The Uttarakhand High Court observed that “compensation is not merely financial relief but a principle of social justice,” while upholding Rs.53.93 lakh awarded to a victim’s family and dismissing the insurance company’s appeal against the 2024 MACT order.
Compensation is not merely financial relief; it embodies a principle of social justice, the Uttarakhand High Court noted while rejecting an insurance company’s appeal against what it deemed an excessive award to the family of a victim in a 2024 accident claim case.
Justice Alok Mehra, sitting alone, upheld the Nainital District Court’s decision to grant Rs 53,93,600 to the victim’s relatives as fair and justified.
The insurance company had contested an order from the Motor Accident Claims Tribunal (MACT) in Nainital, issued in November 2024, which mandated that the deceased’s family receive Rs 53.93 lakh in compensation, along with an annual interest rate of 6 percent.
In its appeal, the insurance firm argued that the compensation amount was excessive and legally unfounded.
However, the court stated that the Motor Vehicles Act functions as a welfare statute designed to ensure prompt and adequate compensation for victims. It addresses not only financial losses but also the emotional toll of losing love, affection, and family support, affirming that the tribunal’s ruling was both legally valid and appropriately measured.
The judge highlighted that in matters of motor accident compensation, it is essential for courts to take a compassionate and broad-minded approach.
Legal Framework Recognising Compensation as a Tool of Social Justice
- Section 357 of the Code of Criminal Procedure, 1973 empowers courts to award compensation to victims of offences, in addition to punishing the offender. This provision ensures that justice extends beyond conviction and addresses the harm suffered by the victim.
- Further, Section 357A of the CrPC mandates that every State Government, in coordination with the Central Government, must establish a Victim Compensation Scheme (VCS) to financially rehabilitate victims of crime or their dependents. This reflects a statutory recognition that compensation is not merely a financial relief but also a means to achieve social justice.
- Similarly, Article 300-A of the Constitution guarantees the right to property, and when the State unlawfully deprives a person of property or livelihood, courts often order compensation by reading this provision with Article 21, which protects the right to life and personal liberty.
Over time, judicial interpretation has evolved to emphasise that compensation is not an act of charity but a constitutional obligation. In D.K. Basu v. State of West Bengal (1997), the Supreme Court held that compensation is “an appropriate and effective remedy for enforcement of rights,” reinforcing the view that financial relief serves as a tool for restoring justice and dignity to victims.