Introduction
Road accidents often cause death or serious injury. In many cases, it may take a long time to prove negligence or wrongful conduct in court. To provide quick relief to victims, the Motor Vehicles Act introduces the concept of no fault liability.
Under this system, compensation is provided to the victim or their family without requiring proof that the driver was negligent or careless.
Meaning / Definition
No fault liability means that compensation is payable to the victim of a motor accident even if the fault (mistake or negligence) of the driver is not proved.
Under Section 164 of the Motor Vehicles Act, if death or grievous injury results from the use of a motor vehicle, the owner of the vehicle or the authorised insurance company must pay compensation, regardless of who caused the accident.
The claimant (person asking for compensation) does not need to prove negligence, rash driving, or wrongful conduct.
Modes or Types
Compensation for Death or Grievous Injury
Section 164 provides fixed compensation in cases of motor accidents:
- Death – ₹5,00,000
- Grievous hurt (serious bodily injury) – ₹2,50,000
Earlier, under Section 140 of the Motor Vehicles Act, the compensation amounts were much lower:
- Death – ₹50,000
- Permanent disablement – ₹25,000
The Motor Vehicles (Amendment) Act, 2019 increased these amounts and replaced the term “permanent disablement” with “grievous hurt.”
Liability of Vehicle Owner and Insurer
Under the earlier law (Section 140), the vehicle owner alone was directly liable, while the insurance company paid compensation through the insurance contract.
Under Section 164, the law clearly states that the owner of the vehicle or the authorised insurer is liable to pay compensation.
This provision clarifies what was earlier implied under the old law.
Liability in Accidents Involving Multiple Vehicles
If an accident involves more than one vehicle, the owners of all vehicles involved are jointly and severally liable.
Joint and several liability means:
- The victim can claim the entire compensation from any one of the responsible parties.
- The parties can later adjust the amount among themselves.
No Need to Prove Negligence
Since the compensation is based on no fault liability, the victim does not need to prove:
- rash driving
- negligence
- wrongful act by the driver
Even if the victim himself was partly negligent, he is still entitled to compensation.
This means contributory negligence (victim’s own fault) is not a defence under Section 164.
Settlement of Claims by Insurance Company
Section 149 provides a procedure for settlement of claims by insurance companies.
When an accident occurs:
- The victim or claimant may inform the insurance company about the accident.
- The company may also receive the information from another source.
Once informed, the insurance company must:
- appoint a settlement officer to examine the claim
- follow the procedure prescribed by the Central Government
The settlement officer must make an offer for settlement before the Claims Tribunal within 30 days.
If the claimant accepts the offer, the Tribunal records the settlement and the insurance company must pay the amount within 30 days.
If the claimant rejects the offer, the Tribunal will continue the case and decide the claim after hearing the parties.
Distinction / Comparison
No Fault Liability vs Fault Liability
| Basis | No Fault Liability | Fault Liability |
|---|---|---|
| Proof of negligence | Not required | Must be proved |
| Compensation amount | Fixed amount under law | Determined by court |
| Speed of relief | Faster relief to victim | Usually slower due to detailed trial |
| Contributory negligence | Not a defence | May reduce compensation |
Practical Example
Suppose a pedestrian is injured in a road accident caused by a car.
Under Section 164, the victim can claim ₹2,50,000 for grievous injury without proving that the driver was negligent.
Even if the accident partly happened due to the pedestrian’s own mistake, the victim is still entitled to compensation under the no fault liability rule.
Summary
- No fault liability provides compensation without proving negligence.
- It is governed by Section 164 of the Motor Vehicles Act after the 2019 amendment.
- Compensation is ₹5,00,000 for death and ₹2,50,000 for grievous injury.
- Liability is placed on the vehicle owner or the authorised insurer.
- If multiple vehicles are involved, all owners are jointly and severally liable.
- The claimant does not need to prove rashness, negligence, or wrongful conduct.
- Contributory negligence is not a defence under no fault liability.
- Insurance companies may settle claims through a procedure under Section 149.