Compensation to Legal Representatives in Motor Accident Cases

Source: High Court of Himachal Pradesh 

Why in News? 

The bench of Justice Jiya Lal Bhardwaj in the case of Ratnoo Ram v. Himachal Pradesh Road Transport Corporation and Another (2025) enhanced the compensation awarded to a father for his 18-year-old son's death in a motor accident from Rs.1,52,000 to Rs.4,05,000, and increased the interest rate from 7.5% to 9% per annum. 

• The Court held that the Motor Accident Claims Tribunal can't deny compensation to the father of the deceased on the ground that he was not financially dependent on his son. 

What was the Background of Ratnoo Ram v. Himachal Pradesh Road Transport Corporation and Another (2025) Case? 

• The appellant's son, Suresh, died in a motor vehicular accident on September 8, 1992, when he was 18 years old. 
• The appellant filed a claim petition under Section 163-A of the Motor Vehicles Act, 1988, claiming compensation of Rs.15,00,000 along with interest at 18% per annum. 
• The Motor Accident Claims Tribunal-III, Shimla initially awarded only Rs.1,52,000 with interest at 7.5% per annum. 
• The Tribunal held that the appellant was not dependent upon the deceased, but awarded compensation based on loss to the estate. 
• The appellant challenged this award as inadequate, arguing that the findings on dependency were erroneous, and compensation was insufficient. 
• The appellant contended that no compensation was awarded for filial consortium, and the interest rate was too low. 
• The respondent-Corporation had at one point offered Rs.1,00,000 as lump-sum settlement, which could not be finalized. 

What were the Court's Observations? 

• The Court held that the Tribunal's findings denying compensation to the father as a legal representative were erroneous, emphasizing that even without dependency, he is entitled to inherit the deceased's estate. 
• Citing Gujarat SRTC v. Ramanbhai Prabhatbhai (1987) and N. Jayasree v. Cholamandalam MS General Insurance Company Limited (2022), the Court clarified that 'legal representative' under the Motor Vehicles Act has a wider meaning than legal heir, encompassing anyone representing the deceased's estate with legal right to receive compensatory benefits. 
• The Court emphasized that the Motor Vehicles Act is benevolent legislation requiring liberal interpretation to fulfill its legislative intent. 
• For compensation calculation, the Court relied on National Insurance Company Limited vs. Pranay Sethi (2017) adopting notional income of Rs.25,000 per annum for the 18-year-old student deceased, with multiplier of 18, adding 40% for future prospects, and deducting 50% as personal expenses since he was a bachelor. 
• The Court held the father entitled to filial consortium (Rs.50,000), loss of estate (Rs.20,000), and funeral expenses (Rs.20,000) as per Magma General Insurance Company Ltd. v. Nanu Ram (2018) and Pranay Sethi guidelines. 
• Interest was enhanced from 7.5% to 9% per annum based on three-Judge Bench precedents, with direction that delayed payment beyond 90 days would attract 12% interest. 

What is the Motor Vehicles Act, 1988? 

About:  

• The Motor Vehicles Act, 1988 came into effect on July 1, 1989, consolidating all motor vehicle legislation in India.  
• The Act regulates road transport vehicles, covering licensing, registration, permits, insurance, traffic rules, and penalties.  
• Its primary objective is to provide relief to accident victims while ensuring road safety through strict compliance mechanisms. 

Key Objectives: 

• Implement strict licensing procedures and validity standards. 
• Ensure road safety through regulation of hazardous material transport and pollution control. 
• Manage the rapid increase in vehicles across India. 
• Increase compensation for hit-and-run accident victims. 
• Remove time limits for filing compensation claims by accident victims. 

Licensing Requirements: 

Essential Provisions: 

• Section 3: No person can drive a motor vehicle in public without a valid driving license. 
• Section 4: Minimum age restrictions - 18 years for light motor vehicles, 16 years for vehicles with engine capacity below 50cc, and 20 years for public transport vehicles. 
• Section 5: Vehicle owners cannot allow unlicensed persons to drive. 
• Section 6: Prohibition on holding multiple valid licenses simultaneously. 

Learner's License Restrictions: 

• Transport vehicle learner's license requires holding light motor vehicle license for at least one year (except e-carts and e-rickshaws). 
• Minors under 18 need guardian's written consent for motorcycle learner's license. 

