Motor accident compensation is one of the more claimant-friendly areas of Indian law, and a great many people never claim simply because they do not know the tribunal exists.
Preserve the basics first
- Ensure an FIR is registered, and obtain a copy along with the charge sheet when filed
- The accident information report which the police are required to forward to the Tribunal
- All medical records and bills, and the disability certificate from a competent authority if there is permanent disability
- Proof of income: salary certificate, tax returns, or evidence of business income
- The vehicle and insurance particulars of the offending vehicle
The routes to compensation
- Section 166, Motor Vehicles Act, 1988: the fault-based claim, where negligence of the driver is alleged. This is where full compensation is awarded and it is the main route. The applicable filing period must be checked against the accident date, the amended Section 166(3) and relevant court orders.
- Section 166(3), amended from 15 August 2026: the provision retains six months and now permits a further period of up to twelve months where sufficient cause is shown. Earlier accidents and pending matters require a date-specific assessment, including the applicable Supreme Court orders in the pending limitation challenge. Do not treat an old no-limitation statement, or a blanket six-month bar, as the complete answer.
- Section 164: the no-fault liability provision, giving a fixed statutory sum in cases of death or permanent disablement without needing to prove negligence. Useful for early relief.
- Section 163 schemes and the Solatium Fund, in hit and run cases.
- On that last point, the numbering moved with the 2019 amendment. The scheme-making power for hit and run cases is now in Section 161(3), payment comes from the Motor Vehicle Accident Fund under Section 164B, and Section 163 today provides for refund of a hit and run payment once full compensation is awarded.
- Interim compensation can be sought while the claim is pending.
How the amount is worked out
The framework comes from Sarla Verma v. DTC (2009) and National Insurance v. Pranay Sethi (2017):
- Establish monthly income, then add future prospects as a percentage based on age and whether employment was permanent or self-employed.
- Deduct for personal expenses in death cases, on a scale depending on the number of dependants.
- Apply the multiplier for the age of the deceased or injured, from the Sarla Verma table.
- Add conventional heads: loss of estate, funeral expenses, loss of consortium, and for injury claims, medical expenses, attendant care, pain and suffering and loss of amenities.
Every one of those steps is an evidentiary exercise rather than an arithmetic one. Income is proved by returns, Form 16, salary certificates or audited accounts, and an unproved income is assessed notionally at a figure well below what most claimants actually earn. Disability is proved by a certificate stating a percentage, and the tribunal then decides what that percentage means for this claimant's earning capacity, which for a manual worker can be far higher than the medical percentage. Our note on how MACT compensation is calculated works through the multiplier table and the deductions with figures.
The no fault route, and the trap in it
Section 164 fixes a liability on the owner or the authorised insurer to pay five lakh rupees in the case of death and two and a half lakh rupees in the case of grievous hurt, and expressly relieves the claimant of any need to plead or establish a wrongful act, neglect or default. Compensation paid under any other law is set off against it.
The trap is in the first proviso to Section 166 itself. Where a claimant accepts compensation under Section 164 following the settlement procedure in Section 149, the claim petition before the Tribunal lapses. Section 149 is the provision under which the insurer designates an officer on being told of the accident and may make an offer of settlement before the Tribunal, which then records it as a settlement by consent. That is a sensible route for a small claim and a very expensive one where the real value is many times the statutory sum, and the offer often arrives before the family has any idea what the claim is worth. Get it valued before you accept anything.
The report the police must file for you
Under Section 159 the investigating police officer must prepare an accident information report within three months and submit it to the Claims Tribunal. Under Section 166(4) the Tribunal shall treat any such report as an application for compensation. So a claim can be set in motion without the family filing anything, which matters where the injured person is in hospital. Chase the report at the police station, obtain a copy, and confirm with the Tribunal's registry that it has been received and numbered.
Under Section 166(2) you may file before the Tribunal having jurisdiction over the place of the accident, or where you reside or carry on business, or where the respondent resides. Choosing your own city rather than the site of the accident often saves years of travel, and it is a right, not a concession.
Practical points
Join the driver, the owner and the insurer as respondents. Do not accept an early settlement from an insurer without valuing the claim properly; the difference is frequently very large. Compensation awarded is generally not taxable, and interest usually runs from the date of the petition.
Three further points on the machinery. The Tribunals are constituted by the State Government under Section 165 and presided over by a person who is or has been a High Court Judge or a District Judge, or is qualified for such appointment, so this is a judicial forum and not an administrative one. Under Section 168(3) the person required to pay must deposit the entire awarded amount within thirty days of the announcement of the award, which is the provision to cite when payment is not forthcoming. And under Section 173 an appeal lies to the High Court within ninety days, but no appeal by the person liable to pay is entertained unless he deposits twenty five thousand rupees or fifty per cent of the amount awarded, whichever is less, and no appeal lies at all where the amount in dispute is less than one lakh rupees.
Where the insurer repudiates the policy altogether, or pays under protest and seeks to recover from the owner, that is a separate fight with its own rules, and a wrongly repudiated policy also gives rise to a consumer remedy in its own right. Our note on what to do when an insurance claim is rejected sets out the grounds an insurer can and cannot rely on and the forum to take it to.