Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.9322 OF 2022
[ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 32448 OF 2018]
Gohar Mohammed ...Appellant
Versus
Uttar Pradesh State Road Transport Corporation
& others ...Respondent(s)
J U D G M E N T
J.K. Maheshwari, J.
Leave granted.
2. The instant appeal has been filed assailing the final
order dated 06.09.2018 passed by the High Court of
Allahabad in First Appeal from Order No. 3303 of 2018, vide
which the appeal preferred by the appellant against the
award dated 04.05.2018 passed by the Motor Accident
Signature Not Verified
Claims Tribunal (for short ‘ MACT ’) in MACP No. 1107 of 2012
Digitally signed by
VISHAL ANAND
Date: 2022.12.22
11:13:40 IST
Reason:
has been dismissed. MACT allowed the claim petition and
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awarded a compensation of Rs. 31,90,000/ (Thirtyone lacs
and ninety thousand only) in favour of respondent Nos. 6, 7
and 8 (legal representatives of deceased and hereinafter
referred to as ‘ claimants ’) to be paid by respondent No. 5
( ), with further direction to recover the
Insurance Company
same from appellant (hereinafter referred as owner ) who was
saddled with liability.
3. Facts briefly put are that, on the date of accident, i.e.,
29.07.2012, the deceased was 24 years old and working as
Managing Director at DRV Drinks Pvt. Ltd. While he was
returning from factory to residence, his car was hit from
behind by a bus owned by appellant on the bypass road
near Sanhwali village (U.P.). The deceased sustained severe
injuries and died on the way to hospital. FIR was lodged
against the driver as well as owner of the offending vehicle
and on 19.01.2012, claim petition was filed by claimants
before MACT seeking compensation of Rs. 4,19,00,000/
(Four crores and nineteen lacs only) under various heads.
4. The MACT vide order dated 04.05.2018, allowed the
claim petition and awarded a total sum of Rs. 31,90,000/
2
alongwith 7% interest. While computing the loss of
dependency, the annual income of the deceased was
accepted as Rs. 3,09,660/ after making deduction towards
personal expenses, multiplier of 18 was applied. It was held
that the vehicle was not being operated as per the terms of
permit and was in violation of terms and conditions of
insurance policy, therefore the owner of the offending vehicle
was held liable to pay compensation.
5. Appellant filed appeal before the High Court assailing
the issue of liability contending, inter alia, no violation of
guidelines as such was there and submitted that the
offending vehicle was insured with insurance company
indemnifying the liability. Appellant further contended that
he had Special Temporary Authorization (in short ‘permit’) to
operate the bus on the route for which the fee was paid. The
High Court vide impugned order affirmed the findings of
MACT and held that the vehicle owner failed to produce the
original permit and also could not get the same proved
calling the person from the Transport Department, in
absence, the Claims Tribunal rightly decided the issue of
liability against the owner.
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6. Challenging the concurrent findings of the Courts
below, the appellant contested the instant appeal largely on
the ground that failure to produce the original permit cannot
lead to an inference against him, especially when such
permit has been duly issued by Transport Authority and
confirmed in the reply under Right to Information Act (for
short ‘ RTI Act ’). It was further contended that the appellant
had valid permit as he deposited the due fee on the next day
after the date of issuance of permit and hence, the finding of
Courts below that the appellant did not have a valid permit,
as such fastened the liability for payment of compensation
is unjust.
7. Per contra, the State as well as Insurance Company
mainly relied on the findings recorded by the Courts below
to contend that the offending vehicle was not being plied as
per the terms and conditions of the permit and also in
violation of the terms and conditions of the insurance policy.
It has further been contended that the offending vehicle
stood withdrawn from State transport services way back in
4
2009 and was no more under the control of respondent No.
1, hence, the issue of liability has rightly been decided.
8. Having heard learned counsel for the parties and on
perusal of the material available on record, it clearly reveals
that on the date of accident, the appellant did not have a
valid and effective permit to ply the offending vehicle on the
route where accident took place. Having extensively gone
through the factfinding exercise, it is categorically recorded
by MACT that the appellant was neither able to
produce/prove the original permit nor was able to prove the
information received under RTI Act. Even if RTI information
is considered by which it is not clear as to when the disputed
permit was issued and by whom. The alleged permit was
issued on 28.07.2012, i.e., on Saturday and no explanation
is on record as to why deposit of fee was asked on the next
day i.e. Sunday. Moreover, assuming that permit was valid
as per letter of Transport Authority, but it does not of any
help to the appellant since the vehicle was being plied on a
route different than specified in permit. The appellant has
failed to give any explanation to refute the observations made
by MACT to ply the vehicle on Roorkee bypass to Haridwar
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via Meerut which did not fall within the route of permit
issued by Transport Authority. The said findings of fact have
been affirmed by the High Court by the impugned order.
9. After going through the record, the concurrent
findings of fact do not warrant any interference since they do
not outrageously defy the logic as to suffer from the vice of
irrationality and neither incur the blame of being perverse. In
view of foregoing discussion, we are of the considered opinion
that the arguments raised by appellant are bereft of any
merit, hence this appeal is hereby dismissed.
10. During the course of hearing of the appeal, Ms. Rani
Chhabra, Mr. Sameer Abhyankar, Ms. Sakshi Kakkar and
Mr. Vivek Gupta, learned counsel for the parties have
expressed concern regarding delay in disposal of the claims
cases in trial court or at appellate stage. Emphasis has been
made to the ‘Objects and Reasons’ of Motor Vehicles
Amendment Act, 2019 (for short “M.V. Amendment Act”)
which is a benevolent legislation brought with an intent to
compensate the family of the deceased and the persons
suffered with injuries including permanent disability as
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expeditiously as possible. It is said the mandate of the
provisions of the M.V. Amendment Act, Rules and recourse
as specified have not been followed by the stakeholders
including Claims Tribunals working under subordination of
different High Courts.
11. It is urged, the legislation to pay compensation in
monetary terms for damages to person or property cannot
put the claimant into his original position. What may be the
adequate amount for a wrongful act is an extreme task. The
payment of compensation in a case of death or for damage to
the body in a motor accident claim may be based on
arithmetical calculation. How far it is just and reasonable, is
a matter of satisfaction of the Court by adopting a uniform
approach. While determining compensation, he/she is
required to be compensated as he/she cannot sue again,
therefore, the determination of compensation of the damages
is an extreme task Therefore in assessing the compensation
.
uniformity and reasonability are required to be followed. In
such cases, dispensation of justice may cause social impact
and may delay payment of compensation. Therefore,
direction to follow the mandate of law at the earliest may be
7
issued.
12. To advert the said issue, the assistance of learned
Senior Counsel Mr. S. Nagamuthu, Mr. C.A. Sundaram, Mr.
A.N. Venugopala Gowda and learned counsel Mr. A.N.
Krishna Swamy was sought as amici curiae including Ms.
Garima Prashad, Additional Advocate General for State of
U.P. They have rendered their assistance being officers of the
Court in true sense and spirit which we acknowledge.
13. Learned counsel for the parties and learned amici
curiae have mainly advanced their arguments with respect to
M.V. Amendment Act in particular Chapter XI thereof, inter
alia, emphasizing the importance of Sections 146, 149, 159,
160, 161, 164, 166 of the M.V. Amendment Act. It is urged
that the Motor Vehicles (Fifth Amendment), Rules, 2022 (for
short “M.V. Amendment Rules”) have also been brought into
force w.e.f. 1.4.2022 after the M.V. Amendment Act. Prior to
the amendment of Act and Rules, as per the directions issued
by the Delhi High Court and this Court, the standard
operating procedure formulated and circulated to all the
High Courts was observed by choice, and the outcome of its
8
implementation was negligible. But, now by amendment, a
statutory regime is prescribed which is not being followed in
most of the High Courts and by subordinate courts though it
is required to be followed strictly. However, appropriate
directions are required to implement the regime of M.V.
Amendment Act and Rules. In alternative, the hurdle in
implementation of the directions by joining the stake
holders may be directed as deemed fit. In support of these
contentions, recourse as taken by the Delhi High Court as
well as this Court in the case of
‘Rajesh Tyagi & Ors. Vs.
