Motor Vehicle Act, i988 CHAPTER IX INSURANCE OF MOTOR VEHICLES AGAINST THIRD PARTY RISKS sectopm 145 to 147 -

CHAPTER IX

INSURANCE OF MOTOR VEHICLES AGAINST THIRD PARTY RISKS

145. Defenitions,- In this Chapter,-

                (a) “authorized insurer” means an insurer for the time being carrying on general insurance business in India under the General Insurance Business(Nationalization) Act, 1972 ( 57 of 1972), and any Government insurance fund authorized to do general insurance business under that Act;

                (b) “certificate of insurance” means a certificate issued by an authorized insurer, in pursuance of sub-section (3) of section 174 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 where a copy of a certificate has been issued, all those certificates or that copy as the case may be;

© “liability” wherever used in relation to death of or bodily injury to any person, includes liability in respect thereof under section 140;

(d) “policy of insurance” includes certificate of insurance

                (e) “property” includes goods carried in the motor vehicle, roads, bridges, culverts, causeways, trees, posts and milestones;

                (f) “third party” includes the Government.

146. Necessity for insurance against third party risk,- (1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be,  a policy of insurance complying to the requirements of this chapter:

Provided that in the case of a vehicle carrying or meant to carry, dangerous or hazardous goods, there shall also be a policy of insurance under the Public Liability Insurance Act, 1991.

Explanation:- A person driving a motor vehicle merely as a paid employee, while there is in force in relation to the use of the vehicle  no such policy as is required by this sub-section, shall not be deemed to act in contravention of the sub-section unless he knows or has reason to believe  that there is no such policy in force.

  (2) Sub-section (1) shall not apply to any vehicle owned by Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise.

  (3) The appropriate Government may, by order, exempt from the operation of sub-clause (1) any vehicle owned by any of the following authorities, namely,-

                (a) the Central Government or a State Government, if the vehicle is used for Government purposes connected with any commercial enterprise:

                (b) any local authority;

                © any State transport undertaking;

                Provided that no such order shall be made in relation to any such authority unless a fund has been established and is maintained by that authority in accordance with the rules made in that behalf under this Act for meeting any liability arising out of the use of any vehicle of that authority which that authority or any person in its employment may incur in third parties.

                Explantaion:-For the purpose of this section, “appropriate Government” means the Central Government or a State Government, as the case may be, and,-

(a)    In relation to any corporation or company owned by the Central Government or any State Government means the Central Government or that State Government;

(b)   In relation to any corporation or company owned by the Central Government and one or more State Governments , means the Central Government”

(c)    In relation to any other State transport undertaking or any local authority, means that Government which has control over that undertaking or authority.

147. Requirements of policies and limits of liability, - (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-

                (a) is issued by  a person who is an authorized insurer; and

                (b) insures the person or classes or persons specified in the policy to the extent specified in sub-section (2);

                                (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorized representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;

                                (ii) against the death or bodily injury to any passenger of public service vehicle caused by or arising out of the use of the vehicle in a public place:

                                Provided that a policy may not be required-

(i)                  to convert the liability in respect of the death, arising out and in the course of his employment, of the employment of a person insured by the policy or in respect of bodily injuries sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen’s Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to , any such employee-

(a)    engaged in the driving of the vehicle, or

(b)   if it is a public service vehicle engaged as a conductor of the vehicle or in examining the tickets on the vehicle, or

(c)    if it is a goods carriage being carried in the vehicle, or

(i)                  to cover the contractual liability.

                Explanation:-For the removal of doubts, it is hereby declared that the death or bodily injury to any person or damages to any property of a third party shall be deemed to have been  caused by or arisen out of, the vehicle in a public place notwithstanding that the person who is dead or injured or the property which has been damaged was not in a public place at the time of the accident, if the act or omission which lead to the accident occurred in a public place.

  (2) Subject to the provisions of sub-section (2), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident,  up to the following limits, namely,-

                (a) save as provided in clause (b), the amount of liability incurred;

              (b) in respect of damage to any property of a third party, a limit of rupees six thousand:

                                Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.

  (3) A policy shall be of no effect for the purposes in this chapter, unless and until there is issued by the insurer in favor of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters, and different forms particulars and matters may be prescribed in different cases.

  (4)  Where a cover note issued by the insurer under the provision of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe.

  (5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.