Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CIVIL) No. 11801-11804 of 2005

Jai Prakash ……. Petitioner  Vs. National Insurance Co. Ltd. & Ors. ….… Respondents  

O R D E R  

R.V. RAVEENDRAN, J.

We propose to address four problems frequently faced  in motor accident claim cases under the Motor Vehicles  Act, 1988 (‘Act’ for short).

Problem (i)

2. The  first  problem  relates  to  a  section  of  motor  accident victims who are doubly unfortunate – first in  getting  involved  in  an  accident,  and  second,  in  not  getting any compensation. Let us elaborate. There are two  categories of victims in motor accidents - those who will

be able to get compensation and those who will not be  able  to  get  compensation.  Victims  of  motor  accidents  involving insured vehicles, who are assured of getting  compensation  from  the  insurer,  fall  in  the  first  category.  Victims  of  motor  accidents  involving  the  following categories of vehicles, who do not receive any  compensation fall under the second category:-  

(i) Hit  and  run  vehicles  which  remain  unidentified.

(ii) Vehicles  which  do  not  have  any  insurance  cover.

(iii) Vehicles  with  third  party  insurance,  carrying persons who are not covered by the  insurance (gratuitous passengers in a goods  vehicle or a car, and pillion riders on two  wheelers etc.)

In hit and run cases, the victim has no one from whom he  can  claim  or  get  compensation.  In  regard  to  vehicles  which  do  not  have  any  insurance  or  do  not  have  an  insurance  covering  the  risks  relating  to  gratuitous  passengers/riders, even if the driver/owner may be made  liable under an award of the Tribunal, there is little or  no  chance  of  recovery  of  compensation  that  may  be  awarded. This is because normally driver and owners of  uninsured vehicles will not have the capacity to pay the  compensation or would have transferred their assets to

escape paying compensation. It is estimated that around  20%  of  the  victims  of  motor  accidents  fall  under  the  unfortunate categories who do not get any compensation  (except some who may get a token amount under Section 161  or 140 of the Act). A person hit by an uninsured vehicle,  feels frustrated, cheated and discriminated, when he does  not get any compensation, but sees another person hit by  an insured vehicle getting compensation. The victim does  not choose the vehicle which hits him, nor any role in  causing  the  accident.  But  a  victim  is  denied  compensation,  if  the  vehicle  which  hits  disappears  without trace, or if the vehicle is without insurance,  while a similar victim hit by an insured vehicle gets  compensation. Should the State, which by law provided for  compulsory  third  party  insurance  to  protect  motor  accident victims, ignore these 20% victims who do not get  compensation or provide them with some effective remedy?  Should the State go something to reduce the incidence of  non-insurance?

Problem (ii)

3. The  second  problem  relates  to  the  widespread  practice of using goods vehicles for passenger traffic.  Such use is primarily due to the following four reasons:

(a) Non-availability  of  regular  mode  of  passenger  transport in several parts of the country, particularly  in  rural  areas,  compelling  people  to  use  lorries  and  other goods vehicles as modes of transport to reach their  destinations.  

(b) Non-availability  of  contract  carriages  for  group  travel  during  special  occasions.  Consequently,  large  groups of people use, again mostly in rural areas, goods  vehicles (lorries and tractor-trailers) for group travel  on  occasions  like  marriages,  festivals,  functions  and  political rallies.  

(c) Frequent break-down of buses/cars/other vehicles (on  roads  with  sparse  traffic)  due  to  bad  maintenance  of  roads or the vehicles, or other emergencies forcing the  stranded  passengers  to  use  goods  vehicles  to  reach  nearest  city  or  town  from  which  they  can  get  regular  recognized modes of transport.  

(d) The temptation of lorry drivers to make a quick buck  by carrying passengers for a fare (with or without the  knowledge of the owner) coupled with the attraction of a  low fare for the poor and needy. (These passengers though  termed as ‘gratuitous’ passengers, except in a few cases,  are fare paying illegal passengers).

