UNEQUAL COMPENSATION FOR EQUAL PERSONS: STATUTORY AND JUDICIAL INCONSISTENCIES IN ROAD AND RAILWAY FATAL ACCIDENT DAMAGES IN INDIA - Anubha Mathur

INTRODUCTION

As many as 21,803 people were killed in 24,678 railway accidents in the country in 2023[1] itself, and this trend shows no signs of slowing down.[2]Media houses cover the gory scenes of train accidents almost weekly, but what remains untouched is the aftermath of these tragedies. In India, receiving just compensation has become not just a legal battle, but a constitutional one due to governance by fragmented statutory regimes that varysignificantly depending on the mode of transport involved.[3]A victim of a rail accident can file for compensation only under the Railways Act, 1989[4]and is restricted by a fixed, capped, no-fault statutory framework[5]while road accident compensation under the Motor Vehicles Act, 1988[6] is determined through judicial assessments based on actual pecuniary and non-pecuniary losses[7]. This essay critically examines why these two regimes, despite addressing identical human loss, produce vastly unequal compensation outcomes.[8]It analyses the statutory basis of quantum fixation, the judicial methodology applied, the constitutional and socio-political harm such disparity causes, and concludes with measures for amelioration.[9]

THE CONFLICTING STATUTORY FRAMEWORK

Compensation for fatal railway accidents in India is governed primarily by the RailwaysAct 1989, read with the Railway Accidents and Untoward Accidents (Compensation) Rules 1990, specifically Chapter XIII of the Act.[10] Section 124 of the Railways Act imposes liability on the railway administration for death or injury caused by derailments, collisions or operational failures and extends this liability to “untoward incidents,” as well, including accidental falling from a train, terrorist acts, robberies, or violent attacks, provided the victim is a bona fide passenger.[11] The liability under both provisions is strict and no-fault, subject only to limited statutory exceptions such as suicide, attempted suicide, self-inflicted injury, intoxication, insanity or natural causes. Under this Act, the actual quantum of compensation payable is not determined by the courts but by delegated legislation under the Compensation Rules. It fixes the value of a passenger’s death or permanent disability at Rs. 8,00,000, an absolute ceiling where no authority, judicial or quasi-judicial, has the discretion to enhance compensation regardless of the nature of the harm, theaffected person(s)’ income, age or number of dependents.[12] The Railway Claims Tribunal thus remains helpless in severe cases as well, with its only function being determining that whether the case falls under the ambit of Section 124 and whether the claimant is a bona fide passenger.[13]

On the contrary, fatal road accident compensation is governed by the Motor Vehicles Act 1988[14], particularly Chapter XII which establishes a comprehensive compensation regime. The Act provides three distinct routes: via Section 140 which governs interim no-fault compensation, through Section 163A based on structured formula compensation and Section 166 which lays down the route for fault-based just compensation. Section 140 provides immediate relief to the family of the deceased or disabled through an interim relief of upto Rs. 50,000 and does not bar subsequent claims under the other two sections.[15] Section 163A introduces a no-fault scheme based on the Second Schedule of the act where compensation is determined througha three-pronged test of annual income, age-based multiplier and deductions for personal expenses. However, the most significant and widely invokedprovision is Section 166 which enables dependants of the deceased to claim jut compensation based on negligence. Under this provision, courts and the Motor Accidents Claims Tribunal (MACTs) assess compensation using the multiplier method, as laid down by the Supreme Court.[16] This method comprises of several steps including ascertainment of the actual incomes of the deceased at the time of death, addition of future prospects as mandates in National Insurance Co. Ltd v Pranay Sethi,[17] deductions for personal and living expenses enumerated in Sarla Verma v DTC[18] and application of an age-based multiplier. Awards under conventional heads such as loss of consortium, loss of estate andfuneral expenses are also given. There is no statutory ceiling on compensation. Courts routinely award compensation running into several crores where income and dependency justify such amounts.[19]

This divergence arises from fundamentally different legislative philosophies. The Railways, being a state-ownedmonopoly and mass carrier, historically adopted a flat compensation model to manage large-scale liability.[20] The objective was never full restitution; it was only minimum guaranteed relief,prioritizing speed, uniformity, certainty and fiscal predictability over full justice.[21] This seems quite ironical in a democratic country like India where the State itself fails to restoring victims to the economic position they would have occupied but for the accident.[22]

[1]National Data Sharing and Accessibility Policy (NDSAP),”State/UT wise Classification of Railway Accidents during 2023” (January, 2025), available at: https://www.data.gov.in/resource/stateut-wise-classification-railway-accidents-during-2023

[2]Ibid.

[3]Roots, R., “The Dangers of Automobile Travel: A Reconsideration”, 66 The American Journal of Economics and Sociology 959–976 (2007).

[4]The Railways Act, 1989 (Act no. 24 of 1989).

[5]Breslin, M., “RAILROAD INDUSTRY: SECURITY AND CAPACITY.”, 68 Defense Transportation Journal 16–28 (2012).

[6]The Motor Vehicles Act 1988 (Act no. 59 of 1988).

[7]Kidner, R., & Richards, K., “Compensation to Dependants of Accident Victims” 82 The Economic Journal 130–142 (1974).

[8]Bimal Jalan, “Concentration and Economic Equality” 5 Economic and Political Weekly 1544–1546 (1970).

[9]Knoeber, C. R, “Penalties and Compensation for Auto Accidents” 7 The Journal of Legal Studies 263–278 (1978).

[10]The Railways Act, 1989 (Act no. 24 of 1989), c.13.

[11]Zoellner, T., & Ferriss, A, “High – Speed Empire” 205 Foreign Policy 44–51 (2014).

[12]Cutler, T., & James, P, “Does Safety Pay? A Critical Account of the Health and Safety Executive Document: “The Costs of Accidents.”” 10 Work, Employment & Society 755–765 (1996).