1. INTRODUCTION
Motor Third Party claims arise from various sections in the M.V. Act. The relevant sections are therefore discussed below:
PROVISONS OF THE MOTOR VEHICLES ACT CONCERNING INSURANCE
SECTION – 3 DRIVING LICENCE
No person shall drive a Motor Vehicle in a Public Place without an effective Driving Licence. Similarly, no Transport vehicle can be driven without a Transport endorsement.
“Effective” shall mean that the licence should be valid and also authorize the driver to drive the type of vehicle question.
Effective driving licence shall include :-
(i) issue by an appropriate authority
(ii) valid on the date of accident
(iii) Endorsement for the types of vehicle permitted to be driven
(iv) Transport endorsement for goods carrying vehicle
(v) Authorisation to drive the public service vehicle, in addition to transport endorsement, for such vehicles
(vi) For carrying goods dangerous or hazardous to human life, the licence should have an endorsement for driving vehicles carrying goods of dangerous or hazardous nature as provided under Rule-9 of Central Motor Vehicles Amendment Rules 1993.
SECTION – 4 AGE FOR DRIVING LICENCE ENTITLEMENT
Not less than
— 16 years for non-geared Motorcycles.
— 18 years for Geared Motorcycles and other vehicles.
— 20 years for Transport Vehicles.
SECTION – 10 CONTENTS OF DRIVING LICENCE
Specifies the form and contents of Driving Licence. Sub-section(2)(e) to (2)(h) have been removed and the expression [“Transport Vehicle”] introduced by Amendment Act of 1994 w.e.f. 14.11.94 to check whether Driver was holding valid and effective licence.
SECTION – 13 EXTENT OF EFFECTIVENESS OF LICENCE
The Licence shall be effective throughout India.
SECTION – 14 CURRENCY OF DRIVING LICENCE
Learner’s Licence
Six months
Transport Licence
Three Years
Other Licences
For a period of Twenty years or till the person attains the age of 50 years whichever is earlier. After attainment of 50 years, the licence is renewed for five years at a time.
Licence for hazardous goods
One year. Driver to undergo refresher course before renewal.
Every licence issued under this Section will remain effective for a period of thirty days after expiry.
SECTION – 15 RENEWAL OF DRIVING LICENCE
If an application for renewal is made within 30 days from the date of expiry, the renewal when effected will be from the date of expiry.
If application for renewal is made after expiry of 30 days, the renewal will be from the date of application. If the application is made after more than five years, the licensing authority may refuse to renew the licence unless the applicant passes a test.
SECTION – 19 DISQUALIFICATION FOR HOLDING A LICENCE – CONDITIONS LAID DOWN AS UNDER
If he
a) is a habitual criminal or a habitual drunkard; or
b) is a habitual addict to any narcotic drug or psychotropic substance within the meaning of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); or
c) is using or has used a motor vehicle in the commission of a cognizable offence; or
d) has by his previous conduct as driver of a motor vehicle shown that his driving is likely to be attended with danger to the public; or
e) has obtained any driving licence or a licence to drive a particular class or description of motor vehicle by fraud or misrepresentation; or
f) has committed any such act which is likely to cause nuisance or danger to the public, as may be prescribed by the Central Govt., having regard to the objects of this; or
g) has failed to submit to, or has not passed, the tests referred to in the proviso to sub-section (3) of section 22; or
h) being a person under the age of eighteen years who has been granted a learner’s licence or a driving licence with the consent in writing of the person having the care of the holder of the licence and has ceased to be in such care.
CHAPTER – 10 NO FAULT LIABILITY – SECTION 140
If an accident results in death or permanent disablement the Owner/s shall pay compensation in equal proportion on the following basis:
— Rs. 50,000/- in case of death
— Rs. 25,000/- in case of Permanent Disablement
Sub-section 4 of this Section provides that the amount should not be reduced even if the victim person is finally proved to have been negligent.
Sub-section (5) provides that the claimant is also entitled to compensation under any other law, subject to the condition that the amount paid under Sec. 140 or 163(a) be deducted from such other compensation.
SECTION 141 (1) – COMPENSATION FOR DEATH AND PERMANENT DISABLEMENT UNDER NO FAULT LIABILITY (NFL)
No claim can be made under Section 140 in conjunction with or in addition to a claim under Sec. 163. But it can be made along with Fault liability.
Sub-section (3) provides that compensation paid under Sec. 143 should be deducted from the final award if it is more than the NFL award. If it is less than the NFL award, the final award need not be paid.
SECTION 142 – PERMANENT DISABLEMENT
Defines Permanent Disablement for the purpose of award under NFL.
