When the vehicle that hit you cannot be traced — the compensation route

A road-accident claim under Section 166 of the Motor Vehicles Act, 1988 begins from a single assumption — that the offending vehicle, its owner and its insurer are identifiable. When they are not — when the vehicle sped away, when the registration plate could not be read in the dark, when the only eyewitness was the deceased — the Section 166 route closes. The legislature recognised this gap from the inception of the 1988 Act. Section 161 of the Motor Vehicles Act, 1988 created a special compensation route for "hit-and-run motor accidents" — accidents arising out of the use of a motor vehicle the identity of which cannot be ascertained despite reasonable efforts. The Solatium Schemes of 1989 and 2001 made under Section 163 of the Act paid a fixed sum from a fund administered by the General Insurance Corporation — Rs 25,000 for death and Rs 12,500 for grievous hurt. The Motor Vehicles (Amendment) Act, 2019 re-engineered the regime: a new Section 164B constituted the Motor Vehicle Accident Fund, and the Compensation to Victims of Hit-and-Run Motor Accidents Scheme, 2022 — notified on 25 February 2022 and in force from 1 April 2022 — increased the entitlement to Rs 2,00,000 for death and Rs 50,000 for grievous hurt, with a one-month investigation window for the Claims Enquiry Officer and a three-month settlement deadline. The Supreme Court in S Rajaseekaran v Union of India, 2022 SCC OnLine SC 1583 issued the directions that drove the 2022 Scheme into operation. This guide tracks the Section 161 route — when it applies, who pays, the 2022 Scheme procedure, the Section 162 cashless-treatment route during the "golden hour" and the Section 164B Motor Vehicle Accident Fund architecture.

The hit-and-run problem is structurally different from the ordinary road-accident claim. In the ordinary claim, the victim or the legal representatives proceed against the owner, the driver and the insurer of an identified vehicle. The compensation is paid out of the policy of insurance, with the insurer's defences under Section 149(2) of the Motor Vehicles Act, 1988 — driving without a licence, breach of policy condition, vehicle used for an unauthorised purpose — available to it as a route to limit or reverse its liability. In the hit-and-run claim, the offending vehicle is by hypothesis unidentified, so the insurer of that vehicle is unreachable. Without a statutory intervention, the victim would have no defendant. Section 161 of the Motor Vehicles Act, 1988 supplies that intervention by creating a fund-based liability — the General Insurance Corporation under the original scheme, and the Motor Vehicle Accident Fund under Section 164B inserted by the 2019 amendment — and a separate claim procedure that does not require a Tribunal trial. The compensation is fixed, the procedure is administrative, and the route is in the nature of a no-fault solatium rather than a fault-based award.

Section 161 — the statutory definition and its boundary

Section 161 of the Motor Vehicles Act, 1988 defines a "hit-and-run motor accident" as an accident arising out of the use of a motor vehicle or motor vehicles the identity whereof cannot be ascertained in spite of reasonable efforts for the purpose. The definition has three elements. First, there must be an accident arising from the use of a motor vehicle — the same use-of-vehicle predicate that governs the Section 140, Section 164 and Section 166 routes. Second, the vehicle's identity must not be ascertainable. Third, reasonable efforts must have been made to ascertain the identity. The third element matters because a careless investigation that fails to identify an identifiable vehicle cannot, on the case law, convert the claim into a Section 161 claim.

The boundary between the Section 161 route and the ordinary no-fault route in Section 140 (pre-2022) or Section 164 (post-2022) was tested in Threeti v Motor Accidents Claims Tribunal, AIR 2003 Ker 53. In that case the offending lorry sped away from the accident scene but the car in which the deceased was travelling was identifiable. The Kerala High Court held that Section 140 — and not Section 161 — applied, because the identity of at least one of the vehicles involved in the accident could be ascertained. The principle is general: Section 161 is reserved for the case where no vehicle involved in the accident is identifiable. If even one of the vehicles is identifiable, the ordinary regime under Sections 140 / 164 and 166 applies, with the identified vehicle's owner and insurer carrying the liability.

