This article is written by Reddi Amulya Kandula of 6th Semester of BALLB of Sri Padmavathi Mahila University, Tirupati, Andhra Pradesh, an intern under Legal Vidhiya
Abstract
The motor vehicles act was first introduced in the year, 1914. This was replaced in the year in September he year, 1939 by Motor vehicle act, 1939. Due to tremendous changes and demand in the society towards motor vehicles. It has now become the fashion that every urban household is carrying at least one motor vehicle. Being such massive motor vehicle count in the country can damage the healthy environment as well as the disturbances, due to this the act had been amended or legislated for ample of times. So, the motor vehicle act, 1939 was replaced by the new motor vehicle act, 1988. Rules are very much necessary to ensure the road safety as well as the public. In the recent amendment of motor vehicle act there had been kept many stringent punishments regarding the traffic violations and negligence. The motor vehicle act had gave the rules for the motor vehicle companies regarding the materials and gases they are using in the constituting the vehicle. There are two types of liabilities they are no fault liability and fault liability and we mainly talk about is third party insurance (liability)
KEY WORDS
Insurance, liability, penalty, Third party, Fault, vicarious liability.
INTRODUCTION
Generally, the motor vehicle act regularises the road transport system. It has been introduced in the year, 1988 by replacing the act introduced in the year, 1939. It contains the detail provisions regarding the license, registration procedures as well as conditions and liabilities provided in the act.
The said act was recently amended in the year, 2019. In the month of September. Under motor vehicle act, there are two types of liabilities they are no fault liability and fault liability in respect of owners vehicle. Owner of the vehicle should be able to get the third party insurance done. So that he can escape from the punishments.
According to the WHO 2018 report, the India had highest number of road accidents in the year. In the year 2017, as per the data collected by the ministry of road transport in the union as well as state level, the data shows that 4.65 lakhs people are going through the accidents every year out of 1.14 lakh been killed due to the road accidents.[1] To protect the lives of the people, various groups had been formed under the union minister NITHIN GADKARI. The working group stated many noble recommendations and one of them was the compensation for the victims in the road accidents as well as medical assistance to them.
He also stated that India is losing 2% GDP due to the death of the people due to the road accidents. In India we nearly have around 5 lakh accidents in ghat one lakh fifty thousand deaths are due to the road accidents, and dead’s are around the age gap of 18- 35 years. We all know that ubi jus ibi remedium which means where there is a wrong there is a remedy, it is an essential maxim in torts, where one’s right has been invaded, the law provides the remedy to the aggrieved party either in terms of compensation or medical assistance.
In motor vehicle act, 1988, section 140 to section 144 of chapter-10 deals with the no fault liability and from section 145 to section 164 of chapter-11 deals with the third party insurance claims and from section 165- 176 of chapter 12 deals with the tribunal claims. This act would be great benefit to the people of road accidents as they can claim for the damages in concern or the compensation. This act also commanded the people to have the driving licence and eligibility criteria for the Registration and it mentioned it will be valid for only fifteen years and it should be renewed for another five years.
Third party insurance
Third party insurance is generally offered to the vehicle owners by the motor vehicle amendment act, 2019, and it only covers the legal liability for the damage that you may cause to the third party it may be a death, bodily damage and damage to the third party property while using your vehicle[2]. They are the individuals other than the insurer and holder of the insurance policy. The third party cover all types of individuals including the government. The onus of the payment is mainly depends upon the insurer who was responsibility for all the liabilities that he had damaged or injured. According to the article 147 of the motor vehicle act, the third party can be the government are liable for the damage. The damage can be the property, bodily injury, death of the person. But there are certain limitations as well as some exceptions for the insurers
FIRST AND SECOND PARTY INSURANCE
Third party insurance policy under which the insurance company agrees to indemnifies the insured person if he held legally liable for the injuries or the damages.The insurance company and the insured first and second parties and other who suffered from the death, injury and the person who claims for compensation is the third party.
According to the Motor vehicle amendment act, 2019, section 147b includes the third party insurance, and this does not include vehicles from the central government, state government, any local authority or any state transport authority. According to the motor vehicle act, 1988, under section 145(g) third party includes the central and state government. Third party includes everyone ( other than the contracting policies of the insurance ) will come under the third party, be it a person who is travelling in a vehicle, any person walking on the road or any passenger in the vehicle will come under the third party insurance.
