Hit-and-run — the new compensation scheme

A hit-and-run accident — one in which the offending motor vehicle cannot be identified despite reasonable efforts — has long been treated as a special category under the Motor Vehicles Act, 1988. For three decades the compensation was the modest fixed sum under the Solatium Scheme, 1989 — twenty-five thousand rupees in death cases and twelve thousand five hundred in grievous-hurt cases — paid out of a pool maintained by the General Insurance Council under the unamended Section 161. The Motor Vehicles (Amendment) Act, 2019 substituted Section 161, inserted Section 164B constituting a statutory Motor Vehicle Accident Fund, and authorised the Central Government to frame a fresh scheme. The Compensation of Victims of Hit and Run Motor Accidents Scheme, 2022, notified on 25 February 2022 and brought into force on 1 April 2022, raised the fixed sums to two lakh rupees for death and fifty thousand rupees for grievous hurt, set up District-level Hit and Run Compensation Inquiry Committees and Verifying Authorities, and prescribed a one-month statutory timeline. On the criminal side, Section 106(2) of the Bharatiya Nyaya Sanhita, 2023 created a separate ten-year offence for the driver who flees without reporting — the provision that triggered the nation-wide truckers' protest in January 2024. This guide maps the old and new schemes, walks through the procedure, and traces the doctrinal background.

The Indian hit-and-run compensation regime sits at the intersection of two distinct statutory ideas. The first is that a victim of road trauma should not be left without remedy merely because the offending vehicle has fled and cannot be traced — a no-fault, no-defendant compensation drawn from a public-fund pool. The second is that the driver who flees has committed a separately blameworthy act — running away to defeat the very identification on which fault-based compensation under Section 166 would depend — and is to be punished on a graver scale than ordinary rash and negligent driving. The first idea is given effect by Section 161 of the Motor Vehicles Act, 1988 read with the Compensation of Victims of Hit and Run Motor Accidents Scheme, 2022. The second is given effect by Section 106(2) of the Bharatiya Nyaya Sanhita, 2023. The Supreme Court in S Rajaseekaran v Union of India, (2014) 6 SCC 36 had directed the Union to revise the long-stagnant Solatium-Scheme figures; the Sundar Committee report that followed and the 2017 amendment recommendations were operationalised by the 2019 Amendment and the 2022 Scheme. This article maps both regimes in parallel and sets out the procedure that a claimant — and the District authority — must follow.

The law in plain English — three layers of hit-and-run compensation

The compensation a hit-and-run victim or the dependants of a deceased can recover under the Motor Vehicles Act, 1988 falls into three layers, and the choice between them is dictated by what is and is not known about the vehicle and the driver.

First — the fixed-sum scheme under Section 161 of the MV Act, 1988. This applies precisely when the offending vehicle cannot be identified despite reasonable efforts. The compensation is fixed by the Central Government by scheme — currently the Compensation of Victims of Hit and Run Motor Accidents Scheme, 2022 — and is paid from the Motor Vehicle Accident Fund constituted under Section 164B. The sums under the 2022 Scheme are two lakh rupees in cases of death and fifty thousand rupees in cases of grievous hurt. The scheme is administered at the District level by a Hit and Run Motor Accident Claims Inquiry Committee and a Verifying Authority (the District Magistrate or a designated Sub-Divisional Magistrate). The statutory adjudication timeline is one month from receipt of the report by the Inquiry Committee.

Second — the no-fault interim regime under Section 164 of the MV Act, 1988 (which replaced the earlier Section 140 from the date of commencement of the 2019 Amendment notified for that provision). This regime applies when the offending vehicle is identified but the no-fault interim is paid pending adjudication of fault — five lakh rupees in death cases and two and a half lakh rupees in grievous-hurt cases. The interim is payable by the insurer or owner, and is set off against any final award. The structured-formula provision in the omitted Section 163A — which the 2019 Amendment repealed but whose Second Schedule continued to inform multiplier disputes through transitional litigation — remains the doctrinal source of the formulaic approach now reflected in Section 164.

