CLAIMS TRIBUNAL AND AWARD OF COMPENSATION

A new forum that is Motor Accidents Claims Tribunal (known as Claims Tribunal) which substitutes Civil Courts has been created by the Motor Vehicles Act for cheaper and speedier remedy to the victims of accident of motor vehicles. Section 165- 175 (1988 Act), that is Sections 110 to 110-F (1939 Act) deal with the setting up of claims tribunal, the procedure for dealing with cases coming before the tribunals, and the award of compensation by them. Prior to these provisions, a suit for damages had to be filed in a civil court, on payment of ad valorem court fee. Under these provisions an application claiming compensation can be made to the Claims Tribunal without payment of ad valorem court fee. These provisions do not create any new liability, and the liability is still based on tort law and enactments like the Fatal Accidents Act. Therefore, Claims Tribunal was established in the judgment in the case of Oriental Fire & General Insurance Co. vs. Kamal Kamini.



A state government may, by notification in the Official Gazette, constitute one or more Motor Accidents Claims Tribunal for such area as may be specified in the notification under the Section 165(1) of 1988 Act. According to Section 165 (1988 Act), the Claims Tribunals have jurisdiction to entertain claims for compensation when an accident arises out of the use of the motor vehicle. Section 165 does not say that to give jurisdiction to the Claims Tribunals, the accident must occur in a public place. Thus, the Claims Tribunal can entertain a claim even though the accident occurred on private land. Where any Claims Tribunal has been constituted for any areas, no civil court shall have jurisdiction in respect of any action taken or to be taken by or before the Claims Tribunal in respect of the claim for compensation shall be granted by the civil court under the Section 175 of 1988 Act.



It has been held that Motor Accident Claims Tribunal constituted under the Motor Vehicle Act, 1988 is a civil court of limited jurisdiction and is certainly not a court of record which is encrypted under the judgment in the case of U.C. Sheth vs. V.S. Joranpura. Therefore, the principle of sanctity of recitals in court proceedings available to a court of record cannot be stratched to the proceedings of a tribunal. It has also been said that the proceedings of the tribunal while so acting, are summary in nature and in exerting its summary jurisdiction the tribunal must follow principles of justice, equity and good conscience and must be aware that its summary inquiring is in connection with a legislation which is meant for social welfare.



Section 168 of the Motor Vehicle Act, 1988 requires the payment of compensation which must be just compensation. The expression “just”, it is held, denotes equitability, fairness and reasonableness and non-arbitrariness which is explained in the case of State of Haryana vs. Jasbir Kaur, where the word “just” is open for many interpretation by different judges of the court. Sub-section (2) of Section 149 of the Motor Vehicles Act, 1988 contains grounds on which the insurer can challenge the award of compensation made by the Tribunal. It contains limited grounds. Section 149, 170 and 173 are part of one scheme and if we give any different interpretation to Section 172 of the 1988 Act, the same would go contrary to the scheme and object of the Act. If law would have provided for compensation to dependents of victims of motor vehicle accident, that would not have been sufficient unless there is a guarantee that compensation awarded to an injured or dependent of the victims of motor accident shall be recoverable from the person held liable for the consequences of the accident.



In term of Section 166(1)(c) of the Motor Vehicles Act, 1988, in case of death, all or any of the legal representatives of the deceased become entitled to compensation and any such legal representative can file a claim petition. In terms of Section 166(1)(c) in case of death, all or any of the legal representatives of the deceased become entitled to compensation and any such legal representatives can file a claim petition. A legal representative is one who suffers on account of death of a person due to a motor vehicle accident and need not necessarily be a wife, husband, parent and child.


Quantum of Compensation

There are two methods adopted to determine and for calculation of compensation in fatal accident actions. The first multiple method was mentioned is Davies vs. Powell, which is calculated having regard to ‘a balance of gains and losses for the injury sustained by the death’, and the second is Nance vs. British Columbia Electric Railway Co. Ltd., which is basically based on contributory negligence.



Appeal to the High Court

A person aggrieved by an award of a Claims Tribunal can prefer an appeal to the High Court. An appeal to the High Court can be made within 90 days [not three months] of the award of the Claims Tribunal. The High Court has the power to condone the delay. If the high Court is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time, it may entertain the appeal after the expiry of the said period of 90 days.

The most important problems faced recently is that in antiquated systems, parties have to physically appear before the Motor Accident Claims Tribunals to give evidence. This cause tremendous delay as the lawyer has to call every party on different days because of the paucity of time with Claim Tribunals. Generally, there is delay in the functioning due to huge workload in the lower judiciary and poor technology adoption. This causes delay in depositing compensation amount by the insurance company after the decision of Claims Tribunals. There is also interruption in court hearings due to factors which are beyond our control like recently in the pandemic or during emergency. Recently when whole world was under lockdown in the pandemic, COVID 19, the hearings also paused because of this because it is important to have physical hearing instead of virtual one as physical evidence is required. This lead to a huge list of cases pending.



Every problem has a solution. The insurance company conducts a private investigation to verify the facts of the accident and refer the case to its in-house mediation department or an external independent mediation agency which then scrutinizes the authenticity of documents. After scrutiny, the mediation department or the external independent mediation agency decides the quantum of compensation after consultation with the insurance company. If the recommendation is accepted by the insurance company and the party, then, the case can be transferred to Claims Tribunals to follow the traditional process. This can prevent the majority of motor accident compensation cases from reaching the ever exploding docket of courts, as in many cases facts are straight and all parties are traceable. The problem occurs in cases where any party is not traceable due to fictitious address or where insurance or license is fake. Such cases are even a challenge for Claims Tribunals.



There is also an alternative in which the Claims Tribunal can refer the case to the mediation agency or online dispute center. Such agency decides the disputes and refers the case back to Claims Tribunals to pass an order for compensation.

In conclusion, the government should pay more heed to such cases as it will make the people lose hope from the government agency and be transferred to private agency which will increase the risk of fraud in the private sector. As there is also one body which will look after such cases, the burden on such body will definitely be too high which will decrease the efficiency to provide justice to citizens. Thus if they expectation is not fulfilled they will move towards alternative. Therefore with the 2019 Act, the powers and efficiency of Claims Tribunals have been strengthened by amending, adding and repealing certain provisions according to the needs of the present times like Section 173(2), in which the appeals contesting the award of Claims Tribunals has significantly increased which made it imperative to recognize this change in various stipulations of Motor Vehicle Act.



This article is written by Deep Shikha, of Vivekanand Global University.

Recent Posts

See All

Claims Tribunal is defined under Chapter XII in Section 165 of Motor Vehicle Act 1988, which sanctions the State Government to initiate...