Jaibir Singh & Ors. , 2009 SCC Online Del 4306’ (for short
“ Rajesh Tyagi I” ), ‘Jai Prakash Vs. National Insurance
(for short “ Jai Prakash
Co. Ltd. & Ors., (2010) 2 SCC 607’
I” ), ‘Rajesh Tyagi & Ors. Vs. Jaibir Singh & Ors., 2014
(for short “ ),
SCC OnLine Del 7626’ Rajesh Tyagi II”
‘Rajesh Tyagi & Ors. Vs. Jaibir Singh & Ors., 2017 SCC
Online Del 4306’ (for short “ Rajesh Tyagi III” ) have been
relied upon, in addition to refer the provisions of M.V.
amendment Act and Rules.
9
14. After having heard learned counsels, we deem it
necessary to trace the history as to how the M.V. Amendment
Act and M.V. Amendment Rules have been brought into force
to set up new regime to deal with the claim cases since the
time of accident.
Evolution of Motor Vehicles Act visàvis 2019
Amendment –
15. In this regard, the distinguished attempt to address
the ensuing concerns was made by the Delhi High Court in
Rajesh Tyagi I (supra). In the said case, the Court while
dealing with the question of effective implementation of Delhi
Motor Accident Claims Tribunal Rules, 2008 and Section
158(6) of M.V. Act (pre2019 amendment) directed the
Station House Officers to submit ‘accident information report’
to MACT within 30 days of accident and said report be
treated as claim petition by MACT for the purpose of inquiry.
Suggestions were invited and later a committee was
constituted to find out a mechanism for time bound
settlement of motor accident claim cases. After deliberations
10
from all stakeholders, the committee submitted a draft of
‘agreed procedure’ and consequently vide order dated
16.12.2009, the Delhi High Court formulated “Claims
Tribunal Agreed Procedure” (for short ‘CTAP’ ) for time bound
settlement of motor accident claims within 90 to 120 days
and directed its implementation only for trial as pilot project
for a period of six months from 15.01.2010 to 14.07.2010.
The CTAP in addition to Section 158(6), in a nutshell
provided as follows –
1. Mandatory intimation of factum of the accident
by Investigating Officer to the Claims Tribunal
within 48 hours of the accident and if
information about insurance company is
available by that time, then intimation to the
concerned insurance company by email;
2. Appointment of designated officer by insurance
company for each case immediately upon
receipt of intimation;
3. Collection of relevant evidence by Investigating
Officer relating to accident as well as
computation of compensation (photographs,
proof of age, proof of income of deceased etc.);
4. Detailed Accident Report (DAR) to be filed by
Investigating Officer before Claims tribunal
within 30 days of the accident and a copy
thereof to the concerned insurance company;
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5. Copy of DAR alongwith documents to be
submitted to Legal Services Authority;
6. Discretion of the Claims Tribunal on application
made for extension of time in cases where the
Investigating Officer is unable to complete the
investigation within 30 days for reasons beyond
his control;
7. Production of driver, owner, claimant and eye
witnesses before Claims Tribunal alongwith
DAR;
8. Furnishing of report by concerned Registration
Authority in FormD of Delhi Motor Accident
Claims Tribunal Rules, 2008 to the Police and
Claims Tribunal within 15 days from the receipt
of request;
9. Examination of DAR by the Claims Tribunal as
to whether the DAR is complete in all respects or
not;
10. Treatment of DAR filed by Investigating Officer
as claim petition under Section 166(4) of Motor
Vehicles Act (pre 2019 Amendment);
11. Grant of 30 days’ time to Insurance Company
by Claims Tribunal to examine the DAR and to
take a decision as to quantum of compensation;
12. Assessment of compensation by designated
officer accompanied with reasoned order which
shall constitute a legal offer to the claimants
and in case, when such offer is acceptable to
the claimant, Claims Tribunal to pass a consent
award with a further 30 days’ time for the
insurance company to deposit the amount;
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13. Time period of not more than 30 days’ to be
granted by Claims Tribunal to claimant to
respond to offer made by insurance company;
14. Conduct of enquiry by Claims Tribunal under
Section 168 and 169 (pre 2019 Amendment)
and passing of award within 30 days’ in case
of nonacceptance of offer by claimant given by
insurance company;
15. Computation of compensation payable to the
legal representatives of deceased victims to be
done by Claims Tribunal in accordance with the
principles laid down by Hon. Supreme Court in
‘Sarla Verma Vs. DTC, 2009 (6) SCALE 129’;
16. Minimum wage to be considered by Claims
Tribunal in cases where legal representatives of
the deceased do not have documentary
evidence as to proof of income of deceased;
17. Consideration of principles laid down by Delhi
High Court in ‘National Insurance Co. Ltd. Vs.
Farzana, MAC. APP.13/2007’ in case of death
of a child.
16. The High Court also directed the Delhi Police to
prepare “Accident Investigation Manual” for implementation
of the . In the output, it revolutionized the Motor
CTAP
Accident Compensation Scheme due to which the
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claimant(s) received the compensation within 120 days of the
accident.
17. Another notable effort was made by this Court in ‘ Jai
’ (supra), wherein this Court identified majorly four
Prakash I
issues i.e., firstly , grant of compensation in cases of ‘hit and
run where the vehicles remain unidentified which do not
have insurance cover having third party insurance but
carrying persons not covered by the insurance’; secondly ,
‘widespread practice of using goods vehicles for passenger
traffic’; thirdly , ‘procedural delays in adjudication of claims
by Motor Accident Claims Tribunal and following hardships
to the victims; and , ‘the full amount of
fourthly
compensation not reaching the victims, particularly to those
who are uneducated’. Having regard to the nature of subject
matter and considering the suggestions made by amicus,
vide order dated 17.12.2009 guidelines/directions were
issued by this Court to be carried out in three stages, the
same are reproduced in brief as under:–
Directions to Police Authorities
1. Director General of Police for each State is
directed to instruct all Police Stations in the
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State to comply with provisions of Section
158(6) of Motor Vehicles Act (pre 2019
Amendment) and submit Accident Information
Report in Form no. 54 accompanied with
copies of First Information Report, site
sketch/mahazar/photographs, insurance
policy, etc. to the jurisdictional MACT and
insurance company within 30 days of
registration of FIR;
Directions to Claims Tribunals
1. Registrar General of each High Court is
directed to instruct all Claims Tribunal in his
State to register the reports of accidents
received under Section 158(6) of the Act and
deal with them without waiting for filing of
claim petition. Further, Registrar General shall
ensure that necessary registers, forms and
other support is extended to the Tribunal;
2. Tribunal shall maintain an Institution Register
for recording Accident Information Reports
received from Station House Officers and
register them as miscellaneous petitions.
Tribunal shall further fix a date of preliminary
hearing and after appearance of claimants, it
shall be converted into claim petition;
3. Tribunal shall satisfy itself that the Accident
Information Report relates to a real accident
and is not a result of any collusion or
fabrication;
4. In case of nondispute of liability by insurance
company, Tribunal shall make an endeavor to
determine the compensation amount by
summary enquiry or refer the matter to Lok
15
Adalat for settlement and disposeoff the claim
petition itself within a time frame not exceeding
six months from the date of registration of
claim petition;
5. Tribunal shall direct insurance company to
deposit the admitted amount or the amount
determined, with Claims Tribunal within 30
days of determination;
Suggestions for Insurance Companies
1. In case of death and nondispute of liability by
insurance company, endeavor shall be made
by insurance company to pay compensation as
per standard formula to the family (legal
representatives) of deceased without waiting
for decision of Tribunal or settlement by Lok
Adalat;
2. In case of injuries and nondispute of liability
by insurance company, the insurer should offer
treatment at its cost to the injured without
waiting for award of the Tribunal;
3. To protect and preserve the compensation
amount awarded to families, special schemes
in consultation with Nationalized Banks and
Life Insurance Corporation of India may be
considered by the insurance companies under
which the compensation is kept in fixed
deposit for an appropriate period and interest
is paid by Bank on monthly basis;
4. Insurance companies may also consider
offering annuity instead of lump sum
compensation and prepare an annuity scheme
with involvement of Life Insurance Corporation
of India.
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Suggestions for Legislative/Executive intervention
1. Formulation of more comprehensive scheme
ensuring payment of compensation to all
accident victims of road accidents;
2. Introduction of hybrid model which involves
collection of fixed lifetime premium in regard
to each vehicle plus imposition of a road
accident cess which may provide more
satisfactory solution in vast country like
India;
3. Define ‘third party’ to cover any accident
victim other than the owner and increase the
premia, if necessary;
4. Consider rationalization of Second Schedule
to the Act and increase the quantum of
compensation payable under Section 161 of
the Act in case of hit and run motor accidents;
5. Secure compensation to the victims of road
accidents involving uninsured vehicles by
directing the owner of vehicle to offer security
or deposit an amount adequate to satisfy the
award as a condition precedent for release of
seized vehicle.
