SCHOOL OF LAW

MANIPAL UNIVERSITY
JAIPUR

Topic – TRANSPORTATION LAW

Submitted by-
ISHA MANCHANDA
191305001
BBA LLB

Submitted To-

Mr. Siddharth Badkul

(Assistant professor)
 Acknowledgment

I would like to express my sincere thanks to my teacher. Without her

wonderful support, this project would not have been possible.

she has been a tremendous help in leading me through the project,

giving me the information, I required and motivating me to complete it.

Lastly, I thank my parents for everything they have provided me and

God for keeping me in good enough condition to finish my assignment
on time. I also wish to thank my friends who help me explain the topic in
summary.

ISHA MANCHANDA

191305001

BBA LLB

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 Table of Contents

Chapter 1
1. Introduction……………………………………………………………. 3-4
Chapter 2
2. Historical Background………………………………………………… 5-7
Chapter 3
3. No Fault Liability Under Motor Vehicle Act 1988 (Chapter X) ……8-10
Chapter 4
4. Case study of no fault liability……………………………………….. 11-12
Chapter 5
5. Conclusion………………………………………………………………13
Bibliography ……………………………………………………………….14

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 Chapter 1
INTRODUCTION
The frequency of people who get assassinated in motor vehicle accidents is increasing
per day. The vital origin of sustenance to such hexed people and their dependents is
the indemnity that they are designated to accept under law. Right from 1956, motor
accident allowance law has been in a case of alteration. It was in that year that the
legislature amended the Motor Vehicles Act 1939 by including diverse advanced
categories.

Over the years several amendments pursued and in 1988, a new Motor Vehicles Act
replaced the old one. Over the years, the judiciary has not only been called upon from
interval to interval to construe these legal provisions and apply them to varied situations
and facts.

The first enactment related to Motor Vehicles in India was the Indian Motor Vehicles
Act,1914 which was afterwards reinstated by the Motor Vehicle Act, 1939. The Act 1939
had been amended many times.

In spite of many amendments it was felt obligatory to bring out an extensive legislation
keeping in mind the notifications in transport, technology, pattern of passenger and
consignment movements, expansion of road structure in the country and principally the
enhanced approach in the motor vehicles management. Divergent committees as well
as the Law Commission had gone into various aspects of road transport.

Manifold Members of parliament had also aided for overall review of the Motor Vehicles
Act 1939.A working group was thus compiled in January 1984 to review all the
provisions of the Act of 1939. This working group and comments received from the
State governments were conferred at an exclusive meeting of Transport ministers of all
State and Union Territories.

On the basis of the outcomes received in the meeting of Transport Ministers and
suggestions made by the Supreme Court in a case the Motor Vehicles Bill was

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introduced in the Parliament.The Motor Vehicles Act 1988 has so far been amended
three times in the years of 1984,2000 and 2001.

Justification of definition of the several categories of motor vehicles:-

The amendment in the year 1994 included:

 Amendment in the year 2001 was constrained.

 Mandating of a minimum one year experience of driving of light motor vehicle
before a person can be granted a license for transport vehicle tightening of
norms for drivers transporting dangerous or hazardous goods.
 Empowering Central Government to make rule for standardizing components in
Motor Vehicles.
 Need to bring the buses plying on CNG within the purview of State Transport
Authority in respect of fixation of route permits and fares.
 Encouraging use of battery CNG and solar energy as an auto furl by exempting
vehicles using such fuel from the requirement of permit or fixation of fall by the
state government.
 Increasing the amount of compensation in the event of death from Rs.25000/- to
Rs.50000/- in respect of no fault liability.

The Amendment in the year 2000 constituted of:

 Alterations made in transport vehicle without prior approval of the Registering

Authority were barred.
 Authorized use of CPG as an auto fuel.
 Buses used by educational institutions brought under the purview of permit
regime.

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 CHAPTER: - 2
HISTRIOCAL BACKGROUND
The Motor Vehicles Act 1939 originally provided for the award of allowance on the
convention of ‘no fault’ liability. The 1939 Act was accordingly amended by Motor
Vehicles (Amendment)Act,1982 consolidating sections 92-A to 92 –E to furnish, for the
first time payment of remittance on the principle of ‘no fault’. The 1939 Act as amended
by the 1982 Amendment Act was nonetheless subsequently annulled. A new Act ‘Motor
Vehicles Act 1988 (Act 59 to 1988) was enacted. It came into cause from 14 th
October,1988. In this Act the sections enacted were Sections 140 to Sections 144
(interrelated to earlier sections 92-A to 92 E. The Act also provided for award of
compensation resulting from a casualty originating out of the use of motor vehicles. In
case of award of compensation on the principle of ‘No fault’ (Chapter X Sections 140 to
Sections 144)

