Mr. Bal Malkit Singh, the President of “All India Motor Transport Congress (AIMTC)” was interviewed by TruckStrategy.com where he addressed various Issues Affecting Road Transport Sector. In this section he discuss Proposed "Motor Vehicles Insurance and Compensation Act 2011"
The Ministry of Finance has initiated a Bill to separate motor insurance from the Motor Act, 1988 ("Act of 1988"). It has been proposed to amend the Act of 1988 by deleting Section(s) 140 to 173 of the Act of 1988 and enacting a special new act titled "Motor Vehicles Insurance and Compensation Act,2011" (hereinafter referred to as "New Act").oad Act.
In essence, the draft of the Bill put forth by the Ministry of Finance, proposes a cap of Rs. 10 lakhs on third-party compensation or on the liability arising out of death or body injury caused to a third party by any vehicle on road. Notwithstanding the same, the draft Bill proposes impounding of the vehicle involved in the accident by the police till the disposal of the claim petition.
In case, such an amendment is introduced and made effective, then in every case wherein a compensation in excess of Rs. 10,00,000/- (Rupees Ten Lakh only) is awarded to an accident victim by the Tribunal constituted under the Act of 1988, the insurance company would be liable to make payment of an amount upto Rupees Ten Lakh to the victim and any amount over and above Rupees Ten Lakhs shall be directly recoverable by the victim from the owner of the vehicle.If the amendment as proposed in terms of the aforesaid Section is introduced, then its repercussions on the owner of vehicles shall be far-fetched in as much as the balance amount of compensation shall be recoverable by the victim from the owner of the vehicle, who/which may not always be in a sound financial position, so as to satisfy the said award. In case the proposed amendments are carried out by the Government, it will mean not only the cost on insurance will go up drastically to the operators.The repercussions are far reaching and we have cited only few. In the interest of tourism in the country and financial growth it brings to every nook and corner of the country, we would request you to kindly support our cause when the bill is tabled in the Parliament.
In case, such an amendment is introduced and made effective, then in every case wherein a compensation in excess of Rs. 10,00,000/- (Rupees Ten Lakh only) is awarded to an accident victim by the Tribunal constituted under the Act of 1988, the insurance company would be liable to make payment of an amount upto Rupees Ten Lakh to the victim and any amount over and above Rupees Ten Lakhs shall be directly recoverable by the victim from the owner of the vehicle.If the amendment as proposed in terms of the aforesaid Section is introduced, then its repercussions on the owner of vehicles shall be far-fetched in as much as the balance amount of compensation shall be recoverable by the victim from the owner of the vehicle, who/which may not always be in a sound financial position, so as to satisfy the said award. In case the proposed amendments are carried out by the Government, it will mean not only the cost on insurance will go up drastically to the operators.The repercussions are far reaching and we have cited only few. In the interest of tourism in the country and financial growth it brings to every nook and corner of the country, we would request you to kindly support our cause when the bill is tabled in the Parliament.
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