MOTOR INSURANCE

(THIRD PARTY SECTION)

 MOTOR THIRD PARTY INSURANCE
In India, the Motor Vehicles Act was passed in 1914 and came
into effect 1st Feb, 1915 and continued till 1939 introducing the
law to compulsory third party insurance. In the Motor Vehicle Act
1939 came into effect from 1st July, 1939. Again the same was
amended with effect from 1st July 1946. Again same was
amended by the Motor Vehicles (Amendment) Act 1950 in order
to establish reciprocity between the provinces of British India
and the Indian States. Again the act was amended in 1956. In the
matter of Third Party insurance of Motor Vehicles with effect
from the practice of motor insurance in India generally follows
that of the U.K. market. The business was governed by a tariff till
March 2008, and now like the UK market it is non-tariff.
However, the IRDA, the Indian regulatory authority for insurance
has directed insurers in India to continue to follow the tariff
policy wordings. The Motor Vehicles Act 1988 (Act No. 59 of
1988) has replaced the earlier 1939 Act and it became effective
from 1st July, 1989. Further amendment was made by Act 54 of
1994, with effect from 14th Nov, 1994.
 MOTOR VEHICLE ACT

Chapter X of 1988 Act (Sec. 140 to 144) deals with No

Fault Liability
Chapter XI (Sec. 145 to 164) deals with Insurance of
Motor Vehicles against Third Party Risks
Chapter XII(Sec. 165 to 176) deals with Claims Tribunals
 Reasons for amendment w.e.f. 14.11.1994
 Removal of time limit to file compensation petition
 Inclusion of Structured Compensation Section i.e. 163A
 Protecting the loss arising out of the use/carrying of
Hazardous Goods,
 IMT effective from 01.07.2002 to 31.12.2006 – De-tariffed from
01.01.2007

 CERTAIN IMPORTANT DEFINITIONS

 Motor Vehicle: “Mechanically self propelled vehicle having

engine capacity above 25 cc.”
 Articulated vehicle: “A motor vehicle to which a Semi-trailer is
attached”
 Trailer: “Any vehicle other than a Semi trailer or a Side car
drawn by a motor vehicle”
 Contract Carriage: “A motor Vehicle that carries a passenger for
hire or reward under a contract on fixed or agreed rate from
one point to another or on time basis”
 Stage Carriage: “A motor Vehicle that carries more than 6
passengers excluding driver for hire or reward at separate fares
paid by individual passengers for whole or part journey”
 CERTAIN IMPORTANT DEFINITIONS
 LMV: Up to GVW 7500 kgs
 MMV: Between GVW 7500 kgs to 12000 kgs
 HGV: GVW above 12000 kgs
 Public place: “A road /street/way/other place, whether a
thorough or not, to which the public have a right of access
and includes place or stand from where the public are picked
up or set down by a Stage Carriage
(As per court interpretation it will cover all places including
those under private ownership where members of public have
an access whether free or controlled in any manner
whatsoever).”
 Reciprocating Country: “Any country as notified by Govt. of
India through its Gazette on the basis of reciprocity for the
purposes of this Chapter.”
 RELEVANCE OF MV ACT TO MOTOR INSURANCE

 Section 146: Necessity of insurance against third

party risks

Compulsory insurance for bringing vehicle to

public place
Third party includes Government
Vehicles carrying dangerous or hazardous
goods shall compulsorily be insured under PLI
Act insurance policy
Central / State Govt. , Local authority, State
transport Undertaking vehicles are exempt
provided a fund is established and maintained
SECTION 146: 1) No person shall use, except as a passenger, or cause or allow any other person to  use,
a  motor vehicle in a public place, unless there is in  force in  relation to  the use  of the  vehicle by that
person or that other person, as the case may be, a policy of insurance complying with the
requirements of this Chapter.
Explanation.--A person  driving a  motor vehicle merely as a paid employee, while  there is  in
force  in relation  to the  use  of  the vehicle no  such policy  as is required by this sub-section, shall not
be deemed  to act  in contravention of the sub-section unless he knows or has reason to believe that
there is no such policy in force.
2) Sub-section (1) shall not apply to any vehicle owned by the Central Government or a State
Government and used for Government purposes unconnected with any commercial enterprise.
3) The appropriate Government may, by order, exempt from the operation of sub-section (1) any
vehicle owned by any of the following authorities, namely:--
a) the  Central Government  or a  State Government,  if the vehicle is  used  for  Government 
purposes  connected  with  any commercial enterprise;
b) Any local authority;
c) Any State transport undertaking:

Provided that no such order shall be made in relation to any such authority unless a fund has
been established and is maintained by that authority in accordance with the rules made in that
behalf under this Act for meeting any liability arising out of the use of any vehicle of that
authority which that authority or any person in its employment may incur to third parties.
Explanation.--For the  purposes of this sub-section, "appropriate Government" means the Central
Government or a State Government, as the case may be, and--
In relation to any corporation or company owned by the Central Government or any State
Government, means the Central Government or that State Government;
In relation to any corporation or company owned by the Central Government and one or more State
Governments, means the Central Government;
In relation to  any other State transport undertaking or any  local authority,  means that Government
which has control over that undertaking or authority.
 RELEVANCE OF MV ACT TO MOTOR INSURANCE

Section 147: Requirements of policies and limits of Liability
Policy to be issued by the authorised insurer covering
Unlimited liability incurred for death and bodily injury to
any person
Owner of goods or his representative carried in Goods carrying
vehicle
Passengers of public service vehicles
Liability under EC Act in respect of Driver, Conductor
EC Liability Employees in goods carrying vehicle (w.e.f. 31.05.2010
monthly wages max upto Rs. 8,000/-. Minimum Amt for Death:
Rs. 1,20,000, Min Factor Multiplier 99.37; Max. Amt. Rs.
9,14,160/- (8000*50%*228.54), Max Factor Multiplier 228.50; For
PTD: Min Amt: Rs. 1,40,000/- Max Amt.: Rs. 10,96,800/-
(8000*60%*228.54); For Death: 50%, For PTD: 60%, Min. Funeral
Expenses Rs. 5000/-, Medical Expenses: Actual, Total Disablement
(Temporary/Permanent): Half Monthly Max Five Years, 28 Days,
Less than 28 days; Penalty S. 4A, upto 50% and Int. 12% )
Rs. 6000.00 for property damages (GR 39, INR 1 Lakh for M/C, Rs.
SECTION 147. Requirements of policies and limits of liability 

