IMPORTANT POINT
Hit and Run motor accidents – Value of money diminishes with time – Central Government must consider whether compensation amounts can be gradually enhanced annually.

ORDER :

ABHAY S. OKA, J.

1) We have heard the learned counsel on the question of issuing interim directions for the effective implementation of the provisions of the Motor Vehicles Act, 1988 (for short, ‘the MV Act’) relating to the grant of compensation in case of hit and run motor accidents.

2) Section 161 of the MV Act, as applicable from 1st April 2022, reads thus:

“161. Special provisions as to compensation in case of hit and run motor accident.—(1) Notwithstanding anything contained in any other law for the time being in force or any instrument having the force of law, the Central Government shall provide for paying in accordance with the provisions of this Act and the Scheme made under sub-section (3), compensation in respect of the death of, or grievous hurt to, persons resulting from hit and run motor accidents. (2) Subject to the provisions of this Act and the Scheme made under sub-section (3), there shall be paid as compensation,—

(a) in respect of the death of any person resulting from a hit and run motor accident, a fixed sum of two lakh rupees or such higher amount as may be prescribed by the Central Government;

(b) in respect of grievous hurt to any person resulting from a hit and run motor accident, a fixed sum of fifty thousand rupees or such higher amount as may be prescribed by the Central Government.

(3) The Central Government may, by notification in the Official Gazette, make a Scheme specifying the manner in which the Scheme shall be administered by the Central Government or General Insurance Council, the form, manner and the time within which applications for compensation may be made, the officers or authorities to whom such applications may be made, the procedure to be followed by such officers or authorities for considering and passing orders on such applications, and all other matters connected with, or incidental to, the administration of the Scheme and the payment of compensation under this section.

(4) A Scheme made under sub-section (3) may provide that,—

(a) a payment of such sum as may be prescribed by the Central Government as interim relief to any claimant under such Scheme;

(b) a contravention of any provision thereof shall be punishable with imprisonment which may extend to two years, or with fine which shall not be less than twenty-five thousand rupees but may extend to five lakh rupees or with both;

(c) the powers, functions or duties conferred or imposed on any officer or authority by such Scheme may be delegated with the prior approval in writing of Central Government, by such officer or authority to any other officer or authority.”

3) In terms of sub-Section (3) of Section 161, the Compensation of Victims of Hit and Run Motor Accidents Scheme, 2022 (for short, ‘the Scheme’) has been brought into force with effect from 1st April 2022. It superseded the Solatium Scheme, 1989 (the Solatium Scheme) framed under unamended sub-Section (1) of Section 163 of the MV Act. The broad framework of the Scheme can be summarised as follows;

a) The Scheme provides for the setting up of the Standing Committee and District Level Committees. The Standing Committee is at the central level. The primary duty of the Standing Committee is to periodically review the working of the Scheme, including consideration of the report of the General Insurance Council. The Standing Committee has the power to direct corrective steps to be taken. Another important function assigned to the Standing Committee is to make recommendations to the Central Government for the amendment of the Scheme for its better and more effective implementation;

b) The District Level Committees are under a mandate to evaluate the progress of the Scheme's implementation in the concerned district and take corrective measures. Each District Level Committee is under an obligation to submit a report to the Standing Committee every quarter. The report must incl