STOP INSURANCE INDUSTRY from absolving liability towards innocent road accident victims

STOP INSURANCE INDUSTRY from absolving liability towards innocent road accident victims

0 have signed. Let’s get to 200!
At 200 signatures, this petition is more likely to be featured in recommendations!
Udayachandran C P started this petition to Secretary, Supreme Court Legal Services Committee, ( and

The object of Motor (Automobile) third party insurance is to provide financial relief and support to the injured accident victim or the next of kin of the deceased.


In a country like India, this is vital, as 90% of the population do not have any sort of insurance either on their life or for emergency treatments. So, this piece of insurance should be looked more as a necessary protection extended to the mass, as part of social security.


The essence of the section 147 of the  Motor Vehicles Act is as follows:

The insurance policy should cover against any liability caused by or arising from the use of the vehicle in a public place “that may be incurred by the vehicle owner in respect of the death of or bodily injury (including any passenger in a public service vehicle) or damage to any property of a third party”


The intent is lucid and clear. The object is to offer unconditional protection for any injury or death caused by or arising out of the use of the vehicle in a public place. Put differently, if there is an accident in the public place in the course of using a motorised vehicle, the insurance policy is expected to own up and pay compensation to the victim. It is quite an open and shut case. The liability of the insurer is certain and set. 


Nevertheless, the insurance Companies have been given the benefit of a few grounds under Section 149 to deny liability, which are:

(1) Use of vehicle for hire and reward not permit to ply such vehicle. 

(2) For organising racing and speed testing; 

(3) Use of transport vehicle not allowed by permit. 

(4) Driver not holding valid driving license or have been disqualified for holding such license.

(5) Policy taken is void as the same is obtained by non-disclosure of material fact.


The insurance Companies have inserted matching conditions in the policy which indeed fits in with the MV ACT provisions. It may well be applicable and enforceable so far as the policyholder is concerned. But, how justified and relevant are these conditions in the matter of payment of compensation to a victim who is in no way connected to or accountable for the lapses and breaches?


Even as it is not disputed that the liability falling on the policyholder is what is covered and that the policyholder has to honour the conditions set in the Act, how do the innocent victims be denied the benefit of compensation for terms breached by the policyholder? 


The policy is counted on to protect the interests of the unfortunate third party victims whether or not the vehicle was running in compliance with the MV Act provisions. The protection afforded by the policy is essentially to take care of situations where the OWNER is incapable of fulfilling the financial obligations.


If for any reason, the MV Act provisions are not followed, it is for the law enforcing machinery to initiate  action and punish the guilty, namely, the policyholder and his/her associates and employees. Right now, the net effect is that the punishment is falling on to the victim of the accident who is no way responsible for the lapse.


There are lot of governmental machinery to check these violations. If violations happen despite efforts to check and control them, it is for the Government to see that the guilty are punished and the checking mechanism and frequency enhanced to reduce the violations and crime.


But the statutory violations cannot and should not hamper the victims of traffic accidents from getting compensation. It is not fair to allow the insurers to avoid liability on the ground that the MV act stipulations were not followed by the owner or the driver of the offending vehicle. The innocent traffic accident victim should not turn a victim of the law of the land as well.




Even the apex court of the land has observed in a case that “When there is a violation of terms and conditions of the policy, insurance company is held to be not liable, but insurance company has to pay the awarded compensation and recover the same from the insured by initiating the proceedings before the executing Court to protect and safeguard the interests of insurance company.


Even if there is any violation of terms and conditions of the policy, the Insurance company is under an obligation to satisfy the claim of third parties; since the liability of the Insurance Company during subsistence of the liability under the policy is statutory in nature and at best, the Insurance Company has to satisfy the compensation and recover the same from the insured.”


In a landmark judgement questioning denial of liability where the driver was under the influence of alcohol, the Supreme Court pointed out that the felony of driving under the influence of alcohol must not be undervalued. However, the tools required to deal with these felonies are in the field of education, in the legal field and in the framework of criminal law but not in the insurance law field. The very same logic applies to breaches in use or driver violations as well.


The position has to change to the Insurer accepting liability irrespective of MV ACT violations, and in all such cases, with the Insurer conferred special privileges to recover amount paid off as compensation, from the owner of the vehicle.  


I may place the earnest plea before all the Authorities concerned to reconsider an amendment to the MV ACT and its provisions matching with the proposed changes. In case it is not possible immediately, the request is to direct that the Insurance Regulator to propose changes in the TP policy format to make it evident that no insurer may go under the shelter of any of the prevailing defenses to avoid liability. Additionally, the Insurer may be given recourse for recovery proceedings as a parallel procedure to be undertaken, the moment the matter is known to the Insurance Company about lapses or violations of MV ACT provisos. The insurers have the wherewithal financially and otherwise to go after the delinquent insured and collect the amount paid as relief to the victims.


The submission in this petition is to invite the focused attention of all those pivotal agencies and Authorities in the larger interests of the innocent and hapless road accident victims who should not be subjected to merciless denial of financial relief on legal grounds of statutory breaches, which help only in promoting the violators as also serving the commercially oriented insurance behemoths who, in fact, would be the key beneficiaries of the status quo continuing.

0 have signed. Let’s get to 200!
At 200 signatures, this petition is more likely to be featured in recommendations!