Third — the full fault-based compensation under Sections 165 and 166 of the MV Act, 1988 before the Motor Accident Claims Tribunal. This is available only when the offending vehicle is identified — the driver, owner and insurer can then be impleaded — and the compensation is the "just compensation" determined on the multiplier method laid down in Sarla Verma v Delhi Transport Corporation, (2009) 6 SCC 121 and in National Insurance Co Ltd v Pranay Sethi, (2017) 16 SCC 680. The procedural map for that claim is the subject of the companion article on MACT procedure. For a hit-and-run victim, this third layer becomes available only if the vehicle is subsequently traced — investigation under Section 173 of the Code of Criminal Procedure, 1973 (now Section 193 of the Bharatiya Nagarik Suraksha Sanhita, 2023) is therefore the procedural gateway.

The old Solatium Scheme, 1989 — what it was and why it was changed

The old regime sat on the unamended text of Section 161 of the Motor Vehicles Act, 1988, read with Section 162 (which contemplated a "scheme for payment of compensation in case of hit and run motor accidents") and Section 163 (which conferred the rule-making power on the Central Government). Under that text, the General Insurance Council — the apex body of general insurers in India under the Insurance Regulatory and Development Authority Act, 1999 — was required to frame and administer a Solatium Scheme. The Solatium Scheme, 1989 (in force from 1 October 1989, with successive amendments) prescribed a fixed sum of twenty-five thousand rupees in respect of the death of any person and twelve thousand five hundred rupees in respect of grievous hurt to any person resulting from a hit-and-run motor accident.

Three structural defects of the old scheme drove its replacement. First, the figures had not been revised in real terms since 1989 — successive amendment cycles raised the limit incrementally to the figures noted above but the value of two-and-a-half decimal-place rupees in 2019 bore no resemblance to what it had been in 1989. Second, the funding source — the General Insurance Council solatium pool — depended on contributions from a shrinking set of public-sector general insurers and a growing set of private players with no obvious incentive to comply; collection was patchy and refusals on technical grounds were routine. Third, the administrative architecture was diffuse — the Claims Enquiry Officer was an officer of the General Insurance Council, the Claims Settlement Commissioner was nominally a Central officer, and a victim chasing a twenty-five-thousand-rupee solatium typically ran out of pocket in transport and stamp fees before the file moved.

The Supreme Court took judicial notice of the dysfunction in S Rajaseekaran v Union of India, (2014) 6 SCC 36, the road-safety public-interest litigation through which the Court has supervised the implementation of the Sundar Committee Report, 2007 and the Justice K S Radhakrishnan Committee on Road Safety. In the long-running orders in that matter, the Court repeatedly directed the Union to revise the Section 161 figures and to operationalise a dedicated fund. The Motor Vehicles (Amendment) Act, 2019 — which substituted Section 161, inserted Sections 164A, 164B and 164C, and notified the relevant chapter on a staggered commencement — gave statutory expression to those directions.

The 2022 Scheme — what it changed

The Compensation of Victims of Hit and Run Motor Accidents Scheme, 2022 was notified by the Ministry of Road Transport and Highways in exercise of the rule-making power under Section 161 read with Section 164B of the Motor Vehicles Act, 1988, on 25 February 2022, and was brought into force on 1 April 2022. It supersedes the Solatium Scheme, 1989 in respect of accidents occurring on or after 1 April 2022. Five substantive changes mark the new scheme.

First — the quantum. Compensation in respect of the death of any person caused by a hit-and-run motor accident is two lakh rupees; in respect of grievous hurt as defined under the Bharatiya Nyaya Sanhita, 2023 (formerly Section 320 of the Indian Penal Code, 1860), the compensation is fifty thousand rupees. The eight-fold rise on the death figure (from twenty-five thousand to two lakh) and the four-fold rise on the grievous-hurt figure (from twelve thousand five hundred to fifty thousand) is the headline change.

Second — the funding source. The new Section 164B of the MV Act, 1988 constitutes the Motor Vehicle Accident Fund, a statutory dedicated fund to which contributions flow from a cess on motor-insurance premiums, grants by the Central Government, and other sources notified under Section 164B(2). The Fund is administered by the General Insurance Council under the supervision of the Central Government, with the Section 161 disbursements drawn directly from it. The architecture severs the disbursement from the willing-contributor problem that had dogged the old solatium pool.

