Motor Vehicles Act : MACT Bar Association Challenges Removal Of No-Fault Liability, Introduction Of Limitation Period Etc; Bombay HC Seeks Centre's Response

A division bench led by Chief Justice Dipankar Datta on Thursday granted time to the Central government to file a reply to the petition filed by Bar Association of Motor Accident Claims Tribunal, Mumbai and posted the matter for November 28, 2022.

The petition, filed through Advocate Yatin Malvankar, challenges the amendments made by the Motor Vehicle Amendment Act, 2019 and rules claiming that it was passed without considering the affected sections of the society.

Only a few sections of the amended act with regards to the fine and punishments were implemented from 2019 and the rest of the provisions were kept in abeyance. According to the petition, this led the petitioner to believe that the government has considered the objections. However, the government implementedall the provisions from April 1, 2022. Thus, the petitioner approached the court.

Chapter X of the 1988 Act provided for interim liability and fixed the amount of compensation that the owner and insurer of the vehicle involved in the accident has to pay to the victim. It provided for immediate liability regardless of whether the driver was at fault or the victim. The 2019 Amendment has deleted Chapter X entirely.

The petition submits that the provision of no-fault liability was introduced to grant immediate relief to the accident victims and to ensure that insurance company pays compensation to the victim.

The removal of Chapter X from the 1988 Act is neither justified nor in the interest of accident victims, the petition states. The petition adds that this means there will not be any immediate relief to the victims of a vehicular accident.

The 1988 Act provided for no fault liability under either section 140 or under section 163A. The amended act contains no such provision, according to the petition.

Section 164 of the amended act provides that the owner of the vehicle or the insurer will have to pay Rs 5 lakh in case of death or Rs 2.5 lakh in case of grievous hurt to the victim.

The petition contends that if a person applies for compensation under section 164, he/she is barred from claiming compensation under section 166. Victim of an accident may be tempted to accept settlement under section 164 without realising that he may need for the treatment, the petition states. This puts a restriction on the victim's right to get a fair and just compensation, thus violating the right to life, according to the petition.

The amendment provides for imposition of limitation period of 6 months for filing motor accident claim without providing any provision for condonation of delay. Section 159 provides 3 months for the investigation and preparation of accident information report.

Thus, out of 6 months limitation period, 3 months are spent waiting for the accident information report without which a claim cannot be filed, according to the petition.

The limitation period is arbitrary as the victim may be suffering from injuries due to which he cannot file claim within 6 months, the petition contends.

The amendment in section 147 provides that Central Government in consultation with IRDA will prescribe base premium and liability of an insurer in relation to the premium for the insurance policy.

The petition contends that the very purpose of enactment of the 1988 Act was to create unlimited third-party liability for insurance companies.

If insurance is linked to premium and made limited against third parties, the accident victim will have a slim chance of recovering just and fair compensation under section 166, the petition submits.

By allowing the central government along with IRDA to fix the base limit of liability, the amended provision violates Articles 14, 19, and 21 of the Constitution, according to the petition.

The amended act omits the 'pay and recover' provision which protected victims in case of breach of insurance policy conditions by the owner of the vehicle. This will make it difficult for victims to get compensation as the entire compensation awarded by the tribunal shall be payable by the owner only in case of breach of insurance conditions, the petition claims.

The petition further states that the government should not have added section 2B to the Act which exempts certain types of vehicles without providing any alternative remedy for the victims if such vehicles are involved in an accident.

The petition concludes by contending that expeditious help to victims is impossible if the amended act is implemented as it is.

The petition prays that the court declare the Motor Vehicles Amendment Act 2019 as unconstitutional and quash the amendment.

Case no. – Public Interest Litigation (L) No. 22297 of 2022

Case title – Bar Association of MACT, Mumbai v. Union of India and Ors.