1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy
which--
a) is issued by a person who is an authorised insurer; and
b) insures  the person  or classes  of persons specified in the policy to the extent specified in sub-
section (2)--
i) Against any liability which may be incurred by him in respect of the death of or bodily injury to any
person or damage to any property of a third party caused by or arising out of the use of the vehicle in a
public place;
ii) Against the death of or bodily injury to any passenger of a public service vehicle caused by or arising
out of the use of the vehicle in a public place:
Provided that a policy shall not be required-
i) to  cover liability in respect of the death, arising out of and  in the  course of  his employment,  of
the  employee of a person insured  by the  policy or  in respect of  bodily  injury sustained by such an
employee arising out of and in the course of his employment other than a liability arising under the
Workmen's  Compensation Act,  1923, (8 of 1923.) in respect of the death of, or bodily injury to, any
such employee--
a) Engaged in driving the vehicle, or
b) If  it is  a public  service vehicle  engaged as  a conductor of  the vehicle  or in  examining tickets 
on  the vehicle, or
c) If it is a goods carriage, being carried in the vehicle, or
ii) To cover any contractual liability.
Explanation.--For the  removal of  doubts, it  is hereby declared that the death of or bodily injury to any
person or damage to any property of a third party shall be deemed to have been caused by or to have 
arisen  out  of,  the  use  of  a  vehicle  in  a  public  place notwithstanding that the person who is dead or
injured or the property which is  damaged was  not in  a public  place  at  the  time  of  the accident, if
the act or omission which led to the accident occurred in a public place.
Subject  to the  proviso to  sub-section  (1),  a  policy  of insurance referred  to in  sub-
section (1),  shall cover any liability incurred in  respect of  any accident,  up to  the 
following  limits, namely:--

a) Save as provided in clause (b), the amount of liability incurred;

b) in respect of damage to any property of a third party, a limit of rupees six thousand:
Provided that  any policy  of insurance  issued with  any limited liability and  in force, 
immediately before  the commencement of this Act, shall  continue to be effective for a
period of four months after such commencement  or till the date of expiry of such policy
whichever is earlier.
3) A  policy shall  be of  no effect  for the  purposes of  this Chapter unless  and until 
there is issued by the insurer in favour of the person  by whom  the policy is effected a
certificate of insurance in the  prescribed form  and containing  the prescribed
particulars of any condition  subject to  which the policy is issued and of any other
prescribed matters;  and different  forms, particulars and matters may be prescribed in
different cases.
4) Where a cover note issued by the insurer under the provisions of this  Chapter or  the
rules  made thereunder  is not  followed by a policy of  insurance within  the prescribed 
time, the  insurer shall, within seven  days of  the expiry of the period of the validity of the
cover note,  notify the  fact to  the registering  authority in  whose records  the  vehicle  to 
which  the  cover  note  relates  has  been registered or  to such  other authority  as the 
State Government  may prescribe.
5) Notwithstanding  anything contained  in any  law for the time being in  force, an 
insurer issuing  a policy of insurance under this section shall  be liable to indemnify the
person or classes of persons specified in  the policy  in respect of any liability which the
policy purports to  cover in  the case  of that  person or  those classes  of persons.
 
 OTHER IMPORTANT SECTIONS
 Section 148: Validity of policies of insurance issued in
reciprocating countries
 Section 149(1): Duty of Insurer to satisfy judgments awards
against persons insured in respect of third party risks
 Section 149(2): Defence of Insurer
 Breach of policy condition, such as, use of vehicle for hire or reward,
organised racing or speed testing , for a purpose not allowed by permit
 being driven by a driver not duly licensed,
 War, Civil War, Riot or Civil Commotion,
 Policy was obtained by the non disclosure of a material fact or by a
representation of fact which is false in some material particular
 Section 157 – Automatic Transfer
 Section 158(6): Duty of Police to inform to the Tribunal as well as Insurer and
Owner within 30 days from FIR date about accidents in Form 54
149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third
party risks

1) If,  after  a certificate of  insurance has  been issued  under sub-section  (3)  of section 147 in
favour  of the  person  by  whom  a  policy  has  been effected, judgment  or award  in respect 
of any  such liability as is required to be covered by a policy under clause (b) of sub-section
(1) of section  147 (being a liability covered by the terms of the policy)  is  obtained   against 
any   person  insured  by  the  policy,  then, notwithstanding that the insurer may be entitled to
avoid or cancel or may have  avoided or  cancelled the policy, the insurer shall, subject to the 
provisions of  this section, pay to the person entitled to the benefit of  the decree  any sum 
not exceeding the sum assured payable thereunder, as  if he  were the  judgment debtor,  in
respect  of  the liability, together  with any  amount payable  in respect of costs and any sum 
payable in  respect of  interest on that sum by virtue of any enactment relating to interest on
judgments.

