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'Not Feasible' : Madras High Court Withdraws Order Mandating Bumper To Bumper Insurance For New Vehicles

Aaratrika Bhaumik
14 Sep 2021 2:08 PM GMT
Not Feasible : Madras High Court Withdraws Order Mandating Bumper To Bumper Insurance For New Vehicles
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The Madras High Court on Monday modified its earlier order dated August 4 that had mandated bumper to bumper insurance for all new vehicles for a period of five years in order to safeguard the lives of passengers, drivers and vehicle owners.

The Court had passed the direction while setting aside the award by the Motor Accident Claims Tribunal (MACT) wherein a sum of Rs 14,65,800 was directed to be paid by the insurance company to the claimants who were relatives of the deceased, as compensation for his death in an accident.

Justice S Vaidyanathan observed that the previous order may not be 'may not be logistically and economically feasible for effective implementation in the present legal dispensation' as a result of which the earlier order was withdrawn.

Pursuant to the earlier order of the Court, the Joint Transport Commissioner, Chennai had issued a Circular dated August 31 to this effect. This circular was also thereby cancelled.

However, the Court urged the lawmakers to look into this aspect and accordingly bring about an amendment to the Act.

"This Court feels that the direction issued by this Court on 04.08.2021 in Paragraphs No.13 may not be conducive and suitable for implementation in the current situation. Therefore, the said direction in Paragraph No.13 is hereby withdrawn for the present. This Court hope and trust that law makers will look into this aspect and examine the need for suitable amendment in the Act, relating to wide coverage of vehicles so as to protect the innocent victims. In view of withdrawal of the direction regarding bumper to bumper policy, the Circular dated 31.08.2021 issued by the Joint Transport Commissioner, Chennai also stands cancelled.", the Court observed.

Advocate S Arunkumar, counsel for the General Insurance Council had moved the High Court seeking clarifications on the order passed last month. It was contended that the order mandating bumper to bumper coverage policy was not 'logistically and economically feasible' to implement and that such a direction would have unintended impact, causing severe repercussions on the society

"Therefore, the directions issued by this Court may be withdrawn in the interest of Policyholders, Automobile Industry and public at large," it was implored.

Further, it was brought to the notice of the Court that there was no requirement for compulsory directions to be issued in this matter as long-term third-party insurance cover had already been mandated by the Supreme Court in September 2018 and the Insurance Regulatory and Development Authority of India (IRDAI) had been periodically monitoring the scenario.

Advocate MB Raghavan appearing for the IRDAI submitted that it would consider better insurance coverage for all victims in consultation with IRDAI to safeguard the interest of innocent victims.

Taking into consideration the submissions of the parties, the Court directed,

"Registry is directed to remove Paragraph No.13 from the earlier order of this Court dated 04.08.2021 and issue a fresh copy of the order to the parties concerned"

Case Title: The New India Assurance Co Ltd v. K Parvathi

Click Here To Read/Download Order






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