Where persons travel in a goods vehicle either knowing or  not knowing that such travel is illegal (gratuitously or  by paying an illegal ‘fare’ to the driver or owner) and

such the vehicle is involved in an accident resulting in  injuries  to  such  passengers,  various  legal  and  moral  questions  arise.  Whether  the  victims  are  entitled  to  compensation? Whether the insurer is liable? Whether the  owner, who may be unaware of such illegal carriage by the  driver, can be made liable? Whether the owner and driver  of  goods  vehicles  should  be  made  liable  to  pay  compensation, even where they were carrying passengers  stranded on the road, gratuitously only out of sympathy ?  Whether  ‘illegal’  passengers  should  be  denied  compensation as a deterrent to discourage unauthorized  travel? Should we ignore the harsh reality that as long  as the causes necessitating or forcing people to resort  to  such  illegal  travel  in  goods  vehicles  continue  to  exist, people will continue to travel in goods vehicles,  unmindful of the risk,  whether legal or illegal?

Problem (iii)

4. The third problem relates to the procedural delays  in adjudication/settlement of claims by Motor Accidents  Claims  Tribunals  (for  short  ‘Tribunals’)  and  consequential hardship to the victims and their families.  In cases where the accident victim dies, the family –  usually the widow and children - loses its sole bread

winner and are virtually driven to the streets. Many a  time,  the  widow  and  children  are  forced  to  take  up  unaccustomed  manual  labour  for  their  survival,  the  children  foregoing  their  education.  Payment  of  compensation  without  delay  will  help  them  to  sustain  themselves and pick up the threads to live with dignity.

4.1) Most of the accident victims (who are injured) are  not able to access quality medical treatment for want of  funds, as their earning capacity is either permanently  lost or is put on hold on account of the injuries. They  get the compensation only after the treatment and after a  contested  trial. Many  a  time  lack  of  treatment  or  inadequate treatment for want of funds, itself converts  what  could  have  been  a  temporary  disability  into  permanent disability for the victim, thereby increasing  the compensation payable. The Insurance Companies know  full well that timely payment of compensation or timely  better treatment of the victims can ultimately reduce the  quantum of compensation payable by them. The insurance  companies also know that they will have to ultimately  reimburse the cost of medical treatment of the accident  victim  with  interest.  But  still  they  fail  to  extend  timely  aid  to  the  injured  victims,  but  wait  for  the

injured to file a claim petition, after completing the  treatment at his own cost.

4.2) The  Legislature  tried  to  reduce  the  period  of  pendency  of  claim  cases  and  quicken  the  process  of  determination of compensation by making two significant  changes in the Act, by Amendment Act 54 of 1994, making  it mandatory for registration of a motor accident claim  within one month of receipt of first information of the  accident, without the claimants having to file a claim  petition.  Sub-section  (6)  of  section  158  of  the  Act  provides:

“As soon as any information regarding any  accident involving death or bodily injury  to any person is recorded or report under  this  section  is  completed  by  a   police  officer,  the  officer-in-charge  of  the  police station shall forward a copy of the  same within thirty days from the date of  recording of information or, as the case  may be, on completion of such report to  the  Claims  Tribunal  having  jurisdiction  and  a  copy  thereof  to  the  concerned  insurer,  and  where  a  copy  is  made  available  to  the  owner,  he  shall  also  within  thirty  days  of  receipt  of  such  report, forward the same to such Claims  Tribunal and insurer”.

Sub-section (4) of Section 166 of the Act reads thus:-

“The  Claims  Tribunal  shall  treat  any  report of accidents forwarded to it under  sub-section  (6)  of  section  158  as  an  application  for  compensation  under  this  Act”.  

Rule 150 of Central Motor Vehicle Rules, 1989 prescribes  the  form  (No.54)  of  the  Police  Report  required  to  be  submitted under section 158(6) of the Act.   