2) No  sum shall  be payable by an insurer under sub-section (1) in respect of any judgment or
award unless, before the commencement of the proceedings  in which  the judgment  or award is
given the insurer had notice  through the  Court or,  as the  case may  be,  the  Claims Tribunal of 
the bringing  of the  proceedings, or  in respect of such judgment or  award so  long as  execution
is stayed thereon pending an appeal; and  an insurer  to whom  notice of  the bringing  of any such
proceedings is  so given  shall be entitled to be made a party thereto and to defend the action on
any of the following grounds, namely:--
a) That there has been a breach of a specified condition of the policy, being one of the following
conditions, namely:--
i) a condition excluding the use of the vehicle--
For hire or reward, where the vehicle is on the date of the contract of insurance a
vehicle not covered by a permit to ply for hire or reward, or
For organized racing and speed testing, or
For a purpose not allowed by the permit under which the vehicle is used, where the
vehicle is a Transport vehicle, or
Without side-car being attached where the vehicle is a motor cycle; or
ii) a condition excluding driving by a named person or persons or by any person
who is not duly licensed, or by any person who  has been disqualified for holding or
obtaining a driving licence during the period of disqualification; or
iii) A condition excluding liability for injury caused or contributed to by
conditions of war, civil war, riot or Civil commotion; or
b) that  the policy  is void  on the  ground  that  it  was obtained by  the non-
disclosure  of  a  material  fact  or  by  a representation  of   fact  which   was  false 
in  some  material particular.
 SOLATIUM FUND
 Fund established by Central Govt. w.e.f. 01.10.1982
 Provided in Section 161,162 & 163 of the Act
 Applicable for Hit & Run cases
 Rs. 25,000/- for death
 Rs. 12,500/- for grievously hurt as per IPC
 To be managed by GIC earlier now New India
 Funding in the ratio of 30:70 by Central & State Govt :
General Insurance Industry
 District Magistrate acts as Claims Settlement
Commissioner and Taluqa/ Sub-Divisional Officer acts as
Claims inquiry officer
 Refund of paid amount (U/s. 162 of M. V. Act 1988)
SECTION 165:   Claims   Tribunals

1) A  State   Government  may,   by notification in  the Official  Gazette, constitute 

one or  more Motor Accidents Claims  Tribunals (hereafter  in this Chapter referred to
as Claims Tribunal) for such area as may be specified in the notification for the 
purpose of  adjudicating  upon  claims  for  compensation  in respect of  accidents
involving  the death  of, or  bodily injury  to, persons arising  out of  the use  of motor
vehicles, or damages to any property of a third party so arising, or both.
Explanation.--For the removal of doubts, it is hereby declared that the expression
"claims for compensation in respect of accidents involving the death of or bodily
injury to persons arising out of the use of motor vehicles" includes claims for
compensation under section 140. 
2) A  Claims Tribunal shall consist of such number of members as the State
Government may think fit to appoint and where it consists of two or  more members, 
one of  them shall be appointed as the Chairman thereof.
3) A person shall not be qualified for appointment as a member of a Claims
Tribunal unless he--
Is, or has been, a Judge of a High Court, or
Is, or has been, a District Judge, or
Is qualified for appointment as a Judge of a High Court.
4) Where two or more Claims Tribunals are constituted for any area, the State
Government, may by general or special order, regulate the distribution of business
among them.
166.  Application   for compensation
1) An application for compensation arising out of an accident of the nature specified in sub-
section (1) of section 165 may be made--
By the person who has sustained the injury; or
By the owner of the property; or
Where death has resulted from the accident, by all or any of the legal representatives of the
deceased; or
By any agent duly authorised by the person injured or all or any of the legal representatives of the
deceased, as the case may be:
Provided that where all the legal representatives of the deceased have  not  joined  in  any 
such  application  for  compensation,  the application shall  be made  on behalf of or for the benefit
of all the legal representatives  of the  deceased and  the legal representatives who have  not so 
joined, shall  be imp leaded  as respondents  to  the application.
2) Every  application under sub-section (1) shall be made to the Claims Tribunal  having 
jurisdiction  over  the  area  in  which  the accident occurred,  and shall  be in  such form and shall
contain such particulars as may be prescribed:
Provided that  where any claim for compensation under section 140  is made  in such
application, the application shall contain a separate statement to  that effect  immediately before 
the  signature  of  the applicant.
3) No application for such compensation shall be entertained unless it is made within six months
of the occurrence of the accident:
Provided that  the Claims  Tribunal may entertain the application after the  expiry of  the said
period of six months but not later than twelve months,  if it is satisfied that the applicant was
prevented by sufficient cause from making the application in time.
4) Where  a police  officer has  filed  a  copy  of  the  report regarding an  accident to a Claims
Tribunal under this Act, the Claims Tribunal may,  if it thinks necessary so to do, treat the report as
if it were an application for compensation under this Act
Section 168:  Award of the Claims Tribunal

1) On  receipt  of  an application for  compensation  made  under  section  166,  the  Claims Tribunal
shall,  after giving notice of the application to the insurer and after giving the parties (including the
insurer) an opportunity of being heard,  hold an  inquiry into  the claim or, as the case may be, each
of  the claims  and, subject to the provisions of section 162 may make an  award determining the
amount of compensation which appears to it  to   be  just  and  specifying  the  person  or  persons 
to  whom compensation shall be paid and in making the award the Claims Tribunal shall specify  the
amount  which shall be paid by the insurer or owner or driver  of the vehicle involved in the accident
or by all or any of them, as the case may be:
Provided  that   where  such   application  makes   a  claim  for compensation under  section 140 
in respect  of the death or permanent disablement of  any person,  such claim  and any  other claim
(whether made in  such application  or otherwise) for compensation in respect of such death or
permanent disablement shall be disposed of in accordance with the provisions of Chapter X.
2) The Claims Tribunal shall arrange to deliver copies of the award to the parties concerned
expeditiously and in any case within a period of fifteen days from the date of the award.
3) When  an award  is made under this section, the person who is required to pay any amount in
terms of such award shall, within thirty days of  the date  of announcing  the award  by the  Claims 
Tribunal, deposit the  entire amount  awarded  in  such  manner  as  the  Claims Tribunal may direct.
 MOTOR ACCIDENT CLAIMS TRIBUNALS

