Pending motor accident claimants can receive ₹5 lakh under Section 164 retrospectively, Gujarat High Court rules

On 6 June 2009, Maheshbhai Champakbhai Gamit was riding motorcycle No. GJ-19-D-3573 with two pillion riders towards Vyara when truck No. KA-01-AD-5007 allegedly being driven rashly and negligently collided with the motorcycle, causing injuries resulting in his death.

The deceased’s legal heirs filed a claim petition under Section 163-A of the Motor Vehicles Act, 1988.

The Motor Accident Claims Tribunal, Vyara, partly allowed the claim and awarded ₹2,62,800 with interest at 8% per annum, after deducting 20% for the deceased’s alleged contributory negligence.

The claimants challenged the award on the grounds that negligence was irrelevant under Section 163-A and that the compensation should be enhanced under Section 164 of the amended Act.

1. Whether, in a claim petition under Section 163-A of the Motor Vehicles Act, the insurer could rely on the deceased’s negligence to seek deduction from the compensation.

2. Whether Section 164 of the Motor Vehicles Act, providing compensation of ₹5,00,000 for death, could be applied retrospectively to an accident that occurred before its enactment.

The Court applied Section 163-A of the Motor Vehicles Act, 1988, under which compensation is payable on the basis of a structured formula without requiring proof of negligence and without permitting the insurer to raise negligence of the victim as a defence.

It relied on Sunil Kumar & Anr. v. United India Insurance Co. Ltd., (2019) 12 SCC 398, holding that negligence of the victim cannot be considered in proceedings under Section 163-A.

The Court also applied Section 164 of the Motor Vehicles Act, which imposes liability to pay ₹5,00,000 in case of death arising from the use of a motor vehicle, without requiring proof of wrongful act, neglect, or default.

Relying on The New India Assurance Co. Ltd. v. Urmila Halder, SLP (C) No. 6260 of 2019, decided on 8 February 2024, the Court held that the beneficial provisions of Section 164 could be applied retrospectively in the absence of a specific statutory bar.

The Tribunal’s deduction for the deceased’s alleged 20% negligence was inconsistent with the statutory scheme of Section 163-A.

Since the claim was filed under that provision, the Court held that the proceedings were intended to provide final compensation under a structured formula without adjudicating fault; allowing a negligence-based deduction would improperly convert the claim into one under Section 166.

On quantum, the Court treated Section 164 as beneficial legislation and, following Urmila Halder, applied its enhanced fixed compensation retrospectively to the pending claim.

Accordingly, the Tribunal’s award of ₹2,62,800 was enhanced to ₹5,00,000.

The Court reversed the Tribunal’s finding and deduction relating to the deceased’s negligence and enhanced the compensation from ₹2,62,800 to ₹5,00,000.

Since ₹2,62,800 had already been awarded, the claimants were held entitled to an additional ₹2,37,200, carrying interest at 8% per annum from the date of filing of the claim petition until realization.

The insurer was directed to deposit the additional compensation with interest within six weeks, after which the Tribunal was directed to disburse the entire compensation to the claimants, subject to verification and deduction of any deficit court fee.