4.3) This Court in General Insurance Council v. State of  A.P. [2007  (12)  SCC  354]  emphasised  the  need  for  implementing  the  aforesaid  provisions.  This  Court  directed:

“It  is,  therefore,  directed  that  all  the  State Governments and the Union Territories  shall  instruct  all  police  officers  concerned about the need to comply with the  requirement  of  Section  158(6)  keeping  in  view the requirement indicated in Rule 150  and  in  Form  54,  Central  Motor  Vehicles  Rules, 1989. Periodical checking shall be  done  by  the  Inspector  General  of  Police  concerned to ensure that the requirements  are being complied with. In case there is  non-compliance, appropriate action shall be  taken  against  the  erring  officials.  The  Department of Road Transport and Highways  shall  make  periodical  verification  to  ensure that action is being taken and in  case of any deviation immediately bring the  same  to  the  notice  of  the  State  Governments/Union Territories concerned so  that necessary action can be taken against  the officials concerned.”      

4.4) But unfortunately neither the police nor the Motor  Accidents  Claims  Tribunals  have  made  any  effort  to  implement these mandatory provisions of the Act. If these  provisions are faithfully and effectively implemented, it  will be possible for the victims of accident and/or their  families to get compensation, in a span of few months.  There is, therefore, an urgent need for the concerned  police authorities and Tribunals to follow the mandate of  these provisions.

Problem (iv)

5. Courts  have  always  been  concerned  that  the  full  compensation  amount  does  not  reach  and  benefit  the  victims and their families, particularly those who are  uneducated, ignorant, or not worldly-wise. Unless there  are  built-in  safeguards  they  may  be  deprived  of  the  benefit of compensation which may be the sole source of  their future sustenance. This court has time and again  insisted upon measures to ensure that the compensation  amount is appropriately invested and protected and not  frittered  away  owing  to  ignorance,  illiteracy  and  susceptibility  to  exploitation.  [See  Union  Carbide  Corporation v. Union of India - 1991 (4) SCC 584 and  General Manager, Kerala State Road Transport Corporation

v. Susamma Thomas - 1994 (2) SCC 176]. But in spite of  the directions in these cases, the position continues to  be far from unsatisfactory and in many cases unscrupulous  relatives, agents and touts are taking away a big chunk  of the compensation, by ingenious methods.  

Reports of Amicus Curiae

6. In  this  background,  to  find  some  solutions,  on  9.9.2008, this Court requested Shri Gopal Subramaniam, to  assist the Court as Amicus Curiae. The learned amicus  curiae  with  his  usual  thoroughness  and  commitment  has  examined the issues and submitted a series of reports and  has also made several suggestions for consideration. He  has also referred to and relied on a series of zealous  directions issued by a learned Single Judge of the Delhi  High Court to expedite and streamline the adjudication of  motor vehicle claims and disbursement of compensation.  

7. Having  considered  the  nature  of  the  problems  and  taking  note  of  the  several  suggestions  made  by  the  learned Amicus Curiae and after hearing, we propose to  issue a set of directions to the police authorities and

Claims  Tribunals.  We  also  propose  to  make  some  suggestions for implementation by Insurance Companies and  some suggestions for the consideration of the Parliament  and the Central Government.  

Directions to Police Authorities

8. The  Director  General  of  Police  of  each  State  is  directed to instruct all Police Stations in his State to  comply with the provisions of Section 158(6) of the Act.  For this purpose, the following steps will have to be  taken by the Station House Officers of the jurisdictional  police stations:

(i) Accident Information Report in Form No. 54 of the  Central Motor Vehicle Rules,1989 (‘AIR’ for short) shall  be submitted by the police (Station House Officer) to the  jurisdictional Motor Vehicle Claims Tribunal, within 30  days of the registration of the FIR. In addition to the  particulars required to be furnished in Form No. 54, the  police  should  also  collect  and  furnish  the  following  additional particulars in the AIR to the Tribunal: (i)  The age of the victims at the time of accident; (ii) The  income of the victim; (iii) The names and ages of the  dependent family members.  

(ii) The  AIR  shall  be  accompanied  by  the  attested  copies of the FIR, site sketch/mahazar/photographs of the

place  of  occurrence,  driving  licence  of  the  driver,  insurance policy (and if necessary, fitness certificate)  of the vehicle and postmortem report (in case of death)  or  the  Injury/Wound  certificate  (in  the  case  of  injuries). The names/addresses of injured or dependant  family members of the deceased should also be furnished  to the Tribunal.  

