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    DocScanner 01-Apr-2022 12 37

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    Khushi Thakur

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    of 15
    CHAPTER 31 Third Party or Compulsory. We ae ff Insurance of Motor Vehicles NATURE AND SCOPE In law of torts if a person negligent] third party, the driver whose neglige Tie veri a servant ofthe owner ofthe vehicle and the seal ane pay i, } often a person of no means and so common law recognised wena Tia nee owner of the motor car. The master is liable for i of the Feaareant does such actin the course of his employment: In Puahecer ae - tdershir Ranjit G and P Co, it was held that the det factor so far asthe lab master for the act of his servant is concemed in wise he aye committed by the Grier ine course of his employment” or not and that it does not depen nS or unlawTuT nature of his act or whetheror re es 7 coh Not he acted against the express instructions ot {is master or in violation of the rules framed under the statute. This wale ore Supreme Court was applied in Prithi Singh v Brindaram where the driver has caged © passenger in contravention of rule 4.60 of the Punjab Motor Vehicles Rules 1940, In the following case the driver acted in violation of the instructions but still the master is made liable. In Imperial Chemical Industries v Shotwill, Lord Pearce observed: The doctrine of vicarious liability has not grown ftom any very clear logical or legal Principle, but from social convenience and rough justice. The policies dealt with in this chapter are those concerned with liability of the owner to third parties for causing them injury or death by the use of the motor vehicle. The Motor Vehicles Act 1939, in its Chapter 8 deals with this branch of liability insurance. This is another important branch of liability insurance and is made compulsory regulated by the Motor Vehicles Act 1939, Chapter 8 containing ss made has largely reproduced the provisions of the English law embodied in the Real Te Acts 1930 and 1934, the Road Transport Lighting Act of 1937 and Ce aad Tale (Right Against Insurance) Act of 1930, which were consolidated inn Reid DoF Act 1960, now replaced by the Board ‘Traffic Act 1972. A new chapt + was introduced providing for ‘Liability without fault in certain ca under the Amending Act of 1982, which came into force on 1 Octobe 1082 TN Act was repealed and replaced by the present Motor Vehicles oe 1cTp © Pott Act 1988 splits Chapter 7 of the old Act into two chapters, namel y ‘chad "ibe Vehicles Against Third Party Risks’, Chapter 9 (ss Le i 140-44) under | (ss 165-76). The old Chapter 7A is now numbered as Chapter ly drives his vehicle and causes jn jut 7 ence caused the damage is liable ene nee ei a 1. AIR 1977 SC.1735. io . AIR 1987 P&H 56(FB). > ° cy 37808) x aia v Gowrawa AIR 1987 Kant 107(DB); Dhalumal v via AC Finance and General Insurance v Parvatamma AIR 1986 Kant 4, [1964] 2 All ER 999(HL). rance of Motor Vehicles ability to pay Compensation ont inci ” The purpose of this ‘i 1eris to protect the public. he principle of no fault.’ The purps ‘The contract in this type of p : : Policy also, like any other contract of insurance, is one | ofindemnity, The object of this type of Policy is to protect the insured against his Iabilty to thitd parties arising out of an accident caused by the use of a motor vehicle ma public road and it is also made omPulsory. The general effect of the Act is that every person who runs 4 motor vehicle is under a duty not to use or to cause or permit ay olher person to use it on a road unless any li in respect of the death or bodil: id ‘ability, which may be incurred thereby icy of insure tO any person caused by or arising out of thi, user is covered by a policy of insurance. Section 146 of the Motor Vehicles Act 1938 says that no Person shall use except as a Passenger or _- Persons required to be insured are: ie, the driver of the vehicle; and (b) motor vehick v ws any other person to use a : Nien net the second category come not only the Vehicle but even one i ion of the: nee permanent-owner of the i sion of the vehicle under a Contract oF 1 22" ower for the time being an i seco? Seat or hiring, or to insure the Vehicle under this (@) who uses a motor vehicle except as a Passenger, one who causes or allo ©) Wapplies to any person i 'e user by himself or allowing another person to use; ii) Such use should be a motor Vehicle; by iv) Such vehicles should be used in a public place; gona () The using or causing of use by the other person should be without a policy of insurance; (Wi) ‘The Policy of insurance should comply