Satindra Nath Raha and Uma Shankar Shastri were travelling by a bus owned by Gupta
of M.P. Speedways Company. They were travelling from Bhind to Gwalior. On the way
a bus owned by Bhuta drove from opposite direction. On account of laxity of both the
buses there was a head on collision of the two buses as a repercussion of which
Satindra Nath Raha and Uma Shankar Shastri sustained brutal injuries to which they
deceased on the very day in the hospital facility.

Widow of Raha claimed a compensation of Rs.3,00,000 under Section 110(A) of Motor

Vehicles Act and Mrs.Shastri claimed a sum of Rs.1,20,000 as reimbursement.

The Claims Tribunal decreed the claim of Mrs. Raha to the extent of Rs.60,000 and of
Mrs. Shastri to the extent of Rs.40000. The compensation awarded to Mrs. Raha is on
the basis of the Salary which Mr.Raha would have earned upto the age of 55 years after
deducting half the salary. The quantum awarded by the Tribunal was upheld by the High
Court. Gupta and Mrs. Raha filed the present appeals in this Court. Gupta contended
that the compensation awarded was exorbitant and Mrs.Raha opposed that the
compensation granted was excessively deficient and should be increased. Allowing the
appeal filed by Mrs. Raha and dismissing the appeal filed by Gupta.

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Court Held:
1. The contention of Gupta that he should not be made liable to pay the compensation
since no negligence was alleged against the driver Ram Swarup negatived. Although
the plaint is loosely drafted but it clearly contains the relief of compensation against
Gupta and Ram Swarup, the driver. Pleading have to be interpreted not with formalistic
rigour but with latitude or awareness of low legal literacy of poor people. The Claims
Tribunal and the High Court overlooked two important and vital considerations. Firstly
the increments which Mr. Raha would have earned while reaching the maximum of his
grade long before his retirement and secondly the pensionary benefits which he would
have obtained had he retired. It would be reasonable to expect that if the deceased had
not died due to the accident he would have lived at least upto the age of 65 years. The
Court, therefore, enhanced the compensation of Rs. 60,000/- to Rs. 1,00,000/-. [948 F,
G, 949A-B, 950A-B]

2. It is unfortunate that section 95(2)(d) of the Motor Vehicles Act restricts the liability of
the Insurance Companies to Rs. 2,000/- only in case of a third party. The court
suggested that the Legislature should increase the liability of the Insurance company.
The court observed that it was anamolous that if a passenger dies in a plane accident
he gets the compensation of Rs. 1 lac and a person who dies in the road accident
should get only Rs. 2,000/-. [946 D-E]

3. Expressing its concern for the need for creating no fault liability by a suitable
legislation, the Court observed:
The time is ripe for serious consideration of creating no-fault liability. Having regard to
the directive principles of State policy, the poverty of the ordinary run of victim of
automobile accidents, the compulsory nature of insurance of motor vehicles, the
nationalization of general insurance companies and the expanding trend towards
nationalization of bus transport, the law of torts based on no-fault needs reforms. Where
the social need of the hour requires that precious human lives lost in motor accidents
leaving a trial of economic disaster in the shape of their unprovided for families call for
special attention of the law makers to meet this social need by providing for heavy and

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adequate compensation particularly through Insurance Companies. Our country cannot
afford the loss of a precious life when we are building a progressive society and if any
person engaged in industry, office, business or any other occupation dies, a void is
created which is bound to result in a serious setback to the industry or occupation
concerned. Apart from that the death of a worker creates a serious economic problem
for the family which he leaves behind. In these circumstances it is only just and fair that
the Legislature should make a suitable provision so as to pay adequate compensation
by property evaluating the
precious life of a citizen in its true perspective rather than devaluating human lives on
the basis of an artificial mathematical formula. [916 C--950 D-F]