(iii) Simultaneously,  copy  of  the  AIR  with  annexures  thereto  shall  be  furnished  to  the  concerned  insurance  company to enable the Insurer to process the claim.

(iv) The police shall notify the first date of hearing  fixed  by  the  Tribunal  to  the  victim  (injured)  or  the  family of the victim (in case of death) and the driver,  owner and insurer. If so directed by the Tribunal, the  police may secure their presence on the first date of  hearing.

9. To  avoid  any  administrative  difficulties  in  immediate implementation of sections 158(6) of the Act,  we permit such implementation to be carried out in three  stages. In the first stage, all police stations/claims  Tribunals in the NCT Region and State Capital regions  shall   implement the provisions by end of April 2010. In  the  second  stage,  all  the  police  stations/claims  Tribunals  in  district  headquarters  regions  shall  implement the provisions by the end of August 2010. In  the  third  stage,  all  police  stations/Claims  Tribunals

shall implement the provisions by the end of December,  2010. The Director Generals shall ensure that necessary  forms and infrastructural support is made available to  give effect to Section 158 (6) of the Act.

10. Section 196 of the Act provides that whoever drives  a motor vehicle or causes or allows a motor vehicle to be  driven in contravention of the provisions of Section 146  shall  be  punishable  with  imprisonment  which  may  be  extended to three months, or with fine which may extend  to Rs. 1000/-, or with both. Though the statute requires  prosecution  of  the  driver  and  owner  of  uninsured  vehicles,  this  is  seldom  done.  Thereby  a  valuable  deterrent is ignored. We therefore direct the Director  Generals to issue instructions to prosecute drivers and  owners of uninsured vehicles under Section 196 of the  Act.  

11. The  Transport  Department,  Health  Department  and  other concerned departments shall extend necessary co- operation  to  the  Director-Generals  to  give  effect  to  Section 158 (6).  

Directions to the Claims Tribunals

12. The Registrar General of each High Court is directed  to instruct all Claims Tribunals in his State to register  the reports of accidents receive under Section 158 (6) of  the Act as applications for compensation under Section  166 (4) of the Act and deal with them without waiting for  the filing of claim applications by the injured or by the  family  of  the  deceased.  The  Registrar  General  shall  ensure that necessary Registers, forms and other support  is extended to the Tribunal to give effect to Section 166  (4) of the Act.  

13. For complying with section 166(4) of the Act, the  jurisdictional  Motor  Accident  Claims  Tribunals  shall  initiate the following steps:

(a) The Tribunal shall maintain an Institution Register  for recording the AIRs which are received from the  Station House Officers of the Police Stations and  register  them  as  miscellaneous  petitions.  If  any  private  claim  petitions  are  directly  filed  with  reference to an AIR, they should also be recorded in  the Register.  

(b) The Tribunal shall list the AIRs as miscellaneous  petitions.  It  shall  fix  a  date  for  preliminary  hearing so as to enable the police to notify such  date to the victim (family of victim in the event of  death)  and  the  owner,  driver  and  insurer  of  the

vehicle  involved  in  the  accident.  Once  the  claimant/s  appear,  the  miscellaneous  application  shall  be  converted  to  claim  petition.  Where  a  claimant/s file the claim petition even before the  receipt of the AIR by the Tribunal, the AIR may be  tagged to the claim petition.  

(c) The Tribunal shall enquire and satisfy itself that  the AIR relates to a real accident and is not the  result  of  any  collusion  and  fabrication  of  an  accident  (by  any  ‘Police  Officer  –  Advocate  –  Doctor’ nexus, which has come to light in several  cases).  

(d) The Tribunal shall by a summary enquiry ascertain  the  dependent  family  members/legal  heirs.  The  jurisdictional police shall also enquire and submit  the names of the dependent legal heirs.

(e) The  Tribunal  shall  categories  the  claim  cases  registered, into those where the insurer disputes  liability  and  those  where  the  insurer  does  not  dispute the liability.  

