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Report No. 149

Removing Certain Deficiencies in The Motor Vehicles Act, 1988

Chapter 1


1.1. The Motor Vehicles Act, 1939 (Act 4 of 1939), based on the English Road Traffic Act, 1930, remained on the statute book for about five decades. Recently, the law relating to motor vehicles has been re-framed by enacting the Motor Vehicles Act, 1988 (Act 59 of 1988), but certain hardships and practical difficulties have been experienced in the working of the new Act even though it is only five years old. This Report discusses the amendments needed to the Act in the light of this experience.

1.2. The frequency of accidents caused by motor vehicles and the pitiable plight of the victims of such accidents and their dependants have been the subject-matter of comment by the Supreme Court in a number of cases.1 During recent years, the number of road accidents in the country have increased more alarmingly. Almost every day one finds in the newspapers sad tales of road accidents. The number of road accidents in the country during 1989-91 was 8,37,601. The number of persons killed during the aforesaid period was 1,65,222. The State-wise break up of the road accidents and the number of persons killed in such accidents in India during 1989-91 is contained in the Annexure.

There is, therefore, an urgent need for streamlining the mechanism through which the victims or their legal representatives are compensated for their loss in such accidents so that they may be able to receive expeditiously an appropriate amount as compensation for the damages sustained by them. It is felt all-round that victims of motor accidents and their legal representatives, where the accident is fatal, besides having grievously suffered as a result of the unfortunate event, are subjected to the agonies and uncertainties of a legal battle for a number of years for receiving the damages due to them through the process of Court.

Of late, Lok Adalats have been settling the cases of such nature but it has been found that the victims or their legal representatives are compelled to be satisfied with a paltry sum out of the damages claimed by them. Such persons have no other option but to settle the dispute because they do not know for how many more number of years they will have to litigate for receiving the damages. In the backdrop of these and other related matters, the Law Commission has suo motu taken up the exercise of finding a solution to some of the problems relating to the Motor Vehicles Act and giving their appropriate recommendations thereon. These are discussed below.

1. See for example, State v. Darshna Devi, AIR 1979 SC 855 and Concord Insurance Co. v. Nirmala Devi, AIR 1979 SC 1666.

1.3. In India, there are a number of legislations dealing with the topic of wrongful deaths.1 Of these, the Fatal Accidents Act, 1855 deals generally with the liability for compensation for wrongful deaths (including deaths resulting from motor accidents). The Law Commission in its 111th Report2 considered the provisions of the Fatal Accidents Act, which deal with some aspects of the same species of liability as the one with which we are here concerned and it made certain recommendations but those recommendations have not so far been implemented.

It would, therefore, be proper that the Government considers both reports together to avoid anomalies and inconsistencies between the two enactments. Some of the areas where the other enactments impinge upon the present topic of discussion are also referred to at the appropriate places of this Report. There are also several shortcomings in the Motor Vehicles Act, 1988 which need to be set right. The more important of these inadequacies may be briefly touched upon at this stage.

1. These are the Legal Representatives' Suits Act (XII of 1855), the Fatal Accidents Act (XIII of 1855), the Workmen's Compensation Act (VIII of 1923), the Employers' Liability Act (XXIV of 1938), the Employees' State Insurance Act (XXXIV of 1948), the Merchant Shipping Act (44 of 1958), the Carriage by Air Act (69 of 1972), the Motor Vehicles Act (59 of 1988), the Indian Railways Act (24 of 1789) and the Public Liability Insurance Act (6 of 1991).

2. 111th Report dated 16-5-1985 which has recommended a legislation proposed to be named "Wrongful Deaths Act, 1985" to replace the Fatal Accidents Act, 1885.

1.4. Section 140 of the Motor Vehicles Act, 1988 provides for payment of compensation on "no fault" basis but the scope of the section is limited as it applies only where the victim dies or is permanently disabled. It does not provide for any relief in respect of injuries other than permanent disablement. The Commission has felt it necessary to widen its scope and coverage. The amount of compensation, both in case of death and permanent disablement, seems to be inadequate and requires reconsideration.

1.5. There appears to be infelicitous drafting, want of clarity and overlapping in section 147 of the Motor Vehicles Act, 1988. These drafting defects and obscurities have caused difficulty in interpretation of section 147 and therefore it requires amendment.

1.6. Under the Motor Vehicles Act, 1988, on the death of a person in a motor accident, the 'relatives' and 'dependants' of the deceased are entitled to claim compensation. Similar provisions exist in the Fatal Accidents Act, 1855 and the Railways Act, 1989 but there is no uniformity in the definitions of 'relative' and 'dependant' under the Motor Vehicles Act, 1988. There is, therefore, need to bring uniformity in the aforementioned expressions.

1.7. The choice of remedies provided under section 167 is unhelpful, particularly, when vastly different remedies are provided under the Workmen's Compensation Act, 1923; Employees' State Insurance Act, 1948 and other laws. This requires redrafting of section 167.

1.8. The aforesaid difficulties have prompted the Law Commission to reconsider these questions suo motu with a view to make the law simpler, remove deficiencies in the existing law, to prevent litigation on technicalities and also to remove the anomalies in the 1988 Act.

1.9. With the above object in view, we proceed to examine and analyse the deficiencies in the Motor Vehicles Act, 1988. The present Report is confined to the provisions of the Motor Vehicles Act, 1988 (Act 59 of 1988) relating to the liability incurred by insurers, owners and users of motor vehicles where any person or property suffers damage in an accident involving the vehicle.

1.10. It may be recalled that the Commission has also made various recommendations relating to the amendments in the Motor Vehicles Act and its ancillary provisions in its 51st, 85th, 106th and 119th Reports.

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