Section 140 in The Motor Vehicles Act, 1988

140. Liability to pay compensation in certain cases on the principle of no fault.

(1) Where death or permanent disablement of any person has resulted from an
accident arising out of the use of a motor vehicle or motor vehicles, the owner of the
vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and
severally, be liable to pay compensation in respect of such death or disablement in
accordance with the provisions of this section.
(2) The amount of compensation which shall be payable under sub- section (1) in
respect of the death of any person shall be a fixed sum of twenty- five thousand
rupees and the amount of compensation payable under that sub- section in respect of
the permanent disablement of any person shall be a fixed sum of twelve thousand
rupees.
(3) In any claim for compensation under sub- section (1), the claimant shall not be
required to plead and establish that the death or permanent disablement in respect
of which the claim has been made was due to any wrongful act, neglect or default of
the owner or owners of the vehicle or vehicles concerned or of any other person.
(4) A claim for compensation under sub- section (1) shall not be defeated by reason
of any wrongful act, neglect or default of the person in respect of whose death or
permanent disablement the claim has been made nor shall the quantum of
compensation recoverable in respect of such death or permanent disablement be
reduced on the basis of the share of such person in the responsibility for such death
or permanent disablement.


Section 141 in The Motor Vehicles Act, 1988
141. Provisions as to other right to claim compensation for death or permanent
disablement.
(1) The right to claim compensation under section 140 in respect of death or
permanent disablement of any person shall be in addition to any other right
(hereafter in this section referred to as the right on the principle of fault) to claim
compensation in respect thereof under any other provision of this Act or of any other
law for the time being in force.
(2) A claim for compensation under section 140 in respect of death or permanent
disablement of any person shall be disposed of as expeditiously as possible and
where compensation is claimed in respect of such death or permanent disablement
under section 140 and also in pursuance of any right on the principle of fault, the
claim for compensation under section 140 shall be disposed of as aforesaid in the
first place.
(3) Notwithstanding anything contained in sub- section (1), where in respect of the
death or permanent disablement of any person, the person liable to pay
compensation under section 140 is also liable to pay compensation in accordance
with the right on the principle of fault, the person so liable shall pay the first-
mentioned compensation and--
(a) if the amount of the first- mentioned compensation is less than the amount of the
second- mentioned compensation, he shall be liable to pay (in addition to the first-
mentioned compensation) only so much of the second- mentioned compensation as
is equal to the amount by which it exceeds the first- mentioned compensation;
(b) if the amount of the first- mentioned compensation is equal to or more than the
amount of the second- mentioned compensation, he shall not be liable to pay the
second- mentioned compensation.


Section 142 in The Motor Vehicles Act, 1988
142. Permanent disablement. For the purposes of this Chapter, permanent
disablement of a person shall be deemed to have resulted from an accident of the
nature referred to in sub- section
(1) of section 140 if such person has suffered by reason of the accident, any injury or
injuries involving--
(a) permanent privation of the sight of either eye or the hearing of either ear, or
privation of any member or joint; or
(b) destruction or permanent impairing of the powers of any member or joint; or
(c) permanent disfiguration of the head or face.



Section 143 in The Motor Vehicles Act, 1988
143. Applicability of Chapter to certain claims under Act 8 of 1923 . The provisions of
this Chapter shall also apply in relation to any claim for compensation in respect of
death or permanent disablement of any person under the Workmen' s Compensation
Act, 1923 resulting from an accident of the nature referred to in sub- section
(1) of section 140 and for this purpose, the said provisions shall, with necessary
modifications, be deemed to form part of that Act.

Section 144 in The Motor Vehicles Act, 1988
144. Overriding effect. The provisions of this Chapter shall have effect
notwithstanding anything contained in any other provision of this Act or of any other
law for the time being in force. CHAP INSURANCE OF MOTOR VEHICLES
AGAINST THIRD PARTY RISKS CHAPTER XI INSURANCE OF MOTOR
VEHICLES AGAINST THIRD PARTY RISKS


Section 145 in The Motor Vehicles Act, 1988
145. Definitions. In this Chapter,-

(a) "authorised insurer" means an insurer for the time being carrying on general insurance
business in India under the General Insurance Business (Nationalisation) Act, 1972, and any
Government insurance fund authorised to do general insurance business under that Act;