18. With the advent of time, the suggestions and guidelines
issued by Courts were adopted and implemented by the
authorities. Progress reports were filed by stakeholders at
regular intervals for consideration of court. Similarly, in
furtherance of the directions given by Delhi High Court in
17
Rajesh Tyagi I (supra) , the CTAP was implemented in the
territory of Delhi and certain lacunae were identified in its
practical implementation. Meetings were convened involving
all the stakeholders and further suggestions were presented
before Court for incorporation in order to make the guidelines
more efficient. The suggestions were duly considered, and
Delhi High Court vide order dated 12.12.2014 in ‘ Rajesh
’ (supra) incorporated the suggestions and appended
Tyagi II
the modified Claims Tribunal Agreed Procedure to be
implemented with effect from 01.02.2015 for a period of six
months subject to review after expiry of three months.
Following is the gist of modifications as carried out and
approved by Delhi High Court :
1. Intimation of the accident by the Investigating
Officer has to be in Form I of the modified
procedure (Clause 2);
2. List of documents to be collected by
Investigating Officer is given under Clause 3;
3. Detailed Accident Report (DAR) to be filed by
Investigating Officer shall be in Form II of the
modified procedure;
4. Duty of Investigating Officer to seek directions
from Claims Tribunal in Part X of Form II of
DAR, in event of failure of
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driver/claimant/owner/ insurance company
to disclose relevant information and produce
documents before Investigating Officer within
15 days;
5. Duty of insurance companies to get DAR
verified by their surveyor within 20 days of
the receipt of copy of DAR (Clause 20);
6. Report of the Designated Officer of insurance
company shall be in Form III of modified
procedure (Clause 21);
7. Duty of Claims Tribunal to elicit the truth and
satisfy itself that the statements made in DAR
are true before passing the award (Clause
24);
8. Duty of the Claims Tribunal to examine the
claimants before passing the award to
ascertain their financial condition, proof of
residence etc. (Clause 26);
9. Manner of deposit of award amount to be
specified by Claims Tribunal (Clause 27);
10. Claims Tribunal to pass an appropriate order
for protection of award amount (Clause 28);
11. Claims Tribunal shall deal with the
compliance of provisions in award (Clause
29);
12. Claims Tribunal shall fix a date for reporting
compliance (Clause 30);
13. Copy of DAR as well as award to be sent to
concerned Magistrate (Clause 31);
14. Record of award passed by Claims Tribunal
shall be maintained in Form V (Clause 33);
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19. The aforesaid modified procedure was given a seal of
affirmation by this Court vide order dated 13.05.2016 passed
in , while reviewing the progress
Jai Prakash I (supra)
made with respect to legislative changes that were suggested
by previous order dated 17.12.2009 . The modified procedure
approved by Delhi High Court was brought on record and
after perusal, this Court observed as follows:
“We have also perused the procedure, which has been
placed before us as Annexure R5 with the response
which, in our view, appears to be a comprehensive one
and that we can issue further directions to the Registrar
General of the Delhi High Court to ensure that procedure
is strictly followed insofar as Delhi is concerned and
also circulate the said procedure to all the other High
Courts and the Registrar General of all the other High
Courts are directed to ensure that the said procedure is
implemented through the Motor Accident Claims
Tribunal in coordination with the Legal Service
Authorities as well as the Director General of Police of
the States concerned.”
Subsequently, this Court vide order dated 06.11.2017,
modified its earlier order dated 13.05.2016 and directed all
States to implement the ‘ Modified CTAP ’ while observing as
follows –
“The order dated 13.05.2016 will therefore stand
modified to the extent that Justice Midha has himself
th
modified his earlier order on 12 December, 2014. The
Registry will send a copy of this order as well as the
20
th
order passed by Justice Midha on 12 December, 2014
to the Registrar General of each High Court for
necessary information and compliance. List the matter
rd
on 23 January, 2018.”
20. In pursuance of the implementation of the guidelines,
the proceedings in Rajesh Tyagi I (supra) continued before
Delhi High Court and vide order dated 07.12.2018 (for short
‘ Rajesh Tyagi III ’), the Delhi High Court incorporated few
more directions in the modified . However, effective
CTAP
implementation of the modified procedure remained a
persistent roadblock at all levels, especially in terms of the
directions given by this Court vide order dated 13.05.2016
and 06.11.2017 in . The said concern
Jai Prakash I (supra)
again came for consideration before this Court in ‘M.R.
Krishna Murthi Vs. The New India Assurance Co. Ltd.,
2019 SCC OnLine SC 315’ , wherein, vide order dated
05.03.2019, this Court categorically noted that there was no
effective implementation of modified by Claim
CTAP
Tribunals at all India level. Taking note of the aforesaid, this
Court directed National Legal Services Authority to take up
the matter and monitor the same in coordination and co
21
operation with various High Courts. Further, directions were
also given to State Judicial Academies to sensitize the
Presiding Officers of Claim Tribunals, senior police officials
and insurance companies for implementation of modified
CTAP . Lastly, this Court also directed the Claim Tribunals
pan India to implement ‘Motor Accident Claims Annuity
Deposit Scheme’ (for short ‘ MACAD Scheme ’) as formulated
by Delhi High Court in Rajesh Tyagi III (supra) . The relevant
paragraphs are being reproduced below for ready reference –
“32. Notwithstanding the aforesaid ADR methods,
adjudicatory process before the MACTs is
indispensable. There cannot be a guarantee that
100% cases would be settled through mediation or
Lok Adalat. Therefore, there is a dire need for
deciding these cases without delays and within
reasonable period. The Delhi High Court has given
few judgments providing for mechanism to speed up
the disposal of such cases and to ensure that
schemes are settled within a period of 90/120 days
from the date of accident. In nutshell, these
directions include that on the occurrence of accident,
the police which comes into the picture in the first
instance, should complete the investigation and
along with filing of FIR before the concerned Court of
Metropolitan Magistrate, copies are sent to MACT as
well as Insurance Company also. Insurance
Company is supposed to look into the same to find
out as to whether the claim is payable and within
30 days it should respond to MACT and once all
these documents are before the MACT in the form of
22
evidence etc., as well, it would enable the MACT to
decide the case within 30 days…….
th
33. Vide order dated 06 November, 2017 in Jai
Prakash Case, this Court modified its order dated
th
13 May, 2016 and directed all States to implement
the Modified Claims Tribunal Agreed Procedure
th
formulated by Delhi High Court on 12 December,
2014. The copy of the Modified Claims Tribunal
Agreed Procedure was directed to be circulated to
the Registrar General of each High Court necessary
for compliance…….
34. This needs to be followed at all India level. NALSA
should take up and monitor the same as well in
coordination and cooperation with various High
Courts to facilitate the same.
xxx xxx xxx
37. Thus, direction for implementation of the ‘Claims
Tribunal Agreed Procedure’ which is substituted by
modified procedure, as noted above, are already
there. However, we find that there is no proper
implementation thereof by the Claims Tribunals.
We, thus, direct that there should be programs (sic)
from time to time, in all State Judicial Academies to
sensitize the presiding officers of the Claims
Tribunals, senior police officers of the State Police
as well as Insurance Company for the
implementation of the said Procedure.
21. Based on the guidelines issued by this Court and Delhi
High Court, recommendations were made by Group of
Transport Ministers (GoM) of States alongwith other
stakeholders. The Central Government with an objective to
‘improve road safety, facilitate citizens in their dealings with
transport departments, strengthen rural transport, public
23
transport, last mile connectivity through automation,
computerization and online services’ introduced ‘The Motor
. The aforesaid Bill was
Vehicles (Amendment) Bill, 2019’
passed by both the Houses as ‘The Motor Vehicles Act,
1988 (59 of 1988).
22. Vide new Amendment, ‘Chapter X’ of the preceding
Act was omitted.
‘Chapter XI – Insurance of Motor
Vehicles against third party risks’ and Chapter XII –
were amended as per the Motor Vehicle
Claims Tribunals
Amendment Act, 2019 which came into force w.e.f. 1.4.2022.
For the purpose of this case, we are mainly concerned with
Chapters XI and XII of the Amendment Act and the Rules to
emphasize the necessity of insurance, duties specified to the
police officer, registering authority, insurance companies and
Clam Tribunals to determine compensation.
Necessity of Insurance of the vehicle:
23. By virtue of an amendment made in Section 146,
insurance of motor vehicle is made necessary. The said
Section is relevant, therefore reproduced as under:
24
“ 146 : Necessity for insurance against third party risk.
