Motor Vehicles Act | Section 164 Compensation Of Rs. 5 Lakhs Applicable Even To Pending Claims Arising Prior To 2019 Amendment: Punjab & Haryana High Court

"We are inclined to give the appellants the benefit of the beneficial provisions which have been enacted by Parliament. Hence, in modification of the order of the High Court, we direct that the appellants shall be entitled to an amount of Rs 5 lakhs as compensation." Punjab and Haryana High Court, in a significant ruling, held that the benefit of enhanced compensation under Section 164 of the Motor Vehicles Act, 1988, is applicable to pending claims, even if the underlying accident occurred prior to the 2019 amendment.

A bench presided over by Justice Vikas Suri observed that the amendment is a beneficial piece of legislation aimed at providing substantive relief to victims, thereby warranting its application to ongoing litigation.

The case originated from a tragic motor accident on July 6, 2004, which resulted in the death of a five-year-old girl. The parents had filed a claim petition under Section 163-A of the Motor Vehicles Act, 1988, and were subsequently awarded compensation of Rs. 1,54,500 by the Motor Accidents Claims Tribunal in 2006. Aggrieved by the quantum, the appellants approached the High Court seeking enhancement of the compensation amount, contending that the legislative intent behind the subsequent amendments necessitated a higher award.

The primary question before the court was whether the enhanced compensation of Rs. 5 lakhs, as stipulated under Section 164 of the Act (substituted by the 2019 Amendment), could be extended to a claim arising from an accident that occurred well before the enactment of the amendment. The court was also tasked with determining if the principle of "no-fault liability" as currently codified permits the retrospective application of these beneficial provisions to pending appeals.

Applying the Ratio of Ram Murti

The court extensively relied upon the Supreme Court’s decision in Ram Murti and others vs. Punjab State Electricity Board, noting that the apex court had allowed the benefit of the Rs. 5 lakh compensation to claimants even when the accident occurred years prior to the 2019 legislative changes. The High Court emphasized that the substitution of Chapter XI of the Act, which replaced the earlier Section 163-A framework with the consolidated Section 164, was intended to alleviate the financial burden on accident victims and their families.

Court Explains Beneficial Construction

The bench underscored that Section 164 removes the requirement for claimants to plead or establish fault, negligence, or default of the vehicle owner. By categorizing the provision as a beneficial statute, the court reasoned that the legislative move to enhance compensation to a flat rate of Rs. 5 lakhs for death reflects a policy shift that courts must actively implement to meet the ends of justice.

"The claimant shall not be required to plead or establish that the death or grievous hurt in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or of the vehicle concerned or of any other person."

Treatment of Pending Appeals

Highlighting consistency in judicial approach, the court noted that various coordinate benches have already adopted this interpretation. Specifically, the court referred to the cases of Sushma Devi vs. Tarlochan Singh and Devi Dayal vs. Som Nath, where the court previously directed insurance companies to honor the Rs. 5 lakh threshold in pending matters. The court found no legal impediment to extending this relief to the appellants at hand, noting that the insurance policy was active at the time of the incident.

Consequently, the court set aside the lower tribunal's restrictive award and directed the respondent-insurance company to pay a total compensation of Rs. 5 lakhs. The court further mandated that this amount be paid along with interest at the rate of 7.5% per annum, calculated from the date of the original claim petition. The respondent was given a period of eight weeks to comply with the order, effectively ensuring that the claimants receive the full benefit of the legislative enhancement.

Date of Decision: 25 August 2026