Section 166 of the Motor Vehicles Act

Source: Bombay High Court 

Why in News? 

Recently, Justice Shailesh P. Brahme  held that a claimant appealing under Section 166 of the Motor Vehicles Act may restrict the claim amount for court fee purposes at the initial stage and pay the deficit court fee only if the appeal succeeds. 

• The Bombay High Court held this in the matter of Shivshankar v. Sanjay & Ors (2025). 

What was the Background of Shivshankar v. Sanjay & Ors Case (2025) ? 

• Shivshankar, a 16-year-old minor son of Khandu Udtewar, met with a motor vehicle accident that resulted in injuries affecting his earning capacity. Through his father as guardian, he filed a compensation claim of Rs. 40,00,000/- before the Motor Accident Claims Tribunal under Section 166 of the Motor Vehicles Act. The Tribunal partially allowed his claim and awarded compensation of Rs. 5,50,000/- with interest. 
• Being aggrieved by the inadequate compensation awarded by the Tribunal, the claimant preferred an appeal to the High Court seeking enhancement of compensation. However, in the memorandum of appeal, he valued his claim at only Rs. 1,00,000/- for the purpose of calculating court fees and paid Rs. 3,205/- as court fees accordingly. 
• The Registry raised an objection stating that the appellant was liable to pay court fees on the difference between the amount originally claimed (Rs. 40,00,000/-) and the amount awarded by the Tribunal (Rs. 5,50,000/-). The Registry demanded an additional Rs. 24,410/- as deficit court fees, refusing to accept the restricted valuation of Rs. 1,00,000/-. 
• Vilas Bayaji Thorve, a 69-year-old agriculturist, was involved in motor vehicle accident cases where he had purchased vehicles but had not registered them with the competent authority. The Claims Tribunal held him liable as the owner of the vehicles despite the lack of registration and passed awards against him. 
• Being aggrieved by the Tribunal's decision treating him as the owner when he was neither the registered owner nor the insurer, he preferred appeals. In the memorandum of appeal, he claimed the benefit of paying only half the ad valorem fees as provided under Section 7(2)(ii) of the Maharashtra Court Fees Act, applicable to persons who are neither insurers nor owners. 
• The Registry objected to this claim and the Taxing Officer upheld the objection, directing him to pay full ad valorem fees instead of the concessional half fees. 
• All these cases involved a common legal question: whether appellants in motor vehicle accident cases can restrict the value of their claim in the memorandum of appeal for the purpose of calculating court fees, or whether they must pay court fees based on the full amount claimed or the difference between the original claim and the amount awarded by the Tribunal. 
• The matter was referred to the Taxing Officer who decided against the appellants, upholding the Registry's demand for full court fees. Aggrieved by these orders, the appellants filed Civil Revision Applications under Section 115 of the Code of Civil Procedure before the High Court.

What were the Court’s Observations? 

• The Court observed that Section 7(2) of the Maharashtra Court Fees Act deliberately creates two categories - insurers/owners paying full fees versus accident victims paying half fees initially, reflecting compassionate legislative intent towards trauma victims. 
• The Court noted that the phrase "fee leviable on the amount at which the relief is valued" expressly permits appellants to restrict their claim value for court fees calculation, unlike provisions requiring payment on full difference amounts. 
• The Court observed that accident victims suffer immeasurable physical, mental, and financial trauma, with families facing additional emotional and social hardships when breadwinners die, justifying the concessional fee structure. 
• The Court noted that the concession is temporary - successful appellants must eventually pay deficit fees through the proviso mechanism, ensuring no permanent escape from full fee liability. 
• The Court observed that awarded compensation requires execution proceedings for realization, and claimants already bear full tribunal costs regardless of outcomes, supporting the need for initial relief. 
• The Court noted that Section 173(2) prevents frivolous appeals by barring disputes below Rs. 1,00,000/-, eliminating concerns about exploiting the fee concession. 
• The Court observed no legal distinction exists between appeals from complete versus partial claim rejections - both scenarios permit claim value restriction for fee purposes. 
• The Court concluded that both literal and purposive interpretation clearly permits claim restriction, finding no statutory prohibition and declaring the Taxing Officer's contrary approach legally unsustainable.

What is Section 166 of MVA ?

• Section 166 allows people to file applications seeking compensation for motor vehicle accidents. 
• Who can apply for compensation? 
  • Injured person - If you got hurt in an accident, you can apply yourself 
  • Property owner - If your property (like car, house, shop) got damaged, you can apply 
  • Family members - If someone died in the accident, their legal heirs (spouse, children, parents) can apply 
  • Authorized agent - Someone appointed by the injured person or family can apply on their behalf 
  • Special rule for death cases: If multiple family members exist but only some apply, they must include all other family members in the case as respondents (opposing parties). This ensures everyone's rights are protected. 
• Where to file the application?  
  • You have three options - file in any one of these places: 
    • Where accident happened - Claims Tribunal of that area 
    • Where you live - Claims Tribunal of your residence area 
    • Where defendant lives - Claims Tribunal where the person you're suing lives 
• What format to use? The application must be in the prescribed form with all required details as specified by rules. 
• If you're not claiming under Section 140 (no-fault liability), you must clearly state this in your application. 
• Automatic cases: When police send accident reports to Claims Tribunals, those reports are automatically treated as compensation applications. 
• Section 166 is the legal provision that allows accident victims or their families to formally ask for money compensation through the court system, with flexibility in choosing where to file and who can file the case.