CHAPTER IX
INSURANCE OF MOTOR VEHICLES AGAINST THIRD PARTY RISKS
148.
Validity of policies of insurance issued in reciprocating countries,- Where,
in pursuance of an agreement between India and any reciprocating country, any
motor vehicle registered in the reciprocating country operated on any route or within
the area common to the two countries and there is in force in relation to the use
of the vehicle in the reciprocating country a policy of insurance complying to the
requirements of the law of insurance in force in that country, then not
withstanding anything contained in section 147, but subject to the rules which
may be made under section 164, such policy insurance shall be effective throughout
the route or area in respect of which, the arrangement has been made as if the policy
of insurance has complied with the requirements of this chapter.
149. Duty of insurers to satisfy judgments and awards against persons insured
in respect of third party risks,- (1) If, after a certificate of insurance
has been issued under sub-section (3) of section 147 in favor of the person by
whom a policy has been effected, judgment or award in respect of any such liability as
is required to be covered by a policy under clause (b) of sub-section (1) of section 147 ( being a liability covered by
the terms of the policy) or under the provisions of section 163 A is obtained
against any person insured by the policy, then, notwithstanding that the insurer
may be entitled to avoid or cancel or may have avoided or cancelled the policy,
the insurer shall subject to the provisions of this section, pay to the person
entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were
the judgment debtor, in respect of the liability, together with any amount
payable in respect of costs and any sum payable in respect of the interest on
that sum by virtue if any enactment
relating to interest on judgments.
(2) No sum shall be payable by an insurer
under sub-section (1) in respect of any judgment or award unless, before the
commencement of the proceedings in which the judgment or award is given the
insurance has notice through the court or, as the case may be, the Claims Tribunal
of the bringing of the proceedings, or in respect of such judgment or award so
long as the execution is stayed thereon pending an appeal, and an insurer to
him notice of the bringing of any such proceedings is so given shall be entitled
to made a party thereto and to defend the action on any of the following
grounds namely,-
(a) that
there has been a breach of a specified condition of the policy, being one of
the following conditions namely,-
(i)
a condition excluding the use of the vehicle-
(a) for
hire or reward, where the vehicle is on the date of the contract of the insurance
a vehicle not covered by a permit to ply for hire or reward, or
(b) for
organized racing or speed testing, or
(c) for
a purpose not allowed by the permit under which the vehicle is used, where the vehicle
is a transport vehicle, or
(d) without
side-car being attached where the vehicle is a motor cycle; or
(ii)
a
condition excluding driving by a named
person or persons or any persons who is not duly licensed, or by any person who
has been disqualified for holding or obtaining a driving license during the
period of disqualification; or
(iii)
in a condition excluding liability for injury
caused or contributed by conditions of war, civil war, or riot or civil
commotion; or
(b) A
policy is void on the ground that it was obtained by the non-disclosure of a
material fact or by a representation of a fact which was false in some material
particular.
(3) Where any judgment as is
referred in sub-section (1) in obtained from a Court in a reciprocating
country and in the case of a foreign judgment is, by virtue of the provisions of section 13 of the Code of
Civil Procedure, 1908 (5 of 1908) conclusive of any matter adjudicated upon by
it, the insurer ( being an insurer registered under the Insurance Act, 1938 (5 of
1938) and whether or not registered under the corresponding law of the reciprocating
country shall be liable to the person entitled to the benefit of the decree in
the matter and to the extent specified in sub-section (1) as if the judgment
were given by a court of India.
Provided that no sum shall be payable by the insurer in respect of any
such judgment unless, before the commencement of the proceedings in which the judgment
is given, the insurer had notice through the Court concerned of the brining of the
proceedings and the insurer to him
notice so given is entitled under the corresponding law of the reciprocating
country, to be made a party to the proceedings and to defend the action of
grounds similar to those specified in sub-section (2).
(4) Where a certificate of
insurance has been issued under sub section (3) of section 147 to the person by
whom a policy has been affected, so much of the policy as it purports to
restrict the insurance of the person insured thereby by reference to any conditions
other than those in clause (b) of sub-section (2) shall, as respects such
liabilities as are required to be covered by a policy under clause (b) of
sub-section (1) of section 147, be of no effect:
Provided that any sum paid by the
insurer in or towards the discharge of any liability of any person, which is
covered by the policy by virtue, only of this sub-section shall be recoverable
by the insurer from that person.
(6) In respect of the expression ‘material
fact’ and material particular’, means irrespective of a fact or a particular of
such a nature so as to influence the judgment of a prudent insurer in determining
whether he will take the risk and, if so at what premium and on what conditions
and the expression ‘liability covered by the terms of the policy’ means a liability which is covered by the policy
or which would be so covered but for the
fact that the insurer is entitled to avoid or cancel or has cancelled or
avoided the policy.
(7) No insurer to him the notice
referred to in sub-section (2) or sub-section (3) has been given shall be
entitled to avoid his liability to any person entitled to the benefit of any
such judgment or award as is referred to in sub-section (1) or in such judgment
as is referred to sub-section (3) otherwise than in the manner provided for in
sub-section (2) or in the corresponding law of the reciprocating country, as the
case may be.
Explanation:- For the purpose
of this section, “Claims Tribunal” means a Claims Tribunal constituted under
section 165 and ‘award’ means an award made by the Tribunal under section 168.
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