A presentation on Motor Vehicle Act and Third Party Liability

1. MOTOR VEHICLES ACT, 1988 –
AN OVERVIEW
&
THIRD PARTY LIABILITY
G. THAMIZHARASI
M/s. GIRIDHAR & SAI

2. HISTORICAL BACKGROUND
▪ Fatal Accidents Act, 1885 - provided only a
procedure and a right of named legal heirs to claim
compensation from the person committing
negligence.
▪ Indian Motor Vehicles Act, 1914
▪ Motor Vehicles Act, 1939
▪ Working Group was constituted in January, 1984 to
review all the provisions of the Motor Vehicles Act,
1939 and to submit draft proposals for a
comprehensive legislation to replace the 1939Act.
▪ The Motor Vehicles Act, 1988 has so far been
amended five times in the years 1994, 2000, 2001,
2015 and 2019
M/s. GIRIDHAR & SAI

3. MOTOR VEHICLES ACT, 1988
An Act to consolidate and amend the law
relating to motor vehicles
M/s. GIRIDHAR & SAI

4. SCHEME OF THE ACT
M/s. GIRIDHAR & SAI

5. CERTAIN IMPORTANT
PROVISIONS
M/s. GIRIDHAR & SAI

6. Section – 3 – Necessity
of 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.
M/s. GIRIDHAR & SAI

7. Section-4- Age limit in
connection with driving of motor
vehicles
Not less than
▪ 16 years for non-geared Motorcycles.
▪ 18 years for Geared Motorcycles and other
vehicles.
▪ 20 years for Transport Vehicles.
M/s. GIRIDHAR & SAI

8. Section 39.- Necessity for
registration
▪ No person shall drive any motor vehicle and
no owner of a motor vehicle shall cause or
permit the vehicle to be driven in any public
place or in any other place unless the vehicle
is registered in accordance with this Chapter
and the certificate of registration of the
vehicle has not been suspended or cancelled
and the vehicle carriers a registration mark
displayed in the prescribed manner.
M/s. GIRIDHAR & SAI

9. Section- 66 Necessity for
permits
▪ No owner of a motor vehicle shall use or
permit the use of the vehicle as a transport
vehicle in any public place whether or not
such vehicle is actually carrying any
passengers or goods save in accordance with
the conditions of a permit granted or
countersigned by a Regional or State
Transport Authority or any prescribed
authority authorising him the use of the
vehicle in that place in the manner in which
the vehicle is being used.
M/s. GIRIDHAR & SAI

10. PROVISIONS UNDER CHAPTER
VIII ON CONTROL OF TRAFFIC
▪ 129. Wearing of protective headgear
▪ 130. Duty to produce license and certificate
of registration
▪ 133. Duty of owner of motor vehicle to give
information
▪ 134. Duty of driver in case of accident and
injury to a person
▪ 136. Inspection of vehicle involved in
accident
M/s. GIRIDHAR & SAI

11. OFFENCES AND PENALTIES
▪ Different types of offences and penalties
have been enumerated in following
provisions of the MV Act.
Sections3,4,5,6,23,36,39,47,52,66,93,109,11
2,113,114,115,124,130,132,133,134,158,178,
179,185,189,197 and 198 etc.
M/s. GIRIDHAR & SAI

12. M/s. GIRIDHAR & SAI

13. M/s. GIRIDHAR & SAI

14. MOTOR INSURANCE
&
THIRD PARTY LIABILTY
M/s. GIRIDHAR & SAI

15. THIRD PARTY INSURANCE
M/s. GIRIDHAR & SAI

16. THIRD PARTY INSURANCE
▪ A third party insurance policy is a policy under
which the insurance company agrees to
indemnify the insured person, if he is sued or
held legally liable for injuries or damage done to
a third party.
▪ The insured is one party, the insurance company
is the second party, and the person you (the
insured) injure who claims damages against you
is the third party.
▪ Definition of ‘third party’ is given u/s.145(i) as
follows:
“third party” includes the Government, the driver
and any other co-worker on a transport vehicle.
M/s. GIRIDHAR & SAI

17. TYPES OF POLICIES
(i) Third Party Insurance/ Liability Only Policy
(ii) Comprehensive/ Package Policy
M/s. GIRIDHAR & SAI

