Motor Accident Claims | Supreme Court To Examine Whether Victim Can Seek Compensation Under Both Sections 166 & 163A MV Act

The Supreme Court is set to examine whether a victim can file for compensation under both Section 166 and Section 163A of the Motor Vehicles Act, 1988.

Section 166 permits the claimant to seek compensation based on proving fault or negligence of the driver of the offending vehicle, while Section 163A allows for no-fault liability, meaning the claimant is not required to prove any wrongful act, neglect, or default by the vehicle owner or driver. Compensation under Section 163A is determined based on a structured formula provided in the Second Schedule of the Act.

A bench of Justice CT Ravikumar and Justice Sanjay Karol issued notice returnable in four weeks in an SLP challenging a judgment of the Allahabad High Court regarding compensation for injuries sustained in a road accident.

“The matter involves certain issues of seminal importance including a question whether a victim can file an application for compensation conjointly under Section 166 and 163A of the Motor Vehicle Act,1988. Issue notice, returnable in four weeks”, the Court observed.

The case stems from an accident on October 6, 1995, involving one Jai Prakash, who was seriously injured due to alleged rash and negligent driving by a bus owned by the Uttar Pradesh State Road Transport Corporation (UPSRTC). The claimant, a postgraduate in Indian History, suffered 60 percent permanent disability as a result of the accident.

The claimant filed an application under sections 163A and 166 of the MV Act for compensation. The Motor Accident Claims Tribunal (MACT) in Varanasi awarded the claimant Rs. 2,42,092.43 along with 6 percent annual interest. In its judgment dated September 23, 2002, the MACT calculated the claimant's annual income as Rs. 15,000 and used a multiplier of 18 to determine the compensation. The Tribunal also awarded Rs. 5,000 for pain and suffering, which the claimant argued was insufficient considering the severity of his injuries.

The claimant sought an enhancement of the compensation, contending that the Tribunal had underestimated his income and failed to account for future medical expenses and future prospects.

The Allahabad HC accepted the claimant's argument that the Tribunal had erred in assessing his income. The High Court noted that the claimant, a well-educated individual, was 28 years old at the time of the accident and had a bright future. The HC revised his monthly income to Rs. 5,000 and added 40 percent for future prospects based on the Supreme Court's judgment in Jagdish v. Mohan and Ors. (2018).

Consequently, the HC reassessed the compensation, increasing it from Rs. 2,42,092.43 to Rs. 9,36,900. The HC directed UPSRTC to pay the enhanced amount of Rs. 9,36,900 along with 6 percent interest from the date of the Tribunal's award within two months.

UPSRTC has filed the present SLP challenging the HC decision.

Case no. – Special Leave to Appeal (C) No. 19821/2024

Case Title – UP State Road Transport Corporation & Anr. v. Jai Prakash & Anr.