Section 145.Definitions.

What is an "authorised insurer" as defined in Section 145(a) of the Motor Vehicles Act?

An "authorised insurer" refers to an insurer that is currently engaged in general insurance business in India and holds a certificate of registration issued by the Insurance Regulatory and Development Authority of India (IRDAI). It also includes any government insurance fund authorized to conduct general insurance business under the General Insurance Business (Nationalisation) Act, 1972.

What does "certificate of insurance" mean under Section 145(b) of the Motor Vehicles Act?

A "certificate of insurance" is a document issued by an authorised insurer in compliance with Section 147 of the Motor Vehicles Act. It encompasses a cover note that meets the prescribed requirements. If multiple certificates are issued under a policy or if a copy of a certificate is issued, all such certificates or copies are considered part of the "certificate of insurance."

How is "grievous hurt" defined in Section 145(c) of the Motor Vehicles Act?

"Grievous hurt" in the context of the Motor Vehicles Act carries the same meaning as defined in Section 320 of the Indian Penal Code (IPC), which specifies severe injuries including but not limited to those endangering life, causing permanent disfigurement, or impairing the use of a limb or sense.

What constitutes a "hit and run motor accident" as per Section 145(d) of the Motor Vehicles Act?

A "hit and run motor accident" refers to an accident arising from the use of a motor vehicle where the identity of the vehicle(s) involved cannot be determined despite reasonable efforts to ascertain it.

What is meant by a "reciprocating country" under Section 145(h) of the Motor Vehicles Act?

A "reciprocating country" is a nation that has been notified by the Central Government in the Official Gazette as such based on reciprocal agreements. This designation is relevant for implementing provisions related to the Motor Vehicles Act.

Who does the term "third party" include according to Section 145(i) of the Motor Vehicles Act?

The term "third party" encompasses various entities including the government, the driver of a vehicle, and any other co-worker involved in the operation of a transport vehicle under the Motor Vehicles Act.

What is Section 146 of the Motor Vehicles Act about?

Section 146 of the Motor Vehicles Act mandates that no person shall use a motor vehicle in a public place unless there is a valid insurance policy in force that covers third-party risks. This requirement ensures that in case of any accident involving the motor vehicle, compensation can be provided to affected third parties for injury or damage caused. The section also specifies that vehicles carrying dangerous or hazardous goods must have an additional insurance policy under the Public Liability Insurance Act, 1991. Government-owned vehicles not used for commercial purposes may be exempted from this requirement, subject to certain conditions and establishment of a prescribed fund by the respective authority.

What are the requirements of insurance policies under Section 147 of the Motor Vehicles Act?

Section 147 mandates that every motor vehicle used in a public place must be covered by a valid insurance policy issued by an authorised insurer. The policy must cover the following liabilities:

• 1. Third-party liabilities: This includes liability for death or bodily injury to any person, including the owner of goods, caused by the use of the motor vehicle.
• 2. Property damage: It covers damage to any property of a third party resulting from the use of the motor vehicle.

Additionally, the policy must insure against death or bodily injury to passengers (excluding gratuitous passengers in goods vehicles) caused by the motor vehicle's use in a public place.

Explanation: It clarifies that even if the person injured or the property damaged was not in a public place during the accident, if the incident leading to the accident occurred in a public place, it falls under the insurance coverage.

What is the validity of insurance policies issued in reciprocating countries under Section 148 of the Motor Vehicles Act?

Under Section 148, if there is an arrangement between India and any reciprocating country, and a motor vehicle registered in that reciprocating country operates on a route or within an area common to both countries, the insurance policy issued in the reciprocating country will be considered valid in India. This policy must comply with the insurance requirements of the reciprocating country. This provision allows the insurance policy to be effective throughout the route or area specified in the arrangement, as if it meets the insurance requirements specified in the Indian Motor Vehicles Act.

Explanation: This section facilitates international motor vehicle operations by recognizing insurance policies from reciprocating countries, ensuring that vehicles covered under such policies can operate in specified routes or areas in India without requiring an additional Indian insurance policy.