(b) "certificate of insurance" means a certificate issued by an authorised insurer in pursuance of
sub-section (3) of section 147 and includes a cover note complying with such requirements as may
be prescribed, and where more than one certificate has been issued in connection with a policy, or
where a copy of a certificate has been issued, all those certificates or that copy, as the case may
be;

(c) "liability", wherever used in relation to the death of or bodily injury to any person, includes
liability in respect thereof under section 140;

(d) "policy of insurance" includes "certificate of insurance";

(e) "property" includes goods carried in the motor vehicle, roads, bridges, culverts, causeways,
trees, posts and mile-stones;

(f) "reciprocating country" means any such country as may on the basis of reciprocity be notified
by the Central Government in the Official Gazette to be a reciprocating country for the purposes of
this Chapter;

(g) "third party" includes the Government.



Section 146 in The Motor Vehicles Act, 1988
146. Necessity for insurance against third party risk.
(1) No person shall use, except as a passenger, or cause or allow any other person to
use, a motor vehicle in a public place, unless there is in force in relation to the use of
the vehicle by that person or that other person, as the case may be, a policy of
insurance complying with the requirements of this Chapter. Explanation.-- A person
driving a motor vehicle merely as a paid employee, while there is in force in relation
to the use of the vehicle no such policy as is required by this sub- section, shall not be
deemed to act in contravention of the sub- section unless he knows or has reason to
believe that there is no such policy in force.
(2) Sub- section (1) shall not apply to any vehicle owned by the Central Government
or a State Government and used for Government purposes unconnected with any
commercial enterprise.
(3) The appropriate Government may, by order, exempt from the operation of sub-
section (1) any vehicle owned by any of the following authorities, namely:--
(a) the Central Government or a State Government, if the vehicle is used for
Government purposes connected with any commercial enterprise;
(b) any local authority;
(c) any State transport undertaking: Provided that no such order shall be made in
relation to any such authority unless a fund has been established and is maintained
by that authority in accordance with the rules made in that behalf under this
Act for meeting any liability arising out of the use of any vehicle of that authority
which that authority or any person in its employment may incur to third parties.
Explanation.-- For the purposes of this sub- section," appropriate Government"
means the Central Government or a State Government, as the case may be, and--
(i) in relation to any corporation or company owned by the Central Government or
any State Government, means the Central Government or that State Government;
(ii) in relation to any corporation or company owned by the Central Government and
one or more State Governments, means the Central Government;
(iii) in relation to any other State transport undertaking or any local authority, means
that Government which has control over that undertaking or authority.

Section 147 in The Motor Vehicles Act, 1988
147. Requirements of policies and limits of liability.
(1) In order to comply with the requirements of this Chapter, a policy of insurance
must be a policy which--
(a) is issued by a person who is an authorised insurer; and
(b) insures the person or classes of persons specified in the policy to the extent
specified in sub- section (2)--
(i) against any liability which may be incurred by him in respect of the death of or
bodily injury to any person or damage to any property of a third party caused by or
arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle
caused by or arising out of the use of the vehicle in a public place: Provided that a
policy shall not be required--
(i) to cover liability in respect of the death, arising out of and in the course of his
employment, of the employee of a person insured by the policy or in respect of bodily
injury sustained by such an employee arising out of and in the course of his
employment other than a liability arising under the Workmen' s Compensation Act,
1923 , (8 of 1923 .) in respect of the death of, or bodily injury to, any such employee--
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle engaged as a conductor of the vehicle or in
examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or
(ii) to cover any contractual liability. Explanation.-- For the removal of doubts, it is
hereby declared that the death of or bodily injury to any person or damage to any
property of a third party shall be deemed to have been caused by or to have arisen
out of, the use of a vehicle in a public place notwithstanding that the person who is
dead or injured or the property which is damaged was not in a public place at the
time of the accident, if the act or omission which led to the accident occurred in a
public place.
(2) Subject to the proviso to sub- section (1), a policy of insurance referred to in sub-
section (1), shall cover any liability incurred in respect of any accident, up to the
following limits, namely:--
(a) save as provided in clause (b), the amount of liability incurred;
(b) in respect of damage to any property of a third party, a limit of rupees six
thousand: Provided that any policy of insurance issued with any limited liability and
in force, immediately before the commencement of this Act, shall continue to be
effective for a period of four months after such commencement or till the date of
expiry of such policy whichever is earlier.
(3) A policy shall be of no effect for the purposes of this Chapter unless and until
there is issued by the insurer in favour of the person by whom the policy is effected a
certificate of insurance in the prescribed form and containing the prescribed
particulars of any condition subject to which the policy is issued and of any other
prescribed matters; and different forms, particulars and matters may be prescribed
in different cases.
(4) Where a cover note issued by the insurer under the provisions of this Chapter or
the rules made thereunder is not followed by a policy of insurance within the
prescribed time, the insurer shall, within seven days of the expiry of the period of the
validity of the cover note, notify the fact to the registering authority in whose records
the vehicle to which the cover note relates has been registered or to such other
authority as the State Government may prescribe.
(5) Notwithstanding anything contained in any law for the time being in force, an
insurer issuing a policy of insurance under this section shall be liable to indemnify
the person or classes of persons specified in the policy in respect of any liability
which the policy purports to cover in the case of that person or those classes of
persons.

