Amended Second Schedule of Motor Vehicles Act applies retrospectively to pending claims under Section 163-A.

In brief

The question

1. Whether the 2018 amendment to the Second Schedule of the Motor Vehicles Act, 1988, which fixed fatal accident compensation at Rs. 5,00,000, applies retrospectively to pending appeals

The court held

The Court allowed the appeal and modified the award, enhancing the compensation from Rs. 1,54,500 to Rs. 5,00,000

It also directed

The ST Corporation (Respondent No. 2) is directed to deposit the enhanced amount of Rs. 3,45,500 with 9% interest from the date of the claim petition within six weeks. The Court granted the ST Corporation liberty to pursue legal remedies against the joint tortfeasors to recover amounts exceeding its proportionate liability

01Facts

The appellants (original claimants) are the parents of an 11-month-old infant who died in a motor vehicle accident on October 1, 2011

p. 2, 4

They filed a claim petition under Section 163-A of the Motor Vehicles Act, 1988

p. 2

The Motor Accident Claim Tribunal (Auxiliary), Gandhidham, Kachchh, in MACP No. 351 of 2011 (judgment dated 23/24.04.2015), determined the accident to be a case of composite negligence involving an ST Corporation bus and a Rickshaw

p. 1, 7

The Tribunal awarded Rs. 1,54,500 with 9% interest, strictly following the Second Schedule of the Act as it existed at the time of the award

p. 4

The claimants appealed for enhancement of compensation

p. 2

02Issues

i.1. Whether the 2018 amendment to the Second Schedule of the Motor Vehicles Act, 1988, which fixed fatal accident compensation at Rs. 5,00,000, applies retrospectively to pending appeals

pp. 5-6

ii.2. Whether the ST Corporation (Respondent No. 2) is liable to pay the enhanced amount despite the involvement of other tortfeasors who were not served in the appeal

p. 2, 7

03Law Applied

The court primarily applied Section 163-A of the Motor Vehicles Act, 1988, and the substituted Second Schedule notified on May 22, 2018, which prescribes a fixed compensation of Rs. 5,00,000 for fatal accidents

p. 5

It relied on the precedent established by the Supreme Court in New India Assurance Company Limited v. Urmila Haldar (2024 SCC Online SC 4983), which held that the Motor Vehicles Act is benevolent legislation and the 2018 amendment is retrospective in nature regarding pending proceedings

p. 3, 6

It further applied the principle from Khenyei v. New India Assurance Company Limited (2015) 9 SCC 273, regarding the joint and several liability of tortfeasors in cases of composite negligence

p. 7

Provisions in the judgment · 2 · Linked ones open on LawLens

Motor Vehicles Act, 1988 Section 163 Section 2

04Reasoning

The Court observed that while the Tribunal correctly applied the schedule prevailing in 2015, the legal landscape shifted during the pendency of the appeal due to the 2018 notification

pp. 4-5

Following the Urmila Haldar decision, the Court reasoned that as the Act is "benevolent legislation," the benefits of the amendment must pass to the claimant unless specifically barred

p. 6

Consequently, the "computational mode" for compensation under Section 163-A was updated to the fixed sum of Rs. 5 lakhs

p. 6

Regarding liability, since the Tribunal found composite negligence, the ST Corporation remains jointly and severally liable to the claimants, though it retains the legal right to seek contribution from the joint tortfeasor

pp. 7-8