Bridging the Justice Gap: Why the Proposed MACT Interim Compensation Reform is a Landmark Step

By Adv. Amarjeet Singh, Founder, PRAN – Policy Research Action Network Foundation

Bridging the Justice Gap: Can Interim Compensation Transform Motor Accident Justice in India?

Analysing the Government's Proposal to Empower MACTs to Grant Interim Compensation

📰 In the News

The issue recently entered the national policy discourse following a report published in The Times of India titled "Driving test for repeat offenders, interim compensation for crash victims on cards" (6 July 2026), authored by Special Correspondent Dipak K. Dash.

The report highlights the Government's reported proposal to introduce a statutory mechanism enabling MACTs to grant interim compensation to road accident victims during the pendency of compensation proceedings, along with other proposed road safety reforms. I had the opportunity to comment on the proposal in the report:

"The move to allow interim compensation by MACT tribunals is welcome considering that such cases often face delays in final disposal."

I thank The Times of India and Mr. Dipak K. Dash for including my views in this important national discussion on road safety and victim compensation. See the news for details at: https://timesofindia.indiatimes.com/india/driving-test-for-repeat-offenders-interim-compensation-for-crash-victims-on-cards/articleshow/132202904.cms

"Justice delayed is justice denied" is more than a legal maxim. For thousands of road accident victims, delayed compensation can mean interrupted medical treatment, mounting debt, loss of livelihood, and prolonged uncertainty.

Every road accident creates two battles. The first is the struggle for survival. The second begins after the victim leaves the hospital—the long journey through legal proceedings, insurance claims, medical rehabilitation, and financial hardship.

While emergency treatment demands immediate financial resources, compensation proceedings before Motor Accident Claims Tribunals (MACTs) frequently take years to conclude. This gap between injury and relief remains one of the weakest links in India's road accident compensation framework.

Against this backdrop, the Union Government's reported proposal to empower MACTs to grant interim compensation represents one of the most significant victim-centric reforms under consideration in recent years.

From Road Safety to Post-Accident Justice

This proposal resonates with concerns I previously raised in my opinion article, "Justice Unserved: Why the Forgotten Phase of Road Accidents Needs Urgent Reform," published by The Hindu and reproduced on the PRAN website.

That article argued that India's road safety discourse has traditionally focused on preventing accidents while paying comparatively little attention to what happens after an accident occurs.

For accident victims and their families, the real challenges often begin only after the crash:

prolonged hospitalization;
permanent disability;
loss of employment;
rehabilitation;
insurance disputes; and
lengthy compensation proceedings.

Road safety must therefore be understood not merely as preventing accidents but also as ensuring timely justice and effective rehabilitation for those affected.

The Government's latest proposal appears to acknowledge one of these long-standing structural concerns.

Key Takeaways

✔ The proposal is not yet law.

✔ Presently, MACTs have no general statutory power to grant interim compensation in pending Section 166 claims.

✔ Section 164 provides statutory no-fault compensation but is not equivalent to interim compensation during litigation.

✔ If enacted, the proposal could significantly improve access to justice for road accident victims.

What Does the Law Provide Today?

Understanding the current legal framework is essential before assessing the proposed reform.

Earlier Position: Section 140

Before the Motor Vehicles (Amendment) Act, 2019, Section 140 of the Motor Vehicles Act provided no-fault compensation.

Victims could receive immediate statutory compensation without proving negligence:

₹50,000 in case of death;
₹25,000 in case of permanent disablement.

This amount was later adjusted against the final award. However, Section 140 was omitted following the 2019 amendment.

Present Position: Section 164

The current no-fault compensation provision is Section 164.

It provides:

₹5 lakh for death; and
₹2.5 lakh for grievous hurt,

without requiring proof of negligence.

While Section 164 is an important social welfare provision, it is not designed as an interim compensation mechanism during the pendency of a fault-based compensation claim. This distinction is often overlooked in public discussions.

Claims under Section 166

Most accident compensation cases continue to be filed under Section 166.

These proceedings generally require:

proof of negligence;
documentary evidence;
medical records;
examination of witnesses;
assessment of disability or dependency; and
determination of liability.

Consequently, proceedings frequently remain pending for several years.

At present, there is no express statutory provision empowering MACTs to routinely grant interim monetary relief simply because the claim petition is pending.

Why Existing Compensation Mechanisms Are Not Enough

One of the most common misconceptions is that Section 164 already solves the problem. It does not.

Section 164 creates a separate statutory compensation regime.

The Government's reported proposal addresses an entirely different issue.

· Consider a victim suffering spinal injuries.

· Medical expenses begin immediately.

· Income stops immediately.

· Rehabilitation begins immediately.

· Yet compensation proceedings may continue for years.

· The proposed interim compensation mechanism seeks to bridge precisely this gap.

