No Fault Liability


The Motor Vehicles Act of 1988 was enacted by the parliament of India on July 1st 1989; this Act was a replacement to the previous Motor Vehicles Act of 1939. This Act is a more detailed and comprehensive Act if compared to the Act of 1939. The Motor Vehicles Act, 1988 regulates all road transport within the country and deals with all laws pertaining to road transport. The Act deals in depth with provisions regarding licensing of drivers/conductors, registration of motor vehicles, control of motor vehicles through permits, special provisions relating to state transport undertakings, traffic regulation, insurance, liability, offences and penalties, etc. In order to make the statute more effective, the Government of India made the Central Motor Vehicles Rules 1989.

Some important sections of this Act are:-

Section 112: It proposes the maximum speed at which each class of motor vehicle can be driven.

Section 113: The driver should refuse to drive a vehicle exceeding the weight permitted to carry by the Act.

Section 129: Wearing a helmet is must by person riding motor cycle.

Section 134: Duty of driver in case of accident and injury to a person to give him medical assistance to the injured person and reporting to a police officer or at nearest police station within 24 hours.

Section 185: Drunk person or by a person under the influence of drugs is prohibited.

Section 140: This section deals with ‘no fault liability


Section 140 of the Motor Vehicles Act deals with ‘no fault liability’. The term ‘no fault liability’ means when an accident has occurred due to use of a motor vehicle or motor vehicles and has caused either death or some sort of injury, the owner of the vehicle is still liable to pay compensation even if it isn’t his or her fault. Where death or permanent disablement occurs to any person as a result of an accident due to the use of a motor vehicle, the owners of the vehicle shall be liable to pay compensation for such death or disablement in accordance with the provisions of this section. The provisions of this Section make way for a fixed amount of compensation which must be paid depending upon whether the accident has caused death or disablement. In case of death then the owners have to pay compensation worth fifty thousand rupees and in case of disablement then the compensation is fixed at rupees twenty five thousand, these fixed rates of compensation are as per sub-section(1) of Section 140. It also must be taken into consideration that when claiming compensation for either death or disablement the concerned parties needn’t prove any sort of wrongful act, neglect or default on part of the defendant, as they’re still liable to pay compensation. In any case for compensation under sub-section( 1) the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect, or default of owner or owners of the vehicles concerned or of any other person. This Act is in correspondence with section 92-A of the Motor Vehicles Act, 1939. An important case pertaining to compensation is National Insurance company V Deorao and others (2002).


Often in a case of ‘no fault liability’ people tend to confuse this with ‘strict liability’. Some of the basic differences that we see in between these two laws are, in terms of ‘no fault liability’ the compensation is fixed as per sub-section (1), in case of death the compensation is fixed at fifty thousand rupees and in case of disablement the compensation is fixed at rupees twenty five thousand. But when we talk about ‘strict liability’ then there is no fixed amount of compensation as ‘strict liability isn’t a codified law. When we talk about codification of the laws then one must know that ‘no fault liability’ is a codified law under Sec-140, therefore giving it statutory powers, ‘strict liability’ on the other hand is not a codified law and comes under tort law, therefore not giving it statutory powers. Another important aspect would be that if an individual were to claim compensation under normal tort law in case of a motor vehicle accident then he/she would be able to do so, though the compensation received through this process would and will be deducted from the compensation that was to be awarded by the motor vehicles tribunal. Therefore these two are altogether different concepts. The court is of the opinion that even in case of an accident by a motor vehicle a victim is entitled to get compensation from the tribunal unless any one of the exceptions would apply. The tribunal and High Court have, therefore, gone into error in divesting the claimants of the compensation payable to them. This can be seen in the case Kaushnuma Begum and others v. New India Assurance Co. Ltd and others.