MOTOR VEHICLE ACT, 1988 – 2

Where, in pursuance of an arrangement between India and any reciprocating country, any motor vehicle registered in the reciprocating country operates on any route or within any area common to the two countries and there is in force in relation to the use of the vehicle in the reciprocating country, a policy of insurance complying with the requirements of the law of insurance in force in the country, then, notwithstanding anything contained in section 147 but subject to any rules which may be made under section 164, such policy of insurance shall be effective throughout the route or area in respect of which, the arrangement has been made, as if the policy of the insurance had complied with the requirements of this chapter.

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If, after a certificate of insurance has been issued under sub section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub section (1) of section 147 (being a liability covered by the terms of the policy) or under the provisions of section 163 A is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable there under, as if he were the judgment debtor in respect of the liability, together with any amount payable in respect of the interest on that sum by virtue of any enactment relating to the interest on judgments.

No sum shall be payable by an insurer under sub section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgments or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom the notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely: -

a. That there has been a breach of a special condition of the policy, being one of the following conditions, namely: -

(i)                  A condition excluding the use of the vehicle-

a.  For hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or

b.  For organised racing and speed testing, or

c.   For a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

d.  Without the side car being attached where the vehicle is a motor cycle; or

(ii)                A condition excluding driving by a named person or persons or by any person who is not duly licensed, or a person who has been disqualified for holding or obtaining a driving license during the period of disqualification; or

(iii)               A condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or      

b. That the policy is void on the grounds that it was obtained by the non disclosure of a material fact or by a representation of fact which was false in some material particular.

Where any such judgment as is referred to in sub section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of section 13 of the Code Of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and the extent specified in sub section (1), as if the judgment were given by a court in India:

Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub section (2).

Where a certificate of insurance has been issued under sub section (3) of section 147  of the person by whom a policy has been affected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) sub section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub section (1) of section 147, be of no effect:

Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub section shall be recoverable by the insurer from that person.

If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.

In this section the expressions ‘material fact’ and ‘material particular’ means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression ‘liability covered by the terms of the policy’ means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel of has avoided or cancelled the policy.

No insurer to whom the notice referred to in sub section (2) or sub section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment as is referred to in sub section (1) or in such judgment as is referred to in sub section (3) otherwise than in the manner provided for in sub section (2) or in the corresponding law of the reciprocating country, as the case may be.

Explanation: - For the purposes of this section, ‘Claim Tribunal’ means a Claims Tribunal constituted under section 165 and ‘award’ means an award made by that tribunal under section 168.

Where under any contract of insurance affected in accordance with the provisions of this Chapter, a person is insured against the liabilities which he may incur to third parties, then-

a.  In the event of the person becoming insolvent or making a composition or arrangement with his creditors, or

b.  Where the insured person is a company, in the event of a winding up order being made or a resolution for a voluntary winding up being passed with respect the company or of a receiver or manager of the company’s business or undertaking being duly appointed, or of possession being taken by or on behalf of the holders of any debentures secured by a floating chare of any property comprised in or subject to the change,

If, either before or after that event, any such liability is incurred by the insured persons, his rights against the insurer under the contract in respect of the liability shall, notwithstanding anything to the contrary in any provision of law, be transferred to and vest in the third party to whom the liability was so incurred.

Where an order for the administration of the estate of a deceased debtor is made according to the law of insolvency, then, if any debt provable in insolvency is owing by the deceased in respect of a liability to a third party against which he was insured under a contract of insurance in accordance with the provisions of this Chapter, the deceased debtor’s rights against the insurer in respect of that liability shall, notwithstanding anything to the contrary in any provisions of law, be transferred to and vest in the person to whom the debt is owing.

Any condition in a policy issued for the purposes of this Chapter purporting either directly or indirectly to avoid the policy or to alter the rights of the parties there under upon the happening to the insured person of any of the events specified in clause (a) or clause (b) of sub section (1) or upon the making of an order for the administration of the estate of a deceased debtor according to the law of insolvency shall be of no effect.

Upon a transfer under sub section (1) or sub section(2), the insurer shall be under the same liability to the third party as he would have been to the insurer person, but-

a.  If the liability of the insurer to the insured person exceeds the liability of the insured person to the third party, nothing in this Chapter shall affect the rights of the insured person against the insurer in respect of the excess, and

b.  If the liability of the insurer to the insured person is less than the liability of the insured person to the third party nothing in this Chapter shall affect the rights of the third party against the insured person in respect of the balance.