—
| (1) No person shall use, except as a passenger, or cause or<br>allow any other person to use, a motor vehicle in a public<br>place, unless there is in force in relation to the use of the<br>vehicle by that person or that other person, as the case<br>may be, a policy of insurance with the requirements of this<br>Chapter: | |
|---|---|
| [Provided that in the case of a vehicle carrying, or meant<br>to carry, dangerous or hazardous goods, there shall also<br>be a policy of insurance under the Public Liability<br>Insurance Act, 1991 (6 of 1991).] | |
| Explanation. —A person driving a motor vehicle merely as<br>a paid employee, while there is in force in relation to the<br>use of the vehicle no such policy as is required by this sub<br>section, shall not be deemed to act in contravention of the<br>subsection unless he knows or has reason to believe that<br>there is no such policy in force. | |
| (2) Subsection (1) shall not apply to any vehicle owned by<br>the Central Government or a State Government and used<br>for Government purposes unconnected with any<br>commercial enterprise. | |
| (3) The appropriate Government may, by order, exempt<br>from the operation of subsection (1) any vehicle owned by<br>any of the following authorities, namely:— | |
| (a) the Central Government or a State Government, if<br>the vehicle is used for Government purposes<br>connected with any commercial enterprise; | |
| (b) any local authority; | |
| (c) any State transport undertaking: | |
| Provided that no such order shall be made in relation to<br>any such authority unless a fund has been established<br>and is maintained by that authority in accordance with<br>the rules made in that behalf under this Act for meeting<br>any liability arising out of the use of any vehicle of that<br>authority which that authority or any person in its<br>employment may incur to third parties. | |
| Explanation. —For the purposes of this subsection,<br>“appropriate Government” means the Central Government<br>or a State Government, as the case may be, and— | |
25
(i) in relation to any corporation or company owned by the
Central Government or any State Government, means the
Central Government or that State Government;
(ii) in relation to any corporation or company owned by the
Central Government and one or more State Governments,
means the Central Government;
(iii) in relation to any other State transport undertaking or
any local authority, means that Government which has
control over that undertaking or authority.
24. On perusing the M.V. Amendment Act, in particular
Section 146 of Chapter XI, it is clear that a motor vehicle
cannot ply on public place nor is allowed to be used at the
public place unless insured. The exemption from insurance
has been prescribed to the vehicles owned by the Central
Government, State Government, local authority or any State
Transport Undertaking, if the vehicle is used for the purpose
not connected with any commercial enterprise. Exemptions
specified in subsection (2) are subject to the orders of the
appropriate Government. As per the said provisions, the
rigor of subsection (1) would not apply to the vehicles
owned by the authorities specified in subsection (3) (a) to (c)
subject to establishment of the fund and its maintenance by
such authority, as may be prescribed by appropriate
Government. Thus, exemptions permitted to the class and
category of the vehicles of the Central Government and State
26
Government are only subject to the order of the appropriate
Government on establishing and maintaining fund by such
authority. The appropriate Government has also been
defined for the purpose of vehicles of local authorities and
State Transport Undertakings.
25. The limits of the liability of the insurance have been
prescribed under Section 147 and in terms of the policy so
issued under the provisions of the M.V. Amendment Act.
Section 147 is reproduced thus:
147 : Requirements of policies and limits of liability. —
(1) In order to comply with the requirements of this
Chapter, a policy of insurance must be a policy which—
(a) is issued by a person who is an authorised insurer;
and
(b) insures the person or classes of persons specified in
the policy to the extent specified in subsection (2)—
(i) against any liability which may be incurred by him in
27
respect of the death of or bodily [injury to any person,
including owner of the goods or his authorised
representative carried in the vehicle] or damage to any
property of a third party caused by or arising out of the
use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger
of a public service vehicle caused by or arising out of the
use of the vehicle in a public place:
Provided that a policy shall not be required—
(i) to cover liability in respect of the death, arising out of
and in the course of his employment, of the employee of a
person insured by the policy or in respect of bodily injury
27
sustained by such an employee arising out of and in the
course of his employment other than a liability arising
under the Workmen's Compensation Act, 1923 (8 of
1923) in respect of the death of, or bodily injury to, any
such employee—
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle engaged as conductor of
the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or
(ii) to cover any contractual liability.
Explanation. —For the removal of doubts, it is hereby
declared that the death of or bodily injury to any person
or damage to any property of a third party shall be
deemed to have been caused by or to have arisen out of,
the use of a vehicle in a public place notwithstanding that
the person who is dead or injured or the property which
is damaged was not in a public place at the time of the
accident, if the act or omission which led to the accident
occurred in a public place.
(2) Subject to the proviso to subsection (1), a policy of
insurance referred to in subsection (1), shall cover any
liability incurred in respect of any accident, up to the
following limits, namely:—
(a) save as provided in clause (b), the amount of liability
incurred;
(b) in respect of damage to any property of a third party,
a limit of rupees six thousand:
Provided that any policy of insurance issued with any
limited liability and in force, immediately before the
commencement of this Act, shall continue to be effective
for a period of four months after such commencement or
till the date of expiry of such policy whichever is earlier.
(3) A policy shall be of no effect for the purposes of this
Chapter unless and until there is issued by the insurer in
favour of the person by whom the policy is effected a
certificate of insurance in the prescribed form and
containing the prescribed particulars of any condition
subject to which the policy is issued and of any other
28
prescribed matters; and different forms, particulars and
matters may be prescribed in different cases.
(4) Where a cover note issued by the insurer under the
provisions of this Chapter or the rules made thereunder
is not followed by a policy of insurance within the
prescribed time, the insurer shall, within seven days of
the expiry of the period of the validity of the cover note,
notify the fact to the registering authority in whose
records the vehicle to which the cover note relates has
been registered or to such other authority as the State
Government may prescribe.
(5) Notwithstanding anything contained in any law for
the time being in force, an insurer issuing a policy of
insurance under this section shall be liable to indemnify
the person or classes of persons specified in the policy in
respect of any liability which the policy purports to cover
in the case of that person or those classes of persons.
The aforesaid provision specifies what may be the
requirements of the insurance policies and on having
insurance, limits of liability to pay compensation to the
claimants.
ACTION BY POLICE OFFICERS AND REGISTERING
AUTHORITIES IN THE EVENT OF OCCURRENCE OF
ACCIDENT BY USE OF MOTOR VEHICLE AT PUBLIC
PLACE:
26. While following the procedure, where an accident has
taken place, information regarding accident is required to be
furnished to the police officer. The relevant provisions with
29
respect to the information and duties of the police officer and
registering authority have been specified under Sections 159
and 160 of the M.V. Amendment Act, which are reproduced
as thus:
“159 . Information to be given regarding accident.—The
police officer shall, during the investigation, prepare
an accident information report to facilitate the
settlement of claim in such form and manner, within
three months and containing such particulars and
submit the same to the Claims Tribunal and such
other agency as may be prescribed.”
| 160 | . A registering authority or the officerincharge of a | |||
|---|---|---|---|---|
| police station shall, if so required by a person who | ||||
| alleges that he is entitled to claim compensation in | ||||
| respect of an accident arising out of the use of a | ||||
| motor vehicle, or if so required by an insurer against | ||||
| whom a claim has been made in respect of any motor | ||||
| vehicle, furnish to that person or to that insurer, as | ||||
| the case may be, on payment of the prescribed fee, | ||||
| any information at the disposal of the said authority | ||||
| or the said police officer relating to the identification | ||||
| marks and other particulars of the vehicle and the | ||||
| name and address of the person who was using the | ||||
| vehicle at the time of the accident or was injured by it | ||||
| and the property, if any, damaged in such form and | ||||
| within such time as the Central Government may | ||||
| prescribe | .” |
27. From the above, it is evident that on receiving the
intimation of the accident and during investigation, the police
officer is required to prepare the accident information report
30
( AIR ) and shall work as a facilitator in settlement of the
claim in a manner as prescribed and furnish the information
to the Claims Tribunal and other stakeholders, as specified.
The police officer and registering authority are supposed to
discharge their functions to facilitate and furnish the
information on payment of prescribed fees to the person
entitled for compensation or to insurer, against whom the
claim has been made. They shall also facilitate to identify
the vehicle, name and address of the person using the vehicle
at the time of accident and also regarding a person injured or
property involved, as prescribed.
28. The Central Government in its wisdom with an intent
to carry out the purpose of the Act promulgated the Rules,
known as Motor Vehicle Amendment Rules, 2022.