The original Section 161, as enacted in the 1988 Act, required the General Insurance Corporation and the general-insurance companies carrying on business in India to provide for the payment of compensation in respect of death of, or grievous hurt to, persons resulting from hit-and-run motor accidents. The Solatium Schemes of 1989 and 2001 were framed under Section 163 of the Act to give operational effect to this obligation. The compensation under the original Section 161 read with the 2001 Scheme was Rs 25,000 for death and Rs 12,500 for grievous hurt — sums that had been chosen in the 1980s and had not been revised for over two decades. The Supreme Court in General Insurance Council v State of Andhra Pradesh, (2010) 6 SCC 768 upheld the constitutional validity of the Solatium Fund mechanism, locating it within the welfare framework of Articles 21, 39A and 41 of the Constitution of India and recognising the fund as a legitimate burden on the general-insurance industry.

The 2019 amendment and the constitution of the Motor Vehicle Accident Fund under Section 164B

The Motor Vehicles (Amendment) Act, 2019 re-engineered the hit-and-run regime in two steps. First, it substituted Section 161 with a re-worded provision that contemplated payment through a "Scheme" framed by the Central Government, replacing the old reference to the General Insurance Corporation and the general-insurance companies. Second, it inserted a new Section 164B constituting the Motor Vehicle Accident Fund, with a substantially wider mandate than the Solatium Fund it replaced.

Section 164B of the Motor Vehicles Act, 1988 provides that the Central Government shall constitute a fund to be called the Motor Vehicle Accident Fund which shall be utilised for — (a) treatment of the persons injured in road accidents in accordance with the scheme framed by the Central Government under Section 162; (b) compensation to the representatives of a person who died in a hit-and-run motor accident; (c) compensation to a person grievously hurt in a hit-and-run motor accident; (d) compensation to such other persons or class of persons as may be prescribed by the Central Government. The Fund is to be credited with — (i) payment of a nature notified by the Central Government in this behalf; (ii) any grant or loan made to the Fund by the Central Government; (iii) the balance of the Solatium Fund existing on the date of commencement of the 2019 amendment; and (iv) any other source as may be prescribed. The architecture is significantly broader than the Solatium Fund — the Solatium Fund was confined to hit-and-run cases; the Motor Vehicle Accident Fund covers hit-and-run, cashless treatment under Section 162, and "other persons or class of persons" as may be prescribed.

The Motor Vehicle Accident Fund Scheme, 2022 was notified by the Central Government alongside the Compensation to Victims of Hit-and-Run Motor Accidents Scheme, 2022 to operationalise the Section 164B Fund. The administration of the Fund is entrusted to the General Insurance Council (the body that succeeded to GIPSA functions in this regard), with a Designated Officer in each state and district to receive and process claims.

The Compensation to Victims of Hit-and-Run Motor Accidents Scheme, 2022 — the four key changes

The Compensation to Victims of Hit-and-Run Motor Accidents Scheme, 2022 was notified by the Central Government on 25 February 2022 and brought into force on 1 April 2022, superseding the Solatium Scheme of 2001. The 2022 Scheme made four substantive changes to the hit-and-run regime.

The first is the compensation amount. The 2022 Scheme fixes the entitlement at Rs 2,00,000 in respect of the death of any person and Rs 50,000 in respect of grievous hurt to any person — an eight-fold increase on the Rs 25,000 / Rs 12,500 figures under the 2001 Scheme. The new figures align the hit-and-run sums more closely with the post-2019 Section 164 interim-compensation figures (Rs 5,00,000 for death and Rs 2,50,000 for grievous hurt) in the identified-vehicle no-fault track, though the Section 164 figures remain higher. The differential is deliberate: in the identified-vehicle case the insurer is on the hook, while in the hit-and-run case the burden falls on the public Motor Vehicle Accident Fund.

The second is the time-bound disposal. The 2022 Scheme requires the Claims Enquiry Officer — typically the Sub-Divisional Magistrate or an officer of equivalent rank designated by the state government — to complete the inquiry within one month of receipt of the application, and the Claims Settlement Commissioner to dispose of the application within three months of receipt. The time-frames operate as soft deadlines under the Scheme — there is no statutory consequence of overshoot — but the Supreme Court in S Rajaseekaran v Union of India, 2022 SCC OnLine SC 1583 directed all state governments to put in place the Designated Officer structure and the time-line discipline contemplated by the 2022 Scheme.

