Revised Motor Vehicles Act Schedule Applies Retroactively To Pending Claims: Calcutta HC

The Calcutta High Court has reinforced the retroactive applicability of the 2018 amendment to the Motor Vehicles Act, 1988, ruling that the fixed compensation of ₹5 lakh for fatal accidents must be awarded in all pending litigations regardless of when the accident occurred. This decision mandates that insurance companies cannot evade the enhanced lump-sum liability even if the claim was filed under the old structured formula, solidifying the 'procedural' nature of the beneficial amendment.

A single-judge bench of Justice Md. Shabbar Rashidi heard the appeal challenging a 2018 Tribunal award that had granted a lower compensation based on the pre-amendment criteria. The Court was tasked with determining whether the revised Second Schedule of the Motor Vehicles Act, 1988, which simplified compensation to a flat rate, should apply to cases where the accident predated the notification.

Court Observations on Statutory Amendments

The Court noted that the 2018 notification by the Ministry of Road Transport and Highways fundamentally altered the methodology of compensation. While the Tribunal had awarded ₹3,49,500 based on the old formula, the High Court emphasized that the legislative mandate at the time of the award must prevail. Relying on the precedent set in Urmila Halder vs. New India Assurance Co. Ltd. & ors, the Court noted that the age and earning capacity of the victim are no longer relevant factors under the amended Section 163A of the Motor Vehicles Act, 1988.

The Court, in its reasoning, observed: "Whatever is there in the Second Schedule on the date the award is to be pronounced being the legislative mandate, has to be followed by the tribunal in determining compensation. The law does not cast a duty on the tribunal to look into the contents of the Second Schedule which has ceased to exist by reason of substitution vide the said notification while dealing with claim applications that were filed when the old schedule was in force."

Addressing the insurer's liability, the Court referenced Reliance General Insurance Company Ltd. vs. Om Prakash and Others to maintain the 'pay and recover' doctrine. The Court has the following directions:

"The claimants are entitled to get the minimum compensation provided in Second Schedule of the Act of 1988 to the tune of Rs. 5,00,000/-. The aforesaid claim amount shall also carry interest at the rate of 6% per annum from the date of filing of the claim application till realization. The amount of compensation together with interest as directed by this judgment and order hall be deposited by the insurance company with the learned Registrar General within 6 weeks of the communication of this order. Learned Registrar General is requested to disburse the said amount to the two claimants in equal shares as directed by the learned tribunal. In view of the ratio laid down in the case of Reliance General Insurance Company Ltd. vs. Om Prakash and Others the insurance company shall be at liberty to take steps in accordance with law."

Background

The case arose from a fatal accident on August 19, 2014, involving a minor girl who was crushed by a truck while riding pillion on a motorcycle. The parents filed a claim under Section 163A of the Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal, Calcutta, awarded ₹3,49,500 in August 2018, just months after the Second Schedule was amended to provide a flat ₹5,00,000.

The claimants appealed, seeking the enhanced amount. The insurance company contested the liability, alleging the driver held a fake license and that the 2018 notification should not apply retrospectively. However, the High Court, aligning with the Supreme Court's affirmation in The New India Assurance Co. Ltd. vs. Urmila Halder, held that the new schedule must be applied to all pending matters. The Court also noted that under the Employee’s compensation Act, 1923, specific percentages of the ₹5,00,000 base are used for disability, but for death, the amount is absolute.

Case Details:
Case No.: FMA 1132 of 2021
Case Title: Soma Das And Another Vs. The Manager, Magma HDI General Insurance Company Limited And Another
Appearances:
For the Petitioner(s): Mr. Soujanya Bandyopadhyay, Adv.
For the Respondent(s): Mr. Rajesh Singh, Adv.

Source: 2026 CaseBase(CAL) 2917