Search This Blog

Monday, November 2, 2009


Dear (s)

Do you know the significance of third Sunday in November every year ? Two news items that featured recently in ‘Times of India’ offers a perplexing perspective.

With the increasing no. of vehicles, congested roads, speed, recklessness, urbanization, transport vehicles – accidents on the road are common place. Many of us have seen some accidents – death and injuries are not to be construed at medico legal phenomena alone. There are many profound psychological and social consequences apart from the death or the injuries. The sufferings can seldom be quantified in financial terms. More significant would be the horrific trauma caused to those bereaved by the sudden, unexpected snatching away of the bread winner.

With the development of civilization, act of negligence have become actionable wrong. In the English Law any person or the legal representative of deceased person who expired on account of negligent act of other can besides instituting criminal proceeding, recover damages under the Law of Torts. In days of yore, to give effective rights to the person injured or expired in an accident, Fatal Accidents Act, 1885 was enacted in India. This Act provided only a procedure and a right of named legal heirs to claim compensation from the person committing negligence. In 1939, Motor Vehicles Act, a statute consolidated the laws relating to motor vehicles. This has since been replaced by MV Act 1988. Chap IX of the Act deals with Insurance of Motor vehicles against Third party risks. Sec 146 specifies the necessity for insurance against TP risks but sub sec (2) exempts vehicles owned by Govt as also State transport undertaking. The requirements of policies and limits of liability are specified in Sec 147. Sec 149 deals with the Duty of the Insurers to satisfy judgments and awards against persons insured in respect of TP risks. Many of you would be aware of the restricted liability for Insurers in vogue in the earlier Act.

Claims Tribunal have been set up in accordance with the statute and the injured or the legal representatives of deceased can file claim application in MACT. No limitation has been prescribed for filing of the claim application though initially when law was enforced it was 6 months, ultimately in the garb of welfare legislation the provision of limitation has been deleted. There are lot of assumptions which go in to the assessment of compensation and there is all possibility of variance from Judge to Judge in applying the various principles enunciated by the Courts from time to time.

There have been fanciful and fabulous awards and recently a MACT awarded a compensation of Rs.2.23 crore against Oriental Insurance to two brothers who lost their parents and elder sister in a truck accident at Muzaffarnagar on 30.12.2004.  Elsewhere, the Delhi High Court in Aug 2009 awarded compensation of Rs.2.3 million to the family of man killed in road accident involving an autorickshaw in Sept 1988.

It was briefly reported in Press that the Centre is working on a plan for a cashless system whereby the government would bear all medical expenses during the first 48 hours of hospitalization of road accidents, which would be a very welcome move and would immensely benefit victims who have no relatives around to take care and pay for their medical expenses at the time of an accident. There have been bogus claims also before the various MACT

The first is the news item of concern to all Insurers that appeared on 26.10.09 : PSU insurance firms pay Rs 4,000cr/yr to accident victims
This spoke of the high death toll on India's highways bleeding its insurance firms. Going by statistics PSU Insurers reportedly paid out a whopping Rs 4,000 crore every year since 2007 to settle compensation amounts awarded by the Motor Accidents Claims Tribunal. The report mentioned that Insurers earned a measly Rs 15 lakh in premium from the policy holders on whose behalf it made the payouts. In effect, the public sector insurance firms had dished out Rs 12,000 crore in compensation to road accident victims during the last three financial years. This could well be the tip of the iceberg as companies settle only one lakh cases every year and more than 11 lakh claims are still pending before the MACT.

The burden keeps increasing as it takes nearly a decade many a times before the final order is pronounced and the Insurers have to pay the principal + interest on it from the day the claim was filed. Nearly 40,000 people are killed in road accidents in India every year and one and a half lakh are injured. There have been steady increase in % of the TP cases but the premium is not growing proportionately.
Quoting Ministry of Road Transport and Highways, the newspaper had mentioned the amounts paid as :
2006-2007-------------Rs 3,741 crore
2007-2008-------------Rs 3,865 crore
2008-2009-------------Rs 3,975 crore

Whilst this is one side, the other side was represented in Times of India (2nd Nov 09) which states that Over 11,000 Families Waiting For Compensation since many years.

This report states that Speeding state transport corporation (STC) buses are not just among the worst killers on the roads, they are also the biggest defaulters when it comes to paying compensation to accident victims. The STCs in Tamil Nadu owe a whopping Rs 323.96 crore in compensation to 11,233 victims and their families, based on information obtained under the Right to Information Act. The report states that STCs have not settled compensation amounts of Rs 18.61 crore awarded by the Madras High Court and a startling Rs 305.14 crore ordered by the accident tribunals.

Some hapless families of accident victims, like Palanichamy Gounder, have been waiting for compensation for 28 years now. “ Palanichamy Gounder died in 1981 after being hit by a bus; his family is yet to get compensation. The transport corporation of the Villupuram-Kancheepuram region is the top defaulter, with dues of Rs 103.95 crore. Next comes the Kumbakonam region with Rs 43.48 crore. The Metropolitan Transport Corporation in Chennai is not far behind, with an amount of Rs 33.5 crore yet to be paid”. This makes agonizing wait for several families. The hapless victims struggle to make their ends meet after long years penance in court and after pronouncement of decree in their favour. The Law was meant to guarantee an appropriate and immediate compensation to road accident victims. When Govt. who should be protecting them defaults, where can go pleading ?? would not the purpose of the welfare legislation itself be defeated, if victims are denied their rightful due.

Agonisingly, In Krishnagiri,(a Dist. In Tamilnadu) months ago, a court asked the families of two accident victims to take away the bus of a transport corporation till the compensation was paid. Despite the lower courts in the state taking a stern view of the tardy release of compensation, most transport corporations have not come up with a plan to clear their dues. 

These reports have far reaching consequences. On the one side, Insurers are saddled with high awards and increased costs. Time would be ripe to provide a right of proper contest for the Insurers to mitigate fake cases and the quantum of compensation. There also needs some thinking on fixed structured compensations as in the case of Rail or airways. The payment of compensation based on the vehicle does not appear equitable as the intention of the legislation was to provide just compensation.

Just in case, you remembered the Question at the beginning, Third Sunday of every November is marked at “United Nations world Day of Remembrance for Road Traffic Victims’. In some countries, candle light parades, gatherings, seminars and theatre performances are conducted on this day as acknowledgement of victims of road traffic crashes and their unfortunate families.

Look forward to your views and feedback

With regards

S Sampathkumar


  1. The article is rich on statitics and brings to fore the extent somewhat of the bleeding the insurance industry is facing. However, some thoughts need to be shared on the lack of proactive role to be played by the insurers in coming to aid of the accident victims and ensure that the high leakage in the system is controlled. In the process insurers find themselves in the unique undesirable position of having to pay such high cost and being depicted with a black brush. Partly the blame lies on the systems and the judiciary but largely the blame lies with the insurers who can actually help themselves out of this rut.

  2. Yes Milind. Largely agree with you. The Companies are bleeding and yet have a black image. Whilst the Private players perhaps are impeded by geographical distance, PSU have procedural hassles. Not all is well with Insurers

  3. Sweet melons, juicy bum and a really delightful snatch she is absolutely pleading to be fucked with pawg videos a fat shaft!
    It's starting to burn a little bit more advanced,
    you might want to give that a good friction rub that creates some heat and some
    good adhesion through that tape.

    Here is my site ... phat ass