How are road accident claims decided?, Pg8

Key Highlights:

• India possesses the world's largest road network, yet records the highest number of road fatalities globally, with 1,77,175 lives lost in 2024.
• The Motor Vehicles Act, 1988 is the primary legislation governing motor-accident compensation in India.
• Motor Accidents Claims Tribunals (MACTs) are constituted by State governments to adjudicate claims arising from motor vehicle accidents.
• The Supreme Court, through landmark judgments like Sarla Verma (2009) and Pranay Sethi (2017), has standardized formulas for calculating "just" compensation.
• A recent Supreme Court judgment in Shishu Pal (2026) recognized "loss of domestic care" for homemakers, fixing a minimum notional income of ₹30,000 per month.

Detailed Insights:

• Road accidents are estimated to cost India around 3.14% of its GDP, impacting dependants of victims significantly.
• Claims can be filed by the injured person, owner of damaged property, or legal representatives in case of death, under Section 166 of the Motor Vehicles Act, 1988.
• Liability for compensation initially rests with the negligent driver and, vicariously, the vehicle owner, with insurers generally satisfying awards due to mandatory third-party insurance.
• The "pay and recover" principle allows courts to direct insurers to pay victims first, then recover from the owner/driver, even if policy breaches are established.
• No-fault liability provides compensation of ₹5 lakh for death and ₹2.5 lakh for grievous hurt, payable without proving negligence.
• Compensation calculation for accidental deaths involves three stages: establishing foundational facts (age, income, dependants), applying prescribed heads and formulae, and aggregating amounts.
• The Supreme Court in Saroj (2024) ruled that age for compensation should be established from school-leaving certificates, not Aadhaar cards.
• Rashmirekha Tripathy (2026) specified using the immediately preceding year's ITR for salaried persons and average of three years' ITRs for self-employed persons to determine income.
• The Jitender Kumar (2025) judgment clarified that all legal representatives, including earning sons and daughters, can claim compensation regardless of financial dependency.
• Compensation includes "loss of income/dependency," "loss of estate," "funeral expenses," and "loss of consortium," with conventional heads enhanced by 10% every three years as per Pranay Sethi (2017).

Key Concepts Involved:

• Motor Vehicles Act, 1988: Principal law governing motor-accident compensation, regulation, and liability in India.
• Motor Accidents Claims Tribunals (MACTs): Quasi-judicial bodies established by state governments to adjudicate claims related to motor vehicle accidents.
• No-fault liability: A legal principle where compensation is paid to accident victims regardless of who was at fault, simplifying the claims process.