(f) Wherever the insurer does not dispute the liability  under  the  policy,  the  Tribunal  shall  make  an  endeavour to determine the compensation amount by a  summary  enquiry  or  refer  the  matter  to  the  Lok  Adalat for settlement, so as to dispose of the claim  petition itself, within a time frame not exceeding  six  months  from  the  date  of  registration  of  the  claim petition.  

(g) The insurance companies shall be directed to deposit  the admitted amount or the amount determined, with  the  claims  tribunals  within  30  days  of  determination. The Tribunals should ensure that the  compensation  amount  is  kept  in  Fixed  deposit  and  disbursed as per the directions contained in General  Manager, KSRTC v. Susamma Thomas [1994 (2) SCC 176].

(h) As the proceedings initiated in pursuance of Section  158(6)  and  166(4)  of  the  Act,  are  different  in  nature  from  an  application  by  the  victim/s  under  Section  166(1)  of  the  Act,  Section  170  will  not  apply. The insurers will therefore be entitled to  assist the Tribunal (either independently or with  the  owners  of  the  vehicles)  to  verify  the  correctness  in  regard  to  the  accident,  injuries,  age, income and dependents of the deceased victim  and in determining the quantum of compensation.  

14. The  aforesaid  directions  to  the  Tribunals  are  without prejudice to the discretion of each Tribunal to  follow such summary procedure as it deems fit as provided  under Section 169 of the Act. Many Tribunals instead of  holding an inquiry into the claim by following suitable  summary procedure, as mandated by Section 168 and 169 of  the  Act,  tend  to  conduct  motor  accident  cases  like  regular civil suits. This should be avoided. The Tribunal  shall take an active role in deciding and expeditious  disposal of the applications for compensation and make

effective use of Section 165 of the Evidence Act, 1872,  to determine the just compensation.   SUGGESTIONS FOR INSURANCE COMPANIES

15. In  cases  of  death,  where  the  liability  of  the  insurer is not disputed, the insurance companies should,  without waiting for the decision of the Motor Accidents  Claims Tribunal or a settlement before the Lok Adalat,  endeavour to pay to the family (Legal representatives) of  the deceased,  compensation as per the standard formula  determined by the decisions of this Court.  

16. In cases of injuries to any accident victim, where  the liability is not disputed, the insurer should offer  treatment at its cost to the injured, without waiting for  an award of the Tribunal. If insurance companies can meet  the bills for treatment of those who have taken a medical  insurance policy, we see no reason why they should not  extend a similar treatment to the accident victims of  vehicles insured with them.  

17. In countries like United Kingdom, the percentage of  motor accident claims, with reference to the accidents is  very  low.  This  is  because  immediately  after  being

notified  of  the  accident,  the  insurer  makes  its  own  enquiries and satisfies itself about its liability and  voluntarily  assesses  and  pays  the  compensation  to  the  victim. Only where the insurer denies the claim or where  the  victim  is  not  satisfied  with  the  quantum  of  compensation paid, the matter goes to court. There is no  reason why insurance companies in India should not adopt  such  a  procedure.  In  death  cases,  the  calculation  of  compensation is now standardized by several decisions of  this  court  [See  for  example:  Sarla  Verma  v.  Delhi  Transport Corporation – 2009 (6) SCC 121]. The insurers  can either by relying upon the police report (AIR) or by  enquiring  with  the  family  or  the  employer  of  the  deceased,  ascertain  the  three  inputs  required  for  calculation  of  the  compensation,  that  is,  age  of  the  deceased, income of the deceased and number of dependent  family members. With these particulars, the insurers can  easily  calculate  the  compensation  and  offer  a  compensation, either a lump sum or an annuity. Similarly  in cases of injuries, the insurers can offer treatment in  hospitals approved by it and meet the expenses or pay the  bills,  or  if  the  victim  has  already  undergone  the  treatment, reimburse the cost of treatment. It can also  reimburse other items of special damages, the damages for  pain  suffering,  which  is  also  standardized  in  several

decisions of this Court. By such voluntary payment there  will be all round benefits. The insurers save interest  and litigation cost and discharge their obligation to the  society.  The  victims  will  be  relieved  from  financial  hardship  and  benefit  from  timely  effective  treatment.  Burden on courts will be reduced and judicial man power  can be diverted to more complex cases.  