with the provisions of the Act. Persons Governed a hi Plies to all perso 'er incorporated. or not Matte re \cludes any company or association or body of individuals, he, duty imposed under the section is absolut, it does not T Whether such person-Has knowledge or not of the fe f having de he only category of persons exempted from this duty are nan “xplanation is added according to which a qualifi ‘tid employee who drives the vehicle. The expl A employee who . Hazi Zakaria v Noo: S m AIR.1971 MP 5, : Mana a a NS pon Vehicles Act 1984; 1460. I. The Motor Vehic! wom 251 other than a passenger: Pa ia What is prohibited is th 0013? Indi uninsured vehicle with the knowledge that the’ veh gee he is ot abl Further cl 2 of 146 exempts ie oe being insured, when w | for state government purposes un commercial enterprise, The appropriate state. governments ‘are Connect txemption with crtajt conditions in the.case of government y, ee ron-governmental functions.’ Normally the duty imposed by the section iso ona public road. ; He Shall not use or Allow any Other Person to use a Motor Vehicle ‘This section uses the word ‘use’ while s'125 tises the!word ‘drives’, The ex of a motor oe driving of a motor-vehicle and so ‘user’ here is connotation. The word ‘use’ indicates 'that the vehicle need not be cat rd “use! cs able of ‘vehicle, aX in publi! and cnt be' moved atod wit driven as suc! potential danger to the public.’ him and in such a case he ue the vehicle though he is not within the vehicle. ‘allows’ is also used in a wider sense. THs-permission need not be by the-pwneralc ~eeatBe granted by any person who has vg cre ape econ The Vehicle must be a Motor Vehicle wad ‘Act defines a motor vehicle as any mechanically’ prop ‘apon roads ‘whether the power of propulsion is transmitted thereto jitemal source and includes a chassis to which a body has not been attached but does not include a vehicle running upon fixed rails or @ a ol propulsion determines whether a vehicle human or animal force it is not a motor vehicle; but. 2 propelled or intended or adapted for non-mechanical propu} if in any circumstance itis in fact mechanically propelled. of motor. vehicles like goods vehicles,” heavy transport Ve _ ight transport vehicles," locomotive," motor cabs,” motor CO service vehicles,” state carriage tractors," trailers’ and transPeT" "cy Hechuded in the definition of a ‘motor vehicle’ unless any item is °SPI Cy cycle question whether a bicycle fitted with an auxiliary engine used 2 a third party insurance is subile. It was held that when it was TO rye petrol removal of the cylinder piston and connecting though ‘there a ‘other hand th does not come within the definition of a motor vehicle.” On 'he shicles, 8 Lloyd v Singleton (1953] 1 QBD 291. ls be 9. Elliot v Greeje 1960 (1) QB 367. _ 10. Motor Vehicles Act 1939, s 2(18). 11. Shaweross on Motor Insurance, 2nd edn, p 176. 12, ‘The Motor Vehicles Act 1939, 5 2(8). 13. Ibid, s 2(9). 14. Ibid, s (10). 23. id, 5263). 24, Laverence v Homlete (1952 2 QBD 74.) iY 252 Suted) ‘mment vt ice ed ig hicls used op ofa vehicle; because generally an owner uses his vehicle or causes or alfoyen Ensit Pre person fay send his vehicle for fetching someting le celled vehicle adopted rae from an exe ched and tit nor vet refers 10 7 The Aol a Motor QOS Ee icles. nope ta, 1 2 | roxy Ory lobeeg ofa Wie ‘The wan adopted for use only in a factory or in any other enclosed premise aH : i fies proeled# is a motor vehicle oats which is atl) mn becomes 21 yO er rd SS Third Party or Compulsory Insurance of Motor Vehicles required licence and third party insurance = ee Auto ri Is within the defi motor cab as jit isa vehicle with a limitation of see, ls within ion of carrying two passengers only! ich run on fixed rails, eg, a train or a ; € tory or in any other enclosed premises. A’ vehicle, otherwise a motor vehicle, when used upon the owner's premises, which is not a public place will not attract 5 94(1), > The Use Must be in a Public Place Public place has been defined as a road, street, way or other place whether a thoroughfare or not, to Which the public have a right of access, and includes. any place or stand at which passengers are picked up or set down by a stage carriage.” The Indian definition includes a bus-stand, a taxi-stand, etc, whether they are private or Public sites. It is its user that makes it a public place. In Pandurang v New India Life Insurance Co, the question whether a private road or a private place to which the public have a permissive access would be a ‘public place’ within the meaning of s 2(24) as well as s 95 (new s 2 (34) and s 147 of the 1988 Act), was answered