No person against whom a claim is made in respect of any liability referred to in clause (b) of sub section (1) of section 147 shall on demand by or on behalf of the person making the claim refuse to state whether or not be was insured in respect of that liability by any policy issued under the provisions of this Chapter, or would have been so insured if the insurer had not avoided or cancelled the policy, nor shall he refuse, if he was or would have been so insured, to give such particulars with respect to that policy as were specified in the certificate of insurance issued in respect thereof.

COPRA, 1986

The COPRA (Consumer Protection Act), 1986,  has been enacted to provide for better protection of the interests of the consumers by making provisions for the establishment of Consumer Councils, other authorities for the settlement of consumer disputes and for matters connected therewith. 

This Act is considered as the Magna Carta in the field of Consumer protection for checking the unfair trade practices and defect in goods and deficiencies in services, as far as India is concerned. This act aimed at the process of consumer protection. On 24th December 1986, this act was enacted and brought into force in whole of India except the state of Jammu & Kashmir.

The main objectives that this special statute desired to achieve were as follows:

• To promote and protect the rights of consumers such as safety, choice, information, consumer education, redressal and representation.

• To establish consumer protection councils at the Central, State and District levels for enhancing the consumer protection mechanism.

• To create a special quasi-judicial mechanism at National, State and District level to provide speedy and simple redressal to consumer disputes.

• To empower these quasi-judicial bodies:

1.   To give relief of specific nature and to award whenever appropriate.

2.   Provide penalties for non-compliance of its orders.

The Act aimed in its scope to afford adequate protection and ensure effective access of justice for all consumers of India.

The Act recognises for the protection of six fundamental rights to every Indian consumer in Sec. 6 of the Act:-

Ø The Right to be protected against the marketing of goods and services which are hazardous to life and property.

Ø The Right to be informed about the quality, quantity, purity, standard and price of the goods or services so as to protect the consumers against the unfair trade practices.

Ø The Right to be assured, wherever possible, access to a variety of goods and services at competitive prices.

Ø The Right to be heard and to be assured that consumers' interests will receive due consideration at the appropriate forums.

Ø The Right to seek redressal against the unfair trade practices or the restrictive trade practices or the unscrupulous exploitation of consumers.

Ø The Right to provide consumer education.   

Various institutions were created by the COPRA, 1986 for implementing the Act:-

• Consumer Protection Councils,
• Consumer Dispute Redressal Agencies.

The Consumer Protection Councils are three tier machinery operational at the National level, State level and the District level.

        i. The Central Consumer Protection Council:-

The Central Consumer Protection Council shall consist of:

a)   A Minister in charge of the consumer affairs in the Central Govt., as its chairman.

b)  Such number of other officials or non-official members representing such interests as may be prescribed by the Central Govt.

        ii. The State Consumer Protection Council:-

The State Consumer Protection Council shall consist of:

a)   A Minister in charge of the consumer affairs in the State Govt., as its chairman.

b)  Such number of other officials or non-official members representing such interests as may be prescribed by the State Govt.

c)   Such number of other official or non-official members, not exceeding 10 members, as may be nominated by the Central Govt.

        iii. The District Consumer Protection Council:-

The District Consumer Protection Council shall consist of:

a)   The Collector of the District as its chairman.

b)  Such number of other officials or non-official members representing such interests as may be prescribed by the State Govt.

The major objectives of the Consumer Protection Council are as follows:

The main functions of the Consumer Protection Council are to provide the consumers:

Ø The Right to be protected against the marketing of goods and services which are hazardous to life and property.

Ø The Right to be informed about the quality, quantity, purity, standard and price of the goods or services so as to protect the consumers against the unfair trade practices.

Ø The Right to be assured, wherever possible, access to a variety of goods and services at competitive prices.

Ø The Right to be heard and to be assured that consumers' interests will receive due consideration at the appropriate forums.

Ø The Right to seek redressal against the unfair trade practices or the restrictive trade practices or the unscrupulous exploitation of consumers.

Ø The Right to provide consumer education.  

The Consumer Dispute Redressal Agencies:-

The consumer dispute is defined under the Section 2 (1) (e) of the Consumer Protection Act, 1986, which means-

‘a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint is called a consumer dispute.’

In India there is a three tier quasi judicial machinery, known as the Consumer Courts at the National level, State level and the District level. These are the different types of the Consumer Dispute Redressal Agencies.

