The Punjab & Haryana High Court has affirmed that the enhanced no-fault compensation of Rs.5,00,000 under Section 164 of the Motor Vehicles Act, 1988, applies retrospectively to accidents occurring before the 2019 amendment, provided the claim was filed under Section 163-A. This ruling aligns with the Supreme Court’s precedent in Ram Murti & Ors. v. Punjab State Electricity Board and significantly alters the compensation landscape for pre-amendment motor accident claims.
Background & Facts
The Dispute
The appellant, Jaswant Kaur, filed a claim petition under Section 163-A of the Motor Vehicles Act, 1988, seeking compensation for the death of her husband, Sohan Singh, who died on 06.07.2002 in a motor accident involving a truck bearing registration number HR-03-GA-0187. The accident occurred when the truck collided with the scooter being driven by Sohan Singh. The claim petition was filed on 12.03.2003 before the Motor Accident Claims Tribunal, Panchkula.
Key Facts
- The deceased, Sohan Singh, was the sole breadwinner of the family and was aged 48 years at the time of death.
- The vehicle involved in the accident was owned by respondent No.1 and insured with respondent No.2 (Insurance Company).
- The Tribunal found the accident occurred due to the use of the insured vehicle and held the insurer liable.
- No challenge was raised by respondents regarding liability or the occurrence of the accident.
- The Tribunal awarded compensation of Rs.1,62,000/- along with interest at 9% per annum from the date of filing of the claim petition (12.03.2003) until realization.
- The Motor Vehicles (Amendment) Act, 2019 (Act No.32 of 2019) came into force on 18.09.2019, replacing Section 163-A with Section 164, which mandates a fixed compensation of Rs.5,00,000/- in case of death.
Procedural History
- 06.07.2002: Motor accident resulting in death of Sohan Singh.
- 12.03.2003: Claim petition filed under Section 163-A before the Motor Accident Claims Tribunal, Panchkula.
- 12.03.2003: Tribunal delivered its award, granting Rs.1,62,000/- as compensation with 9% interest from the date of filing.
- 19.09.2019: Motor Vehicles (Amendment) Act, 2019 came into force, introducing Section 164.
- 2023: Supreme Court delivered judgment in Ram Murti & Ors. v. Punjab State Electricity Board, holding Section 164 applicable retrospectively to pre-amendment deaths.
- 2025: Appellant filed this appeal before the High Court seeking enhancement of compensation to Rs.5,00,000/-.
The Parties' Positions
The appellant contended that the claim, though filed under Section 163-A, was a no-fault liability claim and therefore entitled to the enhanced benefit under Section 164 as interpreted by the Supreme Court in Ram Murti. The respondents argued that the compensation already awarded was adequate and that retrospective application of Section 164 was not intended or permissible.
Relief Sought
The appellant sought enhancement of compensation from Rs.1,62,000/- to Rs.5,00,000/-, with interest at 9% per annum from 12.03.2003 until realization, and directed compliance with the Supreme Court’s directions on electronic service of awards.
The Legal Issue
The central question was whether claimants in motor accident cases filed under Section 163-A, arising from accidents occurring before the 2019 amendment, are entitled to the enhanced fixed compensation of Rs.5,00,000/- under Section 164 of the Motor Vehicles Act, 1988, as interpreted by the Supreme Court in Ram Murti & Ors. v. Punjab State Electricity Board.
Arguments Presented
For the Appellant
The appellant’s counsel relied on the Supreme Court’s judgment in Ram Murti & Ors. v. Punjab State Electricity Board (2023 ACJ 631), which held that Section 164, being a beneficial provision, must be applied retrospectively to accidents occurring prior to the 2019 amendment, even if the claim was filed under Section 163-A. The counsel further cited two decisions of this Court - Santosh @ Munna Devi v. Swaranjti Singh and Chhailu & Anr. v. Ashok Kumar & Anr. (23.01.2024) - which followed Ram Murti and granted enhanced compensation in similar circumstances. It was argued that Section 164 was enacted to ensure uniform, adequate compensation for victims of no-fault accidents and that denying its benefit to pre-amendment cases would defeat the legislative intent.
