Supreme Court Demands Answers from Centre Over Interim Compensation Scheme

• by Akanksha Mishra
• 2026-10-22 10:52:00

In a significant judicial push to protect the socio-economic welfare of families affected by fatal traffic collisions across India, the Supreme Court of India has questioned the Central Government over its proposed road accident compensation framework. Scrutinizing the policy that offers rapid interim relief of ₹2 lakh for fatalities and ₹1 lakh for grievous injuries, an apex court bench comprising Justice JB Pardiwala and Justice KV Vishwanathan asked why this vital financial lifeline is restricted exclusively to collisions caused by insured vehicles. Pointing out that thousands of collisions across Indian highways involve unregistered or uninsured vehicles, the judges raised concerns over leaving the most vulnerable victims without immediate institutional relief, demanding that the Union Government explain the rationale behind excluding uninsured vehicles from its immediate compensation umbrella.

Centre's Legal Defence: Motor Vehicles Act Architecture and the Role of MACT

Responding directly to the apex court's queries, Union Government officials outlined the legal framework behind the scheme’s structure:

Tied to Insured Provisions of MV Act: Government representatives explained that the current interim relief blueprint is structured specifically around statutory provisions within the Motor Vehicles Act governing insured vehicles, ensuring automatic recovery from designated insurance funds.

Recourse via Claims Tribunals: In instances where an offending vehicle is found to be uninsured, officials stated that victims or their legal heirs must route their compensation pleas through the Motor Accident Claims Tribunal (MACT), where compensation liability is directly placed upon the defaulting vehicle owner.

Pre-requisite for Judicial Orders: The state noted that because an uninsured vehicle lacks a commercial policy underwriting its risk, the government cannot instantly obligate third-party underwriters, leaving full assessment to tribunal adjudication.

Section 6 Mechanics & Mandatory Public Awareness: Directives from the Bench

The apex court bench conducted a detailed review of Section 6 of the draft scheme, focusing on ease of access for grief-stricken families:

Digital Claims Architecture: Under Section 6, accident victims or the legal heirs of the deceased can submit claims directly through a dedicated online portal by providing supporting details of their original petition filed or pending before the MACT.

Ensuring High Visibility: Emphasizing that government welfare programs fail when citizens remain unaware of their entitlements, the bench directed the Centre to roll out widespread publicity campaigns across regional mediums so that ordinary commuters and rural families understand their statutory right to claim fast-track interim relief.

Streamlining Judicial Overlaps: The court underlined that digital mechanisms must simplify documentation, preventing administrative red tape from obstructing timely disbursements when medical treatment or last rites require urgent funding.

'No-Fault Liability' Under Section 164: ₹5 Lakh Statutory Shield Explained

Union Road Transport Ministry officials presented the statutory calculation model underpinning the interim payout limits:

Strict No-Fault Liability: Section 164 of the Motor Vehicles Act provides for absolute 'no-fault liability' in events of fatal or grievous vehicular accidents, requiring the vehicle owner or their insurance provider to pay up to ₹5 lakh in the event of death and ₹2.5 lakh for permanent or severe injury.

Bypassing the Burden of Proof: Under this statutory shield, claimants do not need to plead or prove that the victim’s death or disability resulted from negligence, mechanical failure, or a wrongful act on the part of the vehicle driver.

Interim vs Final Settlement: Explaining the numbers, a senior official noted: "As immediate relief, an interim compensation of ₹2 lakh for death and ₹1 lakh for grievous injury has been fixed. The final compensation may be higher depending on the MACT order."

Ministry Rollout Timeline: Consultation with States and 2025 Judicial Backing

The formulation of the compensation scheme represents the culmination of prolonged judicial scrutiny aimed at curbing road crash distress:

Directives Traced to April 2025: The Supreme Court had originally mandated the Union Ministry of Road Transport and Highways to draft a nationwide victim compensation blueprint back in April 2025.

State Consultations Underway: The Central Government informed the court that the blueprint was officially circulated to all states and Union Territories on February 23 for administrative feedback and inter-state synchronization.

Imminent Statutory Notification: Transport ministry authorities affirmed that the interim relief mechanism will soon be formally notified under the regulatory provisions of the Central Motor Vehicle Act, standardizing emergency relief payouts across the country once final judicial directions are incorporated.

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