Section 163 in The Motor Vehicles Act, 1988
163. Scheme for payment of compensation in case of hit and run motor accidents.
(1) The Central Government may, by notification in the Official Gazette, make a
scheme specifying, the manner in which the scheme shall be administered by the
General Insurance Corporation, the form, manner and the time within which
applications for compensation may be made, the officers or authorities to whom such
applications may be made, the procedure to be followed by such officers or
authorities for considering and passing orders on such applications, and all other
matters connected with, or incidental to, the administration of the scheme and the
payment of compensation.
(2) A scheme made under sub- section (1) may provide that--
(a) a contravention of any provision thereof shall be punishable with imprisonment
for such term as may be specified but in no case exceeding three months, or with fine
which may extend to such amount as may be specified but in no case exceeding five
hundred rupees or with both;
(b) the powers, functions or duties conferred or imposed on any officer or authority
by such scheme may be delegated with the prior approval in writing of the Central
Government, by such officer or authority to any other officer or authority;
(c) any provision of such scheme may operate with retrospective effect from a date
not earlier than the date of establishment of the Solatium Fund under the Motor
Vehicles Act, 1939 , (4 of 1939 .) as it stood immediately before the commencement
of this Act: Provided that no such retrospective effect shall be given so as to
prejudicially affect the interests of any person who may be governed by such
provision.


Section 165 in The Motor Vehicles Act, 1988
165. Claims Tribunals.
(1) A State Government may, by notification in the Official Gazette, constitute one or
more Motor Accidents Claims Tribunals (hereafter in this Chapter referred to as
Claims Tribunal) for such area as may be specified in the notification for the purpose
of adjudicating upon claims for compensation in respect of accidents involving the
death of, or bodily injury to, persons arising out of the use of motor vehicles, or
damages to any property of a third party so arising, or both. Explanation.-- For the
removal of doubts, it is hereby declared that the expression" claims for compensation
in respect of accidents involving the death of or bodily injury to persons arising out of
the use of motor vehicles" includes claims for compensation under section 140.
(2) A Claims Tribunal shall consist of such number of members as the State
Government may think fit to appoint and where it consists of two or more members,
one of them shall be appointed as the Chairman thereof.
(3) A person shall not be qualified for appointment as a member of a Claims Tribunal
unless he--
(a) is, or has been, a Judge of a High Court, or
(b) is, or has been, a District Judge, or
(c) is qualified for appointment as a Judge of a High Court.
(4) Where two or more Claims Tribunals are constituted for any area, the State
Government, may by general or special order, regulate the distribution of business
among them.



Section 166 in The Motor Vehicles Act, 1988
166. Application for compensation.
(1) An application for compensation arising out of an accident of the nature specified
in sub- section (1) of section 165 may be made--
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all or any of the legal
representatives of the deceased; or
(d) by any agent duly authorised by the person injured or all or any of the legal
representatives of the deceased, as the case may be:
Provided that where all the legal representatives of the deceased have not joined in
any such application for compensation, the application shall be made on behalf of or
for the benefit of all the legal representatives of the deceased and the legal
representatives who have not so joined, shall be impleaded as respondents to the
application.
(2) Every application under sub- section (1) shall be made to the Claims Tribunal
having jurisdiction over the area in which the accident occurred, and shall be in such
form and shall contain such particulars as may be prescribed: Provided that where
any claim for compensation under section 140 is made in such application, the
application shall contain a separate statement to that effect immediately before the
signature of the applicant.
(3) No application for such compensation shall be entertained unless it is made
within six months of the occurrence of the accident: Provided that the Claims
Tribunal may entertain the application after the expiry of the said period of six
months but not later than twelve months, if it is satisfied that the applicant was
prevented by sufficient cause from making the application in time.
(4) Where a police officer has filed a copy of the report regarding an accident to a
Claims Tribunal under this Act, the Claims Tribunal may, if it thinks necessary so to
do, treat the report as if it were an application for compensation under this Act.



