Motor Vehicles Insurance

Lucius while driving his car runs into another car which was parked. A passenger sitting inside the car got severely injured, leading to loss of eyesight. She wants to file a case against Lucius under the Motor Vehicles Act 1988 for compensation for the injuries suffered by her. What should she prove to get her compensation?

• That Lucius was negligent in driving.

• That Lucius had the intention to cause grievous hurt.

• That Lucius did not have his driving licence and was wrong in driving the vehicle.

• She need not prove wrongful act/ default/ neglect on part of Lucius.

Answer explanation

This is covered under S 140 of the Motor Vehicles Act, 1988. It's a case of no fault liability. The claimant need not prove any wrongful act/ neglect/ default on part of the owner of the vehicle.

In the above case, the aggrieved passenger finds out from Lucius's certificate of insurance as to who his insurer is and makes a claim against Lucius and his insurer both. The insurer then finds out about some misrepresentation about material facts made by Lucius. Accordingly, the insurer claims in court that they should not be made to pay the money to the third party as the policy in itself is one they are justified in avoiding. Assume that Lucius does not have enough money to pay compensation to the aggrieved. Will the claim by the insurer stand in court?

• Yes. The insurer is not bound to pay under a policy that is void.

• No. The insurer is bound to pay the aggrieved as if it were the judgment debtor.

• Yes. Otherwise the insurer will be at a loss.

Answer explanation

S 149 makes it the duty of the insurer to pay as if it were the judgment debtor.

In the above scenario, assume that Lucius had just contracted with the insurance company for a motor vehicles insurance covering third party risks. He has received a certificate of insurance accordingly. But the actual policy was not delivered to him at the time of the accident. Is the insurance company liable to pay the aggrieved person in this case?

• No. The insurance company's liability springs from the actual policy document which was not in existence then.

• No. The certificate of insurance cannot bind the insurance company.

• Yes. The certificate of insurance has the effect of binding the insurance company.

• Cannot say.

Elaine was on her usual evening walk routine when a speeding motorbike hit her and made her ram against a wall. The place was not well lit and did not have any CCTV cameras for the police to verify. Is there any remedy for compensation available to Elaine as per the Indian laws?

• Yes, but only after the police ascertains the identity of the culprit.

• No. Elaine should have known better than to take the risk of walking at a dimly lit place.

• Yes. She can file a claim for compensation u/ s 161 of the MV Act.

Answer explanation

Hit and run case.

In the earlier question, Elaine is awarded a compensation by the Claims Tribunal. She feels this is inadequate. Can she file an appeal?

• She can file an appeal in the District Court within 60 days of the award.

• She can file an appeal in the Motor Accidents Claims Appellate Tribunal within 60 days of the award.

• She can file an appeal in the High Court within 90 days of the award.

• There is no right to appeal from the MACT.

Answer explanation

s 173 of the MV Act

Which of the following statements is true about motor vehicles insurance covering third party risks?

• It is mandatory as per the Motor Vehicles Act 1988

• It is only recommended under the Motor Vehicles Act 1988.

• It is purely a matter of choice of the concerned individual.

• None of the above.

Answer explanation

Refer to ss. 125 and 146.

Kuttan is the driver of Appu. While Kuttan was driving to pick up Appu's friend and drop her at Appu's house, the police pulled him over and asked him to show the certificate of insurance. Kuttan is unable to find the certificate but finds out from talking to Appu on phone that the vehicle's insurance has not been renewed. Is Kuttan guilty of any offence?

• Yes. He drove an uninsured vehicle.

• No. He was merely paid to drive and had no reason to suspect that the vehicle was uninsured.

• None of the above.

Answer explanation

Explanation to S 146 of the MV Act says that a driver who is merely a paid employee shall not be deemed to be in contravention unless he knows or has reason to believe that there is no such policy in force.

Who among the following may not file a claim in the MACT in respect of compensation due to a motor accident?

• The injured person

• The owner of the vehicle that is damaged

• A duly authorised agent of the injured person

• None of the above.

Answer explanation

All the categories of persons in the options can file claims.

Who has to pay compensation in hit and run cases?

• The government

• No compensation

• General Insurance Corporation

Which of the following statements is true about liability over third party risks?

• It is extinguished by insolvency of the wrong party/ the insured.

• It is extinguished by death of the insured/ the wrong party.

• Neither.