The apex forum, that is the National Consumer Redressal Commission, functions in the capital state of India, New Delhi; then comes the State Consumer Redressal Commission, which functions at the state capitals, and finally at the lowermost level comes the District Consumer Redressal Forum, which functions at the district levels.

The main objective behind the establishment of the three tier specialised consumer dispute redressal forums at the District level, State level and the National level is to provide an expeditious and cost effective grievance redressal mechanism for the Indian consumers. The Act has introduced a very nominal amount of the court fee for filing a complaint before the Forums. The Supreme Court pointed out that the Consumer Protection Act has aimed at establishing dispute resolution forums at grass root level so that large body of the consumers of the country residing at the rural and the urban regions can access these forums easily and with little cost.

The Consumer Forums are established at the National level, the State level and the District levels.

• The District Consumer Forum:-

The District Consumer Forum represents the root of the dispute redressal mechanism. It is to be established by the State Govt. in each district of the state. Under Section 9 (a) of the Act-

‘A Consumer Dispute Redressal Forum to be known as the ‘District Forum’ shall be established by the State Govt. in each district of the State by notification.’

The Act further states that- ‘Provided that the State Govt. may, if it deems fit, establish more than one District Forum in a District.’

Composition:-

Every District Forum shall consist of a person who has been or is qualifies to be a District judge as its President and two non judicial members, one of whom shall be a women.

The members shall:-

·       Be not less than 35 years of age,

·       Possess a bachelor’s degree from any recognized university; and

·       Be a person of ability, integrity and standing, and have adequate knowledge and experience of at least 10 years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration.

A person shall not be qualified to become a member if:-

·       The person has been convicted and sentenced to imprisonment for an offence; which involves the moral turpitude.

·       The person is an undischarged insolvent.

·       The person is of unsound mind.

·       The person has been removed or dismissed from a Govt service.

·       The person has such other disqualifications as may be prescribed by the State Govt.

Jurisdiction:-

The District Forum enjoys the jurisdiction of hearing the cases in which the amount of claim value does not exceed 20 lakhs.

• State Consumer Dispute Redressal Commission:-

The State Consumer Dispute Redressal Commission is the 2nd tier of the Consumer Dispute Redressal Commission. Section 9 (b) of the Act, provides for the establishment of the State Commission and states that-

‘A consumer dispute redressal commission to be known as the State Commission shall be established by the State govt in the state by notification.’   

 It is ordinarily located in every state capital but the State Govt. can create circuit benches of the State Commission in such other places within the State as may be required.

Composition:-

Every State Commission shall consist of a President, who is or has been the Judge of the High Court, and not less than 2 and not more than such number of members, as the State govt considers necessary, and one of whom shall be a women.

The members shall:-

·       Be not less than 35 years of age,

·       Possess a bachelor’s degree from any recognized university; and

·       Be a person of ability, integrity and standing, and have adequate knowledge and experience of at least 10 years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration.

A person shall not be qualified to become a member if:-

·       The person has been convicted and sentenced to imprisonment for an offence; which involves the moral turpitude.

·       The person is an undischarged insolvent.

·       The person is of unsound mind.

·       The person has been removed or dismissed from a Govt service.

·       The person has such other disqualifications as may be prescribed by the State Govt.

Jurisdiction:-

 The State Commission enjoys the jurisdiction of hearing all the cases in which the amount of claim value is between 20 lakhs to 1 crore.

• National Consumer Dispute Redressal Commission:-

The apex tier of the Consumer Dispute Redressal machinery established under the Act is the National Commission and the same is to be established by the Central Govt. Section 9 (c) of the Act provides for the establishment of the National Commission and states that-

‘A National Consumer Dispute Redressal Commission, to be known as the National Commission, shall be established by the Central Govt by notification.’

According to the Act and Rules of the Central Govt., the National Commission shall ordinarily function at New Delhi, but the Central Govt can create circuit benches of the National Commission in such other places as appears necessary to it.

Composition:-

The National Commission shall consist of a person who is or has been a Judge of the Supreme Court as its President, and there shall be not less than 4 other members and not more than 9 members, one of whom shall be a women appointed by the Central Govt.

The members shall:-

·       Be not less than 35 years of age,

·       Possess a bachelor’s degree from any recognized university; and

·       Be a person of ability, integrity and standing, and have adequate knowledge and experience of at least 10 years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration.

