The Motor Vehicle Act (Amendment), 2019 gives detailed legislative provisions regarding licensing of vehicles, registration, control of vehicles through permit, provisions related to state transport, insurance, traffic management and regulations, offences and penalties concerning motor vehicles on roads.

As the ever so development and technological advancements are happening in the automobile field and with that increase in the network of roads which simultaneously include complex transport and passengers routes, it is more than ever required that the Act is to constantly be kept amended so that we can keep up with all the changes and the challenges it poses. 

This Act also provides liabilities to be adhered to and considered. Mainly under this act, the liabilities which are of greater importance is no-fault liability and third party liability[1].



Initially, the compensation was only awarded on the principle of fault in the Motor Vehicle Act,1939. In the case of Zakaria and Ors. v Naoshir Cama Ors., there was a contention raised as to whether or not the liability can be imposed to pay compensation even when there weren’t any rash or negligent actions on part of the owners. The Supreme Court did not accept this. The Supreme Court was of the opinion that there can not be any liability imposed on the part of the owner and the driver of the vehicle when there was an absence of negligence on their behalf[2]. 

There was a need to address the loss of life, accidents and hit and run cases caused by motor vehicle accidents. 


In Manjushri v. B.L. Gupta, Justice Fazal Ali observed “The time is ripe for serious consideration of creating no-fault liability. Having regard to the directive principles of state policy, the plight of the ordinary run of victims of motor vehicle accidents, the compulsory nature of insurance of motor vehicles, nationalisation of general insurance companies and the expanding trend towards nationalisation of bus transport, the law of torts based on the principle of no-fault liability needs reform” [3].

Also, in India Insurance co. v. Nirmala, it was observed that – the jurisprudence of compensation for motor accidents must develop in the direction of the principle of no-fault liability[4].

As the result of subsequent developments of cases, the Supreme Court’s observation and law commission’s  recommendations, finally the Motor vehicle Act 1939 was amended and chapter X was introduced and under Section 95 no-fault liability was provided. Later, it was replaced by the Motor Vehicle Act,1988 in chapter X. The no-fault liability was aimed for the victims of hit and run cases and the victims of motor vehicle accidents.


Sections 140-144 of the Motor Vehicle Act covers the no-fault liability[5].

Section 140 talks about the liability to pay compensation in case of death or permanent disability. Further, under sec.140, subsection 2, the compensation to be paid in case of death is Rs. 50,000 and in case of permanent disablement of any person, Rs. 25,000 is to be paid[6].

According to the Section 142, the permanent disablement of a person will only be taken into account if such person has suffered permanent privation of the sight of any eye, or hearing of ears, the privation of any part of the body or joint, or the destruction or permanent impairment of the joints, or permanent disfiguration of head or face. 

It was provided that the claimant shall not be required to prove any fault of the owner of the vehicle or any other person for claiming compensation as mentioned in section 140. It means that the claimant shall not be required to plead and establish that there was any wrongful act, negligence or default was on the part of the owner(s) of the vehicle(s) concerned or of any other person while claiming compensation.

It should also be kept in mind that the claims for the compensation under section 140 shall neither be defeated by the reason of negligence or default of the accident victims nor shall the compensation payable be reduced on account of any such responsibility. Also, very importantly, the defence of contributory negligence is not allowed to be pleaded when the compensation under Section 140 is claimed. 


This doubt was cleared in the case of Manjit Singh v Ratan Singh. In this case, the court has held that the amended Section 142, w.e.f 14.11.1994, which raised  the compensation amount for no-fault liability from Rs. 25000 to Rs. 50000 is also applicable retrospectively. Resultant the amount payable as assessed by the tribunal to Rs. 30000 was raised by the High Court to Rs. 50000 in this case[7]. 

The word ‘accident’ is not defined in the Act, instead the expression ‘arising out of the use of a vehicle’ is used. This has greatly enlarged the scope of protection made available to the victims and is in consonance with the beneficial objects underlying the enactment. This has been vividly explained in the Shivaji Dayanu v. Vatschala Uttam More case[8].

