Explainer · Motor Accident · Last verified October 2026
No-Fault Liability in Motor Accident Claims (2026)
No-fault liability is the idea that an accident victim should get some compensation quickly, without first having to win a long fight over who caused the crash. India has had such a rule for decades, but it changed in a way many people miss. The old no-fault section and the structured formula that courts used are both gone, replaced since April 2022 by a single provision with higher amounts. This explainer, for accident victims, families and anyone advising them, sets out what no-fault liability means today, how much it pays, and how it fits with a full compensation claim before the tribunal. It is general information, not legal advice. Last verified October 2026.
- No-fault now: Section 164 pays Rs 5,00,000 for death and Rs 2,50,000 for grievous hurt without proof of fault.
- Old rules gone: Section 140 (Rs 50,000 / Rs 25,000) and the Section 163A formula were omitted from 1 April 2022.
- Not a ceiling: a full fault-based claim under Section 166 is usually far larger and based on real loss.
- Hit and run: an untraced vehicle is paid from the Section 161 fund under the Hit and Run Scheme, not under Section 164.
- Still settling: the removal of the old no-fault regime is under challenge, so confirm the current law.
01The short answer
No-fault liability means an accident victim can receive a fixed sum without proving who was at fault. In India this is now paid under Section 164 of the Motor Vehicles Act, 1988: Rs 5,00,000 for death and Rs 2,50,000 for grievous hurt.
- The old no-fault section (Section 140, which paid Rs 50,000 and Rs 25,000) and the Section 163A structured formula are no longer in force, having been removed when the 2019 amendment took effect on 1 April 2022.
- No-fault is a floor, not a ceiling. A victim can still pursue a full, fault-based claim under Section 166, where compensation is based on real loss and is usually far larger.
So the practical takeaway is simple: Section 164 gives a quick fixed amount; Section 166 gives the full amount but needs the case to be made out.
02What no-fault liability means
In an ordinary accident claim, a victim must show that the driver was negligent, that the fault caused the injury, and then prove the loss. That can take time. No-fault liability cuts through the first part. It says: here is a fixed amount, payable because an accident happened involving a motor vehicle, whether or not anyone is shown to be to blame.
The point of a no-fault rule is speed and certainty for the worst cases, death and serious injury, where a family cannot wait years for relief. It does not ask the victim to prove negligence, and it does not reduce the amount because the victim was partly careless. In exchange, the amount is fixed and modest compared with a full claim.
03The old regime: Sections 140 and 163A
For years, no-fault liability in India sat in two places. Section 140, in Chapter X, paid a flat Rs 50,000 for death and Rs 25,000 for permanent disablement on a no-fault basis. Separately, Section 163A allowed a claim on a structured formula tied to the Second Schedule of the Act, using the victim's notional income and an age based multiplier, again without proof of fault.
Both are now history. When the Motor Vehicles (Amendment) Act, 2019 was brought into force on 1 April 2022, Chapter X (Sections 140 to 144) and Section 163A were omitted, and the Second Schedule was removed. Anyone relying on an old article or template that still cites Section 140 or 163A is citing a repealed provision.
04The 2022 shift: Section 164
In their place stands Section 164. It pays a fixed Rs 5,00,000 on death and Rs 2,50,000 for grievous hurt, payable by the owner or insurer without the victim having to prove any wrongful act, neglect or default. This is the current no-fault provision, and the higher figures reflect the shift from the old Rs 50,000 and Rs 25,000.
Since 1 April 2022, no-fault compensation is Section 164: Rs 5 lakh for death and Rs 2.5 lakh for grievous hurt, paid without proof of fault.
Because it needs no proof of blame, a Section 164 amount can be sanctioned relatively quickly, which is why it often functions as early relief while a larger claim is pursued.
05No-fault versus a full tribunal claim
No-fault is not the whole of a victim's remedy. The fuller route is a fault-based claim under Section 166 before the Motor Accident Claims Tribunal, where compensation is calculated from the victim's actual income, age and dependency, with additions for future prospects and fixed heads, under the principles courts set in Sarla Verma and Pranay Sethi.
| Feature | No-fault (Section 164) | Fault-based (Section 166) |
|---|---|---|
| Proof of fault | Not required | Must be shown |
| Amount | Fixed: Rs 5 lakh death, Rs 2.5 lakh grievous | Based on real loss, no fixed cap |
| Speed | Quicker, as fault is not argued | Longer, as loss and fault are proved |
| Typical use | Early relief | The main, larger claim |
A claimant does not get both amounts stacked without limit; accepting the no-fault amount is adjusted against the final award. For how the full figure is built, see how MACT compensation is calculated.