A person shall not be qualified to become a member if:-

·       The person has been convicted and sentenced to imprisonment for an offence; which involves the moral turpitude.

·       The person is an undischarged insolvent.

·       The person is of unsound mind.

·       The person has been removed or dismissed from a Govt service.

·       The person has such other disqualifications as may be prescribed by the State Govt.

Jurisdiction:-

It enjoys the jurisdiction of hearing the cases in which the amount of claim value exceeds 1 crore.  

Who is a Consumer?

Consumer as the term implies is one who consumes. He is the one who purchases goods for the private use or consumption. In short, the consumer is one who consumes goods or services at the end of the chain of production.

The Consumer Protection Act defines the word ‘consumer’ in Section 2 (1) (d) of the Act, as-

‘Consumer means any person who- 

a)   Buys any goods for a consideration which has been paid or promised to pay, but does not include a person who obtains such goods for resale or for any commercial purpose; or
 

b)  Hires or avails of any services for a consideration which has been paid or promised to pay, but does not include a person who avails of such services for any commercial purpose.’

What are Goods?

Goods are defined under Section 2 (i) of the Consumer Protection Act, as-

‘Goods mean goods as defined in the Sale of Goods Act, 1930.”

Section 2 (7) of the Sales of Goods Act, 1930, defines goods as-

‘Goods means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before the sale or under the contract of sale.’

Remedies:-

The Remedies provided under the Consumer Protection Act, 1986 includes-

·       The removal of the defects, if after the proper testing the products proves to be defective.

·       The replacement of the defective goods by a new non defective product of the same type.

·       If the goods are defective and beyond repairs the authority can order for the refund of the price paid by the complainant for the product.

·       The products which can prove hazardous for life, their sale can be stopped.

·       In the end, there is a provision in this Act that the trader should pay adequate cost to the victim concerned.

MOTOR VEHICLES ACT, 1988 – 1

LIABILITY WITHOUT FAULT IN CERTAIN CASES:-

Where the death of a person or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly or severally, be liable to pay the compensation in respect of such death or disablement in accordance with the provisions of this section.

The amount of the compensation which shall be payable under sub section (1) in respect of the death of any person shall be a fixed sum of fifty thousand rupees and the amount of the compensation payable under that sub section in respect of the permanent disablement of any person shall be a fixed sum of twenty five thousand rupees.

In any claim for compensation under sub section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.

A claim for the compensation under sub section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.

Notwithstanding anything contained in sub section (2) regarding the death or the bodily injury to any person, for which the owner of the vehicle is liable to give the compensation for relief, he is also liable to pay the compensation under any other law for the time being in force:

Provided that the amount of such compensation to be given under any other law shall be reduced from the amount of compensation payable under this section or under the section 163 A.

The right to claim the compensation under the section 140 in respect of death or permanent disablement of any person shall be in addition to any other right except the right to claim under the scheme referred to in section 163 A, such other right hereafter in this section referred to as the right on the principle of fault to claim compensation in respect thereof under any other provisions of this act or of any other law for the time being in force.

A claim for compensation under the section 140 in respect of death or permanent disablement of any person shall be disposed of as expeditiously as possible and where the compensation is claimed in respect of such death or permanent disablement under section 140 and also in pursuance of any right on the principle of fault, the claim for compensation under the section 140 shall be disposed of as aforesaid in the first place.

Notwithstanding anything contained in sub section (1), where in respect of the death or permanent disablement of any person, the person liable to pay the compensation under the section 140 is also liable to pay compensation in accordance with the right on the principle of fault, the person so liable shall pay the first mentioned compensation and-

  a.  If the amount of the first mentioned compensation is less than the amount of the second mentioned compensation, he shall be liable to pay (in addition to the first mentioned compensation) only so much of the second mentioned compensation as is equal to the amount by which it exceeds the first mentioned compensation;

  b.  If the amount of the first mentioned compensation is equal to or more than the amount of the second mentioned compensation, he shall not be liable to pay the second mentioned compensation.

For the purposes of this Chapter, permanent disablement of a person shall be deemed to have resulted from an accident of the nature referred to in sub section (1) of section 140 if such person has suffered by reason of the accident, any injury or injuries involving:-

  a.  The permanent privation of the sight of either eye or the hearing of either ear, or privation of any member or joint; or

  b.  The destruction or permanent impairing of the powers of any member or joint; or

  c.   The permanent disfigurement of the head or the face.