Act only or third party includes only the legal liability for damage caused to the third party like death, bodily injury, any property damage. This third party insurance does not include damages for your vehicle. Generally, third part insurances are decided by the workers compensation(WC) court or Motor Accident claim tribunal. Third party cover protects you against the legal liability of accidents it also covers damage caused to the surrounding.
Cases for the third party insurance claims
United India insurance Co. Ltd v karam Chand& Ors. (2011)
In this case the court delivered the principle that third parties include people who suffered as a result of the use of the said motor vehicle in the public place. Generally, the third party members are the victims of that particular accident and they had an eligibility to claim the compensation as a result of such an accident. And the fist and second party insured that includes the owner of the vehicle may give the compensation at the beginning jointly or severally responsible to pay the sum. But there is an exception given in the section 163A I’d no to pay the compensation if there is no intention to damage or there no fault in the accident. But it is not if there is an intention/ neglect/ default
Smt. Tulasi Shaukar v. New India insurance company
The issue is regarded to the third party liability after the death of the insured and during the transfer of ownership of the vehicle. In this the court held that the transfer of the insurance policy is to the wife of the deceased was automatic and deemed to have the same if the policy did not change the name of the beneficiary despite the transfer of ownership of the had already occurred.
Thus, liability if the third party insurer will be still valid and cannot be ceased even if the owner of the vehicle had been deceased.
Uttar Pradesh state road transport corporation v. National insurance Co. & Ors. (2021)
In this case there is question regarding the compensation and the Supreme Court declared that the insurance company/ owner of the vehicle is liable to pay the award of compensation declared by the high court and the company also liable to pay the amount of the first party not in a range to pay the compensation.
The court also answered it as when the effective control and command of the bus is with the corporation then the corporation would become the owner of the vehicle for some specific period. Further the principle of vicarious liability is applicable to this type of liabilities.
NO FAULT LIABILITY
Section 140 of the motor vehicle act, 1988 deals with the principle of no fault liability. According to this, the owners of the vehicle are responsible for the damages or compensation for the victims of accidents caused by them. The person can claim no fault liability when there is a death or permanent disability arises due to the accident, thus rendering the owner to pay the compensation. The fixed amount to be paid for the cause of death is ₹50,000 and in the case of permanent disability that may include lost of eye sight, hearing, joints or permanent disfigurement of the face anything that include the sum if ₹25,000. The owner of the vehicle to be jointly liable of severally liable to pay the compensation to the aggrieved party.
It is important to note that a person who is charged under the section 140 of the motor vehicle act is also liable to pay the compensation or damages under any other law. The main purpose of the motor vehicle act is to provide the aid in the emergency situations. The claims in this section could be disposed of first even if a claim is made under 163A and later the individual can pay the sum. The motor vehicle act may reduce the compensation according the rules given in the section 163A
CASES
The oriental insurance company Ltd Vs Hansrajbhai Vs kodala & ors
In this case, the question was with the regard to whether to claim for the compensation under 163A which would be the alternative measure to the claim for compensation under section 140 of the motor vehicle act.
The court held that the compensation granted under the section 163A was a final measure and not the interim one as such the compensation paid under section 140 is awarded under the fault liability principle that is payable under the section 168 of the motor vehicle act. And 163A is the one which reduces the sum of the compensation to the third party insurers and 168 of the motor vehicles act is not under the section 163A.
Thus, section 163A excludes the payment of the compensation on the basis of fault and addition to pay the compensation under section 163A
National Insurance co.Ltd v. sinitha & ors
In this case , the question was passed to the court that to include 163A of the motor vehicle act will either fall under the fault or no fault liability.
In this case the court declared that, it was fact that since it was open to the concerned party to defeat any claim under the section 163A on the wrongful acts or neglect or default. Although the section 140(3) is similar to the section 163A which states that the aggrieved party need not establish the wrongful act/ neglect/ default to the opposite party. This gives the third party to defeat the claim against the aggrieved party. And most importantly burden of proof rests in the defence.
In many cases regarding the accidents, and if there is no intention regarding to the damage of the person which will come under the no fault liability. However, the third party can claim for the compensation or damages in concern. The court held that it was an act to provide the speedy remedy to the victims as it was a substantial remedy and it could not be neglected. Most importantly section 163A of the motor vehicle act had the overriding effect on the section 140 but it still prevails and it cannot be dilute.