What is Section 149 of the Motor Vehicles Act about?

Section 149 outlines the procedure for settlement of claims by insurance companies related to motor vehicle accidents. Upon receiving information about an accident, the insurance company must designate an officer to handle claims arising from that accident.

What responsibilities does the designated officer have under Section 149?

The designated officer is responsible for processing the settlement of compensation claims. Within thirty days of receiving information about the accident, the officer must make an offer for settlement to the claimant before the Motor Accident Claims Tribunal. This offer must include specific details and follow procedures prescribed by the Central Government.

What happens if the claimant accepts the settlement offer under Section 149?

If the claimant accepts the offer:

• 1. The Claims Tribunal will record the settlement, which is then deemed to be settled by consent.
• 2. The insurance company must make the payment within thirty days from the date of receiving the settlement record.

What if the claimant rejects the settlement offer according to Section 149?

If the claimant rejects the offer, the Claims Tribunal will schedule a hearing to adjudicate the claim on its merits.

Explanation: Section 149 ensures a structured process for insurance companies to settle claims efficiently and fairly. It mandates timely actions from the insurance company upon receiving accident information and outlines clear steps for both accepting and rejecting settlement offers before the Claims Tribunal.

What does Section 150 of the Motor Vehicles Act specify?

Section 150 outlines the obligations of insurers when a judgment or award is obtained against a person insured under a motor vehicle insurance policy for third-party liabilities.

What is the primary obligation of the insurer according to Section 150?

The insurer must satisfy the judgment or award obtained against the insured person, provided the liability falls within the coverage specified in the insurance policy.

Under what circumstances can an insurer avoid paying a judgment or award?

An insurer can avoid paying if:

• 1. There has been a breach of a specified condition of the insurance policy (such as exclusions for certain uses of the vehicle).
• 2. The policy was obtained through non-disclosure of material facts or false representations.
• 3. There is non-receipt of premium as required under the Insurance Act, 1938.

What happens if a judgment or award is obtained in a reciprocating country?

If a judgment or award is obtained in a reciprocating country and is conclusive under the Code of Civil Procedure, the insurer registered under the Insurance Act, 1938, is liable to satisfy it to the extent specified in Section 150(1), similar to judgments from Indian courts.

Explanation: Section 150 ensures that insurers fulfill their obligations promptly when a judgment or award is issued against a person insured under a motor vehicle insurance policy. It also clarifies the grounds on which an insurer can contest liability and outlines procedures for handling claims from reciprocating countries.

What rights do third parties have against insurers under Section 151 of the Motor Vehicles Act?

Third parties have rights against insurers if the insured person becomes insolvent, enters into a composition or arrangement with creditors, or if the insured person is a company and undergoes winding-up proceedings. In such cases, the rights of the insured person against the insurer in respect of liabilities covered by the insurance policy are transferred to and vest in the third party to whom the liability was incurred.

Under what circumstances are these rights transferred to the third party?

These rights are transferred:

• 1. If the insured person becomes insolvent or enters into a composition or arrangement with creditors.
• 2. In the case of a company, if a winding-up order is made, a voluntary winding-up resolution is passed, a receiver or manager is appointed, or possession is taken by debenture holders.

What happens to the rights of the insured person against the insurer in such cases?

Upon transfer, the insurer becomes liable to the third party to the same extent as it would have been to the insured person. However:

• 1. If the insurer's liability to the insured person exceeds its liability to the third party, the insured person retains rights against the insurer for the excess amount.
• 2. If the insurer's liability to the insured person is less than its liability to the third party, the third party retains rights against the insured person for the balance amount.

Explanation: Section 151 ensures that third parties who incur liabilities due to the insured person's actions are protected even if the insured person becomes insolvent or is involved in winding-up proceedings. It prohibits any policy condition that attempts to avoid or alter these rights upon the insured person's insolvency. This provision aims to secure the compensation due to third parties under motor vehicle insurance policies despite financial difficulties faced by the insured.

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