 Section 165 deals about constitution of MACTs

 State Governments are empowered to constitute the
Tribunals
 A member has to be a judge in High Court or a
District Judge
 Powers of a Civil Court in taking evidence on oath or
enforcing attendance of a witness
 Section 169(1) empowers for summary procedure
instead of going into detailed inquiry
 There could be more than one members of the
Tribunal
 MOTOR ACCIDENT CLAIMS TRIBUNALS
 Section 152: Settlement between Insured & Insurer is valid
unless third party is a party to it. This section allows Pre-
litigation settlement
 Section 170: Insurer can assume defence on behalf of Insured
& Driver in case of collusion between the Claimants and
Insured or failure of the Insured to contest the case
 Section 168: Tribunal to send the copies of the award to the
parties concerned within 15 days of the judgment & the
judgment debtors to satisfy the award within 30 days from
the date of award
 Section 174: In case of non satisfaction of the award, amount
to be recovered from the judgment debtor as Arrears of Land
Revenue.
 Section 171: Award of interest where claim is allowed
 APPLICATION FOR COMPENSATION
 Section 166(2): Claims Tribunal having jurisdiction over the area where
 accident took place
 Claimants resides or carries on business
 Defendant resides
 No time limit for filing of claim application
 Section 140 ( earlier Sec. 92-A, 1939 Act w.e.f. 01.10.1982 – Rs. 15,000/Rs.
7,500/- w.e.f. 01.07.1989 Rs. 25,000/- & Rs. 12,000/-)
 Application for claim under No Fault Liability
 Rs. 50000/- for death & Rs. 25000/- for permanent Disablement ( Permanent
privation of the sight of eye etc., Section 142 of M. V. Act 1988, w.e.f. 14.11.1994)
 Claimant not required to prove negligence
 Documents required are insurance validity and involvement of insured vehicle
 Section 166
 Application for claim under Fault Liability
 Claimant to prove negligence
 Claims can be filed simultaneously under Section 140 & 166
 Claimants eligible for compensation under WC (EC) Act and MV Act can file
under one Act provisions only (U/s. 167 of the M. V. Act 1988)
 Amount of Compensation payable under General Damages

 Damages which the law presumes to flow from the

negligence.
 Following are the heads of General Damages
(illustrative) for which monetary compensation are
awarded

 Mental and nervous shock.

 Pain and suffering.
 Loss of amenities of life.
 Loss of enjoyment of life.
 Continued impairment of health.
 Loss of prospective earning.
 Loss of maltreatment aspect in case of facial
disfiguration.
 Structured Compensation
 Brought into effect from 14.11.1994 by insertions of Section 163-A & 163-B
 Valid for death/injuries occurring on or after 14.11.1994
 Persons having annual income upto Rs. 40000/- (2004 ACJ SC 934, Bipul Girishbai Soni Vs.
UII) are only eligible for seeking compensation
 W.e.f 22nd May, 2018, the compensation for death shall be Rs. 5,00,000/-, for permanent
disability – Rs. 5,00,000/- x % disability of Schedule I of EC Act, 1923 or minimum Rs.
50,000/- and for minor injuries, Rs. 25,000/-. From 01.01.2019, the above amounts will be
increased by 5% annually. This provision is retrospective in nature as per earlier SC
Judgments. – Padma Srinivasan Vs. Premier Insurance Co Pvt Ltd., 1982 ACJ 191 and
Maitree Koley Vs. NIA , 2004 ACJ 46 SC
 Once claimed under this, right to claim under section 140 & 166 is forfeited. Application
u/s 140 and 163-A are not simultaneous. Conversion of application from 166 to 163-A
post NFL award is not allowed. 2012 ACJ 2253 Bom NIA Vs. Bruno Baltazar Saldanha;
2008 ACJ 2863 HP, Kamladevi Vs. Ramkrishan; 2003 ACJ 350 Bom UII Vs. Jana Bai
 Compensation is calculated as per the scale of compensation given in IInd Schedule of the
Act.
 Rs. 15000/- shall be taken as the annual notional income for persons having no income or
1/3rd of the earning surviving spouse (this is prior to amendment dated 22nd May, 2018.
 Special Damages
 Damages relate to actual financial loss or expenses
resulting from the accident

 Some of the heads under which Special Damages are

awarded are:
 Medical, Surgical and hospital expenses for injury
cases
 Loss of salary and income for injury cases
 Loss of dependency for death cases
 Funeral expenses for death cases
 Loss of estate for death cases
 Loss of Consortium cases
Legal Principles underlying Motor Third Party Insurance

 Duty of care to your immediate neighbors (the care means

reasonable care),
 Contributory negligence (not applicable to under age
children)
 Composite negligence (joint tort feasors)
 APPEALS

 Appellate authority against the Tribunal award is High Court

 Time limit for filing appeal is 90 days from the date of award
( EC award for 60 days on law points only)
 Filing appeal on grounds of quantum is allowed provided
application under Section 170 had been filed before the
Tribunal
 Deposit of 50% of the awarded amount or Rs. 25000/-
whichever is less should be deposited prior to filing of appeal
( for EC award full amount to be paid U/s. 30 of the EC Act)
 Amount in dispute less than Rs. 10000/-
 Appellate authority against High Court order is Supreme Court
by way of special Leave Petition, if the law points are involved
 LOK ADALAT AND LEGAL SERVICES ACT 1987
 Initiated by Justice Mr. P.N. Bhagawati
 It started in the year 1986
 Statutory status given in 1987 by passing of The Legal Services
Authorities Act, 1987.
Object – To provide free and competent legal services to the weaker
section of the society and to organize Lok-Adalats to ensure speedy
and inexpensive justice through conciliation
Section 19 (5) -To determine and to arrive at a compromise settlement
between the parties to dispute in respect of:
Any case pending before court or
Any case not filed in court, but falling within the jurisdiction of Lok-
Adalats.
Section 21(1) – The court fee paid shall be refunded in the manner
provided under Court Fee Act, 1870.
Section 21(2) – The award is binding on all and no appeal shall lie against
the Award.
Section 22 (a) – MACT does not fall under the said section because it
covers only Insurance service and MACT claims do not fall under the
said category.
 DRIVING LICENCE
• Motor Cycle with Max. 50 cc – minimum age 16 years (section 7 (2) to
get learner license guardian’s consent is required)
• Motor vehicle except motor cycle with maximum 50 cc, minimum age
18 years ( for Transport vehicle minimum age 20 years and 8 th Std. passed)
• Section 7 of M. V. Act 1988 to get learner license for transport minimum
holding of 1 year LMV license is required,
• Transport 3 years, Hazardous goods (Rule 137 of Central Vehicle Rule
1989) endorsement 1 year ( for renewal one day refresher course). From
obtaining hazardous goods DL, the driver should have transport license,
ability read and write at least one Indian language as per Schedule VIII of
the constitution and English. 3 days training.
• LMV / M-cycle license 20 years or 50 years whichever is earlier, after 50
years, 5 years renewal.
• 30 days grace period for renewal. If renewed within 30 days effect date
from the date of expiry. If renewed after 30 days, from the date of
renewal
•Section 3 – Motor cab or Motor cycle hired for his own used for rented
U/s. 75 (2), transport DL is not required,
IMPORTANT POINTS:
Sarla Verma Vs. DTC 2009 ACJ 1298/ NIC Vs. Pranay Sethi, SC, DOJ:
31.10.2017– Maximum multiplier 18 (21 years to 25 completed age),
Minimum multiplier 5 ( 66 years and above ), Salary at the time of death only,
A.a. FPI – Permanent employee with provision of annual increment ( less
than 40 years 50%, 40 to < 50 years 30 %, 50< 60 years – 15%, more than 60
years, NIL )
b. Self employee or on fixed wage without provision of annual increments
( less than 40 years 40%, 40 to < 50 years 25 %, 50< 60 years – 10%, more
than 60 years, NIL ),
B. Loss of dependency ( 2 to 3 - 2/3rd, 4 to 6 – 3/4th and more than 6 – 4/5th)
C. Loss of dependency for Bachelor – to be half only by treating Mother as
the only dependent (father is not deemed to be a dependent, unless evidence
otherwise). In case, other than mother, younger siblings and father are solely
dependent on the income of the deceased, then dependency as per Sr. No. B
above, para 15 of Sarla Verma case.