29. As per the Rules, in the event of a road accident, the
investigation must be started immediately on receipt of
information by the police officer of the police station
concerned. The Investigating Officer shall inspect site of
accident, take photographs/videos of scene and vehicle
involved, followed by preparation of site plan drawn to scale
31
as to indicate the width of road(s) as the case may be and
other relevant factors including the persons and vehicles
involved in the accident. In a case of injury, the Investigating
Officer shall take photographs of the injured in the hospital
and shall conduct spot enquiry examining the
eyewitnesses/bystanders. The intimation regarding the
accident is required to be furnished by Investigating Officer
within 48 hours to the Claims Tribunal in the shape of First
Accident Report ( ) in . It is further required to be
FAR FormI
sent to the Nodal Officer of the insurance company on having
particulars of the insurance policy. The injured/victim(s),
legal representative(s), State Legal Services Authority, insurer
shall also be provided the copy of and the same must
FormI
be uploaded on the website of the State Police, if available.
30. It would be the duty of the Investigating Officer to
inform the injured/victim(s)/legal representative(s) regarding
their rights by supplying FormII attaching flow chart within
10 days specifying the scheme to seek remedial measure. It
would be the duty of the Investigating Officer to ask the
information in FormIII and FormIV from the driver(s) and
32
the owner(s) respectively within 30 days. As per the new
regime, on receiving the information, Interim Accident Report
( ) shall be submitted by the Investigating Officer to the
IAR
Claims Tribunal within 50 days in Form V along with
relevant documents. A copy of the said IAR shall be
furnished to the insurance company of the motor vehicle(s)
involved in the road accident, victim(s)/claimant(s), State
Legal Services Authority, insurer and General Insurance
Council. The Investigating Officer or the insurance company
shall have right to verify the details of the driver and the
owner by using the App or shall take the help of
VAHAN
Registering Authority. Investigating Officer is duty bound to
take the relevant details from the victim(s) or the legal
representative(s), as the case may be and furnish the details
within 60 days in . is modulated to the
FormVI FormVIA
minor children, who are in need of care and protection in
terms of the Juvenile Justice (Care and Protection of
Children) Act, 2015.
31. On failure to submit the relevant information and
documents, as required in Forms III, IV and VI by the
33
driver(s), owner(s), claimant(s) or any information by the
insurance company, the Investigating Officer may ask for
direction to the stakeholder(s) before the Claims Tribunal to
furnish such information within 15 days. The registering
authority is duty bound to verify the licence of driver, fitness
and permit of the vehicle(s) involved in the accident and shall
supply such information within 15 days to the Investigating
Officer. Similarly, for the purpose of issuance of medico legal
report or the postmortem report, the hospital is required to
furnish such information to the Investigating Officer within
15 days.
32. The Investigating Officer shall within 90 days
compile all relevant documents and material in the form of
Detailed Accident Report ( DAR ) in FormVII accompanying
site plan FormVIII , mechanical inspection report FormIX
verification report and the report under Section
, FormX
173 Code of Criminal Procedure (Cr.P.C.) It would be the
duty of the registering authority to verify the registration
certificate, driving licence, fitness and permit in respect of
the vehicle(s) involved in the accident and the same is
34
required to be submitted within 15 days to the Investigating
Officer to complete the and . The extension of time
IAR DAR
limit to file IAR and DAR is only permissible where the
Investigating Officer approaches the Claims Tribunal in cases
where parties reside outside the jurisdiction of the Court or
where the driver’s licence is issued outside the jurisdiction of
the Court or where the victim(s) have suffered grievous
injuries and are undergoing continuous treatment. Thus,
the Investigating Officer shall furnish within 48 hours,
FAR
IAR within 50 days, complete the investigation within 60
days and file DAR within 90 days. Copy of DAR shall be
furnished to the victim(s), owner(s)/driver(s) of the vehicle(s),
the insurance company involved and the State Legal Services
Authority including the Nodal Officer of the insurance
company and the General Insurance Council.
33. On perusal of the above, it is clear that to carry out the
purpose of the provisions of Sections 159 and 160 of the M.V.
Amendment Act, the Officer Incharge of the police station
and the registering authority are required to act upon in a
manner as prescribed in the Rules within the period as
35
specified, thereby on receiving the information of accident,
the complete information regarding such accident is to be
made available before the Claims Tribunal within the time
limit without delay. As per Rules, the failure to perform the
duties by the police officer may entail severe consequences
as envisaged under the provisions of the State Police Act.
Thus, legislative intent is clear that on reporting a road
accident the Investigation Officer must complete all his
action within time frame and shall act as facilitator to the
victim(s)/claimant(s), insurance company by furnishing all
details in prescribed forms, thereby claimant(s) may get
damages/compensation without delay.
PROCEDURE TO PROCESS THE CLAIM BEFORE
TRIBUBAL FOR GRANT OF COMPENSATION.
34. Under the M.V. Amendment Act and the Rules framed
thereunder, by omitting ChapterX, the provisions for grant
of compensation under nofault liability have been deleted
and the special procedure has been carved out introducing
Section 149. The aforesaid section is relevant to deal with
the issue in context, therefore reproduced as thus:
36
“
149.Settlement by insurance company and
—
procedure therefor.
(1) The insurance company shall, upon receiving
information of the accident, either from claimant or
through accident information report or otherwise,
designate an officer to settle the claims relating to
such accident.
(2) An officer designated by the insurance company for
processing the settlement of claim of compensation
may make an offer to the claimant for settlement
before the Claims Tribunal giving such details,
within thirty days and after following such
procedure as may be prescribed by the Central
Government.
(3) If, the claimant to whom the offer is made under
subsection (2), —
(a) accepts such offer, —
(i) the Claims Tribunal shall make a record of such
settlement, and such claim shall be deemed to
be settled by consent; and
(ii) the payment shall be made by the insurance
company within a maximum period of thirty
days from the date of receipt of such record of
settlement;
(b) rejects such offer, a date of hearing shall be fixed by
the Claims Tribunal to adjudicate such claim on
merits.
35. As per Section 149, on receiving the information of the
accident from claimant or from the Accident Information
Report ( AIR ), the insurance company shall appoint a
‘Designated Officer’ to settle the claim. The said officer is
required to make an offer to the claimant(s), specifying its
37
detail within 30 days by following such procedure, as
prescribed by the Central Government. Subsection (3) of
Section 149 makes it clear that the offer made by the
Designated Officer may either be accepted or rejected by the
injured/victim or legal heirs of the deceased. In case, the
offer is accepted, the Claims Tribunal shall record the
settlement and treat such a claim as settled by consent. On
such settlement, the payment has to be made by insurance
company within 30 days. But, in the latter situation of
rejection of such offer, the Claims Tribunals shall fix a date
of hearing for adjudication of such claim on merits.
36. Section 164 of M.V. Amendment Act is relevant to deal
with the claim cases in which negligence is not required to be
pleaded and proved and the same is reproduced thus:
Section 164 Payment of compensation in case of
death or grievous hurt, etc
(1) Notwithstanding anything contained in this Act or
in any other law for the time being in force or
instrument having the force of law, the owner of the
motor vehicle or the authorised insurer shall be liable
to pay in the case of death or grievous hurt due to any
accident arising out of the use of motor vehicle, a
compensation, of a sum of five lakh rupees in case of
death or of two and a half lakh rupees in case of
grievous hurt to the legal heirs or the victim, as the
case may be.
38
(2) In any claim for compensation under subsection
(1), the claimant shall not be required to plead or
establish that the death or grievous hurt 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 of the vehicle concerned or of any other
person.
| (3) Where, in respect of death or grievous hurt due to | ||
|---|---|---|
| an accident arising out of the use of motor vehicle, | ||
| compensation has been paid under any other law for | ||
| the time being in force, such amount of compensation | ||
| shall be reduced from the amount of compensation | ||
| payable under this section | . |
37. The aforesaid provision has been brought where the
claimant(s) is not required to plead or establish any wrongful
act or neglect or default of the owner(s) of the vehicle(s) or of
any other person for payment of compensation. Therefore,
subsection (1) has been given overriding effect limiting the
liability to pay compensation to the tune of Rs. 5 lakhs in case
of death and Rs. 2.50 lakhs in case of grievous hurt to the legal
heirs or to the victim(s), as the case may be. It is further
made clear the compensation, if payable in any other law, then
such amount is required to be reduced from the amount of
compensation payable under this Section, meaning thereby
the legislative intent is clear that a person, who has suffered
with an accident must be compensated just and reasonably
and the victim(s)/family of the deceased must be paid for the
39
bodily injury or loss of life caused by an accident by use of a
motor vehicle at a public place.