For the Respondent
The respondents’ counsel contended that the Tribunal’s award of Rs.1,62,000/- was based on the law prevailing at the time of the accident and that retrospective application of Section 164 would violate the principle of non-retroactivity of statutes. They argued that Ram Murti was distinguishable as it involved a claim under Section 166, not Section 163-A, and that the Supreme Court did not intend to override the settled compensation methodology applicable to claims filed under Section 163-A.
The Court's Analysis
The Court examined the nature of Section 164 and its relationship with Section 163-A. It noted that both provisions deal with no-fault liability, where compensation is payable irrespective of negligence, and that Section 164 was introduced to replace Section 163-A with a higher, fixed quantum of compensation. The Court emphasized that the Supreme Court in Ram Murti had explicitly held that the Motor Vehicles Act is a beneficial legislation and that the enhanced compensation under Section 164 must be extended to all cases of death arising from motor accidents, regardless of whether the claim was filed under Section 163-A or Section 166.
"We are inclined to give the appellants the benefit of the beneficial provisions which have been enacted by Parliament. Hence, in modification of the order of the High Court, we direct that the appellants shall be entitled to an amount of Rs.5,00,000/- as compensation."
The Court observed that the reasoning in Ram Murti was not confined to Section 166 claims but was grounded in the legislative intent to provide uniform, adequate, and timely compensation to victims of motor accidents. The Court further noted that the Santosh @ Munna Devi and Chhailu judgments had already applied this principle to Section 163-A claims, and this Court was bound by its own coordinate bench’s precedent.
The Court rejected the respondents’ argument that retrospective application would be unjust, noting that the Supreme Court had already addressed this concern in Ram Murti and had directed payment of the enhanced amount even where partial compensation had been paid earlier. The Court held that the claimant’s right to enhanced compensation arises from the nature of the accident and the statutory framework, not the procedural route chosen at the time of filing.
The Verdict
The appeal was partly allowed. The Court enhanced the compensation from Rs.1,62,000/- to Rs.5,00,000/-, directing payment of the differential amount of Rs.3,38,000/- along with interest at 9% per annum from the date of filing of the claim petition, i.e., 12.03.2003, until realization. The Court directed the Insurance Company to comply with the electronic service and payment directives issued by the Supreme Court in Bajaj Allianz General Insurance Co. v. Union of India (16.03.2021). All pending applications stood disposed of.
What This Means For Similar Cases
Retrospective Benefit Applies to All No-Fault Claims
- Practitioners must now assert Section 164’s Rs.5,00,000 compensation in all pending or future claims arising from accidents occurring before 18.09.2019, regardless of whether the petition was filed under Section 163-A or Section 166.
- Claims previously settled below Rs.5,00,000/- may be reopened if not fully paid, provided the limitation period has not expired.
Insurance Companies Must Reassess Liability
- Insurers can no longer rely on the pre-amendment compensation tables for pre-2019 accidents.
- All claims involving death must be evaluated against the Rs.5,00,000 benchmark, even if the claim was filed years ago under Section 163-A.
Procedural Form Does Not Limit Substantive Right
- The choice of statutory provision at the time of filing does not extinguish the claimant’s right to the enhanced benefit under Section 164.
- Courts must treat Section 164 as a substantive right that attaches upon the occurrence of the accident, not merely a procedural change.
Compliance with Electronic Service is Mandatory
- Insurance companies must comply with the Supreme Court’s directive in Bajaj Allianz to electronically transmit authenticated copies of awards to insurers.
- Non-compliance may attract contempt proceedings or penalties under the Insurance Regulatory and Development Authority (IRDAI) guidelines.
Interest Calculation Remains Unchanged
- Interest continues to run from the date of filing of the claim petition, not from the date of accident or award.
- The 9% rate, as awarded by the Tribunal, remains the standard unless modified by a higher court.