It was ruled in this case  that a causal relationship need not be direct and proximate, it would also suffice even if it is less immediate. This interpretation of the above-mentioned phrase allowed the accessibility of this provision to a much larger group of victims. This interpretation and fact matrix which lead to this has since been followed in lots of cases.

This has been beneficial for the heirs of the deceased as it would have been difficult for them to prove the negligence on the part of the defendant and then claim compensation for the damages, otherwise.


Under the provisions of the Motor Vehicle Act,1988, it is mandatory that every vehicle in India should have a valid insurance cover to drive on the road. By ‘every vehicle’, it means any vehicle used for social, domestic, or for pleasure purposes and for other insurer’s business motor purpose should be insured. In Govindan v. New India Assurance Co. Lt., the court stated that the third party insurance is compulsory under the Motor Vehicle Act and should not be overridden by any clause in the policy [9].

Third-party insurance or third party liability cover is a statutory requirement under the Motor Vehicle Act. The first party in this is the insured and the second party is the insurer. It is referred to as the third party liability cover as the beneficiary of this insurance is not the insured, but the other person apart from these two. This insurance only covers the insured’s legal liabilities arising out of death or permanent disablement or disability of the third party, loss or damage to the third party’s property. 

It will only come in use when the insured has been sued or held legally liable for the loss, damage, or injuries done to the third party. 

Chapter XI of the Motor Vehicle Act, 1988 contains the provisions of the insurance of motor vehicles against third party risk. It is covered between Sections 145 to 164 of the Motor Vehicle Act. 


As per the Section 147(2) of the Motor Vehicle Act, policies are only bound to cover the liability in the respect of the accident up to the limit of the amount of liability incurred, and in case of damage to any property of the third party. It is explained in the case, Bhoopathy v. Vijayalakshmi [10], the Madras High court opined that no bar is to be imposed as to when the liability of the insurer ceases to exist. 


Under the liability of a third party, the third party is liable to payback. Consider an event, causing death or disability to a person or damage to property of a third party falling under the provisions of chapter XI of the Motor Vehicle Act, if the insurer has paid the third party excess amount than the amount in relation to which liability was incurred. Here in this scenario, the third party is liable to pay back that excess amount to the insurer or as the case may be to the insured. Further also, if the compensation has been already paid to legal heirs or person injured, such compensation amount will be refunded back to the insurer. 


This is a question which requires some pondering. If the vehicle is not insured as should have been under third party cover, even then the claimant has a right to claim compensation. But here, in this case, the responsibility will be fixed on the negligent driver or the owner of the vehicle. Such a person will have to pay the compensation to the victim out of his own pocket. This position is also maintained where a vehicle, belonging to the Central or State Government or a corporation is exempted from being insured under Section 146(2) and (3) of the Motor Vehicle Act,1988. And it is to be noted that exemption from the requirement of getting the vehicle insured does not imply exemption from liability to pay compensation. 


The law needs to keep pace with the charges happening in society. And in a country such as ours it is very important. The provisions related to the liabilities provided in the Motor Vehicles Act has been whenever necessary given due diligence. And it has tried to do justice to the disadvantaged. And to an impressive extent it has met its purpose. 


  1. The Motor Vehicle (Amendments) Act ,2019.
  2. Zakaria v. Naoshir Cama, AIR 1976 AP 171.
  3. Manjusri v. B.L Gupta, AIR 1977 SC 1158.
  4. India Insurance v. Nirmala, AIR 1979 SC 1666.
  5. The Motor Vehicle Act (Amendments), 2019.
  6. The Motor Vehicle Act (Amendment),2019, s.140.
  7. Manjit Singh v. Rattan Singh, AIR 1997 HP 21.
  8. Shivaji Dayanu v. Vatschala Uttam More, 1991 SCR (3) 26.
  9. Govindan v. New India Assurance Co Ltd, 1999 3 SCC 754.
  10. Bhoopathy v. Vijayalakshmi, ILR (1966) 2 MAD 65.


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