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Insurance Article

Motor Vehicle Act (Amendment) Bill 2017 To Come Up In Winter Session Of Parliament

December 15 2017

After the Gujarat elections, all eyes are now on the Winter Session of Parliament. The Motor Vehicle Act (Amendment) Bill 2017 will come up for passage in the Rajya Sabha. Lok Sabha already passed the Bill in April of this year, with modification to 68 sections and addition of 28 new ones.

The Bill if passed by the Rajya Sabha will lead to a 10% annual increase in penalties for violation of traffic rules, mandatory guidelines for cab aggregators, hefty penalties on vehicle companies for manufacture of faulty vehicles and removal of cap on liability for third party insurance. The Bill is hailed as an important step in road safety, which is the worst in the world at 1.46 lakh deaths on a yearly basis.

The amendments related to insurance are removal of the ‘limited liability’ clause that limited the insurer’s liability in third party claim cases, to ₹10 lakh in case of death and ₹5 lakh in case of grievous injury. Secondly, there is a new section, which states that the application of compensation to the Claims Tribunal with regards to road accidents should have a time limit of six months.

This is being changed from the current format that does not specify a time limit. Moreover, there is also a provision that does not give the authority to the Claims Tribunal to entertain late applications on any ground.

Apart from insurance, there are hefty revisions on penalties as well to deter offenders, and promote safety on roads. Notable provisions are: increase of drunk driving fine to ₹10,000 from ₹2,000; fine for rash driving to be increased from ₹1,000 to ₹5,000 and upping the fine of talking on phone and driving from ₹1,000 to ₹5,000.

Source: Economic Times

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