38. In addition to the said process of adjudication, the
claimant(s) have the option for taking recourse directly by
approaching the Claims Tribunal by filing an application
seeking compensation. The said provision of Section 166 is
relevant and reproduced as thus:
“166 . Application for compensation. —
(1) An application for compensation arising out of an
accident of the nature specified in subsection (1) of
section 165 may be made —
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all
or any of the legal representatives of the deceased;
or
(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:
Provided that where all the legal representatives of the
deceased have not joined in any such application for
compensation, the application shall be made on behalf of or
for the benefit of all the legal representatives of the deceased
and the legal representatives who have not so joined, shall
be impleaded as respondents to the application.
Provided further that where a person accepts compensation
under section 164 in accordance with the procedure provided
under section 149, his claims petition before the Claims
Tribunal shall lapse.]
40
[(2) Every application under subsection (1) shall be made,
at the option of the claimant, either to the Claims
Tribunal having jurisdiction over the area in which the
accident occurred or to the Claims Tribunal within the
local limits of whose jurisdiction the claimant resides or
carries on business or within the local limits of whose
jurisdiction the defendant resides, and shall be in such
form and contain such particulars as may be
prescribed:
[(3) No application for compensation shall be entertained
unless it is made within six months of the occurrence of
the accident.]
[(4) The Claims Tribunal shall treat any report of accidents
forwarded to it under section 159 as an application for
compensation under this Act.]
[(5) Notwithstanding anything in this Act or any other law
for the time being in force, the right of a person to claim
compensation for injury in an accident shall, upon the
death of the person injured, survive to his legal
representatives, irrespective of whether the cause of
death is relatable to or had any nexus with the injury or
not.]
39. On perusal, it is clear that in the case of injuries or of
death or of damage of property arising out of motor accident
at a public place, application for grant of compensation can
be submitted directly to the Claims Tribunal by the
claimants. In the case of death, all the representatives of the
deceased or any of them may file an application. If all have
not joined as applicant(s), remaining may be joined as
respondents. Under this Section, if the claimant(s) apply for
41
grant of compensation, they have option to choose the place
or the Claims Tribunal, which may have the jurisdiction
either where, the accident occurred or the claimant(s) resides
or carries business or in the local limits of whose jurisdiction
the defendant resides. For taking recourse under the
aforesaid Section, the application seeking compensation can
be entertained if it is filed within six months from the date
of the accident. As per second proviso of subsection (1), it is
apparent that in case recourse under Section 164 or as per
the procedure specified in Section 149 has been taken and
the compensation is accepted by the claimant(s), then
recourse under Section 166 would not be available. But, in
case the compensation has not been accepted under Section
149 or the recourse of Section 164 has not been taken, the
Claims Tribunal, in whose jurisdiction the accident occurred,
shall treat the report of Section 159 as claim petition under
this Act and may proceed to decide the same in accordance
with law.
40. On perusal of the scheme of the Act, it is clear that as
a first recourse by not pleading or establishing proof of
wrongful act, neglect or default of the owner or driver or of
42
the vehicle, the compensation can be claimed under Section
164, but such compensation is of limited amount to the
tune, as specified in case of death or grievous injury. The
second recourse available to the claimant(s) is to apply by
proving wrongful act and neglect of the owner(s) or the
driver(s) before the Claims Tribunal by opting the
jurisdiction at a place specified under subsection(2) but
such claim must be filed within six months from the date of
accident and be adjudicated by the Tribunal. The third
recourse has been prescribed by introducing Section 149 of
M.V. Amendment Act by which in case the claimant(s) have
failed to take recourse either under Section 164 or Section
166 within the prescribed period of limitation, the report
submitted by the investigating officer to the Claims Tribunal,
within whose jurisdiction the accident occurred, may be
treated as claim application under Section 166(4) and would
not debar the claimant(s) to seek compensation if he/they
could not file the application under Section 166(1) of the Act.
41. As discussed above, Section 149 lays emphasis on the
settlement of the claim in case the liability of the insurance
company is not in dispute subject to complying other
43
necessary formalities, as prescribed. The said provision also
emphasize the determination of compensation within time
frame without delay, thereby the victim may get
compensation for the damages at the earliest. On
harmonious reading and construing the said three Sections,
it is therefore clear that the M.V. Amendment Act
emphasizes the need to pay compensation to the claimant(s)
or legal representative(s) and decide the claim by taking
recourse whatever is opted by the claimant(s) at the earliest
and the family should not be left to suffer without payment of
damages. In cases of rash negligent driving where DAR
does not bring the charge of negligence or the claimant(s)
choose to claim compensation under nofault despite the
charge of negligence, the said claim shall be registered under
Section 164 and it be dealt with accordingly.
42. As per Rules, except in cases under Section 164, for
the claims either under Section 149 or 166, the procedure
prescribed in the M.V. Amendment Rules is required to be
followed by the Claims Tribunal. As specified, on receiving
the FAR , the Claims Tribunal is required to register such
44
FAR as Miscellaneous Application. On filing the IAR and
DAR , it shall be attached and be made part of the
Miscellaneous Application. The Claims Tribunal is required
to examine the , or , as the case may be and in
FAR IAR DAR
the proceedings of the said Miscellaneous Application,
appropriate direction for production of requisite forms
prescribed in the Rules through claimant(s), driver(s),
owner(s) or extension of time, as specified, may be directed.
It should be kept in mind by the Claims Tribunal that the
said DAR may be treated as an application under Section
166 as per subsection (4) thereof. In case the claimant(s)
have taken the recourse under Section 166(1) & (2) and filed
a separate claim petition, the said DAR may be tagged with
the said claim petition, otherwise the proceedings under
Section 149 shall continue. The Claims Tribunal awaiting
the report under Section 173 Cr.P.C. may satisfy itself with
respect to the negligence before passing an award.
43. On filing FAR , if IAR/DAR is not complete, the time
shall be fixed by the Claims Tribunal to complete the same
and on completion, the date for appearance of the driver(s),
45
owner(s), claimant(s) and eye witness(s) shall be fixed and
they shall be produced by the Investigating Officer on the
date so fixed. It shall also be the duty of the Investigating
Officer to intimate the Nodal Officer of the insurance
company and also the insurance company to secure their
presence on such date.
44. After lodging the FIR and on receipt of information by
the insurance company, it would be the duty of the company
to appoint a Nodal Officer and furnish the intimation to the
state police, who shall coordinate with all stakeholders. On
receiving the information through Nodal Officer, the
insurance company shall verify the claim up to the stage of
filing the DAR. In case it is found that DAR is not correct,
the Designated Officer of the insurance company shall send a
copy of the report of the surveyor/investigator to the Deputy
Commissioner or equivalent officer of the Police Department
or otherwise to carry out the purpose of Section 159. The
said officer shall make an offer to the claimant(s) for
settlement before the Claims Tribunal, specifying the details
of offer and submit the said proposal within 30 days of
46
DAR in FormXI along with the report of the
surveyor/investigator. On submitting such form, the
claimant(s) may accept the offer of the insurance company or
may reject the same. In case the offer is accepted, the
Claims Tribunal shall take such offer on record and by the
consent the claim be settled recording satisfaction that the
compensation, as settled, is just and reasonable and pass an
award in terms of such settlement. Prior to passing an
award, it is open to the Tribunal to examine the claimant(s)
for ascertaining their financial condition, owner(s), driver(s)
and the insurer to submit their defence, if any to satisfy
itself. In case the offer made by the Designated Officer is not
accepted by the claimant(s), rejecting such offer, the
claimant(s) are required to file relevant material asking more
amount of compensation for which the date of hearing shall
be fixed by the Tribunal to adjudicate the claim on merit.
After fixing the date and recording the evidence, if required,
written submissions may be taken and thereafter Tribunal
shall finally adjudicate and decide the claim. After passing
the award, copy of the and the award so passed be sent
DAR
to the criminal court and accordingly, the Miscellaneous
47
Application registered by the Tribunal shall be treated as
disposed of.
ANALYSIS OF THE M.V. AMENDMENT ACT AND RULES
WITH AN INTENT TO FIND OUT CONVENIENT
PROCEDURE FOR ADJUDICATION OF THE CLAIM CASES
WITHOUT ANY DELAY .