Registration Requirements: 

Mandatory Registration: 

• Section 39: No motor vehicle can be driven in public without registration. 
• Section 40: Registration must be done with the authority having jurisdiction over owner's residence or vehicle's primary location. 
• Section 41: Registration validity is 15 years from issuance, renewable as prescribed. 

Registration Process: 

• Application in prescribed form with required documents and fees. 
• Physical presentation of vehicle for inspection. 
• Assignment of unique registration mark with state-specific letters and numbers. 
• Certificate of registration issued in owner's name. 

Permits and Compliance: 

Permit Requirements: 

• Section 66: Transport vehicles require valid permits for operation in public places. 
• Exceptions include government vehicles, ambulances, fire brigades, police vehicles, and hearses. 
• Educational institution buses require mandatory permits with fitness testing. 

Speed and Weight Limitations: 

• Section 112: Speed limits enforced with maximum and minimum restrictions. 
• Section 113: Weight restrictions for unladen and laden vehicles strictly regulated. 
• State governments empowered to impose temporary speed restrictions for safety. 

Safety Measures: 

Mandatory Safety Requirements: 

• Section 128: Two-wheeler riders limited to one additional passenger with proper seating. 
• Section 129: Mandatory helmet use for drivers and riders (exemption for Sikhs wearing turbans). 
• Seat belt mandatory for drivers. 
• Child safety measures are required for children under four years. 

Documentation Requirements: 

• Section 130: Drivers must produce license, registration certificate, insurance, and fitness certificate on demand. 
• Documents can be submitted within 15 days if not available immediately. 
• Digital copies are now acceptable under 2020 amendments. 

Accident Procedures and Compensation: 

Driver Responsibilities: 

• Section 134: In case of accident causing injury or death:  
• Secure medical attention for injured persons. 
• Transport victims to nearest medical facility. 
• Report to police within 24 hours. 
• Provide accident details to insurer in writing. 

Compensation Framework: 

• Section 140 (now omitted): Previously provided no-fault liability compensation of Rs. 50,000 for death and Rs. 25,000 for permanent disability. 
• Section 163A: Structured formula for compensation payments without proving negligence. 
• Section 166: Application procedure for compensation claims. 
• Section 165: Motor Accident Claims Tribunals established for adjudicating claims. 

Claims Tribunal: 

• State governments establish Motor Accident Claims Tribunals for specific areas. 
• Members must be or have been High Court Judges or District Judges. 
• Handles death, bodily injury, and property damage claims. 

Penalties and Offences: 

Major Violations and Penalties: 

• Driving without license (Section 181): Rs. 5,000 fine and/or 3 months imprisonment. 
• Drunk driving (Section 185): Rs. 10,000 fine and/or 6 months imprisonment (first offence); Rs. 15,000 and/or 2 years (repeat offence). 
• Dangerous driving (Section 184): Rs. 1,000-5,000 fine and/or 6 months imprisonment. 
• Overspeeding (Section 183): Rs. 1,000-4,000 depending on vehicle type 
• General violations (Section 177): Rs. 500 (first offence), Rs. 1,000 (subsequent). 

2019 Amendment Highlights: 

Major Changes: 

• Aadhar linkage: Mandatory for license and registration. 
• Increased penalties: Substantial hike in fines for various violations. 
• Vehicle recall provisions: Central Government can recall defective or unsafe vehicles. 
• Taxi aggregators: New licensing framework for digital ride-booking platforms. 
• Road contractor accountability: Penalties up to Rs. 1 lakh for faulty road design. 

New Schemes and Funds: 

• Golden Hour Scheme (Section 162): Cashless treatment for accident victims within critical first hour. 
• Motor Vehicle Accident Fund (Section 164B): Compensation fund for hit-and-run victims and treatment costs. 
• Interim Relief Scheme (Section 164A): Immediate assistance for claimants. 

Enhanced Compensation: 

• Section 164: Rs. 5 lakhs for death, Rs. 2.5 lakhs for grievous injury without proving fault. 
• Hit-and-run compensation increased from Rs. 25,000 to Rs. 2 lakhs (death) and Rs. 12,500 to Rs. 50,000 (serious injury). 
• Insurance claims must be settled within one month. 

National Road Safety Board: 

• Established under 2019 Amendment to advise on traffic regulations and road safety. 
• Includes representatives from all state governments. 
• Focuses on policy formulation and implementation monitoring.