Section 164 of the Motor Vehicles Act applies retrospectively to award fixed compensation for death.

In brief

The question

1. Whether the enhanced compensation of Rs. 5,00,000/- under the newly inserted Section 164 of the Motor Vehicles Act can be applied retrospectively to pending appeals originating from accidents occurred prior to the amendment

The court held

The Court answered the issue in the affirmative, holding that the appellant is entitled to the enhanced compensation of Rs. 5,00,000/-

It also directed

The appeal was partly allowed, and the impugned award was modified to increase the compensation from Rs. 1,48,500/- to Rs. 5,00,000/-. Respondent No. 2 (Insurance Company) was directed to deposit the enhanced amount with 8% interest per annum from the date of the claim petition within six weeks. The exoneration of respondent No. 3 was maintained

01Facts

On December 21, 2010, the deceased (Bhudhaji Shakraji Chauhan) was traveling in a rickshaw when a car driven in a rash and negligent manner collided with it, resulting in his death

p. 2

The legal heirs filed a claim petition under Section 163A of the Motor Vehicles (MV) Act, 1988

p. 3

On July 7, 2012, the Motor Accident Claims Tribunal, Nadiad, awarded a compensation of Rs. 1,48,500/- with 8% interest, while exonerating respondent No. 3 (Insurance Company) from liability

pp. 1-3

The appellants challenged this award on the grounds of quantum, arguing for the retrospective application of the newly inserted Section 164 of the MV Act, which provides for a fixed compensation of Rs. 5,00,000/- for death

p. 3

02Issues

i.1. Whether the enhanced compensation of Rs. 5,00,000/- under the newly inserted Section 164 of the Motor Vehicles Act can be applied retrospectively to pending appeals originating from accidents occurred prior to the amendment

p. 3, 6

ii.2. Whether the compensation awarded by the Tribunal requires enhancement based on current beneficial legislation

p. 6

03Law Applied

Section 164 of the Motor Vehicles Act (as amended), which mandates a fixed compensation of Rs. 5,00,000/- in case of death, regardless of proof of fault

p. 5

The precedent established by the Hon’ble Supreme Court in New India Assurance Company Limited v. Urmila Halder (2024 (0) AIJEL-SC-74844), which held that Section 164 is a beneficial piece of legislation and its computational modality applies to pending claims to pass the benefit to claimants in the absence of a specific bar

p. 4, 6

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

Motor Vehicles Act, 1988 Section 163 Section 164

04Reasoning

The High Court observed that while the original claim was filed under the old Section 163A, the subsequent legislative amendment replaced the structured formula with a flat compensation under Section 164

p. 5

The Court rejected the respondent-insurer’s contention that the amendment cannot apply retrospectively

p. 4, 7

Following the Supreme Court’s reasoning in Urmila Halder, the Court determined that since the legislation is beneficial in nature, the "computational mode and modality" provided in the new Section 164 must be extended to the appellant

p. 6

The court found that the Tribunal’s original award of Rs. 1,48,500/- was insufficient under the now-applicable statutory scheme

p. 7