45. As per the discussion made hereinabove, it is made
clear that the M.V. Amendment Act and the Rules have been
introduced with an advent to implement the steps taken by
the Court issuing directions to carry out the purpose of the
benevolent legislation. As per the M.V. Amendment Act,
insurance of the vehicle, until exempted, is made necessary
to carry out the purpose of the Act and the Rules subject to
the conditions, as specified under Section 147.
46. The claimant(s) have been given three options to claim
compensation before the Claims Tribunal. As discussed
hereinabove, the option under Section 164 is without
pleading the proof of negligence while option under Section
166(1) & (2) by the claimant(s) is by proving the negligence
of the offending vehicle. In addition, Section 149 is
added by which the de novo procedure has been prescribed
48
immediate on registration of FIR by taking action through
the police officer before the Claims Tribunal. It is urged by
learned Amicus Curiae that the said procedure is not being
followed in most part of the country by the Claim Tribunals
though the said Section is a complete code in itself in the
matter of distribution of the compensation. Therefore,
appropriate directions are required.
47. As prescribed under M. V. Amendment Act and
Rules, the police officials and the registering authority are
bound to take action in the event when an accident takes
place and the information is received by them. Further, it is
seen that as per Rule 3 of the M.V. Amendment Rules, the
police officer is required to furnish the details to the
victim(s) regarding his/their rights in a road accident and the
flow chart of the scheme along with FormII is required to be
furnished to them. The said flow chart and all other
documents, as specified in the Rules, must be either in
vernacular language or in English and shall be furnished to
the claimant(s) or other affected persons, as per their
convenience. They are required to take immediate action and
submit the report to the Claims Tribunal informing the
49
victim(s), driver(s), owner(s), insurance company and other
stakeholders with an intent to facilitate them, subject to the
directions of the Claims Tribunal. The Claims Tribunal is
also duty bound to take immediate action and to proceed in
the matter as required under the Act and the Rules.
48 In our view, the contentions advanced by the learned
counsels deserve to be allowed. The police officers and
registering authority are duty bound to act as per the M.V.
Amendment Act and the Rules and are required to submit
the , and within the prescribed period under
FAR IAR DAR
the Rules. The registering authority is also bound to take
action in the matter of verification of the permit, fitness of
vehicle, driver licence and on other ancillary issues. The
insurance company is bound to appoint the Nodal Officer as
per Rule 24 to facilitate the Investigating Officer in the matter
of enquiry and investigation, submitting details regarding
insurance and coordinate with the stakeholders.
49. In our view, the procedure carved out under Section
149 of the Amendment Act is de novo on filing the
FAR
before the Claims Tribunal and Tribunal is required to
50
register such proceedings as Miscellaneous Application. On
filing and by the police officer within the time as
IAR DAR
specified, it shall be made part thereof. If the claimant(s) has
not opted for taking recourse under Section 166(1) within the
time limit of six months, such Miscellaneous Application may
be treated as an application under Section 166(4) of M.V.
Amendment Act and be adjudicated in accordance with law.
Therefore, the procedure as prescribed under Section 149 is
in addition to the proceedings of Sections 164, 166 of M.V.
Amendment Act and such mandate of law is required to be
followed in true sense and spirit.
50. Learned Amicus Curiae contends that in a situation
where the claimant(s) opts to file a claim petition under
Section 166 other than a place where the accident has taken
place taking recourse of Section 166(2) of the M.V.
Amendment Act, the proceedings initiated under Section 149
is required to be closed and tagged with those proceedings.
It is also urged that possibility of filing application by opting
the Claims Tribunals at different places within territorial
jurisdiction of different High Court by other claimant(s)
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cannot be ruled out. It is further contended that in case the
claim petitions have been filed at different places by different
claimant(s) within the territorial jurisdiction of different High
Courts, appropriate directions to transfer those cases at one
place in exercise of the power under Section 142 of the
Constitution of India needs to be issued, thereby the delay
may be curbed in proceeding the claim case.
51. In our view, the argument as advanced is having force,
therefore, we direct that on initiation of the proceedings
under Section 149 registering a Miscellaneous Application
by the Claims Tribunal, in whose jurisdiction the accident
occurred would continue until the proceedings under
Section 166 has been filed by the claimant(s) separately. In
the event of filing a separate application and on receiving the
information in this regard either from the claimant(s), or
investigating officer or insurance company, the proceedings
under Section 149 shall be deemed as closed and be tagged
with the proceedings of Sections 164/166 filed by the
claimant(s). In case the claimant(s)/legal representative(s)
have filed different applications under Section 166 before
different Claim Tribunals at different places outside the
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territorial jurisdiction of one High Court, in the said
contingency the Claims Tribunal, where the first claim
petition is filed shall have jurisdiction to adjudicate and
decide the same and other claim petition(s) filed by the
claimant(s)/legal representative(s) in the territorial limits of
other High Courts shall stand transferred to the Claims
Tribunal where the first claim petition was filed and the
proceedings under Section 149 shall be tagged with the said
file. In order to curb the delay on account of pendency of
claim petition(s) before different Claim Tribunals within the
territorial jurisdiction of different High Courts, such direction
is necessary. Therefore, we deem it appropriate to exercise
our power under Article 142 of the Constitution of India. It is
directed that Registrar General of the High Courts shall
issue appropriate orders for transferring the subsequent
proceedings and records to the Claims Tribunal where the
first claim petition filed by the claimant(s) is pending. It is
made clear here that the parties are not required to file any
transfer petition before this Court seeking order of transfer in
such individual cases pending in the jurisdiction of different
High Courts
53
52. Learned Amicus Curiae has further pointed out that in
some High Courts, distribution memos attaching the Claims
Tribunal to the police stations have not been issued,
however taking recourse under Section 149 of the M.V.
Amendment Act is not possible within the prescribed period
of time, therefore directions may be issued to prepare the
distribution memos by the High Courts with respect to
police stations and Claims Tribunals in order to implement
the recourse of Section 149 of the M.V. Amendment Act
and the Rules may be issued and the same be notified in
public domain for the convenience of public.
53. In this regard, it would suffice to observe that in the
High Courts, where the distribution of police stations and
specified Claims Tribunals is not already in force, steps shall
be taken by the Registrar Generals to prepare distribution
memos and notify the same time to time, thereby the
proceedings under Section 149 may continue effectively in
such Claim Tribunals without any delay. The Tribunals, as
notified, shall take recourse as discussed and on
appointment of the Designated Officer as per Rule 23 of the
Rules, the settlement of claim may be processed by the
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insurance company. The said proceedings would continue
until it is tagged with the claim petition, if any, filed under
Section 166 of the M.V. Amendment Act. It is also made
clear that if the claimant(s) have not taken any recourse
under Section 166, then the miscellaneous application be
treated as claim petition under Section 166(4) of the M.V.
Amendment Act and the Claims Tribunal is duty bound to
decide such claim by following the procedure in accordance
with law.
54. It is contended by learned Amicus Curiae that in case
the liability of the insurance company is not disputed in
terms of the policy conditions commensurate to Section 147
of the Act, the offer so made by the Designated Officer ought
to be reasonable specifying the detailed reasons to make
such offer within the time as prescribed. On the said offer,
the Claims Tribunal shall seek consent of the claimant(s),
whether they agree for the same. In case, the claimant(s)
does not agree with the said offer, the enquiry under Section
149(3) should be limited to the extent of enhancement of
compensation shifting onus to claim such enhancement on
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claimant(s) which is required to be discharged by the
claimant(s).
55. We find force in the said contention. Therefore, we
direct that the Designated Officer, while making offer, shall
assign detailed reasons to show that the amount which is
offered is just and reasonable. In case, the said offer is not
accepted by the claimant(s), the onus would shift on the
claimant(s) to seek for enhancement of the amount of
compensation and the said enquiry under Section 149(3)
would be limited for enhancement only.
56. Learned Amicus Curiae further submits that in case
the claimant(s) wishes to opt to take recourse under Section
166 of the M.V. Amendment Act opting jurisdiction of Claims
Tribunal as specified under Section 166(2), in such cases,
directions may be issued to join the Nodal Officer/Designated
Officer of the insurance companies of a place where the
accident took place. The said recourse is necessary to
further curb the delay in tagging the proceedings of Section
149. Those Designated Officer/Nodal Officer may be in a
position to clarify regarding the details of the proceedings
56
already taken under Section 149 of the M.V. Amendment Act
before the Claims Tribunal concerned.
57. We find force in the said contention. Therefore, we
direct that if the claimant(s) wants to exercise the option
under Section 166(2) of the M.V. Amendment Act, he/they
are free to take such recourse by joining the Designated
Officer/Nodal Officer of the insurance company of the place
where the accident occurred as respondent in the claim
petition.
