Concept of Liability without Fault” in motor insurance? How Motor Vehicle Act deals with without fault liability?

Sec 140 of Motor Vehicles Act, 1988 deals with the liability without fault. The claimant involved in a motor vehicle accident is not required to prove wrongful act, neglect, or default on the part of the owner of the vehicle or by any other person.

The claim under these provisions is neither defeated or affected in any way, by any wrongful act, neglect or default on the part of the claimant; nor can be of the claimant’s share of responsibility for the accident.  In other words, the legal defense of ‘contributory negligence’ is not available to the motorist and his insurer.

These provisions apply in cases where the claimant suffers death or permanent disablement, as defined in the Act.  The amounts of compensation are fixed as follows:

  • Death, Rs, 50,000
  • Permanent Disablement Rs. 25,000

The object behind no-fault principle is to give minimum statutory relief expeditiously to the victim of the road accident or his legal representative.  To that extent, these provisions constitute a measure of social justice.

Where no-fault liability is concerned, there is clearly a departure from the usual common law principle that a claimant should establish negligence on the part of the owner or driver of the motor vehicle before claiming any compensation for death or permanent disablement arising out of a motor vehicle accident.

The right to claim compensation U/S 140 in respect of death of permanent disablement of any person shall be in addition to any other right to claim compensation in respect thereof under any other provision of this Act or of any other law for the time being in force.

Thus the claims for death or permanent disablement can also b e pursued under other provisions of the Act on the basis of negligence.  The motorist i.e. the owner of the vehicle or driver of the vehicle is liable to pay compensation on the basis of ‘no fault’ as well as on the basis of ‘fault’ or negligence he has to pay first the compensation on ‘no fault’ basis i.e. Rs. 550,000 or Rs. 25,000 as the case may be, for death or permanent disablement.

If such compensation paid is less than the compensation awarded on the principle of ‘fault’ or negligence, the motorist is liable to pay the balance.  For example, if Rs. 30,000/- is awarded for permanent disablement on the basis of negligence, the claimant is entitled to receive only Rs. 5,000 being the excess over the no-fault compensation settled first. In any claim for compensation under this Section,  the claimant shall NOT be required to plead or establish that the death or permanent disablement in respect of which the claim has been made, was due to any wrongful act or neglect or default of the owner/s of the vehicle/s concerned or any other person.

Sec. 143 of the Act will 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 a motor accident.  Time limit for depositing compensation under this section is one month.

Extracts from “Guide for Motor Insurance (IC-72)” by Dr. Rakesh Agarwal. Copyright of Sashi Publications, Kolkata and

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