in the affirmative. The court held: The sight of access may be permissive, limited or restricted or regulated by oral or fiten permission or on payment of fee..what is necessary is that the place must be accessible to the members of threypublic and be available for their use, enjoyment, allocation or other purposes. In this case the accident happened within the compound of the Tata Electric and Locomotive Company factory within which are situated various structures, open spaces and roads constantly used by the public having business with the company, Persone and Vehicles entering are supposed to possess permission or authority to enter. It was held that the accident took place at a ‘public place’.” In Bugge v Taylor where a motor nicle was left unattended during hours of darkness on the forecourt of hotel to [ich the public has access, the defendant was held to have been properly convicted of leaving an unattended vehicle on a road even though the place where it was left was the Private property,” A Policy of Insurance should be in Force There must be a Policy of insurance. Whether the Policy was in force was not whether the ine company considered its on risk, but whether the insurance company was in lemnify the user if damage and injury h r i tn gem injury has resulted from the vehicle at a 0 Permanently attached.” In Taylor y i i (lic covering the appellant's motor on: against tind party Hoke wie ee insured a s using the car he was charged Tr note from the second insurer 8. Floyd v Bush (1953) Mt QBD 265, aumitra Auto Rickshaw Sahakar Sangh v Direcy Motor Vehicles Act 1939, 5 2(24), "8" ¥ Director of Transport Bombay AIR 1967 Bom 402 (DB), 38. AiR 1988 Bom 248(FB), 38. (1941) 1B 198. 30. Camill v Roseland (1953) 1 QBD 4g6. 253 0013? and so it was held that no policy was i policy was in fore Isunce of eet ey os Apel se ae of et inane wh 2c ote i sed (0 be valid for 15d sein of ea deca ig the proposal for insurance, cover note covers lentes ne peace Sit eat the instance company is nt Table ifthe acide ane ed betas as ore the poli my came into effect.” Section 147(1)(b) mentioned the classes ¢ liable under the Act policy. The Act policy oF re dpa amnage an insured i the insurer ipso facto lable for the harm suffered by a passeni Pay oes noe 1 ae hie nor fr evar iia, pilin née nee as Pane Fak Gopalkrishnan v Narayanan it was observed that the owner of a seni Sato Ink Goparotey in respect of third party risks f0 cover a oo nie aed oe rausrance company is not liable for injures fo ‘aie gratuitously, and therefore eer unless the owner of the scooter hhad taken a policy coverin; isk.” c 1g such a risk, ryana it had been held that risk to a gratuitous plea Chander v State of Ha private car is not required to be covered by s 95(1)(6) and therefore if grat passenger travelling 19 & jeep dies, the insurer cannot ‘be made liable fe et Binary when the owner of the ood is traveling along with the goods and dies inaa accident, te insure cangok te made liable because such a case is not eovered by a poi ‘eeved under s 95(1)(b).” The policy Fequired under this section must be one complying, with the requirements of this chapter. e < In Mandidas v Ramadevi it has bec, held that when the insured is Tiable tothe hid party, the insurance company also will be liable.” It was also hheld that relying.on th pceivations of the Supreme Com be "Skandia Insurance Co Lid Kokila i anata a defence available under $ LU Ot cose ravadan,” which considedng 2 FI relating 6 Gbserved thatthe said section © the old Act corresponding {0 $ jmmunity to the insurance Comp irre which means that the insurer get immu eSired is guilty of an infringement of violation inte forthe vehicle In this case it Wo in evide! siver and his unauthorised deleEn i oer ence the insurer is liable. The fecident:. The burden lies o% the insurance company 10. Prose license.” The scope of § 147 and conditions 10 ‘be satisfied for its app! elucidated in a few ‘cases. 31. [1965] 1 QBD 557. Aci 3, ited Indic v nc AIR. 1999 081 195: ited India Insurance Co 14d ¥ Lave soln ATR 32, Divisional Manager, Uni d 3 Phagwandas v Kastrilal 1974 Le rakaswat y Gian Sin ‘ 34. Bhagwan pce Coa» Suto RA NC 8 SC 257. oii er sist ei if Haryana 1975 ACI 164: poze Insurance CO ¥ 108 acai: 35. Subhash. ‘Chandar v 4 Genera insurance Kishna KUMOTE 1968 ‘ACS 295. 