ARTICLE #3 – THE MOTOR VEHICLES ACT, 1988

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Is it mandatory to take third party insurance in India?

Yes – Section 146 of the Motor Vehicle Act, 1988 mandates it.

What is the procedure of third party settlement of claims?

• Insurance company designates an officer to settle claim;
• Officer offers a compensation to the claimant for settlement before Claims tribunal within 30 days;
• If claimants accepts offer – (i) Claims Tribunal shall make a record of such settlement, and such claim shall be deemed to be settled by consent; and (ii) the payment shall be made by the insurance company within a maximum period of thirty days from the date of receipt of such record of settlement;
• If claimants rejects offer – a date of hearing shall be fixed by the Claims Tribunal to adjudicate such claim on merits.

What happens to the claim by a third party if the insured dies after raising a claim?

It shall not impact the claim by the third party. The claim survives.

What happens to the Insurance policy on transfer of vehicle?

The insurance policy also gets transferred to the new owner. Within 14 days of transfer of vehicle, the new owner has to apply for making necessary changes in the Certificate & Policy of Insurance.

What all can be asked to be shown by a Police officer in uniform (authorised by state government)?

Any person driving a motor vehicle in any public place can be asked to produce —

(a) the certificate of insurance; (b) the certificate of registration; (c) the pollution under control certificate; (d) the driving licence; (e) in the case of a transport vehicle, also the certificate of fitness referred to in section 56, and the permit; and (f) any certificate or authorisation of exemption that has been granted under this Act, relating to the use of the vehicle.

Within what time frame does Police has to submit the accident information report to the Claims tribunal?

Within 3 months from the date of accident.

What is the compensation provided in cases of Hit & Run?

• If it results into death of a person – a fixed sum of INR 2 Lacs;
• If it results into grievous hurt to a person – a fixed sum of INR 50,000/-

What is the compensation provided to legal heirs of victims of death and grievous hurt?

Section 164 of the Motor Vehicles Act, 1988 says that the owner of the motor vehicle or the authorised insurer shall be liable to pay –

• in the case of death – INR 5 Lacs;
• in case of grievous hurt – INR 2.5 Lacs. If any compensation is received under any other provision of the act, then that amount will be deducted from the amount to be paid under this section.

What is Motor Accidents Claims Tribunal?

It is constituted for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to any property of a third party so arising, or both.

Who can make an application for compensation before the Motor Accidents Claims Tribunal?

Under Section 166 of the Motor Vehicles Act 1988 –

• (a) By the person who has sustained the injury; or
• (b) By the owner of the property; or
• (c) Where death has resulted from the accident, by all or any of the legal representatives of the deceased; or
• (d) By any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be.

Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application

Provided further that where a person accepts compensation under section 164, his claims petition before the Claims Tribunal shall lapse.

Where can an application for compensation under Motor Vehicles Act be filed?

a. Either to the Claims Tribunal having jurisdiction over the area in which the accident occurred or

b. to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or

c. carries on business or

d. within the local limits of whose jurisdiction the defendant resides

Within what time an application for compensation can be filed before the Motor Accidents Claims Tribunal?

Within 6 months of the occurrence of the accident.