Beneficial amendment to Section 163-A Motor Vehicles Act applies retrospectively to accidents preceding its notification.

The appeals arose from a motor vehicle accident on March 19, 2018, involving an auto-rickshaw (No. C.G. 10/ B. Y. / 6059), which resulted in the death of five-year-old Prashant Kaushik.

The 2nd Additional Motor Accident Claims Tribunal, Bilaspur, awarded Rs. 5,00,000 to the claimants (the parents) under Section 163-A of the Motor Vehicles Act, 1988, fastening liability on the insurer.

The Insurance Company appealed on the grounds that the amendment to the 2nd Schedule of Section 163-A (which fixed compensation at Rs. 5,00,000) only came into effect on May 22, 2018, and could not be applied retrospectively to an accident occurring in March 2018.

Simultaneously, the claimants filed an appeal seeking enhancement of the compensation.

1. Whether the amendment to the 2nd Schedule of Section 163-A of the Motor Vehicles Act, 1988, effective from May 22, 2018, applies to accidents that occurred prior to said date.

2. Whether the compensation of Rs. 5,00,000 awarded by the Claims Tribunal was subject to enhancement or reduction.

Section 163-A of the Motor Vehicles Act, 1988, and the revised 2nd Schedule introduced via Gazette Notification on May 22, 2018.

Supreme Court precedent in New India Assurance Co. Ltd. v. Urmila Halder (2024 SCC Online SC 498), which held that beneficial legislation must be interpreted to pass benefits to claimants in the absence of a specific bar, and that amendments clarifying "computational modes and modalities" apply to accidents occurring prior to the notification date.

The Court noted that the central legal controversy regarding the retrospective application of the 2018 amendment is res integra (already decided) following the Urmila Halder decision.

The Court reasoned that since the amendment to Section 163-A is a piece of beneficial legislation intended to simplify the compensation process, it should be applied to pending claims even if the accident predated the notification.

The amendment merely clarified the computational modality by fixing a standard sum, and therefore, the Tribunal did not err in awarding the statutory amount of Rs. 5,00,000.

The Court found no merit in the claimants’ plea for enhancement beyond the statutory fix, nor in the insurer's plea for reduction based on the date of the accident.

The Court held that the compensation of Rs. 5,00,000 was correctly granted as per the amended 2nd Schedule of Section 163-A of the Act, regardless of the fact that the accident occurred on March 19, 2018.

Each party was ordered to bear their own costs.