The provisions of this Chapter shall also apply in relation to any claim for compensation in respect of the death or permanent disablement of any person under the Workmen’s Compensation Act, 1923 (8 of 1923) resulting from an accident of the nature referred to in sub section (1) of section 140 and for this purpose, the said provisions shall, with necessary modifications, be deemed to form the part of that Act.

The provisions of this Chapter shall have effect notwithstanding anything contained in any other provision of this Act or of any other law for the time being in force.

INSURANCE OF MOTOR VEHICLES AGAINST THIRD PARTIES RISKS

In this Chapter:-

  a.  The ‘authorised insurer’ means an insurer for the time being carrying on general insurance business in India under the General Insurance Business (Nationalisation) Act, 1972, (57 of 1972), and any Govt. insurance fund authorised to do general insurance business under that Act;

  b.  The ‘certificate of insurance’ means a certificate issued by an authorised insurer in pursuance of the sub section (3) of section 147 and includes a cover note complying with such requirements as may be prescribed, and where more than one certificate has been issued in connection with a policy, or where a copy of a certificate has been issued, all those certificates or that copy, as the case may be;

  c.   The ‘liability’, wherever used in relation to the death of or the bodily injury to any person, includes the liability in respect thereof under section 140;

  d.  The ‘policy of insurance’ includes the ‘certificate of insurance’;

  e.  The ‘property’ includes the goods carried in the motor vehicle, roads, bridges, culverts, causeways, trees, posts and mile stones;

  f.    The ‘reciprocating country’ means any such country as may on the basis of reciprocity be notified by the Central Govt in the Official Gazette to be a  reciprocating country for the purpose of this Chapter;   

  g.  The ‘third party’ includes the Govt.

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 the insurance complying with the requirements of this Chapter:

Provided that in the case of a vehicle carrying, or meant to carry, dangerous or hazardous goods, there shall also be a policy of insurance under the Public Liability Insurance Act, 1991 (6 of 1991).

Explanation:- a person driving a motor vehicle merely as a paid employee, while there is in force in relation to the use of the vehicle no such policy as is required by this sub section, shall not be deemed to act in contravention of the sub section unless he knows or has reason to believe that there is no such policy in force.

Sub section (1) shall not apply to any vehicle owned by the Central Govt or a State govt, and used for the Govt purposes unconnected with any commercial enterprise.

The appropriate govt may, by order, exempt from the operation of sub section (1) any vehicle owned by any of the following authorities, namely:-

  a.  The Central govt or a State govt, if the vehicle is used for the govt purposes connected with any commercial enterprise;

  b.  Any local authority;

  c.   Any State transport undertaking:

Provided that no such order 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 in 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.

Explanation:- For the purposes of this sub section, ‘appropriate govt’ means the Central govt or the State govt, as the case may be, and-

                     i.        In relation to any corporation or company owned by the Central govt or any State govt, means the Central govt or that State govt;

                   ii.        In relation to any corporation or company owned by the Central govt and one or more State govts, means the Central govt;

                   iii.        In relation to any other State transport undertaking or any local authority, means that govt which has control over that undertaking or authority.

(1)        In order to comply with the requirements of this chapter, a policy of insurance must be a policy which-

a)  Is issued by a person who is an authorised insurer; and

b)  Insures the person or classes of persons specified in the policy to the extent specified in sub section (2)-

                                                                         i.        Against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including the owner of the goods or his authorised representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place.

                                             

                       ii.         Against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:

Provided that a policy shall not be required-

      i.        To cover the liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of the bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen’s Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee-

a)  Engaged in driving the vehicle, or

b)  If it is a public service vehicle engaged as a conductor of the vehicle or in examining the tickets on the vehicle, or

c)  If it is a goods carriage, being carried in the vehicle, or

   ii.        To cover any contractual liability.

Explanation: - For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in public place at the time of accident, if the act or omission which led to the accident occurred in a public place.

(2)        Subject to the proviso to sub section (1), a policy of insurance referred to in sub section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely: -

a.  Save as provided in clause (b), the amount of liability incurred;

b.  In respect of damage to any property of a third party, a limit of rupees six thousand:

Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.

(3)        A policy shall be of no effect for the purposes of this Chapter unless and until this is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.

(4)        Where a cover note issued by the insurer under the provisions of this Chapter or the rules made there under is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State govt may prescribe.

(5)        Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.