06Hit and run and the untraced vehicle
No-fault thinking also underlies the hit and run remedy. Where the offending vehicle is never identified, there is no owner or insurer to pay even a no-fault amount, so a separate central fund under Section 161 pays a fixed sum under the Hit and Run Scheme, 2022: Rs 2,00,000 for death and Rs 50,000 for grievous hurt.
If the vehicle is later traced, the victim moves from that scheme to the ordinary routes, Section 164 for the no-fault amount and Section 166 for the full claim. For the detail of the untraced-vehicle route, see the Hit and Run Scheme explained.
07Where the law is still settling
The removal of the old no-fault regime has been challenged. A motor accident bar association has questioned the constitutional validity of dropping Chapter X and tightening claim timelines, and a High Court has issued notice on that petition. No final ruling settling the point was found at the time of writing, so the position described here reflects the amended Act as it currently stands.
The 2019 amendment is the subject of pending litigation and the figures and provisions are set by statute and rules, which can change. Confirm the current position before relying on any amount or section.
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The honest summary: Section 164 is the live no-fault provision today, but this is an area under active challenge, so check the current law for your facts.
08Where Claw fits
Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.
Understanding no-fault liability is one thing; running a claim and watching how courts apply a changing law is another. Claw tracks Motor Accident Claims Tribunal matters and the appeals that follow to the High Courts and the Supreme Court, across 9,102 courts, benches and forums, with alerts and monitoring, so a claimant or an adviser sees every movement in a case, including the pending challenges to the amended Act. Its Legal GPT researches across 30 crore+ judgments, with Supreme Court decisions from 1950 and High Court decisions from 1990, so you can see how tribunals have applied Section 164 and Section 166 to comparable facts. Results return in under 5 seconds, and Claw does not train its AI models on your documents. To follow a filed claim or find how a court has decided a similar matter, run a case search across Indian courts by name. A clean result means nothing was found on the forums and date searched, not that nothing exists, and this is general information, not legal advice.
Related reading: how MACT compensation is calculated, how to file a MACT claim, and the Hit and Run Scheme explained.
09Sources and further reading
- Ministry of Road Transport and Highways: morth.nic.in
- India Code (Motor Vehicles Act, 1988): indiacode.nic.in
- Supreme Court of India (judgments): sci.gov.in
- Claw: clawlaw.in
This explainer is general information, not legal advice. The provisions and amounts are set by statute and are the subject of pending litigation; confirm the current position before you act.
10Frequently asked questions
What is no-fault liability in a motor accident?
It is a rule that pays an accident victim a fixed amount without the victim having to prove that the driver or owner was negligent. In India it is now paid under Section 164 of the Motor Vehicles Act, 1988, which gives Rs 5,00,000 for death and Rs 2,50,000 for grievous hurt. The amount is fixed and does not depend on who caused the accident.
Is Section 140 still the no-fault provision?
No. Section 140, in Chapter X, and the Section 163A structured formula were both omitted when the Motor Vehicles (Amendment) Act, 2019 came into force on 1 April 2022, and the Second Schedule was removed. No-fault compensation is now paid under Section 164. Any guide still citing Section 140 or 163A is citing a repealed provision.
How much is no-fault compensation now?
Under Section 164 it is Rs 5,00,000 for death and Rs 2,50,000 for grievous hurt, payable without proof of wrongful act, neglect or default. This replaced the older amounts of Rs 50,000 for death and Rs 25,000 for permanent disablement under the old Section 140.
Can I claim more than the no-fault amount?
Yes. No-fault under Section 164 is a floor, not a ceiling. You can pursue a full, fault-based claim before the Motor Accident Claims Tribunal under Section 166, where compensation is based on the victim's income, age and dependency and has no fixed cap. The no-fault amount is adjusted against the final award rather than added without limit.
Does no-fault liability apply to a hit and run?
A hit and run with an untraced vehicle is handled separately. There is no owner or insurer to pay, so a central fund under Section 161 pays a fixed sum under the Hit and Run Scheme, 2022, which is Rs 2,00,000 for death and Rs 50,000 for grievous hurt. If the vehicle is later traced, the victim can move to the Section 164 no-fault amount and a full Section 166 claim.