What Has the Government Proposed?

According to the reported proposal, the Government intends to expressly empower MACTs to grant interim compensation before the final disposal of compensation claims.

The proposal reportedly also includes:

mandatory driving tests for repeat traffic offenders;
increasing the appeal threshold before High Courts from ₹1 lakh to ₹5 lakh; and
restrictions on fresh driving licences following licence revocation.

Among these proposals, interim compensation carries the greatest humanitarian significance.

Current Law vs Proposed Reform

Current Legal Position	Proposed Reform
No general statutory power for MACTs to grant interim compensation in pending Section 166 claims.	Express statutory authority for MACTs to grant interim compensation.
Victims frequently wait years for financial relief.	Early financial assistance during litigation.
No uniform nationwide mechanism.	Uniform statutory framework proposed.
Medical expenses remain immediate burdens.	Financial assistance during treatment and rehabilitation.

Many jurisdictions recognise that accident victims require financial assistance long before final judicial determination of liability. Various legal systems provide interim payments, advance insurance settlements, or structured compensation mechanisms that ensure victims receive timely support.

India's proposed reform reflects the same humanitarian principle: Compensation should respond to immediate human needs rather than only final judicial outcomes.

PRAN's Perspective

At the Policy Research Action Network (PRAN) Foundation, we believe that road safety policy should not conclude with accident prevention.

It must also encompass:

timely compensation;
rehabilitation;
legal aid;
insurance accountability; and
access to justice.

The proposed reform marks an important shift from a liability-centric model towards a victim-centric framework.

PRAN Recommendations

PRAN recommends that any legislative amendment should incorporate the following safeguards.

Legislative Measures

Clearly define eligibility for interim compensation.
Specify the stage at which applications may be entertained.
Ensure that interim compensation does not prejudice claims under Section 166.

Decide interim applications within 30–60 days.
Provide simplified procedures based on prima facie evidence.
Prescribe transparent adjustment against the final award.

Clearly identify whether insurers or the Motor Vehicle Accident Fund will initially bear liability.
Standardise procedures across all MACTs.
Introduce digital monitoring to ensure timely compliance.

Looking Beyond Compensation

The proposal should be viewed as part of a broader reform agenda. India's road safety framework should eventually integrate:

emergency medical care;
psychological counselling;
rehabilitation;
insurance settlement;
legal assistance; and
long-term victim support.

True road safety extends beyond preventing accidents—it includes restoring lives after accidents occur.

Conclusion

The Government's reported proposal to empower Motor Accident Claims Tribunals to grant interim compensation has the potential to redefine motor accident compensation in India.

If enacted with appropriate safeguards, it will represent more than a procedural amendment. It will recognise that justice is meaningful only when it reaches victims in time to make a difference.

Road safety should not end when the accident occurs.

It should continue until every victim receives timely medical care, meaningful financial assistance, effective rehabilitation, and fair access to justice.

That is the justice gap this proposal seeks to bridge—and one that PRAN Foundation will continue to address through research, legal advocacy, and evidence-based policy engagement.

Loss of Right Leg for a Mason Must Be Treated as 100% Functional Disability for MACT Compensation: Supreme Court

By Adv. Amarjeet Singh, Founder, PRAN – Policy Research Action Network Foundation

Introduction

Supreme Court holds that loss of a leg for a mason can amount to 100% functional disability for motor accident compensation purposes, emphasizing loss of earning capacity over medical disability percentages.

In a significant ruling strengthening the rights of accident victims, the Supreme Court has reiterated that compensation in motor accident cases cannot be determined solely on the basis of medical disability percentages. The Court emphasized that what truly matters is the functional disability suffered by the victim and its impact on earning capacity.

For a skilled mason whose livelihood depends on physical mobility, balance, and the ability to stand and work for long hours, the loss of a leg can effectively destroy his capacity to continue his profession. Recognizing this reality, the Supreme Court treated the disability as amounting to 100% functional disability for the purpose of compensation, despite any lower medical disability assessment.

Case Details

Case: Reported Supreme Court decision concerning a skilled mason injured in a motor vehicle accident.

Court: Supreme Court of India

Bench: Justice Sudhanshu Dhulia and Justice K. Vinod Chandran (as reported)

Decision: Compensation enhanced; emphasis placed on assessment of functional disability and loss of earning capacity.

Source: LiveLaw report dated July 2025.

Note: Readers should consult the official judgment for the complete factual matrix, citation, and operative directions.

Facts of the Case

The claimant, a skilled mason, suffered serious injuries in a motor vehicle accident resulting in permanent disability. He contended that because of the injuries sustained, he could no longer perform the physically demanding work of masonry that had been his source of livelihood.

The dispute before the Court primarily concerned the assessment of disability and the corresponding impact on compensation.

