Navigating the Constitutional Complexities of Section 166(3), Motor Vehicles Act, 1988 (MVA, 1988): Time-Barred Claims and condonation of delay

By Aayush Shrivastava

Introduction

As we approach a new paradigm where prevention of disputes and the promotion of alternative dispute resolution mechanisms take centre stage, certain persistent issues often remain overlooked. These issues, while as familiar as the morning tea and rusk that many Indians cherish, are rarely discussed. One such issue, though widespread, is seldom given the attention it deserves. On a personal level, injuries and fatalities resulting from road accidents impose a severe financial burden. They often drive financially stable households into poverty and place additional debt on those already living in poverty[1]. More than 50% of vehicles on Indian roads are not insured. Before delving into why such a large percentage of vehicles remain uninsured, despite the statutory mandate for third-party insurance under Section 146 of the MVA, 1988, it is important to assess the effectiveness of claim settlements for victims of accidents involving insured vehicles. Equally critical is evaluating the efficiency of the claims adjudication process and identifying the obstacles that lead to delays in the resolution of these cases.

The Motor Vehicles Act, 1988, is a remedial statute designed to restore the claimant to their pre-accident position and compensate for the losses suffered. Therefore, it should be interpreted in a manner that maximizes the benefit to the claimant, in line with the benevolent objectives of the legislation[2]. However, in India insurance coverage is quite low and as a consequence, victims frequently do not receive adequate compensation. Long procedural delays are another common cause of insurance-related problems[3]. A recurring issue before the Motor Accident Claims Tribunal (MACT) arises when it must decide whether to condone delays in the filing of time-barred claims. Section 166(3) of the MVA, 1988, stipulates a limitation period of six months from the date of the accident for filing compensation applications. The tribunal faces the dilemma of balancing the beneficent purpose of the legislation, which aims to provide relief to victims, against the strict, literal interpretation of the statutory time limit.

Historical background of Section 166(3)

The Motor Vehicles Act, 1939, was initially amended in 1988 to impose a six-month deadline for filing claim petitions following an accident. However, the 1994 amendment removed this time restriction, allowing claims to be filed regardless of when the accident occurred. Subsequently, with the enactment of 2019 Act, which came into effect on April 1, 2022, the legislature reinstated the provisions of Section 166(3), reintroducing the six-month limitation period for filing compensation claims arising from accidents.

It is difficult to foresee all the potential factors that could lead to delays in filing an application. While a more flexible outer limit may appear justifiable, enforcing a rigid deadline may not always align with the principles of justice. A more equitable approach would be to establish a short limitation period, while granting the Tribunal discretion to consider applications filed beyond this period, provided sufficient cause is shown, rather than extending the limitation period and making it rigid[4].

Constitutional validity of the Section 166(3)

The object of a benevolent statute is to provide relief to the injured. The section after amendment may result in denial of the right to claim compensation to any claims filed by the injured insurer after the limitation period. The same has been challenged recently before the Apex court in Bhagirathi Dash v UOI & Ors.[5]. While decision is pending, a detailed study of underlying constitutional principles is the recourse.

Any discussion on constitutional validity would be incomplete without addressing the Maneka Gandhi case[6], where the relationship between Articles 14, 19, and 21 was critically examined. These provisions must be read in conjunction with one another. Any law that encroaches upon an individual’s personal liberty must pass a three-fold test: (i) it must lay down a clear and adequate procedure; (ii) the procedure must conform to the fundamental rights guaranteed under Article 19, as applicable in the given circumstances; and (iii) it must be subjected to scrutiny under Article 14, ensuring that it upholds the principle of equality before the law.

Applying the aforementioned test, it appears that the impugned provision satisfies the first two elements. With respect to Article 14, to determine whether the law is arbitrary, we must first examine whether the classification of claims is based on an intelligible differentia. Secondly, we must assess whether this differentia has a rational nexus to the object of the statute. Assuming, for the sake of argument, that Section 166(3) meets the first requirement, it is challenging for the provision to pass the second. The limitation period acts as a semi-permeable barrier, restricting the filing of time-barred claims and effectively denying access to compensation for injured parties, which appears contrary to the statute’s underlying objective.

Statutory limitations are intended to restrict the enforcement of legal remedies once the prescribed time period has elapsed, while not undermining the underlying rights[7]. This suggests that even if the tribunal rejects a claim for compensation, the injured party may still seek compensation through other legal channels. Whether an alternative remedy, such as initiating a consumer complaint against an insurance company for service deficiencies, can be considered a substitute for a claim under the Motor Vehicles Act remains a contentious issue.

The Way Forward

To address the conundrum before the claims tribunal regarding condonation of delay for applications presented after the period of limitation u/s 166(3) (6 months), the observation of Madras HC in Thomas Daniel vs Selvi[8] is of pervasive value. In the present matter, the court ruled that any decision made by the Tribunal would be contingent upon the resolution of the ongoing constitutional challenge to the validity of Section 166(3) before the Apex court in Bhagirathi Dash case[9]. Moreover, the Tribunal’s decision would be shaped by the final determination of the SLP concerning the Kerala High Court’s ruling in Vimala Jose v. Aboobacker[10] and Akshay Raj v. Ministry of Law and Justice, Legislative Department[11], particularly regarding the applicability of Section 5 of the Limitation Act, 1963, to such claims.

The court also referred to its earlier decision in Malaravan v. Praveen Travels Pvt. Ltd.[12], wherein it was observed that in Vimala Jose and Akshay Raj cases, the Kerala High Court had applied Section 5 of the Limitation Act to allow condonation of delay but the enforcement of these judgments has been stayed by the Supreme Court, as the issue remains under consideration. Despite the bench’s inclination to follow the Kerala High Court’s position in Akshay Raj, it chose not to adopt that approach at this stage.

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[1] Traffic Crash Injuries and Disabilities: The Burden on Indian Society (English). Washington, D.C.: World Bank Group.

http://documents.worldbank.org/curated/en/761181612392067411/Traffic-Crash-Injuries-and-Disabilities-The-Burden-on-Indian-Society

[2] Syed Mehaboob v. New India Assurance Co. Ltd., (2011) 11 SCC 625.

[3] Supra note 1.

[4] Law Commission of India, Report no. 149: Removing certain deficiencies in the Motor Vehicles Act, 1988 (No. 59 of 1988).

[5] Bhagirathi Dash v. UOI & Ors. WP (C) 166/2024.

[6] Maneka Gandhi v. Union of India 1978 AIR 597.

[7] Punjab National Bank And Ors v. Surendra Prasad Sinha 1992 AIR 1815.

[8] Thomas Daniel v. Selvi C.R.P. (MD) No. 761 of 2024.

[9] Supra note 5.

[10] Vimala Jose v. Aboobacker O.P.(MAC) No.136 of 2022.

[11] Akshay Raj -vs- Ministry of Law and Justice Legislative Department O.P. (MAC) No.6 of 2023.

[12] Malaravan v. Praveen Travels Pvt. Ltd., (2023) 5 CTC 47.