Section 164 of the Motor Vehicles Act, 1988, provides for fixed compensation in cases of death or grievous hurt, and there is no statutory provision for any annual increase or retrospective enhancement of these fixed amounts.

Order

1. These appeals have been preferred by the appellants against the orders dated 21.08.2024 passed by the learned Tribunal in respective claim petition Nos.51/2023 (81/2023), 56/2023 (86/2023), 57/2023 (87/2023), 55/2023 (85/2023), 58/2023 (88/2023) & 52/2023 (82/2023).

2. Heard learned counsel for the appellant.

3. Learned counsel for the appellant contends that while deciding the claim petitions, the Tribunal has recorded an erroneous finding and directing for an increase of the compensation amount at the rate of 5% per annum from 01.01.2019 till the first month of the year of accident.

4. Learned counsel has drawn the attention of this Court to Section 164 of the Motor Vehicles Act, 1988 , which reads as follows:

"164. Payment of compensation in case of death or grevious hurt, etc. --

(1) Notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle or the authorised insurer shall be liable to pay in the case of death or grievous hurt due to any accident arising out of the use of motor vehicle, a compensation, of a sum of five lakh rupees in case of death or of two and a half lakh rupees in case of grievous hurt to the legal heirs or the victim, as the case may be.

(2) In any claim for compensation under sub-section (1), 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.

(3) Where, in respect of death or grievous hurt due to an accident arising out of the use of motor vehicle, compensation has been paid under any other law for the time being in force, such amount of compensation shall be reduced from the amount of compensation payable under this section."

5. A bare perusal of Section 164 of the Motor Vehicles Act, 1988 makes it clear that in case of death, the compensation amount is fixed at Rs. 5,00,000/- and in case of grievous injury, fixed compensation amount of Rs. 2,50,000/- is payable. There is no provision under the said section for any annual increase in the compensation amount.

6. Learned counsel further submits that although the direction for increase of compensation was issued with effect from 01.01.2019, but the provisions of Chapter XI of the Motor Vehicles Act, 1988 which includes Section 164 was substitued vide notification dated 25.02.2022 which came into effect from 01.04.2022. Therefore, the Tribunal has erred in granting the benefit of increase from a date prior to the enforcement of the said provisions.

7. It is further submitted that the fixed compensation amount of Rs. 2,50,000/- with interest in all claim petitions has already been deposited by the appellant company in terms of the interim order granted by this Court.

8. Despite service, none appears on behalf of the respondents.

9. Considered the submissions made by learned counsel for the appellant and gone through the material available on record.

10. Upon perusal of the impugned award and the relevant notification issued under the Motor Vehicles Act, this Court finds that the statute prescribes a fixed compensation of Rs. 5,00,000/- in case of death and Rs. 2,50,000/- in case of grievous injury. There is no provision for enhancement/increase of the said amount by 5% annually. Furthermore, the notification itself came into effect from 01.04.2022, whereas, direction of the learned Tribunal for increase has been issued w.e.f. 01.01.2019.

11. In view of the above, the appeals preferred by the appellants deserve to be allowed.

12. Accordingly, the appeals are allowed. The awards dated 21.08.2024, passed by the learned Tribunal is modified to the extent that the direction regarding enhancement/increase of compensation