Permanent Disablement has been defined as :-
a) Permanent privation of the sight of either eye or the hearing of either ear or privation of any member or joint or
b) Destruction or permanent impairment of the powers of any member of joint; or
c) Permanent disfiguration of the head or face.
SECTION 143 – Applicability of Chapter x – Under WC ACT
States that the provision of this Chapter also applies to claims under the WC Act arising out of the use of the Motor Vehicle.
SECTION 146 – Necessity for Insurance against TP risks
Provides that no vehicle shall ply in a Public Place without a valid insurance.
SECTION 147 – Requirements of policy and limits of liability
Specifies the cover to be granted under the Policy and the limits of liability.
a The liability towards Third Party Personal Injury/death in respect of all vehicles
Unlimited.
b Towards Third Party Property Damage
Rs. 6,000/-
c Towards Passengers in a Passenger Service Vehicle
Unlimited.
d Towards Workmen as also the coolies connected with the operation or maintenance of the vehicle
As per the Schedule of the WC.
SECTION 149 – Duty of the Insurer to satisfy Judgements
SECTION 149(1) Lays down that once the policy is issued under the Act. Notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, he shall pay the claims of the third party as if he were the judgement debtor.
SECTION 149(2) Lays down the defenses available to the insurance company
Vehicles used for/ by
a) Hire and reward
b) Organized racing and speed testing
c) In breach of its permit to use
d) Without side car (motor cycles only)
e) Unlicenced driver
f) War, civil war, riot and civil commotion
g) Policy obtained by non-disclosure or misrepresentation of a material fact.
NOTE: The insurer has no right to defend the claim on merits i.e. quantum, negligence etc. Therefore, it must be ensured that wherever one or more defences enumerated above are available, they are raised and proved before the court in the written statement itself.
SECTION 151 – Duty to give information as to Insurance
If any third party/claimant approaches the owner of the vehicle for details of the Policy issued he shall furnish the details without refusing.
SECTION 157 – Transfer of Insurance Certificate
Deals with Transfer of Insurance. It states that if the vehicle is transferred together with the Certificate of Insurance and the policy, the transfer of the said certificate/policy shall be deemed to have been effected from the date of transfer of the vehicle. It also stipulates that the transferee should approach the insurance company within 14 days from the date of purchase of the vehicle and get necessary changes effected under the policy.
SECTION 158(6) – Submission of Police Report
Casts a duty upon the police to submit a report of the accident to the claims tribunal as well as the insurer, as soon as the information is available.
SECTION 161 – Payment for Compensation in Hit and Run
Provides for payment of compensation in hit and run accidents i.e. where the identity of the offending vehicle is not established. This is paid out of Solatium Fund.
Death Rs. 25,000/- & Grievous Hurt Rs. 12,500/-
SECTION 163 – Hit and Run
Wherever the identity of the vehicle is not known and death or injury has resulted out of accident, the claimants are entitled for the compensation, out of the Solatium Fund. The manner of disbursement of claims is left to the Government which is dealt with in the rules.
SECTION 163(A) – Structured Compensation
The Section gives a right to the claimant to prefer a claim against the owner or insurer of the vehicle where the negligence on the part of the driver is not required to be proved. The compensation payable shall be as per Schedule II of the Act Permanent Disablement to be ascertained from the provisions of WC Act for the purpose of compensation under this Section.
SECTION 166 – Application for Compensation – Fault Liability
Explains as to how, where and by whom an application for compensation is to be preferred.
An application for compensation can be made to any of the following Claims Tribunal:
a) Within whose jurisdiction accident occurred
b) Within whose jurisdiction the claimant resides or carries on his business.
c) Within whose jurisdiction the defendant resides.
SECTION 167 – Right to Claim under M.V. ACT/W.C. ACT
Where an accident gives rise to claim compensation under M.V. Act as also under W.C. Act the application can be filed under either of the acts but not under both.
SECTION 168(3) – Depositing of Award Amount
Award to be deposited within 30 days from the date of its announcement.
SECTION 170 – Impleading Insurer in Certain Cases
Wherever the owner of the vehicle colludes with the claimants or fails to contest the claim, then the Tribunal has powers to issue notice to the insurer and permit him to contest the case on all grounds open to the insured, without prejudice to his defences under Sec. 149(2). Such permission shall be granted by way of a reasoned order in writing.
SECTION 171 – Interest on the Award Amount
Permits the MACT to award simple interest from not earlier than the date of claim.
SECTION 173 – APPEALS
Any person aggrieved by an award of the Tribunal, derives right to file an appeal under this Section, within a period of ninety days from the date of award. However, the party who is fixed with the liability cannot file an appeal unless he deposits 50% of the award or a sum of Rs.25,000/- whichever is less, along with the appeal. No appeal can be filed against the order of the Tribunal if the amount involved is less than Rs. 10,000/-.