Context:
A recent legal analysis highlights disparities in compensation awarded for road accident fatalities under the Motor Vehicles Act, 1988, arguing that the current income-based formula undermines the constitutional principles of equality (Article 14) and right to life with dignity (Article 21). The proposal advocates a universal “dignity floor” to ensure equal baseline compensation for all victims.
Key Highlights:
Compensation Framework under Motor Vehicles Act, 1988
• The Motor Accident Claims Tribunal (MACT) awards compensation using the multiplier method.
• Formula established in Sarla Verma v. DTC (2009) and refined in National Insurance Co. v. Pranay Sethi (2017).
• Compensation = Annual Income × Age-based Multiplier (+ conventional heads like consortium, funeral expenses).
• Results in higher compensation for high-income earners.
Judicial Developments
• Kirti v. Oriental Insurance Co. (2021): Recognized the economic value of unpaid domestic work.
• However, compensation remains largely income-linked, disadvantaging homemakers, informal workers, and unemployed individuals.
Comparative Legal Provisions
• Railways Act, 1989 – Provides a fixed statutory compensation for accidental deaths.
• Carriage by Air Act, 1972 – Also provides a fixed sum compensation model.
• Contrasts with the variable, income-based road accident compensation system.
Proposed Reform: Universal ‘Dignity Floor’
• Establish a fixed minimum compensation amount for every fatality.
• Add income-linked components for financial dependency loss.
• Introduce “dignity damages” to compensate for emotional and non-economic harm.
Significance / Concerns
• Ensures equal recognition of the intrinsic value of every human life.
• Addresses socio-economic discrimination in compensation.
• Aligns compensation regime with constitutional morality.