How to proceed to claim compensation arising out of an accident

Overview: With an escalation in the number of road accidents that India witnesses every year, it is a usual situation where a person involved in an accident- on either side would need to seek compensation for injury suffered by him on account of the accident.

 

Purpose: Its sole purpose is to extend a hassle free procedure that a person injured in a road accident can follow to get compensated for his loss or injury.

 

Areas of Application of Law: Provisions of the Motor Vehicles Act, 1988.

 

Process: Below is the step by step process for obtaining compensatory relief arising out of an accident:


1. To begin with, the applicant should engage a lawyer who will file an application on behalf of the claimant.


2. Who can claim compensation:

  • A person who has sustained the injury, 
  • A person who is owner of the vehicle or by a persons’ legal representative in case where death has occurred due to the accident.


3. Limitation law holds that an application for compensatory relief cannot be brought after 6 months from the occurrence of the accident.


4. Where will claim application be filed:

  • Application will be filed at either at the claims tribunal having jurisdiction in the area where the accident took place or at the claim tribunal within the jurisdiction of which the claimant or defendant resides. 
  • A civil court would be barred from entertaining an application for a compensatory claim if there is already a claim tribunal in that area.
  • The application would be accompanied by a court fee and stamp of Rs 10.


5. Particulars in the application would include:

  • Name and father’s name of injured/deceased
  • Place, date and time of accident
  • Name and address of police station in whose jurisdiction the accident took place
  • Age of the person injured/deceased
  • Occupation of the person injured/deceased
  • Monthly income of person injured/deceased
  • Name and address of employer of person injured/deceased
  • Whether the person against whom claim is made pays income tax or not

6. In case of no-fault liability: Section 140 of Motor Vehicles Act, 1988 (Fixed compensation)


  • In a case where death or permanent disablement of any person has resulted due to the accident arising out of the use of a motor vehicle, the owner or owners of the vehicles would be jointly and severally, liable to pay compensation in respect of such death or disablement.
  • The amount of compensation in such cases is fixed and would be payable as a fixed sum of Rs. 50,000 for death, and Rs 25,000 for permanent disablement.
  • The claimant would not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner of vehicle.


7. In a hit and run case: Section 161 of Motor Vehicles Act, 1988


  • If the accident is of a hit and run nature, the amount of compensation would be Rs. 25,000 in case of death and Rs. 12,500 in case of grievous hurt.
  • A prerequisite of such a case is that the vehicle involved in the accident would be intractable, even though positive efforts for tracing and identification have been put in.


8. Payment of compensation on a structured formula basis- Section 163 of Motor Vehicles Act, 1988


  • The owner of the motor vehicle or the authorized insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be. 
  • The second schedule is a table prescribing the compensation to be awarded reference to the age and income of the deceased.
  • This essentially means that the quantum of compensation would not be fixed and would depend on various particulars of both claimant and defendant, such as age, marital status, income etc.
  • For instance: Clause (6) of the Second Schedule lays down that in the cases of fatal and disability in non-fatal accidents, income of the non-earning person should be taken as Rs.15,000/- per annum and that of spouse shall be taken as 1/3rd of the income of the earning/surviving spouse.
  • The claimant would not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner of vehicle.


9. An appeal against the order of the claims tribunal would be brought to the respective high court within 9- days from the date of the award. However, no appeal would be entertained unless the person required to pay has deposited Rs. 25,000 or 50% of the amount awarded, whichever is less. No appeal can be brought if the amount of award is less than Rs. 10,000. 


Documents required to be submitted in the court if any: Pictures showing collision, documents showing that defendant pays income tax, insurance papers.  


Punishment/Expected Relief: Compensatory relief for a person who may have been injured in an accident. 


Landmark Judgments:

1. It was held that the orporation was liable to pay compensation and not the registered owner in accordance with Section 2(30) of the Motor Vehicles Act, 1988 which defines ‘owner’ for the interpretation of the Act- Rajasthan State Road Transport vs Kailash Nath Kothari & Ors. (https://indiankanoon.org/doc/862928/)


2. The right of compensation of victim is not affected by the fact that motor vehicle was driven by a man who was not having driving license to do so- Skandia Insurance Co. Ltd vs Kokilaben Chandravadan & Ors (https://indiankanoon.org/doc/1182839/)




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