D. Income – para 11- Actual salary less tax as per Sarla Verma’s case.
• Multiplier : Upto 15 – 0, 21 to 25 – 18, 26 to 30 – 17, 31 to 35 – 16, 36 to
40 – 15, 41 to 45 – 14, 46 to 50 – 13, 51 to 55 – 11, 56 – 60 – 9 , 61 to 65 – 7
& 66 and above – 5

• In our WS to be filed after 30 days from the receipt of service of Summon/s

on us. After 30 days and upto 90 days, the Court has the power to allow the
WS with reasons for the delay to be recorded in writing by the Court. Or. VIII
R.1 of CPC, 1908, wef 01.07.2002. WS to be filed admitting the policy or
denying insurance coverage as the case maybe and pleading for the breach
of conditions of policy by giving specific of the said breach. (No General
Denial because general denial is no denial). Evidence to be laid and
arguments to be made by us. High Value Circular with Ref – HO/MTD/TP/CIR
NO- 28/2016/MARKETING/IBD/ADMN/346 dated 28.09.2016 to be followed
in all cases excluding the cases cited therein which were become obsolete
due to latest SC authoritative pronouncements.
E. Multiplier of bachelor – Ramrao Lala Borse Vs.NIA,
DOJ: 19.01.2018, CA No. 418/2018 & Shri Nagra Mal
Vs. OIC, DOJ: 19.01.2018 – CA No. 448/2018
F. Hemraj Vs. OIC, SC , DOJ: 22.11.2017, FPI concept of
Pranay Sethi in self employee or on fixed wage without
provision of annual increments extended to people
whose income is determined on guess work.
G. General Damages: Rs. 40,000/- for Loss of spousal
consortium, Rs. 15,000/- for Loss of Estate and Rs.
15,000/- for Funeral Expenses The said amounts to be
.

enhanced @ 10% every 3 years as per Pranay Sethi

case.
 H. 2008 ACJ 614, NIC Vs. Indira Shrivastava, para 17, the
amounts paid to the deceased by the employer by way of
perks should be included for computation of his monthly
income as that would have been added to his family income
by way of contribution to the family as contra-distinguished to
the ones, which were for his benefits. Further from the amt of
income, the statutory amount of taxes must be deducted.
I. Para 22 of Sarla Verma case – Salary at the time of death to
be taken.
J. Para24 of Sarla Verma case – the claimants could only rely on
the pay scale in force at the time of accident.
K. 2013 (3) TAC 369 SC- Jiju Kuruvilla Vs. Kunjujamaa Mohan &
Ors. – para 29, Number of dependents at the time of death
to be considered. Also, as per Or. XXII, R.6 of CPC, 1908 NO
ABETMENT AFTER HEARING and this is in addition to Jiju
Kuruvilla’s case.
• Shashikala Vs. Ganglakshmanna, 2015 ACJ 1239 SC para
17 – Multiplier should be on the completed age, as on
the date of accident.
• 1990 ACJ 465 Bom – Every disability cannot affect the
earning capacity of the person. 2007 (1) TAC 15 SC –
Tejinder Singh GujralVs. Inderjeet Singh & Anr. –
Appellant suffered some injuries, but same could not
mean that he would not be in a position to rise in his
profession (Advocate), by reason of injuries suffered.
2011 (1) TAC 135 Bom, para 13 – Miss Chitra Rameshwar
Shet Vs. Manuel D’Souza & Anr. ; 2006 ACJ 799 Cal, para
9 – Varun Kumar Das Vs. NIA ; 2006 ACJ 757 AP, para 11,
NIA Vs. Shinde Ramkrishna & Anr. ; 2007 ACJ 650 Cal,
Antanu Kumar Ghoshal Vs. NIC. n of injuries suffered.
• 2017 ACJ 1391, Bhogireddy Vs. Manimuthupandi , para 4
– No split multiplier despite of early retirement age and SC
passed disgusting remark against the deviation from Sarla
Verma case.
• Rajesh Vs. Rajbir 2013 ACJ 1403 SC , para 21 – The word
‘consortium’ was defined and Funeral Expenses was
defined.
• 1994 ACJ 1115 Bom – Shekhar Santaram Dighe Vs. Roshan
lal Uday Ban, para 6 , Loss of earning till hearing – If full
salary received, then no amount to be allowed under that
head.
• 2007 (3) TAC 819 Bom – NIA Vs. Ranglal Punju Nikam, para
8 – In case the salary received by the beneficiaries even
after injury, then the multiplier should take care of the
period, when the full salary was received.
• 2011 SCC (12) 488 – Shri Kumaresh Vs. DM, NIC – Even salary
certificate proved by the employer, however, if from cross-
examination, if the income of the deceased doesn’t appear genuine,
Tribunal can fix income of the deceased, considering the ground
realities.