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 CHAPTER: - 3
NO FAULT LIABILITY UNDER MOTOR VEHICLE ACT
CHAPTER X

LIABILITY WITHOUT FAULT IN CERTAIN CASES

Liability to pay compensation in certain cases on the principle of no fault-

1) Where death or permanent disablement in accordance with the provisions of this
section.
2) The amount of compensation which shall be payable under sub section (1) in
respect of the death of any person shall be fixed sum of Rupees eighty five
thousand and the amount of compensation payable under that sub section in
respect of the permanent disablement of any person shall be a fixed sum of
Rupees twenty five thousand.
3) The amount of compensation which shall be payable. Under sub section (1) in
respect of the death of any person shall be a fixed sum of rupees fifty thousand
and the amount of compensation payable under that sub section in respect of the
permanent disablement of any person shall be a fixed sum of twenty five
thousand rupees.
4) A claim for compensation under sub-section (1) shall not be defeated by reason
of any wrongful act, neglect or default of the person in respect of whose death or
permanent disablement the claim has been made nor shall the quantum of
compensation recoverable in respect of such death or permanent disablement be
reduced on the basis of the share of such person in the responsibility for such
death or permanent disablement.
5) Notwithstanding anything contained in sub-section (2) regarding death or bodily
injury to any person, for which the owner of the vehicle is liable to give
compensation for relief, he is also liable to pay compensation under any other
law for the time being in force:
Provided that the amount of such compensation to be given under any other law

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 shall be reduced from the amount of compensation payable under this section or
under Section 163A.]

141. Provisions as to other right to claim compensation for death or permanent

disablement.- (1) The right to claim compensation under Section 140 in respect of death
or permanent disablement of any person shall be in addition to [any other right, except
the right to claim under the scheme referred to in Section 163A (such other right
hereafter] in this section referred to as the right on the principle of fault) to claim
compensation in respect thereof under any other provision of this Act or of any other law
for the time being in force].

(2) A claim for compensation under Section 140 in respect of death or permanent
disablement of any person shall be disposed of as expeditiously as possible and where
compensation is claimed in respect of such death or permanent disablement under
Section 140 and also in pursuance of any right on the principle of fault, the claim for
compensation under Section 140 shall be disposed of as aforesaid in the first place.

(3) Notwithstanding anything contained in sub-section (1), where in respect of the death
or permanent disablement of any person, the person liable to pay compensation under
Section 140 is also liable to pay compensation in accordance with the right on the
principle of fault, the person so liable shall pay the first-mentioned compensation and—

(a)if the amount of the first-mentioned compensation is less than the amount of the
second-mentioned compensation, he shall be liable to pay (in addition to the first-
mentioned compensation) only so much of the second-mentioned compensation as is
equal to the amount by which it exceeds the first mentioned compensation;

(b)if the amount of the first-mentioned compensation is equal to or more than the
amount of the second-mentioned compensation, he shall not be liable to pay the
second-mentioned compensation.

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142. Permanent disablement.- For the purposes of this Chapter, permanent
disablement of a person shall be deemed to have resulted from an accident of the
nature referred to in sub-section (1) of Section 140 if such person has suffered by
reason of the accident, any injury or injuries involving:—

(a)permanent privation of the sight of either eye or the hearing of either ear, or privation
of any member or joint; or

(b)destruction or permanent impairing of the powers of any member or joint; or

(c)permanent disfiguration of the head or face.

143. Applicability of Chapter to certain claims under Act 8 of 1923.- The provisions of
this Chapter shall also apply in relation to any claim for compensation in respect of
death or permanent disablement of any person under the Workmen’s Compensation
Act, 1923 resulting from an accident of the nature referred to in sub-section (1) of
Section 140 and for this purpose, the said provisions shall, with necessary
modifications, be deemed to form part of that Act.

144. Overriding Effect- The provisions of this Chapter shall have effect notwithstanding
anything contained in any other provision of this Act or of any other law for the time
being in force.

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 CHAPTER 4
CASE STUDY OF NO FAULT LIABILITY