18. To  protect  and  preserve  the  compensation  amount  awarded to the families of the deceased victim special  schemes may be considered by the insurance companies in  consultation  with  the  Life  Insurance  Corporation  of  India,  State  Bank  of  India  or  any  other  Nationalized  Banks. One proposal is for formulation of a scheme in  consultation  with  Nationalized  Banks  under  which  the  compensation is kept in fixed deposit for an appropriate  period and interest is paid by the Bank monthly to the  claimants  without  any  need  for  claimants  having  to  approach either the court or their counsel or the Bank  for  that  purpose.  The  scheme  should  ensure  that  the  amount of compensation is utilized only for the benefit  of the injured claimants or in case of death, for the  benefit of the dependent family. We extract below the  particulars of a special Scheme offered by a nationalized  Bank at the instance of the Delhi High Court :

(i)The fixed deposit shall be automatically renewed till the  period prescribed by the Court.  

(ii)The interest on the fixed deposit shall be paid monthly.  (iii)The monthly interest shall be credited automatically in  

the saving account of the claimant.  (iv)Original fixed deposit receipt shall be retained by the  

Bank in safe custody. However, the original passbook shall  be given to the claimant along with the photocopy of the  FDR.  

(v)The original fixed deposit receipt shall be handed over to  the claimant at the end of the fixed deposit period.  

(vi)Photo identity card shall be issued to the claimant and  the  withdrawal  shall  be  permitted  only  after  due  verification  by  the  Bank  of  the  identity  card  of  the  claimant.  

(vii)No cheque book shall be issued to the claimant without  permission of the court.  

(viii)No loan, advance or withdrawal shall be allowed on the  fixed deposit without permission of the court.  

(ix)The claimant can operate the saving bank account from the  nearest  branch  of  UCO  Bank  and  on  the  request  of  the  claimant, the bank shall provide the said facility.  

19. The Insurance companies may also consider offering  an annuity instead of lump sum compensation. They may  prepare an annuity scheme with the involvement of Life  Insurance  Corporation  of  India  or  its  own  actuaries,  under which they can pay a monthly annuity to the widow  (for  life)  and  to  minor  children  (till  they  attain  majority) and in addition a lump sum at the end of 20 or  25 years to the widow. The benefit of such annuity scheme  may  also  be  extended  to  victims  who  are  permanently

disabled in accidents. Once such schemes are in place,  the victims and the Tribunal will have some choice in the  manner of payment of compensation.

20. Whenever  the  insurance  companies  find  that  the  driver  of  the  insured  vehicle  possessed  fake/forged  driving license, they should lodge a complaint with the  concerned police for prosecution. This will reduce the  incidence of fake licences and increase the road travel  safety.  

SUGGESTIONS FOR LEGISLATIVE/EXECUTIVE INTERVENTION

21. We  may  next  refer  to  some  vital  areas  where  intervention  by  the  legislature  and/or  executive  is  called  for.  The  suggestions  are  intended  to  draw  the  attention of the executive and legislature to the several  vexed  issues,  which  when  properly  and  expeditiously  addressed, will improve the system of compensating the  motor accident victims.

Ensuring that all accident victims get compensation

22. To  ensure  that  all  accident  victims  get  compensation,  it  is  necessary  to  formulate  a  more  comprehensive  scheme  for  payment  of  compensation  to  victims of road accidents, in place of the present system

of third party insurance. For example, in South Africa  and  some  other  African  countries,  Road  Accident  Funds  have  been  created,  managed  by  Road  Accident  Fund  Commissions, thereby eliminating the need for third party  insurance. A fuel levy/surcharge is collected on the sale  of  petrol  and  diesel  and  credited  to  such  fund.  All  accident  victims,  without  exception,  are  paid  compensation from out of the said fund by the Commission.  But the feedback from operational statistics relating to  such  funds  is  that  the  scheme,  while  successful  in  smaller  countries,  may  encounter  difficulties  and  financial deficits in larger countries like South Africa  or  developing  countries  with  infrastructural  deficiencies.  

