THE NECESSITY FOR INSURANCE AGAINST THIRD-PARTY RISK[1]

INTRODUCTION:

Insurance is a sort of agreement which exists among two parties, one ‘INSURER’ (who provides compensation to the victim party) & the other one is ‘INSURED’ who obtains the policy. Basically, the whole agreement is based upon the consideration. Consideration is the most important element of the contract, without consideration the contract becomes void, also there should be proper acceptance & on the due date, proper installment shall be paid from the Undertaking party which will lead to the continuation of the agreement. Precisely, we have enactment in our Indian Constitution which administers this particular area which is “Motor Vehicle act 1988”. The core idea behind this act is to ensure the safety of the citizens in terms of transportation. It’s obligatory to have third party insurance to ride a vehicle in the road according to the respective Motor Vehicle act 1988.

JUDICIAL VIEWPOINT FOR THE THIRD-PARTY INSURANCE:

According to Sec 146 of Motor Vehicle Act stated that “The obligation for indemnity against third party contingency”

“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.” [2]

The core reason for the Insurance is to avoid the abrupt or unexpected event which can be fall in the upcoming span of time, as according to the circumstances & conditions the insurance company becomes legitimately accountable to provide restitution to the concerned party who suffered the injuries.

In the Case of Unknown v Golla Dasari Nagaiah & Others[3], The Hon’ble High court held that “The motor vehicle taxation becomes leviable because of the plying of the object on the road; whether such a plying is on its own accord or through propulsion by another vehicle. The basis for a levy is mostly, the use of the road. The observations made therein cannot be treated as relevant in the facts of this case.”

It’s mandatory that the person should have the valid license in order to claim the compensation from the respective insurance company; if the concerned party is not having the valid license then he/she would not be in the position to claim for the compensation. The agreement of coverage is a particular deal between the insurer and the insured, the core reason is to reimburse the insured for loss originated due to the occurrence by the carrier, to a third party. The renters of individual carriers and passengers are not incorporated by the Amendment procedure. Nevertheless, to come under the ambit of insurance they need to pay the supplementary premium to the concerned company & if the further premium is not spent to incorporate the uncertainty of renters of the private vehicle and riders, the assurance corporation will not be accountable to recompense such sufferers. It has been observed that sometimes the rider of the vehicle belongs to the poor background, thus that person continues without satisfactory coverage. In order to fulfill all those gaps, the Government of India came up with the “Motor Vehicle Act, 1988”, according to which it is mandatory that every rider should have the valid insurance policy covering third-party risk in order to ride their vehicle in the road. The purview of the Third-party risk contains coverage for several types of injuries, harm to the assets of the man & the death of the person.

ADDITIONAL PROVISIONS ADMINISTERING THE SAME:

SECTION 157 OF MOTOR VEHICLE ACT 1988 ” CHANGE OF CERTIFICATION OF INSURANCE”

Whenever the owner of the vehicle sells his vehicle to any other party, then, in that case, it is mandatory to transfer the documents of the insurance into the new owner’s name including all the necessary data of that particular vehicle. Also, the main condition which has to be fulfilled in this section is that the transferee shall appeal within 14 workdays from the date of alteration in the designated pattern to the insurer for performing important moves in respect to the point of alteration in the certification of coverage.

If the certificate of insurance and the policy are not transferred, the insurer could not be made liable even though the vehicle is transferred. It is to be remembered that “an insurance policy is a personal contract between the parties for indemnifying the insured in case of an accident covered under the policy. If the vehicle is transferred by an insured to another person, the insurance policy lapses upon the transfer. In such a case the benefit of the policy is not available to the transferee, without an express agreement with the insurance company. When the insurance policy lapses it would not be available to cover the liability of the purchaser of the vehicle.

AS PER SECTION 151 OF MOTOR VEHICLE ACT 1988 WHICH SAYS THAT “PLEDGE TO GIVE ERUDITION AS TO INSURANCE“

The man presenting the application refuse to state whether or not he was registered in regard to that obligation by any plan declared beneath the provisions of this Chapter, or would have been so insured if the insurer had not dodged or removed the plan, neither shall he deny, it would be an obligation for the insured to provide all necessary details pertaining to policy with certification of insurance.

SECTION 148 OF MOTOR VEHICLES ACT 1988 SAYS THAT “DURATION OF PLANS OF INSURANCE ISSUED IN RECIPROCATING NATIONS“

Assuming a condition where India & other nation is merged in a contract, any machine vehicle recorded in the reciprocating nation works on any track or inside a region shared to the two nations and there is in force in connection to the use of the carrier in the reciprocating nation.

CONCLUSION:

Thus, it is crystal clear that our India laws are working well & basically it is very helpful & a must require law which safeguards the particular person from all kinds of uncertain events which can occur in due course of time, & if any event happens then insured pays the compensation as a part of judicial compulsion also it’s an obligatory rule to have third party insurance according to government. The requisite character of third-party security is legitimate as it presents the method further accessible for the wounded man to retrieve money from the insured. The respondent or fugitive cannot be released on the spot that he has become bankrupt. If he holds a carrier he obliged to refund to the damage directly or by his insurance organization.

[1] AUTHORED BY: MR. AVINASH PANDEY, B.B.A.LL.B, 2ND YEAR STUDENT AT IFIM LAW COLLEGE & RESEARCH WRITER AT LAW AUDIENCE: EDITED BY: MS. PRIYA KUSHWAH, B.A.LL.B, STUDENT AT NATIONAL UNIVERSITY OF STUDY AND RESEARCH IN LAW, RANCHI & ASSISTANT EDITOR AT LAW AUDIENCE.

[2]http://www.advocatekhoj.com/library/bareacts/motor/146.php?Title=Motor%20Vehicles%20Act,%201988&STitle=Necessity%20for%20insurance%20against%20third%20party%20risk(Last visited on 12/09/2018)

[3] Unknown v. Golla Dasari Nagaiah & Others 2014 HC 170 (India).