36 Ne Nes 438; Unit ance Cov Joie St ST ACI 295, A : Ma 38, Urrance Coy Joa ; wal Fl 1915 A ice surance COY WE achsperamma AIR 1974 ‘ap 1205 ove! + TS tian Ideal Insurance ere 3k, Herne 2a neh 901A a A a AM i a Got Sarat Adana AI. 1998 Kat 14168), coasts Ha Co Lid» sti A ited India Insure A ndra Prasad » Dig 1 Sereda al Unt dia Ise Ralerdts Ky, Oriental eat Com eT Pr ah ce 0 He iy ‘a. amteinal Compara mares Seele Dev 19 ACI 01S Se farsi Nati {i999 AC} Corps omnall» Been Dev 1999 ACS SOUSC): SI “aL avs 6 Ravindra 1999 KC arms: Ree A nce i 1183080 Pigg AGC I Pusat Paso a Speen ae i Pia Se Raran v Hindustan Ti 1968 9C 1796 LS 13130DB); New Asiatic 254 > Bh = + 0139 Third Party or Compulsory Insurance of Motor Vehicles What type of policy'and to wi requirements of the chapter’ are stat, Requirements of the policy: {i I should be a policy issued by an authorised insurer. c. Gi) It should cover the person or Persons..specified in the policy to the exte specified in sub-s 2 of 95" it the hat amount must be taken ‘to comply with ed ins 147: Y divides the vehicles 2 ,800ds and those intended to States that a poli i les Act, 1988, jental Fi ree ampneian v Ramachisperamma AIR 1974 AP 120; Oriental Fire a Spit Singh 1967 ACH 36. 2006) 5 oy Hi. Shima yf Singh & Ors. AIR 2006 SC 1576 :¢ Lele Blog Devt dv Puni Devi 1995 ACI 486(DB); National Insurance E00 ‘New India VSripa etal Insurance Ce Lid v, Sukhpal, AIR 1999 HP 98(DB); "Pal Singh 2000 Key \SC). 255 00137 which passengers are carried for/hire or reward or by r or ‘eason of, oF in pursuance’ge, | eof contract of employment... r : V2 fib (i) In respect of persons other than wu Rs 50,000 in all. passengers carried for hire of reward a limit of (ii) In respect of passengers ¢ (a) limit of Rs 50,000 in all where the vehicle i i o vehicle is registered sgistered to Carty not more than thirty passengers; (0) a limit of Rs 75,000 in all where the vehicle is registered to carry more than 330 but not more than 60 passengers; (© alimit of Rs 1 lakh in all where the vel 60 passengers; and (a) subject to the aforesaid limits, Rs. 10,000 for each indivi were the vehicle is @ mot d five mare wingwidual passenger in any oer cASe- cia In all other classes of vehicles, they must be insured to cover the amount of liabilit subject to 2 minimum of Rs 2,000 in respect of;damage to any property of a third a ‘These limits have been ‘ixed by the Amendment (Act ‘36 of 1969) which came into effect from 2 March, 1970. Paar all these, limits provided abor® are omitted, in, the Motor {ronicles Act 1988 and it provides ‘snlimited liability ie, the entire Tiability incurred bythe inj r death to a third party ‘and in respect ‘of damage to any shicle is registered to carry more than jor cab, an rrevaftect that any policy is before the commencement of the Act ie, the be effective for a period ‘of four months after uch commencement 0 ¢ expiry of the policy whi nencemm’™ yen for the veicle owners to seplace theit pol Where the policy is insurer can be ma i to indemnify the satisfied. This clause which was i Hes made clear by the Supreme if the Motor ‘vehicles Act the owner of 1988 as cl (4). Fut was ma by. either in the legislative history or in the provisions of a Vee the part of the iriver is not neces n Oot ‘a motor accident claim. But! ti that proof of negligen® 1 é re payment o! ‘compensation in a 1 : poy provided in the Motor 1a micles Act 1988 eA. insurer liable for th ‘an exception has been provi Hiability’ discussed earlier si ‘A further condition laid down by 8 147(4) 10 make a policy, ne el of requirements of the, chaPi ig that the insurer sh 1d have issued Faeurance’. Before sivins 8 urance policy, 4 cover T eis comin’ jnsurers. When a cover 00! ssued it 1s also treated as a policy of i Ad duty is cast on the insurers ‘wiho issue a cover nore A mendit says that where a Cover NOW jssued by an insurer ‘under provisions © grant sipot followed by the issusne ‘a policy Of Lae the exPiY ose the state government may prescribe. ime Habality is stated ins 14765). vehicle. The inst iver Section Statutory Contract Betwerr Insurer and Dri ‘notwithstanding ‘anything contained in any law for the time being |? jssuing a policy ‘of insurance under this Section shall be liable to inde! , 256 — ty 139 Third Party or Compulsory insurance of Motor Ve hi 0 0 ehicles Purstiance or a classes of persons specified in the Policy in respect of any liability which the policy ltpoms fo cover in the case of that person of tech lasses of persons." This provision is Inpari materia with ¢ 206(3) of the Roa ct 1960 neat 0 id Traffic Act 1960 in England which replaced s 36(4) of the Road Traffic Act 1930, Speaking about the effect of the provision it has been said that the insurer may by virtue of this proviggs be made liable to indemnify an specified class of driver, but is not thereby Hiable to the injured third party himself.” Atkinson Tin Such» Burs observed thatthe effes te Provision, in fact, is to create contact, etween