The third is the prescribed forms and the administrative route. The 2022 Scheme prescribes Form I (intimation by the investigating police officer to the Claims Enquiry Officer), Form II (application by the claimant), Form III (inquiry report by the Claims Enquiry Officer), Form IV (sanction by the Claims Settlement Commissioner) and the subsequent payment-and-acknowledgement forms. The administrative route is deliberately kept outside the Tribunal — the Motor Accidents Claims Tribunal under Section 165 does not adjudicate the hit-and-run claim under the 2022 Scheme; it goes through the executive Designated Officer route. The Tribunal's role in a hit-and-run case is residual — it comes into the picture only if the offending vehicle is later identified, at which point a Section 166 claim becomes maintainable against the identified vehicle's owner and insurer.

The fourth is the subrogation rule. If the vehicle that caused the hit-and-run accident is subsequently identified, the Motor Vehicle Accident Fund is entitled to recover the compensation paid out under the 2022 Scheme from the owner or insurer of the identified vehicle. The Fund's subrogation right operates as a public-recovery mechanism — the Fund disburses to the victim immediately, and recovers from the eventually-identified tortfeasor over time. The Supreme Court in Sebastiani Lakra v National Insurance Co Ltd, (2019) 17 SCC 465 had outlined the subrogation principle even under the older Solatium Scheme regime; the 2022 Scheme codifies it expressly.

Section 162 — cashless treatment during the "golden hour" and at the designated hospital network

Section 162 of the Motor Vehicles Act, 1988, as substituted by the 2019 amendment, supplies a route separate from but linked to the hit-and-run scheme. Sub-section (1) of Section 162 provides that, notwithstanding anything contained in any other law for the time being in force or in any policy or contract of insurance, the insurance company shall provide treatment of road-accident victims, including during the "golden hour" — defined in Section 2(12A) as the time period of up to one hour following a traumatic injury, during which there is the highest likelihood of preventing death by providing prompt medical care — in accordance with the scheme made by the Central Government. The Central Government has framed the cashless-treatment scheme that operationalises Section 162.

The cashless-treatment route under Section 162 is independent of the hit-and-run claim under Section 161 in two ways. First, Section 162 covers any road-accident victim — whether the offending vehicle is identified or not. Second, the compensation under Section 162 is in-kind (hospital treatment up to the prescribed amount) and not a cash award; it operates as a stop-the-bleeding mechanism in the first hour and the first day of the accident, before the formal claim under Section 161 or Section 166 even begins. The Supreme Court in S Rajaseekaran v Union of India, 2022 SCC OnLine SC 1583 issued specific directions on the implementation of the Section 162 cashless-treatment route, directing the Central Government and the National Health Authority to put in place a designated hospital network and the rules for hospital reimbursement.

For a hit-and-run victim, the practical sequence is: cashless treatment under Section 162 in the first hours after the accident; followed by the Section 161 / 2022 Scheme application to the Designated Officer for the fixed-sum compensation. The two routes do not overlap — Section 162 pays for hospital treatment; Section 161 pays the compensation to the victim or the legal representatives.

The procedure under the 2022 Scheme — the claimant's sequence

The claimant's sequence under the 2022 Scheme runs through six steps.

Step one is the First Information Report. The FIR is the primary document. Where the offending vehicle is unidentified, the FIR records that fact and starts the police inquiry that culminates in the Police Inquiry Report. The 2022 Scheme makes Section 159 of the Motor Vehicles Act, 1988 — which requires the police officer to forward a Detailed Accident Report to the Motor Accidents Claims Tribunal — operate as a Form I intimation to the Claims Enquiry Officer in hit-and-run cases. The investigating officer, on concluding that the vehicle is unidentified despite reasonable efforts, sends Form I to the Claims Enquiry Officer.

Step two is the medical record. The death certificate and post-mortem in a fatal-accident case, or the medical record establishing grievous hurt in a non-fatal case, accompany the claim. The 2022 Scheme requires the injury to fall within the definition of "grievous hurt" in Section 320 of the Indian Penal Code, 1860 (now Section 116 of the Bharatiya Nyaya Sanhita, 2023) — fracture, dislocation, permanent privation of sight or hearing, severance of limb, and similar.