• IT Returns filed after death should be disregarded except u/s 159 of

IT Act 1961, i.e. legal heirs can file IT Returns in case of death etc. –
2008 ACJ 936 SC, B. Subbalaskhmi Vs. S. Lakshmi, para 17 , 2004 MP
ACJ 782 para 4, Sutinder Pal Singh Arora Vs. Ashok Kumar Jain, 2007
ACJ 139 AP para 17 – NIC Vs. Ojili Gopal Reddy, 2016 ACJ 496 para
13 Bom – Sumitra Dwarkanath Sirsat Vs. Sivanand Hanumantappa
Bibirotti, 2018 ACJ 540 SC Div Bench – Income Tax filed after death
not taken in toto – Navjot Singh Vs. DTC
• 2017 (1) TAC 619 – Nandini Prabhakar Desai Vs. NIA – Tax returns filed prior to
death would have greater probitive value. However, tax returns filed after
death of person for whom compensation claim have not to be discarded as a
rule.

• UII Vs. Indiro Devi, 2018 ACJ 2051, IT Returns filed by the deceased should be
looked into other than salary certificate, because it was possible that the
deceased had income from other sources also and held that salary certificate
need not be the only basis to assess income for arriving at just and fair
compensation.

• Fahim Ahmad & Ors. Vs. UII, 2014 (2) TAC 383 SC
para 8 – “Although the plea of breach of the conditions of policy was raised
before the Tribunal yet yet neither any issue was framed nor any issue led to
prove the same. In our opinion, it was mandatory for respondent no.1 –
Insurance Company not only to plead the said breach but also substantiate the
same by adducing positive evidence in respect of the same. In the absence of
any such evidence, it cannot be presumed that there was breach of the
conditions of policy.
UII Vs. Patricia Jean Mahajan 2002 – If multiplicand is high, the multiplier will
be lower because the Golden Balance must be struck in the background of the
country where most of the beneficiaries reside. Jiju Kuruvilla Vs. Kunjujamma
Mohan, 2013 ACJ 2141, Exchange rate as on the date of filing of claim
petition. Chanderi devi Vs. Jaspal Singh, 2015 ACJ 1621 SC, if NRI income
cannot be ascertained from the evidence on record, income from similar
nature of work in India to be considered. Shankar Santaram Dighe Vs. Roshan
Lal Udaybanu, 1994 ACJ 1115 Bom, the onus is on the victim in case of injury
and claimants in case of death to prove victim’s income and employment.

So our Advocate to object in writing to the exhibiting of the documents as to

income and employment filed by the claimant(s), other than the authorized
representative of the employer and to be careful while cross-examining the
claimant(s)/ authorized representative of the employer, so as to not to attract
the doctrine of traverse.

DM OIC Vs. Swapna Nayak & Ors, 2017 ACJ 697 SC para 17 – IT Engineer
working in USA. Family after death staying in India- FPI not allowed. Case
arising from Cuttack MACT and Orissa HC.
UII Vs. Tilak Singh, 2006 (2) TAC 312 – Pillion and occupants in Pvt.
Car in Act policy not covered. Later on same was extended to Motor
Cycle occupants in Act only Policy

NIC Vs Anjana Shyam 2007,ACJ 2129 SC, NIC Vs. Reena Devi, 2013
(3) TAC 417 and UII Vs. K.M.Poonam, 2011 ACJ 917 SC – PSV
( Insurer’s liability total passengers injured/died in accident and to
recover proportionately under Pay & Recover provision).

Simple Interest as per U/s. 171 of M.V.Act 1988- not earlier than the
date of application, (Delay due to petitioners because the claimants
get adjourned the proceedings in many occasions, interest not to be
paid for the said delayed period, 1983 ACJ 666 Bom, Telmina
Jassawalla Vs. Mahadeo Sitaram Ghadi & Others), 2008 MhLJ, 957
Bom, Shashikant s/o Jaikumar Makhe & Anr. Vs. Shantabai w/o
Ramswarup Sarda & Anr.
Interest rate (as per base rate of the RBI and not PLR as per Interest Act,
1978). – Puttamma & Ors. Vs. K.L. Narayana Reddy & Anr. 2014 ACJ 526 SC.

Penal interest not allowed as per NIC Vs. Keshav Bahadur & Ors., 2004 (2)
SCC 370, PARA 13 & 14 , NIA Vs. Smt. Saira Imtiaz Lambe, Bom HC, FA No.
783/2015 with CA No. 3563/2015 , DOJ: 23.12.2015, para 30)

Apportionment of amount paid – 2014 ACJ 1612 SC- V Kalabharati Vs. OIC,
O.21 R1 of CPC 1908, to be followed, HO Circular ref no. –
HO:MTD:TP:CIR:NO. 67 dated 20th Nov, 2003. If no specification mentioned
in the application as to how the amounts deposited to be adjusted, then the
amounts will be first towards interest and then the basic awarded amount.

Application for Solvent Security/ Bank Guarantee /Undertaking, in case ,we

deposit under protest.
1990 ACJ 130 Bom Pest Control of India Pvt Ltd Vs. R.D Hattangadi & Ors.,
para 32 – In case of injury claims, if the claimant claims compensation under
different heads separately and the heads are substantial, then the Court must
insist for strict proof thereof. In lumpsome damages claims, if the amounts
are moderate, the Court may not insist on strict legal proof, para 49 of the
above judgment, the claimant files IT Returns and gave evidence himself, the
HC rejected the evidence of other persons because other evidence are held
to be hearsay evidence and cannot be accepted.
R.D. Hattangadi Vs. PCI, para 18 – Interest should not be payable over the
amount in respect of future expenditures under different heads. Only interest
to be payable over the amount which has become payable on the date of
Award .
1993 ACJ 1048 Bom – The HC held that a panchnama is required to be proved
by examining any of the panches and in their absence, the concerend police
office, r para 10
1993 ACJ 1023 Orissa – A party admitting a document has right to explain
that though the document contains such a statement, it is not correct.
Admission of document does not amount to admission of truth or
correctness of its contents.