Section 167 in The Motor Vehicles Act, 1988
167. Option regarding claims for compensation in certain cases. Notwithstanding
anything contained in the Workmen' s Compensation Act, 1923 , (8 of 1923 .) where
the death of, or bodily injury to, any person gives rise to a claim for compensation
under this Act and also under the Workmen' s Compensation Act, 1923 , the person
entitled to compensation may without prejudice to the provisions of Chapter X claim
such compensation under either of those Acts but not under both.


Section 168 in The Motor Vehicles Act, 1988
168. Award of the Claims Tribunal.
(1) On receipt of an application for compensation made under section 166, the Claims
Tribunal shall, after giving notice of the application to the insurer and after giving the
parties (including the insurer) an opportunity of being heard, hold an inquiry into
the claim or, as the case may be, each of the claims and, subject to the provisions of
section 162 may make an award determining the amount of compensation which
appears to it to be just and specifying the person or persons to whom compensation
shall be paid and in making the award the Claims Tribunal shall specify the amount
which shall be paid by the insurer or owner or driver of the vehicle involved in the
accident or by all or any of them, as the case may be: Provided that where such
application makes a claim for compensation under section 140 in respect of the death
or permanent disablement of any person, such claim and any other claim (whether
made in such application or otherwise) for compensatin in respect of such death or
permanent disablement shall be disposed of in accordance with the provisions of
Chapter X.
(2) The Claims Tribunal shall arrange to deliver copies of the award to the parties
concerned expeditiously and in any case within a period of fifteen days from the date
of the award.
(3) When an award is made under this section, the person who is required to pay any
amount in terms of such award shall, within thirty days of the date of announcing the
award by the Claims Tribunal, deposit the entire amount awarded in such manner as
the Claims Tribunal may direct.


Section 171 in The Motor Vehicles Act, 1988
171. Award of interest where any claim is allowed. Where any Claims Tribunal allows
a claim for compensation made under this Act, such Tribunal may direct that in
addition to the amount of compensation simple interest shall also be paid at such
rate and from such date not earlier than the date of making the claim as it may
specify in this behalf.