Key Legal Issue

Whether compensation should be calculated merely on the basis of the percentage of physical disability certified by medical experts, or whether the Tribunal should consider the claimant's actual loss of earning capacity in light of his occupation.

Supreme Court's Findings

The Supreme Court reiterated a well-established principle of motor accident jurisprudence:

The relevant consideration is not merely the percentage of physical disability but the extent to which the disability affects the claimant's earning capacity and ability to pursue his occupation.

The Court observed that:

A mason depends heavily on physical mobility and the use of his limbs.
Loss of a leg substantially impairs the ability to undertake construction work.
Tribunals should not mechanically rely on medical disability percentages.
The real test is the impact of the injury on the victim's livelihood.

Accordingly, the Court recognized that the claimant's disability effectively translated into a complete loss of earning capacity in his chosen profession.

Functional Disability vs. Medical Disability

One of the most misunderstood aspects of motor accident compensation law is the distinction between:

Medical Disability

This refers to the physical impairment assessed by doctors and expressed as a percentage.

Functional Disability

This refers to the effect of the injury on the victim's ability to earn a livelihood.

For example:

A 60% physical disability may amount to nearly 100% functional disability for a mason, driver, labourer, or security guard.
The same injury may have a lesser impact on a person engaged in desk-based work.

The Supreme Court has repeatedly held that compensation must reflect the realities of the victim's occupation rather than a mechanical interpretation of medical records.

Earlier Supreme Court Precedents

This judgment aligns with several earlier decisions where the Court emphasized loss of earning capacity:

Mohan Soni v. Ram Avtar Tomar (2012)

The Supreme Court held that disability must be assessed with reference to the nature of work performed by the victim.

Gunman Amputation Case (2023)

The Court restored compensation based on 100% loss of earning capacity after observing that a person whose right leg had been amputated could no longer perform duties as a gunman.

Jithendran v. New India Assurance Co. Ltd. (2021)

The Court clarified that where an accident victim is incapacitated for life and unable to earn, loss of earning capacity may be assessed at 100% even if the medical disability percentage is lower.

Why This Judgment Matters

The ruling has significant implications for:

Construction workers
Masons
Daily wage labourers
Drivers
Security guards
Farmers
Skilled and unskilled manual workers

Many accident victims face a situation where insurers attempt to restrict compensation based on disability certificates alone. This judgment reinforces that tribunals must evaluate the practical impact of injuries on livelihood and future earning potential.

Lessons for MACT Claimants

Victims pursuing claims before Motor Accident Claims Tribunals (MACT) should:

Produce evidence regarding their occupation.
Demonstrate how the injury affects their ability to perform their work.
Submit employment records, wage records, contractor certificates, or witness statements where available.
Seek assessment of functional disability rather than relying solely on medical disability percentages.

PRAN's View

This decision reflects a humane and realistic approach to compensation law. A worker's livelihood is often his most valuable asset. When an accident deprives a person of the ability to earn, compensation must address that economic loss in a meaningful manner.

The Supreme Court's emphasis on functional disability strengthens the principle that compensation should be just, fair, and rooted in the realities of the victim's life rather than abstract percentages.

Conclusion

The Supreme Court's ruling is another important reminder that justice in motor accident cases requires looking beyond medical reports and understanding the real-world consequences of disability.

For a mason who loses a leg, the loss is not merely physical—it is economic, professional, and deeply personal. By recognizing this reality, the Court has reaffirmed that compensation law must serve the purpose of restoring dignity and providing meaningful relief to accident victims and their families.

Sources

LiveLaw report on the Supreme Court decision.
Mohan Soni v. Ram Avtar Tomar & Others, (2012) 2 SCC 267.
Jithendran v. New India Assurance Co. Ltd., Civil Appeal No. 6494 of 2021.
Supreme Court jurisprudence on functional disability and loss of earning capacity under the Motor Vehicles Act.

Disclaimer

This article is intended for legal awareness and public education purposes only. It does not constitute legal advice. Readers should consult the official judgment and seek professional legal assistance for specific cases.

About PRAN Foundation

PRAN (Policy Research Action Network) Foundation is a Section 8 not-for-profit organization dedicated to advancing justice, accountability, consumer rights, legal awareness, public policy reform, and access to justice across India. Through research, advocacy, legal education, and community engagement, PRAN works to empower citizens and strengthen democratic accountability.

Adv. Amarjeet Singh is the Founder of PRAN (Policy Research Action Network Foundation), a Section 8 non-profit working on justice, accountability, consumer rights, and public policy reform.
📧 pranfoundationindia@gmail.com | 🌐 www.publicrightaction.org | 📱 +91 8920798501
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Disclaimer: This article is for legal awareness and educational purposes only and does not constitute legal advice.

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