payable by the insurer exceeds his liability under Section 96 of the Act 404 When unclaimed and unauthorised amounts are awarded by the Tribunal 407 When Jurisdictional issues are involved 408 Summing Up 408 Costs denied to insurer for raising defences other than statutory defences 410 Plea raised for the first time in appeal 410 Cross-objections 411 Reasons for allowing cross-objections 411 Since MV Act does not provide procedure for appeals, general procedure prescribed in the CPC applies 411 Since right to file cross-objections, which is only a matter of procedure, need not be expressly conferred 413 Since the Award of the Tribunal comes within the meaning of 'Decree' mentioned in Rule 22, Order 41, CPC 414 Summing Up 415 Reasons for not allowing cross-objections 415 Since right to file cross-objections, which is a substantive right, has not been expressly conferred 415 Since the Award of the Tribunal is not a 'Decree' as mentioned in Rule 22, Order 41, CPC 416 What cross-objections are not maintainable? 417 By a respondent against a co-respondent 417 By claimants on the quantum in an appeal by insurer on liability 419 By owner on negligence and quantum, in appeal by insurer on liability 419 Cross-objections survive even when appeal has been found not maintainable 420 Plea in the absence of cross-objections 420 By the Claimants for enhancement in the quantum of compensation 420 By the Respondents on the question of Negligence 420 Additional Evidence 421 Powers of an appellate court 424 When interference by appellate court justified 424 Powers under Order 41, Rule 33, CPC 425 Whether Letters Patent Appeal maintainable 427 Revision 428 Statutory Provision 428 Applicability of the section to a Claims Tribunal 429 Power of revision expressly excluded by legislature 429 Revisional Power inherent in appellate power 430 Two-way applicability test 431 Tribunal is a court 431 Tribunal is not a court 433 Tribunal is subordinate to the High Court 434 Tribunal is not subordinate to the High Court 434
CHAPTER XIII : CONCEPT OF 'JUST' COMPENSATION Meaning of Compensation 436 Basic concepts in assessment of compensation 436 Restitutio in integrum 436 Full and fair compensation 437 Need for Itemised Awards 439 Classification of Losses 441 General and Special Damages 441 Pecuniary and Non-pecuniary Losses 446
CHAPTER XIV : ASSESSMENT OF COMPENSATION FOR PRE-TRIAL PECUNIARY LOSSES Funeral expenses 449 Held not admissible 449 Held not admissible, but allowed 450 Held admissible 451 Held admissible, but not allowed 453 Under no-fault liability structured formula 454 Expenses towards medicines etc. 454 Effect of non-production of Bills 454 Effect of Medical Reimbursement Facility 461 Compensation denied 461 Compensation allowed 462 Government versus Private Hospital 462 Damage to clothing etc. 463 Lost IncomeWages for Paid Leave 463 Cost of Care 465
CHAPTER XV : ASSESSMENT OF COMPENSATION FOR POST-TRIAL PECUNIARY LOSSES Loss of Future Income 473 Introduction 473 Earnings or earning capacity? 474 Calculation of loss of future income in injury and death cases 474 Computation of the Multiplicand 476 Computing the annual income of the victim 476 Future prospects not considered 476 Future prospects considered 478 Future prospects indirectly considered 483 Necessity of Evidence 484 Computing the dependancy of the claimants 484 Computation of the Multiplier 486 Interest Method 486 Product Method 487 Capitalization Method 493 Uncertainties of Life 493 Lumpsum (or Accelerated) Payment 494 Lumpsum (with Deductions) Method 494 Multiplier Method (or Traditional Multiplier Method) 497 Traditional Multiplier (with Deductions) Method 502 Actuarial Multiplier Method 503 Mortality Rate 504 Discount Rates 506 Actuary's Multiplier 506 Evaluation of Methods 508 Evaluation of the Interest Method 508 Evaluation of the Product Method 510 Evaluation of the Lumpsum (with deductions) Method 511 Deduction Unwarranted 511 Deductions Arbitrary 513 Deduction Insufficient 514 Evaluation of the Multiplier Method 514 Evaluation of the Multiplier (with deductions) Method 515 Evaluation of the Actuarial Multiplier Method 515 Collateral Benefits 517 Introduction 517 Ex Gratia Payments 517 Insurance, PF, Gratuity and Pension Benefits 521 Deduction made 522 Deduction not made 528 Conclusion 537 Acceleration of Interest 539 Total Deduction allowed 540 Partial Deduction allowed 541 Deduction not made 541 Compassionate employment to spouse/son of deceased 547 Conclusion 550 Effect of Claimant's Remarriage 550 Introduction 550 Effect of actual remarriage 550 Effect of possibility of remarriage 553 Conclusion 555 Cost of Future Medicare 555 Future medical expenses 555 Expenses of keeping attendants in the future 557
CHAPTER XVI : ASSESMENT OF COMPENSATION FOR NON-PECUNIARY LOSSES Non-pecuniary losses suffered by the Victim 558 Introduction 558 Awards without Itemisation 559 No Compensation for Non-Pecuniary Losses 559 Lumpsum Compensation for all Non-Pecuniary Losses 559 Itemised Compensation for Non-Pecuniary Losses 560 Personal Injury 560 Pain and Suffering 561 Loss of Amenities of Life 563 Loss of Expectation of Life 565 Disfigurement 567 Quantification 568 Status of the Victim 568 Health of the Victim before the accident 569 Gravity of the Injury 569 Conclusion 569 Non-pecuniary Losses suffered by the relatives 570 Introduction 570 Grief, Distress and Shock 570 Loss of Love and Affection 574 Loss of Consortium 574
CHAPTER XVII : ASSESSMENT OF COMPENSATION FOR THE DEATH OF WOMEN AND CHILDREN Loss of Homemaking Capacity 577 Nature of the Loss 577 Analysis of Case-Law 578 Conclusion 583 Compensation for the death of children 584 Introduction 584 Children below 5 years 585 Children above 5 but below 10 years 586 Children above 10 but below 18 years 590 Conclusion 592
APPENDIX: MOTOR ACCIDENTS CLAIMS TRIBUNALS RULES FRAMED UNDER ACT 59 OF 1988 Andhra Pradesh Motor Vehicles Rules, 1989 595 Bihar Motor Vehicles Rules, 1992 602 Goa Motor Vehicles Rules, 1991 610 Gujarat Motor Vehicles Rules, 1989 619 Haryana Motor Vehicles Rules, 1993 628 Karnataka Motor Vehicles Rules, 1989 633 Kerala Motor Vehicles Rules, 1989 640 Madhya Pradesh Motor Vehicles Rules, 1994 649 Maharashtra Motor Vehicles Rules, 1989 656 Punjab Motor Vehicles Rules, 1989 671 Tamil Nadu Motor Vehicles Accidents Claims Tribunal Rules, 1989 676 UP Motor Vehicles Rules, 1989 686 SUBJECT INDEX 693
Law Relating to Compensation under the Motor Vehicles Act
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