the insurers and any driver ofthe vet who is of a class covered by the policy.” This section gives statutory recognition Yon policy. A satisfactory form of policy therefore horn holder while driving his own car bu yi to indemnify; (a) the policy holder while driving another's car,” and (b) other persons iving Frolde TeWard ating B 110 cary not More Ito cary More thay Qo cary more thay individual passen and Tupees for eash he amount of labiliy operty of a third pany of that director pending ig the Riley, he inj accident and brought this action against the insurer of on agaist he the owner of the Riley as being i i A tled to sue him direct by virtue of the usual extension clause in the policy covering the hich ae ae, Ri cat The cour held that De itersll was not covered by his own policy as he hes Rererinagh ntl lier meatal interest in it but was found that he was covered by the policy taken Lability damage tnt PP ty the owner of the Riley car directly.” Similarly for i spect of roviso has been added n d in force, immediaty ct 1988 shall contin inst her driver and the question date | a8 wheter the driver was entitled to recover under the owner's Policy. The policy ement or till the vette | bolder, the owner, was considered as a third person in Tespect of the cover granted to the js given for the ‘authorised driver under the Policy holder's policy. In Lord Porter's words; Oberon was a third party in reference to her authorised driver." This cas « elfect of the clause extending cover to the pe Second contract of insurance between the: i “Miss Marley ¢ also settled mitted driver was to bring into insurer and the permitted driver, idiary to the main contract and it lls away his vehicle, his contract so disappears, tis availabe’ M® Policy or the benefit conferred by s 1034 af ine Motor sive pole “U-" In Kondaiah y Yaseam Fatima the lorry insured by a "8S noting P gi3s Sold and the vehicle delivered to the purchaser; but the insurer nant OF the sale, a , ¢ renits an application under s 31 of the Motor Vehicles ther ied a NE the repigenPPication under § ly without gies ation certificate in favour of the purchaser, The ee ‘out obtaining fresh insurance cover for using the vehicle and 8, tion 75) BOS Ree a opp : i “wance (1934) 40 Comp Cas 16, 174 Austin v Zn 3 in fisasy Tee sGeteral Accident and Liability Insurance Co 257 was'held ithat ‘regarding third party liabili third party. Tt! was I -garding third caused the det hint Palier continued to be effective until the regia comprehen ne he purchaser's name and that therefore the-insu capstone fanseed 0 the PCNA he tansfer allowed the purchase io ional period as far as the third party liability is concerned" g¢ and in an earlier case in BP Venkatappa v BL Lakshmayya, A who was " and had taken an insurance policy in respect of the car, transferred the oir 1 September 1966. On 26 October 1966 while B was negligent in driving the dent resulting in the death of a 16 year old girl. One of the question; ‘vhether the insurance company could be made liable.in respect fa the policy issued to A even after A transferred the vehicle to B. It was held that since there ‘was no transfer of insurance policy to B with the consent of the insurer when the car was wes ed the insurance company cannot be made liable. ‘The recent decision of the Kerala High Court in New India Assurance Co y EK Muummad is also to the similar effect. In this case there was transfer of a motor vehicle from one person to another ‘without information to the insurer. It was held that on such fromter the insurance company cannot be made Tiable, only the driver and the transfers cae held liable.” Assignment or mere handing over the policy is not sufficient, The werefer of policy must be made with the consent of the insurer. This consent may be express or implied. “Further when the permitted driver is covered by two or more policies issued by two or more insurers both the insurers will be liable to contribute Meably towards the loss notwithstanding a restriction in. the policies restricting the txtension to persons who are not protected against liability by any other insurance. During currency of the insurance, the motor vehicle met with an accident. The vehicle earns cy dtiver claimed that the licence was issued by the licensing authority On oe it was found that the license was not issued by the competent authority, It was Gul that in such circumstances, notwithstanding renewal of the said driving licence, the insurer will not incur any liability.” Insurance company was not Tiable to the insured insurer a ver of the vehicle Was holding fake driving licence at the time of the accident® Even though