By- Ishan Singh
In modern times, the accidents caused by motor vehicles have considerably increased. Many innocent people die every day due to the rash and negligent driving of motor vehicles. In order to provide relief to the injured party, Parliament has enacted the Motor Vehicles Act. According to The Motor Vehicle Act, 1988, the insurance of motor vehicles is compulsory. The owner of each motor vehicle is bound to get insurance of his vehicle against the third party risk. The insurance company that provided the insurance gives compensation to the person suffering in the accident (third party) caused by the use of the motor vehicle. The person injured in the accident may recover compensation either from the owner, or driver, or from the insurance company, or from all of them jointly. The object of the compulsory insurance is to protect the interest of the injured party or the third party, who suffers from the use of the vehicle. Even if the driver or owner is not in a position to provide compensation, the insurer will pay compensation on behalf of the owner of the vehicle insured. This provision aims at giving relief to the person who would have suffered because of the inability of the owner or driver to pay compensation for his loss.
In the Injury Cases, it is the injured who claims the compensation. But in Death Cases, the question arises that “who can claim the compensation in place of the person who died ?” In that case, the legal heirs of the deceased can be the claimants. But the legal representative of a person who is himself guilty of rash and negligent driving, cannot claim the compensation.
The Extent of Statutory liability under Motor Vehicle Insurance
According to Section 146(1) of the Motor Vehicle Act, the owner of the vehicle is bound to ensure his vehicle against third-party risk. Section 146(1) states that “no person shall use or cause or allow any other person to use a motor vehicle in a public place (except as a passenger), 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 requirement of the Act.”
But there are exceptions to section 146(1) which are stated in sub-section 2 of section 146. The requirement of section 146(1) does not apply when the vehicle is owned by statutory authorities i.e. the Central Government or a State Government and when the vehicle is used for government purposes connected with any commercial enterprise. Section 146(2) Sub-section (2) of Section 146 provides that appropriate Government may, by order, exempt from the operation of third party insurance to any vehicle owned by any of the following authorities –
- The Central Government or a State Government if the vehicle is used for Government purposes connected with any commercial enterprise.
- Any local authority.
- Any State Transport undertaking within the meaning of Section 68-A.
Provided that no such orders 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 on 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.
Statutory Defenses are also available to the Insurance Company
The statutory defense must be available under the Act and must also be reserved in the policy; such defense should be reserved impliedly or explicitly. The defense must be pleaded and proved by the Insurance company. Issues with regard to such defenses must be framed. Defenses are available under Sections 147 and 149 of the Motor Vehicle Act.
The Extent of Vicarious Liability under Motor Vehicle Insurance
A person who gets his work done through another is liable for all the consequences of that act. In most cases, a man is liable for the wrongs committed by him. But in certain cases, a person is held liable for a wrong committed by another on behalf of him. The phrase “vicarious liability” means the liability of a person for the tort of another. For the vicarious liability of the owner for the actions of others such as driver etc., the reference can be made to New India Assurance Co Ltd. vs. Lachhmi Devi ; Pritam Chand vs H.R.T.C. , Union of India vs. Smt. Raj Rani and Jawahar Singh vs Bala Jain.
In New India Assurance Co Ltd. vs. Lachhmi Devi, The driver was not acting in the course of his employment when the accident occurred. Hence, the owner was not liable for the loss done by the driver to the third party. Consequently, the court did not find any substance in the plea of the appellant and rejected the appeal for compensation. All these appeals were dismissed by the court, however, leaving the parties to bear their own costs.
In Pritam Chand vs H.R.T.C., Pritam Singh who was the driver of jeep No. HIM 537 that was owned by the Himachal Road Transport Corporation had gone on an official duty with Kanshi RamVerma who was the Chief Inspector of the H.R.T.C.After the work has been done Kanshi Ram told Pritam Singh to take the vehicle to the bus stand and had it repaired in the morning but instead of that Pritam went to his home which was 25 km away from the bus stand. On the way he gave a lift to the appellant who was an employee at the H.R.T.C and on the way, they both met with an accident and Pritam Singh died and the appellant got injured and further he filed a claim petition for grant of compensation.
The fact that the driver had taken the vehicle unauthorisedly, did not help the case of the respondent, H.R.T.C. Because the driver was put in charge of the vehicle by the respondent. In view of the law, the owner is also liable for acts of the driver which he may have done unauthorisedly. Therefore, it was held that H.R.T.C was liable for the acts done by their employee.
Now the question arise that the claimant is entitled to how much compensation ?
Keeping in view of the factor that the claimant-appellant has suffered permanent disability to the extent of 25 % as per the disability certificate an amount of Rs. 30,000 was awarded to the claimant on account of pain and suffering as well as future loss, discomforts, and loss of amenities.
 1996 ACJ 496.
 2005(1) Sim LC 415.
 Latest HLJ 2006 (1) (HP) 585.
 (2011) 6 SCC 425.