18. Section 146- Necessity for insurance
against third party risk
▪ No person shall use, except as a passenger, or
cause or allow any other person to use, a motor
vehicle in a public place, unless there is in force in
relation to the use of the vehicle by that person or
that person, as the case may be, a policy of
insurance complying with the requirement of this
Chapter.
▪ No insurance—Punishable
▪ Compulsory Insurance not applicable to vehicle
owned by Central Government or State
Government and used for government purposes.
M/s. GIRIDHAR & SAI

19. M/s. GIRIDHAR & SAI

20. STAGES IN MOTOR VEHICLE
ACCIDENT CASE
M/s. GIRIDHAR & SAI

21. OCCURRENCE OF ACCIDENT AND
INFORMATION TO POLICE
▪ On the occurrence of accident, the role of state
policing agency comes into picture.
▪ Since there is likelihood that a cognizable
offence is committed, therefore generally First
Information Report is lodged in these cases.
▪ In Cholamandalam General Insurance Co Vs
Inspector of Police, Cuddalore, (2017), The
Madras High Court has suggested for
implementation of DAR (Detailed Accident
Report) and DAR to be available through
internet.
M/s. GIRIDHAR & SAI

22. COMMON CHARGES AGAINST THE
DRIVER OF OFFENDING VEHICLE
▪ 279 IPC: Rash driving or riding on a public way
▪ 304A IPC: Causing death by negligence
▪ 337 IPC: Causing hurt by act endangering life or personal safety of
others
▪ 338 IPC: Causing grievous hurt by act endangering life or personal
safety of others
▪ 427 IPC: Mischief causing damage to the amount of fifty rupees
▪ 181-MV ACT- Driving vehicles in contravention of section 3 or
section 4
▪ 183MV ACT- Driving at excessive speed, etc.
▪ 184 MV ACT - Driving dangerously
▪ 185 MV ACT- Driving by a drunken person or by a person under
the influence of drugs.
M/s. GIRIDHAR & SAI

23. APPLICATION FOR
COMPENSATION▪ Section 166– Application for compensation
by injured/Legal representatives in case of
death, owner of TP property, any agent duly
authorised.
▪ L.R.s left over have to be added as
respondents.
▪ Jurisdiction (place of accident, place of
claimant, place of Respondent)
▪ Limitation of 6 months from the date of
accident was reinserted in 2019 u/s. 166(3)
M/s. GIRIDHAR & SAI

24. STATUTORY DEFENCES U/S.150(2)
▪ Breach of specified condition of policy, i.e.,
private vehicle used for hire, ,Transport vehicle
used against permit conditions
▪ Organised racing and speed testing,
▪ Vehicle driven by person not duly licensed or
disqualified from holding any license,
▪ Injury caused or contributed to by conditions of
war, civil war, riot or civil commotion,
▪ Policy obtained by non-disclosure of a material
fact or by misrepresentation of fact.
▪ Non-receipt of premium as required under
section 64VB of the Insurance Act, 1938
M/s. GIRIDHAR & SAI

25. SPECIAL PROVISION ON PAYMENT
OF COMPENSATION
▪ As per section 164, in any claim for compensation
under this, the claimant shall not be required to
plead or establish that the death or grievous hurt
in respect of which the claim has been made was
due to any wrongful act or neglect or default of
the owner/driver of the vehicle concerned.
▪ In the case of –
Death – Rs.5,00,000
Grievous hurt – Rs.2,50,000
▪ THIS IS FIXED AND DEFINITE PAYMENT
WITHOUT PROTRACTED LITIGATION.
M/s. GIRIDHAR & SAI

26. ASSESSMENT OF CLAIM
▪ The assessment of compensation, however,
be made good but cannot be said to be
foolproof. In every such assessment certain
assumptions are to be made and there is all
possibility of variance from Judge to Judge in
applying the various principles enunciated by
the Courts from time to time.
M/s. GIRIDHAR & SAI

27. NOTABLE JUDGMENTS
▪ In General Manager, Kerala State Road Transport,
Tiivandrum v. Susamma Thomas , AIR 1994 SC 1631 – The
multiplier method is the sound method of assessing
compensation. The multiplier method involves the
ascertainment of the loss of dependency or the
multiplicand having regard to the circumstances of the case
and capitalizing the multiplicand by an appropriate
multiplier.
▪ In UPSRTC v. Trilok Chandra 1996 SCC(4) 362- The
compensation to be awarded has two elements. One is the
pecuniary loss to the estate of the deceased resulting from
the accident, the other is the pecuniary loss sustained by
the members of his family for his death. Unit method was
followed and multiplier method not followed.
M/s. GIRIDHAR & SAI

