All India Bar Examination (AIBE) 4-IV Previous Year Question Papers with Answers

Practice Mode:
6.

The amendment in Motor Vehicles Act in 1994, the compensation in case of death of the person is :

A: Rs. 25,000
B: Rs. 50,000
C: Rs. 70,000
D: Rs. 90,000

The answer is: B

Explanation

The correct option is B: Rs. 50,000.

According to the Motor Vehicles (Amendment) Act, 1994, which introduced a new section 163A in the Motor Vehicles Act, 1988, the owner of the motor vehicle or the authorised insurer shall be liable to pay in the case of death due to any accident arising out of the use of motor vehicle, a compensation of a sum of Rs. 50,000 to the legal heirs or the victim. This is on no fault liability basis, which means that there is no need to prove the wrongful act or negligence of the owner or driver of the vehicle. The compensation is based on a structured formula that takes into account the age and income of the victim. However, for calculation of compensation, the maximum annual income is restricted to Rs. 40,000.

The other options are incorrect for the following reasons:

Option A: Rs. 25,000 is the amount of compensation for grievous hurt due to any accident arising out of the use of motor vehicle under section 163A. It is not the amount for death.

Option C: Rs. 70,000 is not a valid amount of compensation under section 163A. The maximum amount of compensation for death under this section was Rs. 53,7000 before the amendment in 1994.

Option D: Rs. 90,000 is not a valid amount of compensation under section 163A. The amount of compensation for death under this section was increased to Rs. 5 lakh by another amendment in 2019.