Third — the adjudicating machinery. The Scheme constitutes, at every District, a Hit and Run Motor Accident Claims Inquiry Committee chaired by the Sub-Divisional Magistrate or an officer designated by the District Magistrate, with the in-charge of the relevant police station and a representative of the General Insurance Council as members. The Inquiry Committee receives the application, conducts a summary inquiry, and submits a report to the Verifying Authority — the District Magistrate or his designate — within one month. The Verifying Authority either approves the report and directs payment, or remits it for further inquiry on recorded reasons.

Fourth — the timeline. The Scheme prescribes outer limits at every stage: the Inquiry Committee is to complete its inquiry and submit its report within one month of receipt of the application; the Verifying Authority is to pass its order within fifteen days of receipt of the report; the General Insurance Council is to disburse the amount within fifteen days of receipt of the order. The aggregate statutory adjudication timeline is therefore two months from the date of application.

Fifth — the application route. An application may be made by the legal representatives of the deceased, the injured person, or any agent duly authorised by them. The application is to be made in Form I appended to the Scheme, supported by the First Information Report under Section 173 of the BNSS [Section 154 CrPC], the post-mortem report (in death cases) or the medical certificate (in grievous-hurt cases), and the certificate of the police station that the offending vehicle could not be traced. There is no court-fee — the Scheme is non-adversarial.

The relationship with Sections 140, 164 and the MACT route — watch for the procedural fork

The first practical question in any hit-and-run inquiry is whether the offending vehicle has been identified. If it has — say through CCTV recovery, witness identification, or subsequent investigation — Section 161 ceases to be the governing provision. The victim's recourse moves to the MACT route under Sections 165 and 166 of the Motor Vehicles Act, 1988, with the Section 164 no-fault interim available at the threshold. The Supreme Court in Threeti v Motor Accidents Claims Tribunal — referred to in the standard commentary on Chapter X of the MV Act — has drawn this line: where at least one of the vehicles involved is identifiable, the matter is no longer a hit-and-run within the meaning of Section 161 and the Tribunal must proceed under Sections 165 and 166. The choice has significant consequences. The Section 161 fixed sum is two lakh; the Section 166 "just compensation" determined on the Sarla Verma multiplier with the Pranay Sethi future-prospects loading is typically several multiples of that figure.

The Scheme contemplates this fork. Paragraph 22 of the Scheme provides that where the offending vehicle is subsequently identified, the compensation paid under the Scheme is to be recovered from the owner or insurer in accordance with the directions of the Verifying Authority, and a fresh MACT claim under Section 166 is to be filed by the legal representatives or the injured. The set-off principle — that no compensation should be recovered twice for the same accident — is preserved. The interpretive question of how a partial recovery affects a subsequent MACT claim has not been settled by an authoritative ruling; the working assumption among the High Courts is the standard set-off.

The MV Act, 1988 also retains, in Section 163, the special provisions as to compensation that operated through the now-omitted Section 163A — the structured-formula approach drawn from the Second Schedule. The 2019 Amendment omitted Section 163A and substituted the Section 164 no-fault interim regime; for accidents occurring after the commencement of that omission notification, the structured-formula approach survives only as an interpretive tool in determining "just compensation" under Section 166.

Step by step — applying under the 2022 Scheme

The application procedure under the 2022 Scheme is short and (in design) non-adversarial. The applicant — the legal representative of the deceased or the injured person — is to follow the following sequence.

Step one — register the FIR. An FIR under Section 173 of the BNSS [Section 154 CrPC] is the foundational document. The FIR should record (i) the date, time and place of the accident, (ii) the description of the accident sufficient to establish that it was caused by a motor vehicle, and (iii) the fact that the offending vehicle could not be traced. The Investigating Officer is required to record a "vehicle untraced" note when reasonable investigative efforts have been exhausted.

Step two — secure the medical record. In death cases, the post-mortem report and the death certificate. In grievous-hurt cases, the medical certificate from a registered medical practitioner identifying the injury as falling within the definition of grievous hurt under Section 2(14) of the BNS [Section 320 IPC]. The Scheme requires both the certifying officer's signature and the hospital's registration number.

Step three — apply in Form I. The application is made in Form I appended to the Scheme to the District Hit and Run Compensation Inquiry Committee through the Sub-Divisional Magistrate's office. The application carries the FIR copy, the medical record, the police-station certificate of "vehicle untraced", the legal-heir certificate (in death cases) or identity proof of the injured (in grievous-hurt cases), and bank-account details. There is no application fee.

