JAI PRAKASH versus NATIONAL INSURANCE CO. LTD. & ORS.

Citation: [2009] 16 S.C.R. 710 · Decided: 17-12-2009 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Hearing Adjourned
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Judgment (excerpt)

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[2009) 16 (ADDL.) S.C.R. 710 
JAi PRAKASH 
v. 
NATIONAL INSURANCE CO. LTD. & ORS. 
(SLP (C ) No. 11801-11804 of 2005) 
DECEMBER 17, 2009 
[R.V. RAVEENDRAN, DR. MUKUNDAKAM SHARMA 
AND K.S. RADHAKRISHNAN, JJ.] 
Motor Vehicles Act, 1988 - ss. 158(6), 166(4), 196 -
Central Motor Vehicle Rules, 1950 - r. 150 - Motor accident 
-
Compensation - In cases of hit and run unidentified 
vehicles; uninsured vehicles; gratuitous passengers; 
passengers in goods vehicles; procedural delays in 
adjudication/settlement of claims; and where compensation 
amount does not reach the claimants, directions issued and 
suggestions made by the Court - Directions to the police 
authorities and claims tribunals for implementation of 
provisions u/ss. 158(6), 166(4), 196 and r. 150 - Direction to 
Insurance companies to lodge complaint in cases of forged 
driving licences - Suggestions made for legislative/executive 
interference to amend and enact more comprehensive law -
Suggestions also made to Insurance Companies. 
In the instant Special Leave Petition, the Court 
addressed four problems generally faced in motor 
accident cases -
(i) 
Victims who do not receive compensation in 
cases, that is 
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(a) hit and run vehicles which remain 
unidentified. 
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(b) offending vehicles not having insurance 
cover and 
710 
• 
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JAi PRAKASH v. NATIONAL INSURANCE CO. LTD. & 711 
ORS. 
(c) vehicles with third party insurance carrying 
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persons not covered by insurance (gratuitous 
passengers and pillion riders etc.). 
{ii) 
Practice of using goods vehicles for 
passenger transport 
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(iii) 
Procedural delay in adjudication/settlement of 
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claims by Motor Accident Claims Tribunal. 
(iv) The entire compensation amount not reaching 
and benefitting the victims and their families. 
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The Court gave the following initial directions 
I suggestions: 
Suggestions For Legislative and Executive Intervention 
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[Problems (i) and (ii)]: 
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1.1. To ensure that all accident victims get 
compensation, it is necessary to formulate a more 
comprehensive scheme for payment of compensation to 
the victims of road accidents, in place of the present E 
system of third party insurance. [Para 22] [732-G] 
1.2. 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 
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, 
model which involves collection of a fixed life time G 
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 
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712 
SUPREME COURT REPORTS (2009] 16 (ADDL.) S.C.R. 
A 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 
B owner. [Para 23) [733-8-F] 
1.3. 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 
C owner) and increase 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. [Para 
24) [733-F-H; 734-A] 
D 
1.4. There is 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 
E 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. [Para 25) [734-B-C] 
1.5. The Central Government may consider 
F amendment of the Second Schedule to the Act to rectify 
the several mistakes therein and rationalize the 
compensation payable thereunder. [Para 27] [734-E] 
U.P. State Road Transport Corporation v. Trilok Chandra 
G 1996 (4) SCC 362; Sar/a V
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