NEW DELHI: The Supreme Court has favoured increasing the compensation for death in hit-and-run road accident cases from the existing ₹2 lakh, underlining that it was essentially the State’s failure to identify the erring vehicle that led an accident to be classified as a hit-and-run case and deserved higher compensation.

“Essentially, a hit and run accident involves failure of state machinery…Somebody has lost his life due to fault of the state and you (state) are giving a compensation of ₹2 lakh only?” a bench of justices AS Oka and Pankaj Mithal said, nudging the government to agree to a higher compensation.

The bench, which was hearing a public interest litigation on reforms in dealing with road accidents, reserved its verdict on an application by KC Jain, who sought a better deal for the families of the road accident victims.

At the October 19 hearing, the bench made it clear that it cannot order the central government to raise the compensation amount but raised several questions. “On what basis should it be ₹2 lakh for death? Due to the default of the State, one can go under public law remedy and file a suit to claim higher compensation. We cannot issue a mandamus (direction or order) but the government should reconsider the amount of ₹2 lakh by exercising its rule-making power,” the bench said.

A road accident is classified as a hit-and-run accident if it is not possible to identify the vehicle responsible for the accident.

Additional solicitor general (ASG) Vikramjeet Banerjee said the ₹2 lakh figure was decided after discussion with stakeholders, a reference to the General Insurance Council, the umbrella body of insurance companies responsible for paying hit-and-run compensation. “Even a case of murder will be a failure of the State,” Banerjee said.

Hit-and-run accidents are covered under Section 161 of the Motor Vehicles Act, a provision that requires the central government to frame a scheme to compensate victims who die or suffer injuries. For paying compensation, a separate fund called the Motor Vehicles Accident Fund has been created into which all insurance companies contribute their share. Neither the Centre nor state governments contribute to this fund.

The scheme was last revised in 2022 when compensation for death cases was increased from ₹25,000 to ₹2 lakh and for injuries from ₹12,500 to ₹50,000.

The court noted that though Section 161 provides for interim compensation, the Centre has not incorporated it in the 2022 scheme. “We will recommend Centre use its rule-making power to provide for interim compensation. This machinery will not work unless there is interim relief,” the bench said.

Jain’s application said compensation was provided to only 1.2% of the total 442,575 victims of hit-and-run cases which took place between 2017 and 2021.

Official figures indicate that compensation was awarded to only 4,958 persons in the five years, of which 3,137 were cases of death and 1,821 for injuries suffered. After the introduction of the 2022 scheme, compensation was paid in 78 claims (72 deaths and 6 injured) till February 2023. During this period, 80,000 hit-and-run accidents were reported.

Advocate Gaurav Agarwal assisting the court as amicus curiae pointed out three reasons to explain why the claims settled in hit-and-run cases were low. “There is a lack of awareness among victims to seek compensation for hit-and-run accidents. The amount being so low and the process so cumbersome, hardly anybody bothers to file a claim. And finally, the victim has to approach the district concerned where the accident took place to file the claim. This may not suit victims who reside in a far-flung district,” Agarwal said.

Both Jain and Agarwal submitted that the amount of ₹2 lakh needs to be enhanced.

Jain said the government could link the compensation to the cost-of-living index.

Agarwal said the Centre could consider a periodic increase in the ₹2 lakh figure. He added that if victims were unable to file claims, the state machinery must try to reach out to victims.

In this regard, he urged the court to fix timelines by which the police tells the victim to seek compensation under the hit-and-run compensation scheme.

Similarly, he suggested that the accident report and other documents to help make a claim should be forwarded by police to the claims inquiry officer (CIO) within a month of the incident. Within 60 days of the accident, the CIO should complete the inquiry and submit a report to the claim settlement officer, Agarwal added.