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Motor Vehicles (Amendment) Act, 2022

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OVERVIEW

All facets of road transport vehicles are governed under the Motor Vehicles Act1, an Act of the Indian Parliament. The Act details the legislative requirements for driver and conductor license, vehicle registration, permit-based motor vehicle control, special provisions for state transportation undertakings, traffic law, insurance, liability, offenses, penalties, etc. The Central Motor Vehicles Rules2 was created in 1989 by the Indian government to implement the legislative provisions of the Act. The Motor Vehicle (Fifth Amendment) Act of 2022 implemented the most recent of the Act’s five amendments, which have been made since it went into effect in 1988.

Sections 50 to 57, including Section 93 of the Motor Vehicle (Amendment) Act, 2019 were notified by the Central Government. Insurance of motor vehicles against third-party risks, that were covered under Chapter IX of the Motor Vehicle Act, 1988 has been replaced by Section 51 to 57 of the Motor vehicle (Amendment) Act, 2019. Similar amendments have also been made regarding the filing of claims before the motor accident claims tribunal under sections 163, 166, 168, and 169 of the Motor Vehicles Act 1988. The second schedule of the Motor Vehicle Act, 1988 under Section 163A, which provided for the structural formula for non-fault basis compensation has also been omitted, by Section 93 of the Motor Vehicle (Amendment) Act, 2019.

AMENDMENTS MADE TO THE ACT

  • Omissions under Chapter X of the Motor Vehicle Act, 1988- Provisions of interim compensation, that came under no-fault liability, i.e., Sections 140 to 144, are omitted and no other interim compensation has been made available in the motor accident claims.
  • Replacement of Chapter XI- Insurance provisions for Motor Vehicles relating to third party risks, i.e., Sections 145 to 164, were replaced with new provisions as under Section 145 to 164D.

NEW PROVISIONS MADE UNDER THE REPLACEMENT OF CHAPTER XI

  • Section 149 (1) Designated Officer to be appointed by the Insurance firm within 10 days of an accident- A designated officer shall be appointed within 10 days upon receiving accident information by the insurance firm. The accident information shall be received through an Accident Information Report or by the claimant himself. All claims relating to any such accidents would be settled by the designated officer.
  • Section 149 (2) Insurance firm’s settlement offer- As per rules prescribed under the Central Motor Vehicles Rules, the Designated Officer is responsible for making a settlement offer on behalf of the insurance firm within 30 days.
  • Section 149 (3) (a) Award of Consent by Claims Tribunal- The Claims Tribunal will pass an award based on the recorded settlement, enforcing the insurance firm to make complete payment of the claim within 30 days of the recording of settlement, if the claimant accepts the offer made by the Designated Officer.
  • Section 149 (3) (b) Rejection of Settlement Offer by Claimant- The Claims Tribunal, shall amend the date of hearing, upon a rejection of the settlement offer by the claimant, and shall adjudicate the claims upon merits.
  • Section 150 – Satisfaction of Award or Judgement against persons insured under third party risks is the responsibility of the Insuring firm- Irrespective of the fact whether the insurer could avoid, cancel, or may have avoided and canceled the policy in the past, the insurance firm would still be responsible for the payment of the compensation. The insurance premium paid by cheques that were dishonored has become a strong defense for insurance firms, and they may claim that policy’s premium was not received by the firm. Under Section 185, driving under influence has also been added as a defense to be used by Insurance firms.
  • Section 156 – Insurance firm cannot refuse a claim after the death of the insured in an accident- Under this new provision, if an insured person dies in an accident, the insurance firm cannot withhold or refuse to give a Motor Accident Claim.
  • Section 158 (1) All documents relating to vehicle’s use shall be duly presented by the driver- All documents like the driver’s license, fitness certificate, insurance certificate, vehicle registration, and so on should be presented to the Police Officer by the driver of the vehicle.
  • Section 158 (2) All documents relating to the accident to be produced are the owner’s responsibility- All documents as mentioned above, if not presented by the vehicle’s driver, it is hence the owner’s responsibility to present documents to a police officer.
  • Section 159 – Accident Information Report to be filed at the Claims Tribunal within three months by the Police Officers- As per the new provisions, the responsibility to file the Accident Information Report within three months of the accident lies with the police officers.
  • Section 160 – Furnishing particulars of accidental vehicles to the claimants is the responsibility of the Police Officers and Registering Authority- Upon the payment of all fees prescribed, it is the duty of the Police Officers and Registering Authority to provide information about the accident to the claimant.
  • Section 161 – Increase in Hit and Run Compensation- According to the new provisions, the compensation for hit and run claims has been increased from INR 25,000/- to INR 2,00,000/- in cases of death of the claimant, and from INR 25,000/-to INR 50,000/- in cases of injury.
  • Section 162 – Golden Hour Scheme– Section 2 (12A) defines Golden Hour as the period of one hour after suffering a life-threatening injury during an accident, during which death is prevented by providing immediate medical care. This provision ensures that the Insurance firms provide cashless treatment of victims of road accidents during the Golden Hour period.
  • Section 164 – No-Fault Liability related compensations– Structured formula for no-fault liability compensation, which was provided under Section 163A in the second schedule of the Motor Vehicle Act, 1988, is omitted under Section 93 of the Motor Vehicle Act, 2019. The claimant of such compensations under section 164, cannot claim compensation under Section 166 of the Motor Vehicle Act. The monetary compensation for such claims stands at INR 5,00,000/- in case of claimant’s demise and INR 2,50,000/- in case of life-threatening injury, without proving the driver’s negligence.
  • Section 164 (A) Scheme-making powers to grant interim relief- The Central Government shall possess the power to make schemes to grant interim relief to claimants, under Section 164 (A).
  • Section 164 (B) Funds for Motor Vehicle Accidents- The central government has the power to form a separate fund for Motor Vehicle Accidents to facilitate mandatory insurance to cover all the roads in the country. The fund may be put in use to provide medical treatment for injured persons in a road accident and in the case of a hit and run the fund is used to reimburse the next of kin of the dead or to the person who suffered life-threatening injuries. The central government can pay compensations to persons out of this fund under Section 164 (B). Rules can be put in place to whom compensation can be paid under section 164 (C)(2)(W). The central government has the authority to decide the maximum amount of liability to be paid to a person under Section 164 (3)(D).
  • Section 164C – Rule Making Power of Central Government- The central government can put regulations in place to undertake the provisions of Chapter XI through Section 164C, including the form of Accident Information Report, submitting claims to the tribunal in which manner and time, regulations of making compensatory payments under Section 164(1). Through Section 164A (2), it can recover funds for the scheme and may credit the income source into the Fund for Motor Vehicle Accidents under Section 164B (1).
  • Section 166(3) Compensation making limitations- Through this provision, a six-month period of limitation has been introduced since the accident occurred, to apply for the filing of compensation. No period of limitation existed before this provision was introduced.
  • Section 166(5) After the demise of the injured, the legal representatives are permitted to continue the claim– The legal representatives of the diseased who was previously injured, are allowed to continue the claim after the demise of the injured, only if the death is related to or has some connection with the injury.
  • Section 173(2) If the award of claims is less than INR 1,00,000/ no appeals are permitted- Under this provision, if in a dispute the award of claims is less than INR 1,00,000/-, then there shall be no appeals permitted against the Claim Tribunal’s award as under Section 173(2).