Cases:
S. 140 to S. 144 correspond to sections 92A to 92E of the old act and provide for liability
without fault. The Supreme Court in M.K. Kunhimohammed v P.A. Ahmedkutty, AIR
1987 SC2158 suggested that the compensation amount payable under sec 92A of the
old act for no fault liability should be increased. Accordingly Sec 140 provides for
payment of Rs 25000 in case of death and Rs 12000 in case of permanent disablement
as compensation when under the old act the compensation payable was Rs15000 in
case of death and Rs 7500 in case of permanent disablement. Section 140(2) is not
retrospective. In an application pending under section 92(A) of the 1939 Act when the
1988 act came into force, compensation awardable is Rs 15000 for death and not Rs
25000. It was so held in Prakash Chandumal Khatri vs Suresh Pahilajrai Makhija , AIR
1991 Bombay 365; the Oriental Insurance Co. Ltd vs Seela Ratnam, AIR1997 Kerala
109(FB) there was an accident on 9-8-1982 resulting in a the death of two persons . in
its order dated thus in Oriental F.and G. Ins. Co v. Shantibhai there was an accident
on 9-8-1982 resulting in the death of two persons .In its order dated 5-8-1983 ,the
claims tribunal allowed compensation without going into the question of negligence of
the driver or the owner of the vehicle, under section 92-A of the(1939) Act which came
into the force on 1-10-1982, i.e, after the date of the accident. The Bombay High Court
affirmed the decision and observed:
“….Section 92-A (1993 Act) does not expressly restrict its application to future
cases and it being a piece of welfare legislation has to be interpreted liberally….I am
therefore, of the considered view that….S. 92-A is to be applied to all pending cases,
irrespective of the date on which the accident occurred, the fact that the Amendment
Act postulates that the amendments will come into force on the dates notified in the
Government Gazette, being of no consequence. Similarly, the circumstances that S. 92-
A is an entirely new provision in no manner negatives the views taken by me.”
But contrary view has been taken by the Rajasthan High Court in Rajasthan State Road
Corp. v. Ogam, AIR 1992 Raj 61. The amendment by Act 54 of 1994 raising the amount

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of compensation from Rs 25000 to Rs 50000 in case of death has not been held
applicable to an accident taking place before the amendment. United India Insurance
Ltd. V. Balubhai Limjibhai Patel, AIR 1997 Guj 78. Contrary view has been taken by the
Himachal Pradesh High Court : Manjit Singh v. Rosan Singh, AIR 1997 HP 21. The
insurance company in an enquiry for the liability under section 140 cannot raise
defenses under section 149. And the Tribunal can direct the insurance company to pay
the amount subject to appropriate direction for reimbursement from the owners if finally
it is not found liable.

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 Chapter 5
Conclusion

The chapter X(section 144) of the motor vehicles act , 1988 (section 146 and section
177) recognizes liability without fault in certain cases .section(144) provides that in
the case of death of victim , a fixed sum of Rs. 50,000 (Rs. Fifty thousand) section
(142 ), and in the case of his permanent disability a fixed sum of Rs. 25,000 (Rs
Twenty Five thousand ) can be claimed as compensation section (140) even if the
owner or the vehicles is not at fault section (140) . It follows that the defense of
contributory negligence or any other defence is also not allowed when the fixed sum of
amount is claimed under this section (144). This section therefore attaches strict liability
of the owner or on their behalf of the insurance company. However , if the claim
exceeds the aforesaid fixed sum of amount , then the plaintiff has to establish fault
on the part of the owner of the vehicle under section 140 of the act (146) and
(177) .The excess of amount claimed under section (141) shall be in addition to the
fixed sum amount paid under section (140) after making adjustment section (140).
Apart from that, payment of solatium in cases of hit and run accidents has been
established by the central government in those cases where the person died or was
grievously hurt section (142) and the identity of the vehicle involved cannot be
ascertained in spite of reasonable efforts section (140). The payment of compensation
payable out of such solatium fund will be Rs. 25,000 in case of death and Rs. 12,500
in case of grevious hurt section(140) . It may be added that the provisions of the motor
vehicle act shall also apply in relation to any claim for compensation in respect of death
or permanent disablement of any person under the workmen’s compensation act 1923
resulting from an accident of the nature referred to in sub-section (144) of section 140
and for this purpose, the said provisions shall, with necessary modification be deemed
to from part of that act (144).Similarly compensation for death is also payable by of
carrier of air under the carriage by AIR Act, 1934.

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 BIBLIOGRAPHY
BOOKS
1. Singh, S.P. “ Law of Torts” Delhi, Universal law publishers, 2007
2. Bangia, R K (1997): Law of Torts, Allahabad Law Agency, Faridabad. Bhatnagar, A S (2004): Motor
Accident Compensation, Orient Law House, New Delhi
3. Ratanlal & Dhirajlal, “The Law of Torts” Nagpur, Wadhwa & Company, 2007
4. Calabresi, G (1961): ‘Some Thoughts on Risk Distribution and the L aw o f To r t s ’ , Ya l e L a w
J o u r n a l , 70 , p p 4 9 9 - 5 5 3 . Cooter, R D and T S Ulen (1998): Law and Economics, second
(ed), New York, Addison-Wesley

WEBSITES
1. 4.http://morth.nic.in/
2. http://indiankanoon.org/doc
3. http://morth.nic.in/writereaddata/sublinkimages/Introduction692234863.pdf
4.http://www.ebc-india.com

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