28. ▪ Sarla Varma Vs. Delhi Transport Corporation , 2009 ACJ 1298 SC-
▪ (i) Whether the future prospects can be taken into account for
determining the income of the deceased ? If so, whether pay revisions
that occurred during the pendency of the claim proceedings or appeals
there from should be taken into account ?Future prospects to be added
in case of permanent job i.e. 50% of actual salary if the deceased was
below 40 years and 30% of actual salary if the deceased was 40 to 50
years. Revision after the death of the deceased not to be considered.
▪ (ii) Whether the deduction towards personal and living expenses of the
deceased should be less than one-fourth (1/4th) as contended by the
appellants, or should be one-third (1/3rd) as contended by the
respondents ?The deduction towards personal and living expenses of
the deceased, should be one-third (1/3rd) where the number of
dependent family members is 2 to 3, one-fourth (1/4th) where the
number of dependant family members is 4 to 6, and one-fifth (1/5th)
where the number of dependant family members exceed six. Where the
deceased is a bachelor 50% to be deducted towards personal expenses.
M/s. GIRIDHAR & SAI

29. ▪ Santosh Devi vs. National Insurance Co. Ltd.,
2012(6)SCC421
”RATIO: “It would be reasonable to say that a person
who is self-employed or is engaged on fixed wages
will also get 30 per cent increase in his total income
over a period of time and if he / she becomes victim
of accident then the same formula deserves to be
applied for calculating the amount of
compensation.”
▪ Reshma Kumari & Ors. vs. Mandan Mohan & Anr.
It approved the methods adopted in Sarla Verma
Case.Rajesh & Ors. vs. Rajbir Singh & Ors and in
Santosh Devi Case.
M/s. GIRIDHAR & SAI

30. ▪ Raj Kumar vs. Ajay Kumar & Anr. Civil Appeal No of 2010 - The heads
under which compensation is awarded in personal injury cases are
the following:
▪ Pecuniary damages (Special Damages)Expenses relating to
treatment, hospitalization, medicines, transportation, nourishing
food and miscellaneous expenditure.
▪ Loss of earnings (and other gains) which the injured would have
made had he not been injured, comprising:(a) Loss of earning during
the period of treatment;(b) Loss of future earnings on account of
permanent disability.Future medical expenses.
▪ Non-pecuniary damages (General Damages)Damages for pain,
suffering and trauma as a consequence of the injuries.Loss of
amenities (and/or loss of prospects of marriage).Loss of expectation
of life (shortening of normal longevity).
M/s. GIRIDHAR & SAI

31. HIT AND RUN CASES
▪ Section 161 of the Act provides for special provisions as to
compensation in case of hit and run motor accident, where
the offending vehicles are not identified.
▪ Death :Rs. 2 Lakhs
▪ Grieveous hurt: Rs. 50,000/-
▪ The Central Government may, by notification in the Official
Gazette, make a scheme specifying the manner in which
the scheme shall be administered by the Central
Government or General Insurance Council, the form,
manner and the time within which applications for
compensation may be made, the officers or authorities to
whom such applications may be made, the procedure to be
followed by such officers or authorities for considering and
passing orders on such applications
M/s. GIRIDHAR & SAI

32. EXPLORING THE POSSIBILITIES
THROUGH ADR
▪ When it is satisfied that no defense under section
150(2) Motor Vehicle Act, 1988 is available and the
accident and involvement of insured vehicle is
established and prima-facie negligence is proved,
the most prudent way to move forward is to look for
compromise settlement through various ADRs.
▪ Upon receiving information regarding the accident,
the Insurance company will have to appoint an
officer to settle the claims relating to such accident
,who shall offer to the claimant the settlement. If the
claimant accepts it, the decree shall be recorded to
that effect – Sec 149
M/s. GIRIDHAR & SAI

33. APPEAL REMEDIES
▪ Provision of appeal before the High Court has been
provided under Section 173 of Motor Vehicle Act.
▪ Limitation of 90 days from the date of award
▪ The courts have held that the right to appeal is available
only to the driver and owner against whom the award is
passed. The right of Insurance Company to file appeal is
not permitted on the ground of quantum or negligence.
▪ Rescue under section- 170: 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.150(2). Such permission shall be granted by
way of a reasoned order in writing.
M/s. GIRIDHAR & SAI

34. THANK YOU
M/s. GIRIDHAR & SAI