ACJ 2006 1971 – Oriental Insurance Vs. Sangeeta Dattrateya Jamcade ,
no objection was raised regarding documents by the Insurance Company.
So, the certified copies of Panchnama and FIR admitted in evidence.

2009 ACJ SC 925 – NIC Vs. Rattani para 14 – An admission made in the
pleadings, as is well known, is admissible in evidence proprio vigore.

2007 (3) TAC SC 11- OIC Vs. Premlata Shukla – FIR. Proof of admissibility.
– Once a part of contents of documents admitted in evidence, party
cannot be permitted to turn around and contend that the other contents
had not been proved.


Minimum Third Party Insurance - IRDA ( Obligation of Insurer in respect
of Motor Third Insurance Business ) Regulations 2015

Liability only policy GR-3, can cover TPPD, TPPI and PA to owner driver.
• 2013 ACJ 1099 Bom – Narayan Kalangutkar & Anr Vs. Shabir Yasin Mirban
& Ors., para 20 – claimants examined witness to the panchnama and FIR,
but they did not depose about the contents of panchnama, sketch or FIR.
Mere production of documents by the witness does not prove the contents
of the documents. To prove a document as per Evidence Act, we have to be
specific while issuing the summon as to whether the summon is for
production of document only or the person has to depose along with the
office record of t he said document, so as to prove the contents. (Or XI of
CPC to be followed – Discovery of interrogatories etc.)

• 1992 ACJ 281 and 811 AP – When policy number mentioned in the
application, Insurance Co to disprove by positive evidence that it is not
theirs.

• 1980 ACJ 435 SC – N.K.V Bros Vs. M. Karumi Ammal , para 2 – the plea that
the criminal case ended in acquittal, and that therefore the Civil Court
should follow, was rejected and rightly so. The requirements of culpable
rashness u/s 304-A of IPC is more drastic than negligence sufficient under
the Law of Torts to create liability.
•Procedure to be followed if the driver is charged without D/L – Section
3,4,5/ 180 and 181 of MV Act 1988- 1984 ACJ (Bom)- NIC Vs. Gonti Eliza
David & Ors. (Para 8- Insurance Co to at least call the I.O. to prove the
said no D/L issue) , 2001 ACJ 800 Kar,, UII vs. N. Srinivasa & Anr., para 4;
NIC Vs. Babu, 1990 ACJ 1003 Madras, NIC Vs. shantabai 1999 ACJ 391 Kar.
•Section 173 (2) of MV Act 1988 – Amount in dispute- Pala Ram Vs.
Punjab Roadways, 2006 (2) TAC 88 HP – It is not the total amount of
award.
•1997 ACJ 95 Bom, AIR 1982 Bom 585- Mere averment in the WS is not
evidence.
•AIR 1983 P& H 260 -, Rattan Kaur Vs. Ranjeet Singh – The penalties
ordered by the Criminal Court to be paid to the injured or heirs of the
deceased to be set up against any compensation in the MACT. Under Sec
357 (1) of CrPc, 1973, the whole or any part of the fine recovered from a
convicted person, may be applied in paying compensation under the
Fatal Accidents Act to the heirs of the deceased., PALANIAPPA Vs. State
of TN, 1977 (2) SCC 634
• Tort feasor himself not covered for his own
negligence, 1991 ACJ 22 Bom, UII Vs. Kantabai
• Documents procured by illegal means, it may be
admitted in evidence if it is relevant and admissible,
AIR 1971, SC 295 Magraj Vs. R.K.Birla
• Compromise after Judgment is passed – Order XXI,
R.2 (1) and R.3, CPC, 1908 to be followed on an
application filed by the claimant(s) or compromise in
execution application filed by the claimant(s).
• Fraud , 2000 ACJ 1032 SC, UII Vs. Rajendra Singh ,
UII Vs. Bhushan Sachdeva, para 9, 2002 ACJ SC 373.
• 2016 (1) TNMAC 596 – M.D TNSRTC Kumbakonam
Ltd Vs. Nagamalli -Adducing false evidence – actions
u/s 340 and 190 CrPC to be initiated.
• Youth bar Association of India Vs. UOI, WP Cr No.
68/2016, DOJ: 7.09.2016 – SC directed all states and UTs
to upload FIR within 24 hours of registration at police
station. The same shall be made available in the websites
on the Police Dept concerned or State Govts. Wef
15.11.2016.
• In GD Entry / SD entry/ DD Entry/ TAR Cases- HO
Circular: HO/MTD/TP/CIR/57 dated 23.10.2003 to be
followed and to be guided by Lalita Kumari Vs. Govt of UP,
Writ Petition Cr No. 68 of 2008, decided on 12.11.2013.
• In fake policy/insurance cases, appropriate steps to be taken
promptly as per HO Cir No. HO/TP/LEGAL/2011 Cir No. 28 dated
30.09.2011 and HO Cir No. 32/2013/IBD: ADMN:111 dated
2.8.2013. to be pleaded and evidence to be laid (evidences as to
oral and documentary.

• Full salary to be received from the employer after death for

certain years , the full amount received to be deducted–
Reliance Vs. Shashi Sharma, 2016 ACJ 2723.

• GPA/ Group LIC – If no contribution by the deceased , then the

amount to be adjusted as per Mamtha Vs. Ranganatha, CA No.
3784/2015 SC, Order dated 27.07.2016. Noorjadi Khatoon Vs.
Pintu Yadav, 2015 (3) TAC 496 Del, OIC vs Meena Tukaram
Jadhav, 2015 ACJ 32 Bom. Or. XXI of CPC to be followed as to
evidence, proof etc.
• Singh Ram Vs. Niramala , 2018 ACJ 1264 SC –, DOJ: 6.3.2018 Fake
Licence , and Pappu Vs. Binod Kumar lamba 2018 ACJ 690 SC DOJ:
19.01.2018– Insurance Co taken clear stand in WS. Owner of
offending vehicle neither pleaded nor adduced evidence. SC passed
Pay & Recover order. Because the owner failed to take reasonable
care as he could not have been unmindful of facts which were within
his knowledge.

