PIL filed in Bombay HC challenges amendment to Motor Vehicle Act limiting third-party liability of insurance companies

Mumbai: The Bombay High Court has asked the Central government to reply to a PIL filed by Bar Association of the Motor Accident Claims Tribunal (MACT) challenging the constitutional validity of the Motor Vehicles (Amendment) Act, 2019 and the Rules which proposed to limit third-party liability of the insurance company. A division bench headed by Chief Justice Dipankar Datta, on Friday, asked the central government to file reply within two weeks. The plea by the Bar Association contends that the MV Act had introduced ‘no-fault liability’ in Indian jurisprudence and the Act ensured that compensation is paid by insurance company to the victim.

Govt adds new section of rules to Motor Vehicle Act 2019 to protect people who help accident victimsA “no fault liability” is that the amount is payable not because there was fault on the part of the driver of the vehicle, but because the vehicle was involved in the accident.  An amendment was introduced in the year 2011 which proposed to limit third-party liability of the insurance company. This would have severe adverse effect on the families of road accident victims, it said.

The plea seeks quashing of the amendment act. “The bills limiting liability of insurance companies and imposing limitation in filing the claims by the accident victims, as the same was about to bring a draconian effect over the families of road accident victims,” reads the PIL. The Bar Association said that it sent representations to authorities concerned raising concern about the bill.

No further steps were taken in the regard and the bill lapses. Another similar bill was passed in 2019 which became an Act despite opposition to the same. Due to opposition, the amended provisions of the 2019 Act were kept in abeyance for some time.

This gave the impression to the petitioner that their grievances were probably considered. However, in April this year, the entire act came to be implemented. Following which the Bar Association filed the PIL in the HC apprehending possible difficulties that could arise for litigants in future.

In the amendment, the provision related to the ‘no fault liability’ in certain cases was deleted. The provisions not only fixed the interim liability but also fixed the amount of compensation that a victim of a vehicular accident can expect from the owner and insurer of the offending vehicle. The amendment also replaced Section 163A whereby compensation was awarded without proof of negligence taking into consideration the low income of a person.

The amended Act also provides that no application for compensation would be entertained unless it is made within six months of the occurrence of this accident. This, the petitioner contended, will deprive poor victims of road accidents from claiming compensation under present MV Act. “Hence amended act is putting restriction on the right of the victim to get a fair and just compensation.

It will be a violation of right to life of the victims of the accident,” the plea stated. .