the insurer was not liable to pay compensation to gratuitous passenger the Supreme Court permitted the claimant to withdraw the amowy deposited by the insurer and permitted the insurer to recover the same from-the vehicle owne Liability of the insurer commences from the date of issuance of the cheque and accep by the insurer but not from the date of ‘encashment.” Rights of Third Parties: The statutory rights, as against the insurers of the injured third party are now governed by ss 149 and 150 of the Motor Vehicles Act 1988: By s 1498 Guty is east on the insurers to satisfy judgments against persons insured in respect of thitl party risks. Before this duty is imposed, the following ‘essentials must be satisfied: (A certificate of insurance must have been delivered to the policy holder under sub-s (4) of 3148. to Bon car, there was an acct which has arisen was, ‘55. AIR 1986 AP 62 (FB); contra Labhsingh v Sumohni Devi AIR 1988 P&H 145. . 20; 56: AIR 1973 Mys 350; Oriental Fire and General Insurance Co v Meena Sarma (ag975) 77 PNR Yl ‘Jamshed Hormiji v Vilas Govind (1976) 2 Kant LY 84; Govind Singh v AS Kailash AIR A vino? 65, South India Insurance Co Ltd v Purna Chandra Misra \973 ACI 465M, Bhoopathy 7 iad 14h Lakshm Ammal AIR 1966 Mad 244; South India Insurance Co Lad v Lakshmi AIR 1971 ‘Nanumal y Inder Singh 1971 ACI 88, 57. 1985 ACI 109(Ker). at $8. AIR 1963 MP l64, Galab Bai v Peter K Sundar 1975 AC} 100(Bom): Yaswaryl Moker He ee deren Fie and General insurance co Lidy Binad Roy AIR 1973 Px 115. ice 59, NGU2MRa Oriel Fire ad Gone (AMOR) 2 SCC 338 : ATR 2008 SC 1408: Meter ‘Act, 1988, Ss. 149(2), 147 and 173. 60, National fasurance Co. Lid. v, Om Prakash Jain 2010) 1S HEC So, 30138 106" 0. National nat ce ace Co Lid sau P, Pout and anatier QO13) 2 SCC aL ATR a Hee eae Singh & AnrsTAIR 2000 Kait 240 £2007 (6) Karl 486! 258 —_— di ii iv. But Claimar vehicle. work sit to the Sf when he compens The clait company from the give the The insur valid driv. On the thit @a (i) a (ii) a re Under s 96 Will be enti Reover the z driver pens tid Tene wets tim the Unig n Seed hi (bp Mee 81 Third Party or Compulsory Insurance of Motor Vehicles ii) 3 —, fan iy soement ity st have been obtained against any person insured in respect of any ; t Jaim is 3 da Feauired to be covered by a policy under s 148. If no c Tage ARd no decree ts peceea ‘against the insured, the insurance company is se cannes the insurer is a branch et insured is the trunk of the tree and a brancl ii) not Stand unless there is tush Gi) Subject to s 149(2) such tab ‘The fact that th 3 ‘T, transferreg oS the sligent in dane One of the 8 ty © ah Hed ttt the insurer is entitled to 8 cancelled the polien > i de liable in re spt Bain sata « Policy is no defence against the third Party S held that singe tt tut in such a case the insurer % Will be able to recover from the person insured the amount paid to the third party. Climant vas travelling as a spare driver in. goods Vehicle and was not driving the Venice He was travelling in the vehicle on the instuctces of the employer to visit the it \uitous passenger. It was held that the ce turer When the oe 1 Assurance Co y \sfer of a motor insurer was not liable to pay Vehicle to the spare driver. The court further observed that the claimant met with the accident | was Theld that on sig | when he was 28 years old and ‘was permanently disabled an driver and the transfer; y is not sufficient Te ir. This consent may svered by two or noe 1 be liable to contin: policies resting any other in 2 accident. ‘The velit A Tcensing authoiy. 0 e licensing authori ompetent author ye Said Griving eed . the i not Tablet tH, company. However, the insurance cor me Pany was also allowed to recover the said amount from the owner. In these circumstances, it was held thet sivi ‘ng directions to the insurer to give the compensation to the insured fi the insurer is bound to pay the third party: () any sum payable under the judgment in Tespect of the assured's liability; (i) any amount payable in respect of costs; and (ii) any sum payable in respect of interest relating to interest on judgments, Under s 96(4) if the Policy restricts the liability to apart of the k Will be entitled to the whole by virtue of the Provision, but the insurer will be entitled to the wey the excess from the assured. At the time of committing the accident, even though the driver was not holding valid Griving licence, the third party can claim. the Sompensation from the ins rue whether the driver was holding licence or not is between the insurer sad the o Compensation to the rwner of the vehicle. After paying the ihird party, the insurer can proceed