Step three is the Form II application. The legal representatives of the deceased (in a fatal accident case) or the victim (in a grievous-hurt case) file Form II before the Claims Enquiry Officer of the district in which the accident occurred. Form II carries the basic particulars — the accident, the victim, the injury or death, the police FIR number, the medical record — and the bank details for direct credit. The "legal representatives" recognised under the 2022 Scheme are listed in a prescribed table — spouse, dependent children, dependent parents, in the order specified — without the formality of obtaining a succession certificate.

Step four is the Claims Enquiry Officer's investigation. The Claims Enquiry Officer — typically the Sub-Divisional Magistrate or an officer of equivalent rank designated under the state government's notification — investigates the claim, verifies the FIR and the police investigation report, the medical record, and the entitlement of the claimant. The 2022 Scheme requires the inquiry to be completed within one month. The Claims Enquiry Officer's report goes to the Claims Settlement Commissioner — typically the District Magistrate of the district — in Form III.

Step five is the Claims Settlement Commissioner's order. The Claims Settlement Commissioner, on the basis of the Claims Enquiry Officer's report, sanctions the compensation in Form IV and directs the Motor Vehicle Accident Fund administrator (the General Insurance Council) to credit the amount to the claimant's bank account. The 2022 Scheme contemplates the sanction within three months of the application.

Step six is the appellate route. A claimant aggrieved by the Claims Settlement Commissioner's order may appeal to the designated Appellate Authority — typically the Divisional Commissioner or an officer designated by the state government — within 60 days. The appellate authority's order is final under the 2022 Scheme, subject of course to the writ jurisdiction of the High Court under Article 226 of the Constitution.

The interaction with the Section 166 fault-based claim — when the vehicle is later identified

The 2022 Scheme does not foreclose a Section 166 fault-based claim if the offending vehicle is later identified. The principle, settled by the Supreme Court in Indra Devi v National Insurance Co Ltd, (2022) 5 SCC 769, is that the receipt of compensation under the hit-and-run scheme does not bar a subsequent Section 166 claim against the identified vehicle's owner and insurer; the hit-and-run sum is deducted from the eventual Section 166 award, on the same deduction principle that operates as between the no-fault interim under Section 140 / 164 and the Section 166 final award.

The Motor Vehicle Accident Fund's subrogation right under the 2022 Scheme runs alongside the claimant's right to a Section 166 award. Where the offending vehicle is identified after the Fund has paid the 2022 Scheme sum, the Fund is entitled to recover the sum from the identified vehicle's owner or insurer; the claimant separately pursues the Section 166 claim for the balance compensation, subject to the deduction of the 2022 Scheme sum already received. The Supreme Court in S Rajaseekaran v Union of India, 2022 SCC OnLine SC 1583 had directed the Central Government to ensure that the subrogation procedure does not in practice delay the disbursement to the claimant.

Where the offending vehicle is uninsured rather than unidentified — that is, the vehicle is identified but no policy was in force at the time of the accident — the Section 161 / 2022 Scheme route does not apply directly. The claimant in such a case proceeds against the owner of the uninsured vehicle in a Section 166 claim before the Motor Accidents Claims Tribunal; the owner is personally liable for the award. The Supreme Court in Sebastiani Lakra v National Insurance Co Ltd, (2019) 17 SCC 465 considered the boundary between the hit-and-run route and the uninsured-vehicle case, and clarified that the Section 161 route is reserved for the unidentified-vehicle case alone.

The amount and the calculation — fixed sums, not multiplier-formula

The compensation under the 2022 Scheme is a fixed sum — Rs 2,00,000 for death, Rs 50,000 for grievous hurt — and does not enter into the multiplier-with-future-prospects calculation laid down by the Constitution Bench in National Insurance Co Ltd v Pranay Sethi, (2017) 16 SCC 680. The Pranay Sethi multiplier formula governs the Section 166 fault-based award; the hit-and-run sum is a different beast — a solatium and not a damages award. The Supreme Court in United India Insurance Co Ltd v Patricia Jean Mahajan, (2002) 6 SCC 281 had set out the general principle that motor-accident compensation must be just and reasonable; the fixed-sum design of the hit-and-run regime is a compromise on that principle — it sacrifices the just-and-reasonable, case-specific calculation in favour of a fast, administrative, fund-based payment.

