Liability without Fault

In one line

For death or grievous hurt in a motor accident the owner or the insurer must pay five lakh or two and a half lakh rupees, and the claimant need not plead or prove that anybody was at fault.

Read the numbers of the sections before the words. Almost every textbook and every past paper on this subject calls this "section 140". Section 140 was repealed with effect from 1 April 2022, along with the whole of Chapter X and with sections 163A and 163B and the Second Schedule. The provision in force is section 164, and the section that used to bear that number, the Central Government's rule-making power, is now section 164C. This chapter states the law as it is and then states the law as it was, because a student must be able to read both the syllabus and the old judgments.

The law in force: section 164

Sub-section (1). Notwithstanding anything in this Act or any other law or instrument having the force of law, the owner of the motor vehicle or the authorised insurer shall be liable to pay, in the case of death or grievous hurt due to any accident arising out of the use of a motor vehicle, a compensation of

• five lakh rupees in the case of death,
• two and a half lakh rupees in the case of grievous hurt,

to the legal heirs or the victim, as the case may be.

Sub-section (2). In any claim under sub-section (1) the claimant shall not be required to plead or establish that the death or grievous hurt was due to any wrongful act or neglect or default of the owner of the vehicle, or of the vehicle concerned, or of any other person.

Sub-section (3). Where compensation has been paid under any other law for the time being in force in respect of the same death or grievous hurt, that amount shall be reduced from the amount payable under this section.

Three changes from the old law worth marking. The trigger is now grievous hurt and not "permanent disablement"; the sums are ten times what they were; and both the owner and the authorised insurer are named as liable.

How it reaches the claimant. Section 149 obliges the insurer to offer settlement on the accident information report prepared by the police under section 159, and by the second proviso to section 166(1) a claimant who accepts compensation under section 164 through that procedure has his claims petition before the Tribunal lapse. A claimant who wants more litigates for just compensation instead, and what has been paid is set off.

Section 164A: interim relief

The Central Government may make schemes for the provision of interim relief to claimants praying for compensation under Chapter XI. A scheme so made must also provide the procedure to recover the funds disbursed under it from the owner of the motor vehicle out of whose use the claim arose, or from such other sources as may be prescribed.