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

On April 8, 2007, Sonal Mansukhbhai (16 years old) was traveling in a tempo bearing registration No. GJ-4V-5993 from an onion factory to Nesvad village.

She was allegedly traveling as the owner of goods (onions) when the vehicle lost control due to a ditch, causing her to fall and succumb to injuries.

The Motor Accident Claims Tribunal (MACT), Bhavnagar, awarded Rs. 1,64,500/- under Section 163A of the Motor Vehicles Act (MV Act) but exonerated Respondent No. 2 (Insurance Company) on the grounds that the police panchnama did not mention the presence of goods.

The claimants appealed for enhancement and to fix liability on the insurer.

1. Whether the Insurance Company can be exonerated from liability based on the absence of goods in police records despite oral evidence to the contrary

2. Whether Section 164 of the Motor Vehicles Act, 1988 (as amended) can be applied retrospectively to award a higher lump-sum compensation

The court primarily applied Section 163A of the MV Act regarding compensation on a structured formula basis and the subsequently inserted Section 164 of the MV Act, which provides a fixed compensation of Rs. 5,00,000 for death.

It relied on National Insurance Company Limited v. Chamundeswari & Ors. (2021 ACJ 2558) to hold that oral evidence should be given more weight than inconsistencies in police papers like FIRs or panchnamas.

Further, it applied the precedent from New India Assurance Company Limited v. Urmila Halder (2024 AIJEL-SC-74844), which established that Section 164, being beneficial legislation, applies retrospectively to pending claims.

The Court found the Tribunal erred in exonerating the Insurer because the owner’s written statement explicitly admitted the deceased was traveling with goods, corroborating the claimants' oral testimony.

Per Chamundeswari, this oral evidence prevails over the omission of goods in the panchnama.

Regarding quantum, the Court noted that during the pendency of the appeal, Section 164 was introduced to replace the structured formula of Section 163A with a fixed sum.

Following the Urmila Halder ratio, the Court held that the "computational mode" of the amendment must benefit the claimant in the absence of a specific bar, as it is beneficial legislation.

The compensation was enhanced from Rs. 1,64,500/- to a lump sum of Rs. 5,00,000/- per Section 164.

The Insurer was directed to pay the additional Rs. 3,35,500/- with 7.5% interest, excluding interest for the 214-day delay in filing the appeal.

The Court granted the Insurer "pay and recover" rights against the owner/driver.