Punjab & Haryana High Court Grants Benefit of Section 164 MV Act to Claim Originally Filed Under Section 166, Grants ₹5 Lakh Compensation Under Section 164 of the Motor Vehicles Act for Pre-2019 Accident, Applying Beneficial Provision Retrospectively

Case Name: Neelam & Another v. Punjab State & Another

Date of Judgment: 29 July 2026

Citation: FAO-2932-2002

Bench: Hon’ble Mr. Justice Yashvir Singh Rathor

Held: The Punjab and Haryana High Court held that the beneficial provisions introduced under Section 164 of the Motor Vehicles Act, 1988, providing fixed no-fault compensation of ₹5,00,000 in cases of death, can be applied retrospectively to motor accident claims arising before the Motor Vehicles (Amendment) Act, 2019. Relying on the Supreme Court’s decision in Ram Murti v. Punjab State Electricity Board, the Court observed that the Motor Vehicles Act is a beneficial legislation intended to provide social welfare relief and, therefore, claimants whose petitions under Section 166 had failed were nevertheless entitled to the statutory compensation available under Section 164. Accordingly, the Court enhanced the compensation to ₹5,00,000 after adjusting the interim compensation already received under Section 140 of the Act.

Summary: The appeal arose from an award passed by the Motor Accident Claims Tribunal, Amritsar, whereby the claim petition filed under Sections 166 and 140 of the Motor Vehicles Act seeking compensation for the death of Roshan Lal was dismissed on merits. The Tribunal held that the deceased himself was driving the bus when the accident occurred due to bursting of a tyre and that there was no rash or negligent act attributable to any other person, which was a prerequisite for maintaining a claim under Section 166 of the Act. The Tribunal also declined the claimants’ request to convert the petition into one under Section 163-A after interim compensation had already been awarded under Section 140.

Before the High Court, the appellants contended that after the enactment of the Motor Vehicles (Amendment) Act, 2019, Section 164 had replaced Section 163-A and introduced a fixed compensation of ₹5,00,000 in cases of death under the principle of no-fault liability. Placing reliance on the Supreme Court’s decision in Ram Murti v. Punjab State Electricity Board, they argued that the beneficial provision had been applied retrospectively even in respect of accidents that occurred prior to the amendment and that they were entitled to identical relief.

The respondents opposed the appeal by contending that the decision in Ram Murti was distinguishable and that no further enhancement was permissible because adequate compensation had already been awarded.

The High Court examined the ratio laid down by the Supreme Court in Ram Murti, wherein Section 164 of the Motor Vehicles Act was retrospectively applied despite the accident having occurred before the 2019 amendment. The Supreme Court had emphasised that the Motor Vehicles Act is a beneficial piece of legislation and that the statutory no-fault compensation introduced by Parliament should be extended to eligible claimants in order to advance the legislative object of social welfare.

Applying the same principle, the Court observed that although the accident in the present case occurred on 14 May 2000 and the original claim under Section 166 had failed, the claim nevertheless arose from the use of a motor vehicle resulting in death. Since Section 164 now provides fixed compensation of ₹5,00,000 in death cases without any income ceiling under the principle of no-fault liability, the appellants were entitled to receive the statutory amount. After deducting the interim compensation of ₹50,000 already paid under Section 140, the Court awarded the balance amount together with interest.

Decision: The appeal was partly allowed. The High Court enhanced the compensation by awarding an additional ₹4,50,000, thereby making the total compensation ₹5,00,000 after adjusting the interim compensation of ₹50,000 already received under Section 140 of the Motor Vehicles Act. The enhanced amount was directed to carry interest at the rate of 9% per annum from 1 September 2019, the date from which Section 164 came into force, until realisation, payable jointly and severally by the respondents.