Motor Vehicle Act, 2019

The Motor Vehicle Act was enacted to consolidate and amend the law relating to accidents arising
from motor vehicle. This act further aims at regularizing the use of Motor Vehicle and to
compensate victims who are injured or died in accident and family member and dependents of the
deceased victim. The act has been amended in 2019.

It is well settled that in case of motor accident claims, an endeavor is made to put the claimants in
the pre-accidental position. The damages to be awarded are to be adequate in terms of money so
that the claimants are put in the same position had they not suffered the loss on account of wrong
of the respondent, though, no amount of compensation can restore the loss of limb or experience
of pain or loss of life.

Essentials:

The compensation petition can be filed by the injured person or legal heirs in case of death of the
victim. The legal heirs will be entitled to the compensation if they are dependent on the deceased
person. That the claimant who seek for the compensation must prove Fault Liability to substantiate
the claim i.e. the respondent was negligent. Although there is no statutory definition of the
negligence, therefore, it means omission of duty caused either by omission to do something with
reasonable due diligence or be obliged or by doing something which a reasonable man would do.

The word ‘negligence’ has been defined by Supreme Court as “Negligence means omission to do
some-thing with reasonable and prudent means granted by the consideration which ordinarily
regulate human affairs or doing something which prudent and a reasonable means guided by
similar considerations would not do.”1

Assessment of Compensation (in case victim died):

Life cannot be valued; therefore, no monetary value can be put for human being. In the Section
161(2)(a) of the Motor Vehicle Act state that Rs. 2,00,000/- had been prescribed by the Central
Government to the Claimant and Section 164(1) of the act state that owner of vehicle or insurer
shall be liable to pay compensation of Rs. 5,00,000 in case of death.

In the Sarla Verma V. Delhi Transport Corporation2 had said that following factors must consider
while determining compensation in the case of deceased of person:

 Ascertaining the multiplicand

The per annum income of the deceased person should be determined. That from the said
income, the amount which the deceased would have spent on himself by way of personal
and living expenses will be deducted. The balance will be considered to be the contribution
to the dependant family, constitutes the multiplicand.

1
State of Karnataka V. Muralidhar, AIR 2009 SC 1621
2
(2009) 6 SCC 121
  Ascertaining the multiplier
Having regard to the age of deceased and period of active career, the appropriate multiplier
should be selected.
 Actual calculation
i). The annual contribution to the family (multiplicand) when multiplied by such multiplier
gives the “loss of dependency to the family.”
ii). Thereafter, conventional amount in the range of about Rs.10,000 may be added as loss
of estate. Where the deceased is survived by a widow, another conventional amount in the
range of Rs.10,000 to Rs.20,000 should be added under the head of loss of consortium.
iii). No amount is to be awarded under the head of pain, suffering or hardship caused to the
legal heirs of the deceased.
iv). The funeral expenses, cost of transportation of the body and cost of medical treatment
of the deceased before death (if incurred) should also be added.
v). The personal and living expenses of deceased should be deducted from his income.

That the factor has been adopted in the Motor Vehicle act, 2019 under Second Schedule to

determine the compensation of the deceased person on structure formula basis. In the Second

Schedule, a table was mentioned in which it was laid down how much will be given to the Legal

Heirs of the deceased person as compensation and the amount of compensation will not be

considered less that Rs. 50,000. In the Second Schedule, Multiplier has been given so that it would

be easier to calculate the compensation.

In case Death of Housewife:

Indian court have recognized that contribution made by the wife to the house is invaluable and
cannot be computed in terms of money. It is stated by the court in one of the cases that A
wife/mother does not work by the clock. She is in the constant attendance of the family throughout
the day and night unless she is employed and is required to attend the employer's work for hours.
She takes care of all the requirements of husband and children including cooking of food, washing
of clothes, etc. She teaches her small children and provides invaluable guidance to them for their
future life.

But to determine the compensation of the deceased person, initial step is to find the per annum of
the housewife. Which was discussed by the High Court in the matter Rakesh Kumar v. Prem Lal3,
how the income of the housewife has to be assessed as “We are in full agreement with the
preposition that the children and husband of the deceased are entitled to compensation on the
ground of the loss of the services of the deceased which were no doubt gratuitous, for the reason
that the members of the family can replace such gratuitous services only by incurring expenditure
and that while estimating the ‘services’ of the deceased housewife, a narrow meaning should not
be given to the meaning of the word “services” but should be construed broadly”.

In Sher Singh v. Raghubir Singh4, High Court set aside the order of the Ld. Tribunal and estimated
the dependency on the Housewife at the rate of Rs. 1500/- per month i.e. Rs. 18000/- per annum.

That as per the 2019 amendment, it was discussed that to determine the compensation on structure
formula basis the per annum income of the Housewife will be taken Rs. 15,000/- which is stated
in entry 6 of the Second Schedule, which state that National income for compensation to those
who had no income prior to accident. General Damages will be included in the compensation
which is in entry 3 of Second Schedule.

3
1996 (1) Sim, L.C. 448(DB)
4
2006(1) Cur, L.J. (HP) 15