Priyanka Singh

Published on: October 9, 2022 at 18:42 IST

A recent public interest litigation challenged a recent amendment in the Motor Vehicles Act, 1988, which removes the provisions of ‘No Fault Liability’.

The PIL filed before the Bombay High Court on Thursday added that the amendment introduces limitation on making claims, limits third party liability for insurance companies.

A divisional Bench of Chief Justice Dipankar Datta granted the Central Government time for filing a reply and posted the matter for November 28. 2022.

The petition was filed by the Bar Association of Motor Accident Claims Tribunal, Mumbai.

Advocate Yatin Malvankar, counsel for petitioner contended that the current amendment is a move without thought, and that the affected sections of the society have gone unconsidered.

As listed in the petition, only a few sections of the amended act were implemented from 2019, regarding to fines and punishments, keeping the rest stagnant. Nevertheless, the Government went on to implement all the provision from 01 April, 2022, thus compelling the petitioner to approach the court.

The petition highlights the complete deletion of Chapter X of the 1988 Act that provided for the interim liability and fixed the amount for compensation that the owner and insurer of the vehicle involved in the accident has to pay to the victim. Be it the driver at fault or the victim, the Chapter gave an immediate liability regardless.

The petition contends that the provision of ‘no fault liability’ (Section140/ s163A of 1988 Act) was introduced to grant immediate relief to the victims of accident, ensuring the insurance companies paid the compensation to the victim.

The removal of Chapter X removes all such remedies that were in the interest of the accident victims. The petition conclusively highlights that there leaves no option for the immediate relief to the victims of vehicular accidents.

No-Fault Liability and Impact of other Amendments in the 1988 Act –

Currently, Section164 of the amended act provides for the payment of Rs. 5 Lakhs in case of death and Rs. 2.5 Lakhs in case of grievous hurt to the victim by the owner or the insurer of the vehicle.

The petition submits the obstruction of the usage of Section 166 of the Act once a person has applied for compensation u/s 164, where a victim may be brainwashed into merely accepting a settlement whereas he might actually be in need of treatment.

The limitation period – the amendment imposes a limitation period of 6 months for filing a motor accident claim without providing any provision for condonation of delay. There are 3 months provided for the investigation and preparation of accident information report. Thus, 3 months out of the 6 months are spent waiting for the accident information report which makes a claim handicapped for filing.

The limitation period is contended by the petitioner to be arbitrary, forcing the victim to suffer the injuries due to the waiting period.

The petitioner submits that the purpose of enactment of the 1988 Act was to hold unlimited third-party liability for the insurance companies.

Whereas, in the amended version, if the insurance is made limited against the third parties the accident victim will have slim chances of gaining a just compensation u/s 166.

The amendment violates the fundamental rights of the citizens viz. Article 14, 19 and 21, by the IRDA working with the Centre.

The amended act omits the provision of ‘pay and recover’, that protected the victims in case of breach of insurance policy conditions by the owner of the vehicle, making it difficult to get compensation.

The petition further submits the error by addition of Section 2B is that it exempts particular types of vehicles with any alternative remedy in case of involvement of such vehicles in accidents.

The petitions concludes the plea by stating that the amended version obstructs expeditious help to victims if the act is implemented in this form, further praying to declare the amended Act 2019 as unconstitutional, hence quashing it.

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