BACK TO MVA INDEX
MVA 1988 (Amended 2019)NEW_2019Chapter VII

Section 164A-164B

Scheme for Reporting Accidents; Motor Vehicle Accident Fund

Insurance of Motor Vehicles Against Third-Party Risks
Fine: N/ACompoundable: N/AEndorsement: No
BARE ACT PROVISION

Legal Text

Section 164B: (1) The Central Government shall constitute a Fund to be called the Motor Vehicle Accident Fund and there shall be credited thereto — (a) payment of a nature notified by the Central Government; (b) any grant or loan made to the Fund by the Central Government; (c) the amount collected or recovered under this Act; (d) any income from investment of the amount of the Fund. (2) The Fund shall be utilised for — (a) treatment of persons injured in road accidents under the golden hour scheme; (b) compensation to representatives of persons who died in hit-and-run motor accidents; (c) compensation to persons who suffer grievous hurt in hit-and-run motor accidents; (d) compensation to such persons as may be prescribed by the Central Government.

Simplified Explanation

Sections 164A and 164B represent the most important structural innovation of the 2019 Amendment — the creation of the Motor Vehicle Accident Fund (MVAF), a dedicated compensation pool for road accident victims. The MVAF consolidates funding for: golden hour cashless treatment (Section 135); hit-and-run compensation (Section 161); compensation for accidents involving uninsured vehicles; and any other categories the Central Government may prescribe. The fund is financed by: government contributions; insurance company levies; fines collected under the MVA; and any other prescribed sources. Section 164A establishes a scheme for comprehensive accident reporting — creating a national accident data infrastructure that enables evidence-based road safety policy. Together, these provisions shift road accident victim protection from a purely private insurance model to a public-private hybrid with guaranteed minimum compensation for all victims regardless of whether the vehicle is insured.

Historical Context

The MVAF was inspired by similar compensation funds in developed countries (UK's Motor Insurers' Bureau, France's FGAO) that ensure no accident victim goes uncompensated due to uninsured vehicles or hit-and-run. India's extremely high proportion of uninsured vehicles (estimated 50-60%) made such a fund essential.

Critical Changes

Motor Vehicle Accident Fund created — entirely new structure under 2019 Amendment.

Covers uninsured vehicle accidents, hit-and-run, and golden hour treatment.

National accident reporting scheme established.

Fund operationalised through MoRTH — implementation ongoing.

Practical Scenarios

"An accident victim injured by an uninsured vehicle — MVAF covers compensation."
"A hit-and-run victim on NH-44 — MVAF pays the ₹2 lakh / ₹50,000 compensation."

Common Queries

The Motor Vehicle Accident Fund (MVAF) is a dedicated compensation fund established by the 2019 Amendment (Section 164B). It pays for: golden hour cashless treatment of accident victims, hit-and-run compensation (₹2 lakh death, ₹50,000 grievous hurt), and compensation for accidents involving uninsured vehicles.
The fund is financed by Central Government grants, insurance company contributions, MVA fines collected, and any other sources prescribed by the Central Government.