• In view of both these judgments, we have to file WS denying non-

validity of D/L, Permit, & Fitness despite all our efforts, (what efforts
made to obtain those documents to be also stated in WS) and
request the Court to direct the owner to produce all the said
documents to prove the validity of all those documents. To lead
evidence as to the said non-validity by explaining the efforts made
by us. Then to argue for non-liability or alternatively Pay & Recover.
• Settlement of disputes outside the Court as per Section 89 of CPC,
1908 [it covers Arbitration, Conciliation (under Arbitration &
Conciliation Act, 1996), Judicial settlement under Lok Adalat
settlement (Legal Services Authority Act, 1987) and Mediation under
(Mediation Rules as per Civil Procedure Alternate Dispute Resolution
and Mediation Rules 2003)].
• 2018 ACJ 2163 , DOJ: 8.8.2018 – Shamanna Vs. DM, OIC – SC held
that the MACT has the power to pass Pay & Recovery order and not
only the SC under Article 142 of Constitution.
• NIC Vs. Ayesha Sekh, Cal HC, DOJ: 17.12.2014 and Bajaj Allianz Gen
Insurance Co Ltd. Vs. Smt. Meenakshi Manohar Tardekar, FA No.
1012 of 2018, HC of Bombay – LIC Agent - Hereditary commission not
to be deducted from total commission earnings.
• NIA Vs. Dharmishta Mehtalia , FA No. 1024 of 2012 – DOJ:
13.07.2017 – In case of fluctuating income as per IT Returns, then
average income of three preceding years before death to be
considered.
 Vijay Kr. Rastogi Vs. UPSRTC, Income from other sources in ITR
other than salary cannot be disregarded. Our office to be careful
and to analyse the IT Returns on record with the help of a C.A. on
our panel and not to consider returns from fixed assets.
 Business Income – only managerial loss to be considered, 2012
(2) TAC (1) SC- NIA Vs. Yogesh Devi, 2009 (2) TAC 345 SC, Rani
Gupta Vs. UII, Sharmila Singh Vs. Rabin Ghosh, 2009 (1) TAC 951
Cal.
 Medical reimbursement already received from employer not to
be allowed – NIA Vs. Sukant Kumar Behra, 2015 ACJ SC 729,
para 7 , OIC Vs. R. Swaminathan, 2006(1) TAC 969 SC.
 Amendment of plaint/ pleading – Whether to allow or not – AIR
1957 SC 363, P.H. Patil Vs. K.H.patil – para 10
 Res Judicata between co-defendents – AIR – 1931, PC 114, M.T.
Munnibibi Vs. Trilokinath, AIR 1974 SC 749, Iftikhar Ahmed Vs.
Syed Meherban Ali & Ors.
• Res Judicata between Insurer and Insured – 1991 ACJ 259 Bom;
Yashwant Ram Shaunbag Vs. UI Fire & Gen Insurance Co .

• Policy copy admissibility – 1989 ACJ 1163 Del, para 2, Insurance

Companies keep relevant page of policy showing the premium
paid and risk of what amount covered. The conditions are
standard conditions as per TAC/IRDA. So the office copy along
with standard conditions are allowed in evidence.
• 1991 ACJ 182 Ker; Benny Vs. UII – Insurance Co produced the
certified copy to prove the limited liability, Owner objected that
Insurance Co does not produce the entire policy document. High
Court stated that the insured who failed to fulfill the statutory
obligation to produce the statutory document cannot tell what is
complete/incomplete.
•While giving evidence on our behalf, our authorized officer should have
the necessary power of attorney or authorization letter to lead evidence.
He should tell the name of the authorized signatory (His Sr No, his
designation on the date of issuance of the said policy) who signed the
original policy as per the office copy available with him. During cross-
examination, he/she should be careful in telling that this document has
come into his possession due to his posting (official proceedings) in the
present place and he knows the signature of the authorized signatory,
although he/she was not present, while the signatory signed it. (Before
giving evidence, we have to admit the document in the WS or additional
WS and also application to be filed before the MACT to instruct the
owner/driver/holder of the of the said documentary evidence to
produce the original copy by way of primary evidence or the maker like
RTO to produce the office copy of those documents by way of secondary
evidence with instruction to depose also alongwith the original of the
document to give oral evidence as well.
• Upon failure of both primary as well as secondary evidence, we have
to lead our evidence through our authorized officers having power of
attorney. Our Advocate and our said Officer to be briefed what to be
asked during examination-in-chief and how our witness should
answer it. Also, our witness to be trained not to admit suggestion
during cross-examination which are inimical to our evidence.

• While examining the claimant and or their witness like IO, Panches,
eye-witness, representative of the employer alongwith the
documents to prove the employment age, income, IT Returns, Form
No. 16, increments, pension, gratuity, PF etc. To object in writing the
documents filed, whether to admit the documents and/or contents,
(we may admit the documents and not contents). Our Advocate must
be very careful not to attract Doctrine of Traverse where the claimant
could not prove the income, accident, negligence etc. by producing
the maker. Our Advocate must be careful while cross-examining the
dependency aspect of the parents and major children including
married daughters.
• Before we lead evidence and if documentary evidence
produced by the Investigator, then to request the Court to allow
us to lead evidence through him and to prove the documents
obtained by him. Then our authorized officer to prove statutory
breach,/ contractual breach, defence of negligence,
dependency aspect, adjustment of GPA/LIC, Medical
reimbursement by the employer for adjustment like Haryana
State Employees salary benefits etc.

• To prove GPA/ Group LIC paid by the employer (procedure to be

referred in Sl 5 3 (J) of High Value Circular DATED 28the Sep
2016, to be followed.

• All other guidelines of High Value Circular dated 28th Sept 2016
to be followed as well as recent SC case laws, guidelines etc.
THANK YOU