Motor Vehicles Act - New Provisions On Third Party Insurance, Accident Claims To Come Into Effect From April 1, 2022

The Central Government has notified that Sections 50 to 57 and 93 of the Motor Vehicles (Amendment Act) 2019 will come into force with effect from April 1, 2022.A notification issued by the Ministry of Road Transport and Highways on February 25 stated :"In exercise of the powers conferred by sub-section (2) of section 1 of the Motor Vehicles (Amendment) Act, 2019 (32 of 2019), the Central Government hereby appoints the 1st day of April, 2022 as the date on which the following provisions of the said Act shall come into force"Sections 51 to 57 of the 2019 Amendment Act wholly replaced Chapter XI of the Motor Vehicles Act 1988 which dealt with insurance of motor vehicles against third party risks.These provisions also made substantial amendments to Sections 163, 166, 168 and 169 of the MV Act 1988 in relation to the filing of claims before Motor Accidents Claims Tribunal.Section 161 inserted to the 1988 Act via Section 50 of the 2019 Amendment Act, which provides for increased compensation in cases of hit and run, also gets operationalised with effect from April 1.Section 93 of the 2019 Act omits the second schedule of the 1988 Act which provided for structure formula for compensation on no-fault basis under Section 163A.Some of the major changes introduced by the 2019 amendment with respect to insurance and claims are :Enabling insurer to seek exoneration from liability for non-receipt of premium The amendment makes non-receipt of premium one of the specified conditions, which would enable the insurer to seek exoneration from the liability., by virtue of new provision Section 1502(c).Limited Liability in no-fault cases. The Amendment replaces Section 163A with Section 164. The structured formula system of payment of compensation envisaged by Section 163A of the earlier Act on the basis of Second Schedule is sought to be repealed. The Second Schedule is also sought to be taken away. This provision contemplates payment of rupees five lakhs in cases of death, and rupees two lakhs and fifty thousand in cases of grievous hurt. Newly added proviso in Section 165(1) states that acceptance of payment of compensation under Section 164 will result in lapse of claim petition. Therefore, the maximum amount a claimant can get on no-fault basis is Rupees 5 lakhs in case of death and rupees two and a half lakhs in cases of grievous hurt. Time-limit of six months for filing claim Sub-section(3) proposed to be added to Section 166 states that the claim petition has to be filed within six months of the date of accident. In the original Act passed in 1988, there was a similar provision. But the said provision fixing time limit was deleted as per 1994 amendment. Therefore, a claim could have been filed at any time, without any limitation. Now, that provision has been brought back. Survival of claim to the estate of claimant after his death As per the present law, a claim for personal injury would abate on the death of the claimant, and would not survive to his estate, due to the operation of Section 306 of the Indian Succession Act. The claim would survive to the estate only if death had nexus with the injuries, and only in such cases the legal heirs would be entitled to come on record and continue with the prosecution of the claim. The amendment remedies that situation, bv incorporation a new sub-section, Section 166(5), with a non-obstante clause which says that the right of a person to claim compensation for injury in an accident shall, upon the death of the person injured, survive to his legal representatives, irrespective of whether the cause of death is relatable to or had any nexus with the injury or not. Hit and Run Scheme The compensation payable for victims in 'hit and run' out of the scheme fund under Section 161 has been enhanced to Rs. 2 lakhs in case of death, and Rs. 50,000/- in case of bodily injury, from Rs.25,000/- and Rs.12,500/- respectively. Motor Vehicle Accident Fund The Bill seeks to introduce a Motor Vehicle Accident Fund under Section 164B, which is to be augmented by a special tax or cess. The Fund is to be utilized for giving immediate relief to victims of motor accidents, and also hit and run cases. The compensation paid out of the fund shall be deductible from the compensation which the victim may get in future from the Tribunal.Click here to read the notificationClick here to read MV Amendment Act 2019

Motor Vehicles Act - New Provisions On Third Party Insurance, Accident Claims To Come Into Effect From April 1, 2022

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