The choice between the hit-and-run fixed sum and a Section 166 multiplier-formula claim is not, however, a free election. The hit-and-run claim is available only where the vehicle is unidentified; the Section 166 claim is available only where the vehicle is identified. If the vehicle is later identified, the claimant who has accepted the hit-and-run sum retains the right to a Section 166 award subject to the deduction of the hit-and-run sum — see Indra Devi v National Insurance Co Ltd, (2022) 5 SCC 769. The election under Section 167 between the Motor Vehicles Act and the Employees' Compensation Act, 1923 — which restricts a workplace road-accident claim to one of the two regimes — does not arise in a pure hit-and-run claim against the Motor Vehicle Accident Fund, because the Fund-based claim is not a claim against an employer.

The fund architecture and the funding source

The Motor Vehicle Accident Fund under Section 164B of the Motor Vehicles Act, 1988 is funded from four streams. The first is a notified payment of the nature prescribed by the Central Government — in practice, a cess on insurance premiums in respect of motor-vehicle policies, payable by the insurer into the Fund. The second is a grant or loan from the Central Government — used to cover any shortfall. The third is the balance carried over from the old Solatium Fund. The fourth is the Fund's recoveries under the subrogation route — the amounts recovered from the owners and insurers of the eventually-identified vehicles.

The General Insurance Council is the administrator of the Fund under the Motor Vehicle Accident Fund Scheme, 2022. The administration is structured to keep the operating expenses low — the claims-processing infrastructure at the district level (the Claims Enquiry Officer and the Claims Settlement Commissioner) is the state government's, and the Fund disburses on the sanction order without an independent re-investigation. The Supreme Court in General Insurance Council v State of Andhra Pradesh, (2010) 6 SCC 768 had upheld the constitutional validity of the cess-based funding model, recognising the public-welfare purpose of the regime.

The practical playbook for a hit-and-run claimant

The practical playbook for a hit-and-run claimant or for the family of one runs to six points. First, the FIR must be lodged immediately, with the police clearly recording that the offending vehicle was not identifiable — a careless FIR that omits the unidentifiability fact will derail the 2022 Scheme claim. Second, the medical record must be preserved — the death certificate, the post-mortem, the wound certificate, the hospital discharge summary — because the Claims Enquiry Officer's inquiry turns on the medical record. Third, the Form II application must be filed before the Claims Enquiry Officer of the district where the accident occurred — not the district where the claimant resides — within the limitation period contemplated by the 2022 Scheme. Fourth, the bank details for direct credit must be the claimant's own — under the 2022 Scheme's "legal representative" framework, the recognised relations receive the credit directly without the formality of a succession certificate. Fifth, where a hospital denies cashless treatment under Section 162, a complaint to the District Health Authority or a CPA complaint under the Consumer Protection Act, 2019 runs in parallel. Sixth, the Section 166 claim before the Motor Accidents Claims Tribunal remains a fall-back — to be filed if the offending vehicle is later identified, with the 2022 Scheme sum already received being deducted from the eventual award.

The hit-and-run regime is the part of the Motor Vehicles Act, 1988 that is least often invoked by the public and least often litigated in the Tribunal. The reason is structural — the regime is administrative rather than adversarial, and the case law on it (S Rajaseekaran, General Insurance Council v State of Andhra Pradesh, Sebastiani Lakra, Indra Devi) is concerned mostly with implementation and architecture rather than with substantive entitlement. For the claimant the regime delivers a fixed sum on a short time-line, paid out of a public fund, without the negligence trial that the Section 166 route entails. The 2022 Scheme's eight-fold increase in the compensation amount — from Rs 25,000 to Rs 2,00,000 for death, from Rs 12,500 to Rs 50,000 for grievous hurt — was the long-overdue recognition that the Solatium Scheme figures of the 1980s had ceased to deliver any meaningful relief. The figures will need revision again; the architecture, however, is now in place to deliver it through a notified scheme rather than a fresh statute.