Step four — Inquiry Committee inquiry. The Inquiry Committee, chaired by the SDM with the relevant SHO and a General Insurance Council representative as members, conducts a summary inquiry. The inquiry verifies (i) that the accident occurred, (ii) that it was caused by a motor vehicle, (iii) that the offending vehicle could not be traced, and (iv) that the death or grievous hurt was caused by the accident. The Committee submits its report to the Verifying Authority within one month.

Step five — Verifying Authority order. The District Magistrate or designated officer either approves the report and directs payment, or remits it for further inquiry on recorded reasons. The order is to be passed within fifteen days of receipt of the report.

Step six — disbursement. The General Insurance Council disburses the amount from the Motor Vehicle Accident Fund within fifteen days of receipt of the order, directly into the bank account of the applicant. The total statutory adjudication timeline from application to credit is two months.

The criminal side — BNS Section 106(2) and the truckers' protest

Until 30 June 2024, a driver who killed a person by rash or negligent driving was punished under Section 304A of the Indian Penal Code, 1860 — two years' simple imprisonment, or fine, or both. There was no separate, graver offence for flight; the prosecution had to make out the Section 304A causation case and the flight evidence served only at the sentencing stage. With the commencement of the Bharatiya Nyaya Sanhita, 2023 on 1 July 2024, Section 106 of the BNS replaced Section 304A. Section 106(1) retains the ordinary rash-and-negligent-driving offence — death caused by any rash or negligent act not amounting to culpable homicide is punishable with imprisonment of either description for a term which may extend to five years, and a fine; the proviso to Section 106(1) carves out registered medical practitioners, retaining the two-year ceiling for them.

Section 106(2) is the new hit-and-run offence. It provides that whoever causes the death of a person by rash and negligent driving of a vehicle not amounting to culpable homicide, and escapes without reporting the accident to a police officer or a Magistrate soon after the incident, shall be punished with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine. The provision marks a quintuple uplift over the predecessor Section 304A scale (two years to ten years), targets the flight element as a separately blameworthy act, and ties punishment to the failure to report — a requirement that mirrors the driver's duty under Section 134(a) of the MV Act, 1988 to render assistance and report.

The provision triggered a nation-wide truckers' strike on 1–2 January 2024 — the All India Motor Transport Congress called the protest on the ground that the ten-year ceiling, coupled with the unliquidated-fine, would lapse into routine convictions for the driver who fled in fear of immediate mob retaliation rather than from any culpable design. The Union Home Ministry on 2 January 2024 issued a statement, recorded in the relevant press release, that Section 106(2) would be brought into force only after consultation with the All India Motor Transport Congress; the provision was therefore not notified along with the rest of the BNS on 1 July 2024 and remains, as on the date of this guide, unnotified. The position will need watching — the consultation has been ongoing, and the central law ministry's formal position is that the provision will be commenced with such modifications as the consultation produces.

The interpretive significance of the gap is that the rash-and-negligent-driving causation case continues to be made out under Section 106(1) — five years — even in flight cases, with the flight relevant at the sentencing stage as it was under the old Section 304A. The 2022 Scheme on the civil-compensation side has been brought into force regardless and operates on every untraced-vehicle accident from 1 April 2022 onwards.

Where things go wrong — the four most common failures

The four routine failures in hit-and-run claims are the following.

Treating an identifiable-vehicle accident as a hit-and-run. The Section 161 fixed sum is two lakh; the Section 166 just-compensation award on the multiplier method for a working-age earner is several multiples of that. Where any one of the offending vehicles is identifiable — even on partial CCTV, partial registration plate, or witness identification — the matter falls outside Section 161 and must be pursued under Sections 165 and 166 to recover the full just compensation. The applicable doctrinal anchor is the rule in Eera v Union of India, (2017) 15 SCC 133 — a statutory expression must be given the meaning that the text bears in its context, and Section 161's "identity whereof cannot be ascertained in spite of reasonable efforts" cannot be stretched to cover accidents in which the offending vehicle is in fact identifiable.