Section 149 in The Motor Vehicles Act, 1988
149. Duty of insurers to satisfy judgments and awards against persons insured in
respect of third party risks.
(1) If, after a certificate of insurance has been issued under sub- section (3) of section
147 in favour of the person by whom a policy has been effected, judgment or award in
respect of any such liability as is required to be covered by a policy under clause (b)
of sub- section (1) of section 147 (being a liability covered by the terms of the policy)
is obtained against any person insured by the policy, then, notwithstanding that the
insurer may be entitled to avoid or cancel or may have avoided or cancelled the
policy, the insurer shall, subject to the provisions of this section, pay to the person
entitled to the benefit of the decree any sum not exceeding the sum assured payable
thereunder, as if he were the judgment debtor, in respect of the liability, together
with any amount payable in respect of costs and any sum payable in respect of
interest on that sum by virtue of any enactment relating to interest on judgments.
(2) No sum shall be payable by an insurer under sub- section (1) in respect of any
judgment or award unless, before the commencement of the proceedings in which
the judgment or award is given the insurer had notice through the Court or, as the
case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of
such judgment or award so long as execution is stayed thereon pending an appeal;
and an insurer to whom notice of the bringing of any such proceedings is so given
shall be entitled to be made a party thereto and to defend the action on any of the
following grounds, namely:--
(a) that there has been a breach of a specified condition of the policy, being one of the
following conditions, namely:--
(i) a condition excluding the use of the vehicle--
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a
vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where
the vehicle is a transport vehicle, or
(d) without side- car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person
who is not duly licensed, or by any person who has been disqualified for holding or
obtaining a driving licence during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions
of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the non- disclosure of
a material fact or by a representation of fact which was false in some material
particular.
(3) Where any such judgment as is referred to in sub- section (1) is obtained from a
Court in a reciprocating country and in the case of
a foreign judgment is, by virtue of the provisions of section 13 of the Code of Civil
Procedure, 1908 (5 of 1908 .) conclusive as to any matter adjudicated upon by it, the
insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938 .) and
whether or not he is registered under the corresponding law of the reciprocating
country) shall be liable to the person entitled to the benefit of the decree in the
manner and to the extent specified in sub- section (1), as if the judgment were given
by a Court in India: Provided that no sum shall be payable by the insurer in respect
of any such judgment unless, before the commencement of the proceedings in which
the judgment is given, the insurer had notice through the Court concerned of the
bringing of the proceedings and the insurer to whom notice is so given is entitled
under the corresponding law of the reciprocating country, to be made a party to the
proceedings and to defend the action on grounds similar to those specified in sub-
section (2).
(4) Where a certificate of insurance has been issued under sub- section (3) of section
147 to the person by whom a policy has been effected, so much of the policy as
purports to restrict the insurance of the persons insured thereby by reference to any
conditions other than those in clause (b) of sub- section (2) shall, as respects such
liabilities as are required to be covered by a policy under clause (b) of sub- section (1)
of section 147, be of no effect: Provided that any sum paid by the insurer in or
towards the discharge of any liability of any person which is covered by the policy by
virtue only of this sub- section shall be recoverable by the insurer from that person.
(5) If the amount which an insurer becomes liable under this section to pay in respect
of a liability incurred by a person insured by a policy exceeds the amount for which
the insurer would apart from the provisions of this section be liable under the policy
in respect of that liability, the insurer shall be entitled to recover the excess from that
person.
(6) In this section the expressions" material fact" and" material particular" means,
respectively a fact or particular of such a nature as to influence the judgment of a
prudent insurer in determining whether he will take the risk and, if so at what
premium and on what conditions and the expression" liability covered by the terms
of the policy" means a liability which is covered by the policy or which would be so
covered but for the fact that the insurer is entitled to avoid or cancel or has avoided
or cancelled the policy.
(7) No insurer to whom the notice referred to in sub- section (2) or sub- section (3)
has been given shall be entitled to avoid his liability to any person entitled to the
benefit of any such judgment or award as is referred to in sub- section (1) or in such
judgment as is referred to in sub- section (3) otherwise than in the manner provided
for in sub- section (2) or in the corresponding law of the reciprocating country, as the
case may be.
Explanation.-- For the purpose of this section," Claims Tribunal" means a Claims
Tribunal constituted under section 165 and" award" means an award made by that
Tribunal under section 168.




Central Government Act
Section 161 in The Motor Vehicles Act, 1988
161. Special provisions as to compensation in case of hit and run motor accident.
(1) For the purposes of this section, section 162 and section 163--
(a) " grievous hurt" shall have the same meaning as in the Indian Penal Code; (45 of
1860 .)
(b) " hit and run motor accident" means an accident arising out of the use of a motor
vehicle or motor vehicles the identity whereof cannot be ascertained in spite of
reasonable efforts for the purpose;
(c) " scheme" means the scheme framed under section 163.
(2) Notwithstanding anything contained in the General Insurance Business
(Nationalisation) Act, 1972 (57 of 1972 .) or any other law for the time being in force
or any instrument having the force of law, the General Insurance Corporation of
India formed under section 9 of the said Act and the insurance companies for the
time being carrying on general insurance business in India shall provide for paying in
accordance with
the provisions of this Act and the scheme, compensation in respect of the death of, or
grievous hurt to, persons resulting from hit and run motor accidents.
(3) Subject to the provisions of this Act and the scheme, there shall be paid as
compensation--
(a) in respect of the death of any person resulting from a hit and run motor accident,
a fixed sum of eight thousand and five hundred rupees;
(b) in respect of grievous hurt to any person resulting from a hit and run motor
accident, a fixed sum of two thousand rupees.
(4) The provisions of sub- section (1) of section 166 shall apply for the purpose of
making applications for compensation under this section as they apply for the
purpose of making applications for compensation referred to in that sub- section.