against the owner oe the vehicle ‘sim the amount whatever it paid to the third party. Unitation on Third Party’s Rights The ext ‘sed third party by $ 149(1) are curtailed 1 P whBy § 149(2) the insure on that sum by virtue of any enactment loss only, the third party © he had not been given’ notice, before or after the commencement’ of the Proceedings in which judgment is gi 'ven, of the bringing of the proceedings; or ae Hi ie sD * ater «Salih Kuma AI 72 Gu 85: Chal Moh Al Raman 96) 9 Fi i ean Hedin ent ut El Mri « Ale ema ena Gajoor Neu inde Inaurance Co Lid 1981 ACH SAS 4 ideer New india Insurance 71 18 A “fal and Ane. AIR 2013 SC 1064 : 2013 @) SCC 41, 8 Me Cake furan Cot ap ara lk SC 6 19) Se 6 GRAS 6 and ors. Third Motor Acclden Claims Tribunal, Bhubaneswarand ors. AIR BHT Delle Rey La: 2000 (2) OLR 6s" 259 staye in appeals! )7 , je that when the insures js given notice of the net xo, The right of the insures 19 be fhe ean defend the action on -c gtayed pending a a js made a party ‘ondition of the policy, being one of use of the jicle: here the vehicle is 07 the date of the contract of re to ply for hire to reward; or it under, which the vehicle is wed by the permi is a transport vehicle; oF tached, where the vehicle is =, driving by anamed person or persons OF ‘by any person excluding OF¥i08 BY ny. person who Pm ‘been disqualified for ng a driving licence uring the period of disqualification; or ition excluding liability for injury caused: oF contributed to by ivil war, riot OF civil commotion; OF that it was obtained by the non-disclosure of of a fact which was false in some materié (iii) A cond condition of war, civ? | (by that the policy is yoid ont | nmaterial fact or by 4 represe particulars. 1 ‘The conditions mentioned in cl (2)(by can be availed of by thi only if they have been incorporated in the policy and not otherwise- In Bhoopathy ¥ Vijayalakshmi, it was held that the fact that an insurer as Dect given rotige of action, the grounds of defence vel action are limited to those specified by sub-s 2 of s 149 and it is not open to an insurer to avoid Jiability under a policy on any 7s ih India Insurance Co v Lakshmi, speaking abou Pine provisions of s 149:86 out other ground. above defences Ramanujam J observed that it is true thi Jamo the insurer in a claim made by third parties based on the defences that are op contract of insurance; but they cann t avo ili i contract of insure bat hy nnot avoid the liability under the policy in The defe ioned i i la eee mentioned ns 96(2)(a) of Motor Vehicles ‘Act 1939 is omitt Brent Motta § as it permitted cancellation of policy By mutual fe prtutiog of third party, when a ‘condition in a policy is ‘preached. by. the a toned in eo his liability under the policy. If any of the conditions eee tea taal ot ee eat ned in the policy are breached then ‘alone the insurer Se ee eee eae itt as a defence, even if the ‘insured has broken oY eiiatclpeta i ied a 8 700 0), the insurer is liable to satisfy the decree. in favour tothe owner Aswan was that ate Co Pessimal one of the conditions of a policy isst jnsared car onthe inburer’s order, pompeny will indemnify any driver who is driving ‘vith his permission, provided that such driver is n0 e insurer in his defence a ed in the consent DDI3? 67. AIR 1959 SC 1331. i 68. Srinivas Roadways v Saroj 97! jonal Insurance Co. Nathibhal $ v Saroja AIR bhai padi 1975 Mad 126; National Insw Nathibhai' Chatwura 69, AIR 1966 M: iad 244: Machineni Kondic 70. AIR 1971 Mad 347, Mechta ti Kondiah v Yaseen Fathima 1986 ACJ \(FB). 71. BIG Insuran Tea cay naae Co bar Sigg AIR 1959 $C1331s Banat Rusthinjiy Horan ; Banani Rusthuinjiv Tbrahimn Vali Master AIR } ws ne il Third Party or Compulsory Insurance of Motor Vehicles entitled:to indemnity under an and when he was driving Asem pute Policy.’ Pessimal owned a car which was insured swani’s insurer contended that as Pessimal w. : t was held that the insurer bcs ‘as covered by his own policy they are not liable. It Duty to Inform Third Party Section 151 of the Motor Vehicles Act imposes statutory duty on the persons against whom a claim is made in respect of any liability referred to in $147(1)(0) fo give the third party the necessary information as to theit instsenes, The above deals with claims before courts. EFFECT OF INSOLVENCY OR DEATH ON CLAIMS Insolvency Section 154 protects the rights of the third party against insolvency of the assured. The broad effect of that section is that all rights and liabilities arising between the insured and the insurers in the case of compulsory motor insurance shall remain unaffected, totwithstanding that a third party has been given larger