Skipping the FIR or the "untraced" certificate. The Scheme expressly requires the FIR copy and the police-station certificate that the offending vehicle could not be traced. Many applications fail at the Inquiry Committee stage because the FIR is registered under a generic head — accident, theft, missing-person — without identifying the case as a motor-vehicle accident causing death or grievous hurt. Counsel and claimants should insist on the FIR being registered under Section 106 of the BNS and on the "untraced" certificate being issued under the standing instructions of the State Police.

Letting the limitation lapse on the parallel Section 166 claim. Even where a Section 161 Scheme payment has been made, the parallel MACT claim under Section 166 — if the vehicle is subsequently identified — must be filed within the period of limitation prescribed under the MV Act, 1988 (and read down by the Supreme Court to remove the originally enacted six-month bar; the 1994 amendment to Section 166 removed the limitation, but the High Courts have read in a delay-and-laches discretion). Counsel should preserve the right to MACT recovery against the possibility of later identification.

Failing to record the dependants' particulars in death cases. The Scheme pays into a single bank account. In death cases the legal-heir certificate becomes the gateway document; an incomplete or contested heir certificate stalls disbursement at the General Insurance Council stage even after the Verifying Authority has approved the report. Claimants should secure the District Collector's legal-heir certificate (or the corresponding succession certificate under the Indian Succession Act, 1925) before the Inquiry Committee inquiry concludes.

Resources — the statutes, the Scheme, and the doctrinal anchors

The operating manual on the civil side is therefore: Section 161 of the Motor Vehicles Act, 1988 read with the Compensation of Victims of Hit and Run Motor Accidents Scheme, 2022; Section 164B for the Motor Vehicle Accident Fund; Section 164 for the no-fault interim where the vehicle is identified; Sections 165 and 166 for the full Tribunal claim. On the criminal side: Section 106(1) of the Bharatiya Nyaya Sanhita, 2023 read with Section 134 of the MV Act, 1988 for the driver's duty to render assistance and report; Section 106(2) of the BNS for the unnotified ten-year offence; Sections 173, 175 and 193 of the BNSS for the FIR and the investigation cycle.

The doctrinal anchors are S Rajaseekaran v Union of India, (2014) 6 SCC 36 — the road-safety public-interest litigation through which the Supreme Court supervised the Sundar Committee implementation and the operationalisation of the 2022 Scheme; Eera v Union of India, (2017) 15 SCC 133 — the statutory-interpretation rule that determines when a hit-and-run characterisation is and is not available; National Insurance Co Ltd v Pranay Sethi, (2017) 16 SCC 680 — the future-prospects loading that governs the parallel Section 166 claim where the vehicle is later identified; and Sarla Verma v Delhi Transport Corporation, (2009) 6 SCC 121 — the multiplier method that sets the floor of "just compensation" once the matter moves to the Tribunal route.

Outcome — what the Scheme produces

The 2022 Scheme produces a modest but reliable backstop. Two lakh rupees for the death of a road-trauma victim and fifty thousand rupees for grievous hurt are not — and were not intended to be — a substitute for the just compensation that would flow from a successful MACT claim on the multiplier method. The Scheme's value is in the cases in which the MACT route is unavailable because the offending vehicle has fled and cannot be traced; in those cases, the dependants of the deceased or the injured person now have a statutory right to a two-month adjudication and disbursement from a dedicated public fund, instead of the patchy, under-funded solatium that the General Insurance Council pool delivered between 1989 and 2022.

The unfinished business is on the criminal side. Section 106(2) of the BNS — the ten-year hit-and-run offence — remains unnotified pending consultation with the transport-industry stakeholders. The doctrinal position in the interim is that Section 106(1) of the BNS (five-year ceiling) governs both rash-and-negligent-driving cases and hit-and-run cases, with the flight element relevant at the sentencing stage. The position will need watching — when Section 106(2) is finally notified, the prosecution and sentencing architecture for hit-and-run cases will change materially.

For the dependants and the injured, the practical operating advice is to file under both regimes where possible — the Section 161 Scheme application as a no-defendant fallback that yields the statutory two lakh / fifty thousand within two months, and a parallel MACT claim under Section 166 preserved against the possibility that the offending vehicle is later traced. The companion article on MACT procedure walks through the latter route in detail.