23. An alternative scheme involves the collection of a  one time (life time) third party insurance premium by a  Central Insurance Agency in respect of every vehicle sold  (in a manner similar to the collection of life time road  tax). The fund created by collection of such third party  insurance can be augmented/supplemented by an appropriate  road  accident  cess/surcharge  on  the  price  of  petrol/diesel  sold  across  the  country.  Such  a  hybrid  model  which  involves  collection  of  a  fixed  life  time  premium in regard to each vehicle plus imposition of a

road  accident  cess  may  provide  a  more  satisfactory  solution in a vast country like India. This will also  address  a  major  grievance  of  insurance  companies  that  their outgoings by way of compensation in motor accident  claims  is  four  times  the  amount  received  as  motor  insurance  premia.  The  general  insurance  companies  may  however continue with optional insurance to provide cover  against damage to the vehicle and injury to the owner.  

24. A  more  realistic  and  easier  alternative  is  to  continue with the present system of third party insurance  with two changes: (i) Define ‘third party’ - to cover any accident victim  

(that is any third party, other than the owner) and  increasing the premia, if necessary.

(ii) Increase the quantum of compensation payable under  Section 161 of the Act in case of hit and run motor  accidents.

25. India has the dubious distinction of being one of  the countries with the highest number of road accidents  and the longest response time in securing first aid and  medical treatment. There is therefore an urgent need for  laying  down  and  enforcing  Road  safety  measures  and  establishment of large number of Trauma Centres and first  aid  centres.  It  is  also  necessary  to  consider  the  establishment of a Road Safety Bureau to lay down Road  Safety Standards and norms, enforce Road safety measures,

establish  and  run  Trauma  Centres,  establish  First  Aid  Centres in Petrol Stations, and carry out research/data  collection for accident prevention.   

26. Several  countries  have  comprehensive  enactments  dealing  exclusively  with  accidents.  In  place  of  the  provisions relating to Accident tribunals and award of  compensation in the Motor Vehicles Act, 1988, and other  statutes  dealing  with  accidents  and  compensation,  enacting a comprehensive and unified statute dealing with  accidents may be considered.

Rationalisation of II schedule to Motor Vehicles Act, 1988

27. The Central Government may consider amendment of the  Second  Schedule  to  the  Act  to  rectify  the  several  mistakes therein and rationalize the compensation payable  thereunder,  repeatedly  pointed  out  by  this  Court  [See  U.P. State Road Transport Corporation v. Trilok Chandra -  1996 (4) SCC 362, and Sarla Verma (supra)].  

Securing  the  compensation  to  the  victims  of  accidents  involving uninsured vehicles

28. Where there is no insurance cover for a vehicle, the  owner should be directed to offer security or deposit an  amount,  adequate  to  satisfy  the  award  that  may  be

ultimately passed, as a condition precedent for release  of the seized vehicle involved in the accident. If such  security or cash deposit is not made, within a period of  three months, appropriate steps may be taken for disposal  of  the  vehicle  and  hold  the  sale  proceeds  in  deposit  until  the  claim  case  is  disposed  of.  The  appropriate  Governments may consider incorporation of a rule on the  lines  of  Rule  6  of  the  Delhi  Motor  Accident  Claims  Tribunal Rules, 2008 in this behalf.

CONSEQUENTIAL DIRECTIONS 29. The  Supreme  Court  Registry  is  directed  to  send  copies  of  this  order  to  (i)  Chief  Secretaries  and  Director  Generals  of  Police  of  all  States,  and  (ii)  Registrar-Generals  of  all  High  Courts,  for  compliance  with the directions. The suggestions made may be placed  before the Central Government by the learned Solicitor  General.  Registry  may  receive  and  put  up  any  other  suggestions. List for further directions on 7.1.2010.

____________________J. (R V Raveendran)

____________________J. (Mukundakam Sharma)

New Delhi; ____________________J. December 17, 2009. (K.S. Radhakrishnan)