In the context of road safety, how effective is India’s road accident compensation framework, and what reforms are needed to address issues arising from uninsured vehicles?

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Introduction

India records one of the highest numbers of road accident fatalities globally. The Motor Vehicles Act, 1988 (amended in 2019), provides the legal framework for compensation through mandatory third-party insurance and Motor Accident Claims Tribunals (MACTs). However, issues such as uninsured vehicles expose significant gaps in the system.

Effectiveness of the Current Framework

1. Mandatory Third-Party Insurance

The Act mandates third-party insurance to ensure victim compensation irrespective of the driver’s financial capacity. This has institutionalised a no-fault liability principle under Sections 140 and 164.

2. Motor Accident Claims Tribunals (MACTs)

MACTs provide a specialised mechanism for speedy adjudication. Compensation principles such as “just compensation” and structured formula approaches have enhanced victim protection.

3. Motor Vehicle Accident Fund (MVAF)

The 2019 amendment created the MVAF to provide compulsory insurance cover to all road users, including hit-and-run victims.

Limitations:

Large number of uninsured or underinsured vehicles.
Delays in claim settlement.
Enforcement gaps in insurance compliance.
Financial distress when the offending vehicle lacks insurance and the driver has no attachable assets.

Reforms Needed

1. Universal Insurance Enforcement

Strict digital verification of insurance through VAHAN database integration and heavy penalties for non-compliance can reduce uninsured vehicles.

2. Strengthening the MVAF

Operationalising and adequately funding the MVAF to cover cases involving uninsured vehicles can ensure guaranteed compensation.

3. Expedited and Simplified Procedures

Time-bound claim settlement, online filing, and standardized compensation frameworks can enhance efficiency.

4. Road Safety and Preventive Measures

Insurance-linked incentives for safe driving and stricter enforcement of traffic norms can reduce accidents and liabilities.

Conclusion

While India’s compensation framework has evolved towards victim-centric justice, gaps persist due to uninsured vehicles and enforcement deficits. Strengthening institutional mechanisms and ensuring universal insurance coverage are essential to uphold the right to life and dignity under Article 21.

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