58. It is further urged by learned Amicus Curiae that the
Claims Tribunal, police officials and the insurance
companies must be sensitized by the State Judicial
Academies working under the control of the High Courts
with respect to the provisions of the M.V. Amendment Act
and the Rules, thereby the said procedure must be adopted
incoordination with the police officials, insurance companies
and other stakeholders. We are in agreement to the said
submission and direct the State Judicial Academies to take
recourse to sensitize the stakeholders including the said
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subject in their annual training calendar as early as
possible.
59. Learned Amicus Curiae has shown the apprehension
that the procedure, as specified under Sections 149,159 and
160 of the M.V. Amendment Act and Rules, is for seeking
compensation de novo. As per the said procedure, the
greater liability has been fastened on the police officers,
registering authority, Nodal Officer and Designated Officer of
the insurance companies. In such a situation, at least
officers of the police department must be well equipped and
conversant with the provisions and rules and efficient to
discharge the function as specified in the Act and the Rules.
Ordinarily the police officers may be efficient in investigation
of the complicated criminal cases but the procedure as
prescribed in the M.V. Amendment Act and Rules is different
than the procedure of investigation in criminal cases. In fact
it fasten duty on the police officer as a facilitator, in addition
to the investigator and submit the report in prescribed forms.
Therefore, the trained and equipped police officers may be
posted in the police stations constituting a special unit to
make investigation for motor accident claim cases. After
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going through the procedure, as discussed in detail above, we
find some substance in the argument. In our view, the head
of the Home Department of the State and the Director
General of Police in all States/Union Territories shall ensure
the compliance of the Rules by constituting a special unit in
the police stations or at least at town level to investigate and
facilitate the motor accident claim cases. The said action
must be ensured within a period of three months from
today.
60. The learned amicus curiae further submitted that in
recording the evidence by Claims Tribunal, appointment of
local commissioner as per Rule 30 of the MV Amendment
Rules 2022 may also be directed, otherwise looking at the
pendency of claim cases before the Tribunals, it will cause
delay in disposal.
61. In our view the said contention is as per Rule 30.
Where the insurance company disputes the liability, the
Claims Tribunal is duty bound to record the evidence
through the local commissioner and the fee/expenses of such
local commissioner shall be borne by the insurance
company.
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62. Accordingly, this appeal is decided with the following
directions:
i) The appeal filed by the owner challenging the
issue of liability is hereby dismissed confirming the
order passed by the High Court and MACT.
ii) On receiving the intimation regarding road
accident by use of a motor vehicle at public place, the
SHO concerned shall take steps as per Section 159 of
the M.V. Amendment Act.
iii) After registering the FIR, Investigating Officer
shall take recourse as specified in the M.V. Amendment
Rules, 2022 and submit the FAR within 48 hours to
the Claims Tribunal. The and shall be filed
IAR DAR
before the Claims Tribunal within the time limit subject
to compliance of the provisions of the Rules.
iv) The registering officer is duty bound to verify
the registration of the vehicle, driving licence, fitness of
vehicle, permit and other ancillary issues and submit
the report in coordination to the police officer before
the Claims Tribunal.
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v) The flow chart and all other documents, as
specified in the Rules, shall either be in vernacular
language or in English language, as the case may be
and shall be supplied as per Rules. The Investigating
Officer shall inform the victim(s)/legal
representative(s), driver(s), owner(s), insurance
companies and other stakeholders with respect to the
action taken following the M.V. Amendment Rules and
shall take steps to produce the witnesses on the date,
so fixed by the Tribunal.
vi) For the purpose to carry out the direction
No. (iii), distribution of police stations attaching them
with the Claim Tribunals is required. Therefore,
distribution memo attaching the police stations to the
Claim Tribunals shall be issued by the Registrar
General of the High Courts from time to time, if not
already issued to ensure the compliance of the Rules.
vii) In view of the M.V. Amendment Act and Rules,
as discussed hereinabove, the role of the Investigating
Officer is very important. He is required to comply with
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the provisions of the Rules within the time limit, as
prescribed therein. Therefore, for effective
implementation of the M.V. Amendment Act and the
Rules framed thereunder, the specified trained police
personnel are required to be deputed to deal with the
motor accident claim cases. Therefore, we direct that
the Chief Secretary/Director General of Police in each
and every State/Union Territory shall develop a
specialized unit in every police station or at town level
and post the trained police personnel to ensure the
compliance of the provisions of the M.V. Amendment
Act and the Rules, within a period of three months
from the date of this order.
viii) On receiving FAR from the police station, the
Claims Tribunal shall register such FAR as
Miscellaneous Application. On filing the IAR and DAR
by the Investigating Officer in connection with the said
FAR , it shall be attached with the same Miscellaneous
Application. The Claims Tribunal shall pass
appropriate orders in the said application to carry out
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the purpose of Section 149 of the M.V. Amendment Act
and the Rules, as discussed above.
ix) The Claim Tribunals are directed to satisfy
themselves with the offer of the Designated Officer of
the insurance company with an intent to award just
and reasonable compensation. After recording such
satisfaction, the settlement be recorded under Section
149(2) of the M.V. Amendment Act, subject to consent
by the claimant(s). If the claimant(s) is not ready to
accept the same, the date be fixed for hearing and
affording an opportunity to produce the documents and
other evidence seeking enhancement, the petition be
decided. In the said event, the said enquiry shall be
limited only to the extent of the enhancement of
compensation, shifting onus on the claimant(s).
x) The General Insurance Council and all
insurance companies are directed to issue appropriate
directions to follow the mandate of Section 149 of the
M.V. Amendment Act and the amended Rules. The
appointment of the Nodal Officer prescribed in Rule 24
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and the Designated Officer prescribed in Rule 23 shall
be immediately notified and modified orders be also
notified time to time to all the police
stations/stakeholders.
xi) If the claimant(s) files an application under
Section 164 or 166 of the M.V. Amendment Act, on
receiving the information, the Miscellaneous
Application registered under Section 149 shall be sent
to the Claims Tribunal where the application under
Section 164 or 166 is pending immediately by the
Claims Tribunal.
xii) In case the claimant(s) or legal representative(s)
of the deceased have filed separate claim petition(s) in
the territorial jurisdiction of different High Courts, in
the said situation, the first claim petition filed by the
claimant(s)/legal representative(s) shall be maintained
by the said Claims Tribunal and the subsequent claim
petition(s) shall stand transferred to the Claims
Tribunal where the first claim petition was filed and
pending. It is made clear here that the claimant(s) are
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not required to apply before this Court seeking transfer
of other claim petition(s) though filed in the territorial
jurisdiction of different High Courts. The Registrar
Generals of the High Courts shall take appropriate
steps and pass appropriate order in this regard in
furtherance to the directions of this Court.
xiii) If the claimant(s) takes recourse under Section
164 or 166 of the M.V. Amendment Act, as the case
may be, he/they are directed to join Nodal
Officer/Designated Officer of the insurance company as
respondents in the claim petition as proper party of the
place of accident where the FIR has been registered by
the police station. Those officers may facilitate the
Claims Tribunal specifying the recourse as taken
under Section 149 of the M.V. Amendment Act.
xiv) Registrar General of the High Courts, States
Legal Services Authority and State Judicial Academies
are requested to sensitize all stakeholders as early as
possible with respect to the provisions of Chapters XI
and XII of the M.V. Amendment Act and the M.V.
65
Amendment Rules, 2022 and to ensure the mandate of
law.
xv) For compliance of mandate of Rule 30 of the
M.V. Amendment Rules, 2022, it is directed that on
disputing the liability by the insurance company, the
Claims Tribunal shall record the evidence through
Local Commissioner and the fee and expenses of such
Local Commissioner shall be borne by the insurance
company.
xvi) The State Authorities shall take appropriate
steps to develop a joint web portal/platform to
coordinate and facilitate the stakeholders for the
purpose to carry out the provisions of M.V. Amendment
Act and the Rules in coordination with any technical
agency and be notified to public at large.
62. Registry of this Court is directed to circulate the copy of
this judgment to the Registrar General of all High Courts and
the Chief Secretary/Administrator of all the States/Union
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Territories for implementation and to carry out the purpose of
Motor Vehicle Amendment Act and the Rules made thereunder.
..………….……………….J.
( S. ABDUL NAZEER )
..………….……………….J.
( J.K. MAHESHWARI )
New Delhi;
December 15, 2022.
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