Vicarious liability
Vicarious liability is the one in which one party is held by or the unlawful actions of a third party. It might be that he is responsible for the damage done to his car when you did not driven it. Which is quite surprising whenever you loan to your friend, family or well wisher then you should be aware of the responsibility of it.
Liability of insurer
Liability insurer provides the much more protection against the claims resulting from the injuries and damages to the people or the property of someone else. Liability insurance covers all the legal costs of the damage and issue the insurer to pay the damages that he is liable. Provisions does not applicable for the intentional damage, contractual liabilities and criminal prosecution. Liability insurance is upon the people who are liable and fault for the injuries or damage to someone . Generally, damages are given to the third party by the insurer in order to compensate the damage.However the insurance liability does not cover intentional acts as well as criminal acts even if the insured party is legally responsible
Cases regarding motor vehicle insurance policies
Divisional manger, orientalise insurance company Ltd. V. Tushar Ranjan Dash & Ors
In this case, the issue was raised in regard to the situation of the event of cancellation of insurance policy prior to an accident
According to the facts of the case, the insurance has been cancelled by the company due to the dishonour of the cheque deposited towards the premium of the insured party. And one more question that was raised was whether the legal heirs of the deceased can claim the compensation from the insurance company
The court held that since the contract of the insurance contemplated third parties who are not involved in the party terms and conditions, the essence need to be maintained and thus regardless of the cheque whether it is dishonoured or not they should protect the insurance contract. Company should soulful amount to the aggrieved party that third party insurers
Liability when motor vehicle is not insured
In India, driving on a public road without a valid third party liability policy is illegal. Everyone in the country should be aware of insurance that not only helps them in the legal complications but secure them from the tragedy situations that may occur at any time. It safeguards the finances and allows you to drive the vehicle with peaceful mind. Be it a two wheeler, car or any transport vehicle, every motor vehicle must be insured for further usage or complications.
- Legal liability
In case of any car accident, if you do not have the third party insurance then two cases will be filled against you that to a criminal case for negligent driving and second one is to get the compensation to family of the deceased. Such a situation can degrade your financial stability.
- Legal liability for not having the third party insurance
If you do not have the valid third party insurance and if any traffic police caught you can impose you the high number of fines or imprisonment for up to three months.
- Financial Burden
In case if you had been travelling in the public roads without having insurance policy which is against the rules of the motor vehicle act, responsible for many damages to the society and if any police caught him he may enter into the new cases and had to sought the legal problems so that he may get into the financial burden. Keeping all goose in mind, he can get an insurance policy to I reduce the burden in himself.
The doctrine of pay and recover
This doctrine of pay and recover will come under the section 149 of the motor vehicle act. The basic need of this policy is that insurer is required to dispose the claims for third party compensation as early as possible as they are mostly need in emergency situations.
Conclusion
In order to provide more stringent measures to the increase of commercial and personal vehicles there is an amendment regarding claim for the compensation for the main victims . Theta should be able to claim for compensation and it should be rewarded as early as possible and there should be medical assistance to them. There is much need in the control of road transport and environment health caused due to pollution, road safety, fitness of the vehicles and additional means of the compensation. The motor vehicle act should be in the country like India as there is huge population as weep as huge and huge motor vehicles . The best act regarding the motor vehicles.
References
- Motor vehicle act, 1988
- https://blog.ipleaders.in/landmark-judgments-under-the-motor-vehicles-act-1988/, last visited on oct 21,2023.
- https://www.studocu.com/in/document/amity-university/insurance-law/liability-under-motor-vehicle-act/11878783, last visited on oct21,2023.
[1] [blog pleaders], [ liabilities of motor vehicle act], [https://blog.ipleaders.in/motor-vehicle-act-1988/], [oct 21, 2023]]
[2] [studocu], [liabilities of motor vehicle act,1988], [https://www.google.com/gasearch?q=liabilities%20in%20motor%20vehicle%20act,%201988&tbm=&source=sh/x/gs/m2/5], [oct 15, 2023]
[3] [ blog pleaders], [liabilities of motor vehicle act,1988], [https://www.google.com/gasearch?q=liabilities%20in%20motor%20vehicle%20act,%201988&tbm=&source=sh/x/gs/m2/5], [oct15, 2023]
0 Comments