India holds the world’s worst record in road accidents, with 135,000 deaths a year. There is no count of the injuries and damage to property. In short, the odds of being hit by a motor vehicle are more than winning a bet in the club. What happens after the accident is equally worse. Compen-sation claims drag on for more than a decade, which is another trough of shame.
The Motor Vehicles Act has clauses intended to speed up claims of victims in the tribunals. One such provides for instant, though nominal, payment for hit-and-run victims. There is another that grants compensation without going into the fault of the driver, owner or the victim. In 1994, a schedule was added to the Act to calculate the compensation easily and to avoid much of the arguments on variables like income of the deceased, life expectancy and dependency. However, the Supreme Court has called this formula “unworkable” and lacking in elementary arithmetic (UP State Transport vs Trilok Chandra). In spite of this ridicule, another judgment of the top court praised the same formula and remarked that it was “a safer guide than any other method.” (Kaushanuma vs New India Assurance).
Last fortnight, the Supreme Court infused a little more uncertainty in its interpretation of the provisions for calculating “no-fault” compensation. It was thought so far that those who invoked Section 163A of the Act for compensation need not prove who was at fault. But in a new twist, the court held that the owner of the vehicles and the insurance companies can argue on the contributory fault of the victim (National Insurance vs Smitha).
The consequence of this interpretation would be that suits for compensation will be delayed by years as the vehicle owners and insurers will try to prove that the victim was also responsible and at fault. They can bring a variety of evidence, including witnesses (there are many hanging around the court complex, or the police will extend help). This means examination, cross-examination and other legal rigmaroles. The Smitha case took 12 years to conclude in the Supreme Court without this burden. The new interpretation will prolong the trial further. The law-makers’ efforts to speed the award of compensation have suffered an unintended setback.
Moreover, the court emphasised that “Section 163A of the Act has an overriding effect over all other provisions of the Motor Vehicles Act. Stated in other words, none of the provisions of the Act which is in conflict with Section 163A will negate the mandate contained therein. Therefore, no matter what, Section 163A of the Act shall stand on its own, without being diluted by any provision.”
Now it is open to the owner or the insurance company to defeat a claim of the victim under Section 163A of the Act by pleading and establishing through cogent evidence a “fault” ground (“wrongful act” or “neglect” or “default”). The court states that claims made under Section 163A can result in “substantial compensation and the liability may be huge. It is difficult to accept that the legislature would fasten such a prodigious liability under the ‘no-fault’ principle, without reference to the ‘fault’ grounds.”
The court assumes that victims are getting “substantial compensation”. However, the reality is that the amounts usually awarded by tribunals are niggardly. The Supreme Court has recently criticised tribunals and courts awarding miserly sums. In some cases, the Supreme Court went as far as to award more than what the victims themselves had asked for, and the tribunals and high courts granted. It justified such munificence stating that the power of the courts is not limited and the rules have not put any ceiling on the amount of damages.
More From This Section
Moreover, the schedule under which the compensation is computed is not only deeply flawed, as pointed out in the Trilok Chandra judgment, but it has not been reviewed for nearly two decades. The law has a provision for periodical revision of the compensation amounts but the law-makers have little time to lend a helping hand to the victims.
There are numerous other hurdles before the victims and their dependents, like the “contingency fee” agreement with lawyers. These “ambulance chasers” take a huge percentage of the award instead of their professional fees. The deal is so bad for the claimants that a wit has defined contingency fee thus: “If the lawyer doesn’t win your suit, he gets nothing; if he wins, you get nothing.”
The rules for road accident compensation are devised as social welfare measures as emphasised in several judgments. The law has been steadily improved over the decades keeping in mind the welfare of the dependents and increase in the number of accidents. Therefore, the same spirit should be seen in law-making and interpretation. However, the present judgment appears to have taken a step backward in this respect.