rights against the insurers than the assured himself had. In this context ss 150-53 also may be read all of which are ‘tended for the above purpose. Section 150 creates a statutory provision that the rights of the third party against the insurers are not affected on insolvency of the insured.” Death of Parties Tre general principle of actio personalis moritur cum persona does’ not apply’ to piew under this Act. Section 102 provides that notwithstanding anything contained in el 7 Indian Succession Act 1925, the death of a person in whose favour'a is given . asurance had been issued, if it occurs after the happening of an event which 5 ‘o @ claim under the provisions of this chapter, shall not be a bar to the vival ert hi shall ni i froma Re Cause of action arising out of the said event against his estate or against “rom this the following rules may be laid down: wh 1 lere the ows ‘otor vehicles dies in the accident and the injured third se the ove of the m eased vt injured third party can make his claim against the estate of the died before the accident; . Owner unless he ) Whe ; te the third Party dies as a result © a claim for th of the accident his-legal representative can © Compensation before the appropriate tribunal; 1) (Si"s4rance ¢, 12 (Supp) 369°) 234 Mace 1979] 2 Lloyd's Rep 193 ° oes Na os Rep 13 tev “er Sunder 1975 ACS 100, 261 tnt — Fi f insur svete both the owner of the motor vehicle and third party aii the aéciden, cert ror in respect o the estate of the deceased owner of the motor vehicle will be liable to the estate th wurchaser With the of the dead third party. Y Ioana the Per for such transf party is not dead in the accident, he can himself make the claim ine peen transferred (ii) the third. ey sinin ‘ix months of the accident, in such a case it does not matter whether the have Mey and the cert rotor vehicle owner is alive or dead in the accident. J ae poli ard ‘Where the insurance is running, death of the insured after an accident does not relive th (a) the previous cc insurer” The effect of death of the transferor is discussed in a few cases.” It may be (i) asa drive vinad here that where the death of the third party is deliberately caused by the motr fi) as a holde Vehicle owner or driver it is not an accident. The liability to the third party under the i - Foi aes only if there isan accident, The word accident means an unlooked for and (b) any condition tinanticipated event, eg, if a pedestrian is chased and knocked down by a motor vehicle i by the applica wll not be an accident although it, may. amount to a'crime of manslaughter. Similarly (©) _ the relation of where the third party deliberately, with an intention to commit suicide, throws himself insurance in ré under a motor vehicle, then also there is no accident. The tribunal refuses compensation If the insurer refused t tosucha party whether he is alive or dead. Te ander the terms Certificate of Insurance unexpired term of such Cancellation or Susper suspended by the inst suspension to the regist I is defined as a certificate issiied by an authorised insurer in pursuiance’of sub-s 4 of 95, and includes a cover note complying with such requirements as may be prescribed and ‘where more than one certificate has been issued, in connection with a policy, or wheres nsig copy of a certificate has been issued, all those certificates or that copy, as the case may be.” prescribe.” Whenever tl ‘A policy is of no effect for the purposes of the Act unless and until the insurer delivers a any means before its ex “certificate of insurance’ to the person by: whom the: policy is effected. This is’a very surrender, to-the insurer {niportant document as without it the owner is unable to obtain a licence for his vehicle. temination Or. suspensi a ri affidavit to that effect.*” ’ Effet of the Certificate with fine of Rs 15 for eve Even though the policy isnot issued but a certificate of insurance has been issued by be | Producti i | insurer, the insurer will still be liable as there is a policy on the same terms as given inthe on of Certificat | certificate.” If the insurer has issued to the insured a policy described in the cetificat, The certificate m but the actual terms of the policy are less favourable to the person claiming under obj aX ona mort be Virtue of the policy against the insurer either directly or through the insured, than te | — UMless the ogee OF Vehic! Particulars ofthe policy as stated in the certificate, the policy shall, as between the inst Sectig,, nw ficate of in and the other person except the insured, be deemed to be in terms conforming inal | is gpc

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