CENTRAL MOTOR VEHICLES (FIFTH AMENDMENT) RULES, 2022

The Central Motor vehicles (Fifth Amendment) Rules, 2022 provide for procedures to investigate and adjudicate Motor Vehicle Claims. These rules came into force on 1st April, 2022 and regulated the timeframe to complete all investigations and adjudication within six months to one year. All the claimants shall receive their claims within one year of the accident due to this provision. Following are the rules that were formed by the Delhi High Court in the case of Rajesh Tyagi v. Jaibir Singh3 for the speedy settlement of motor vehicle accident claims-

  • Form – I i.e., the First Accident Report shall be filed at the Motor Accident Claim Tribunal by the Police Officers within 48 hours of the accident.
  • The victims should be made aware of their rights by the police officers within 10 days of the accident under Form II.
  • Within 30 days of the accident, the driver of the offending vehicle should submit driver’s Form III to the police officers.
  • Within 30 days of the accident, the driver owner of the offending vehicle should submit owner’s Form IV to the police officers.
  • Upon the verification of the owner and driver’s forms, the police officers must submit an Interim Accident Report to the Motor Vehicle Accident Claims Tribunal within 50 days of the accident.
  • Within 60 days of the accident, the victim must submit the victim’s form VI and VI(A) to the police.
  • Within 90 days from the accident, the police must submit the Detailed Accident Report Form VII to the Motor Vehicle Accident Claims Tribunal.
  • Within 30 days of the receipt of the Detailed Accident Report, the insurance firm shall verify the victim’s form VI and is then required to submit its findings and offer of settlement before the Motor Vehicle Accident Claims Tribunal.
  • The Claims Tribunal will pass a Consent Award within 6 months of the accident, if the insurance firm accepts the liability and submits a fair claim offer.
  • If the amount offered by the insurance firm is not fair and is not accepted by the claimant, the Claims Tribunal shall allow arguments from both sides with respect to the compensation quantum and pass an award within 9 months of the accident.
  • The Claims Tribunal shall conduct an inquiry that would be completed after 12 months of the accident if the Insurance firm disputed the liability.

CONCLUSION

Hence, with the new provisions in place we get to know that the central government has taken up the responsibility to ensure that the vehicles on the Indian roads are insured, and the centre may allocate funds to individuals for the reimbursement of damages suffered by victims of hit and run cases, using the Motor Vehicle Accident Fund. We can also see that steps have been taken to increase the compensatory amounts in case of injury and deaths, the reason behind which may be to facilitate the legal representatives and the next of kin in much better ways. We can also infer that in case of long-lasting disputes, the central government can provide interim relief to victims. Therefore, we can conclude by inferring that the new amendments that have been brought into place have been done so to better facilitate the motor vehicle damage claims, the results of which have started to be seen already.

CITATIONS

1. The Motor Vehicles Act 1988, available at https://legislative.gov.in/sites/default/files/A1988-59.pdf
2. Central Motor Vehicle Rules 1989, available at https://morth.nic.in/central-motor-vehicles-rules-1989-1
3. Rajesh Tyagi v. Jasbir Singh, IV (2010) ACC 859.

This article is written by Namay Khanna, is a 3rd year BBA LLB (Hons.) student at Symbiosis Law School, Pune.