Key Provisions of the Motor Vehicles (Amendment) Bill, 2016

Given the growing number of road fatalities witnessed in India annually, the Ministry of Road Transport and Highways recently constituted a Commission whose purpose was to suggest modifications and additions to the existing Act.

The Committee comprised of 18 State Transport Ministers and their recommendations were constituted into the Motor Vehicles (Amendment) Bill, 2016 which was presented before Parliament in August 2016.

Some of the salient features of the Bill are an emphasis on safety of motorists as well as pedestrians along roads and highways in India.

Some of the key provisions of the Motor Vehicles (Amendment) Bill, 2016 are as follows:

Limit on insurer’s liability

As per the proposed amendment, the insurer’s liability will be reduced with regard to third party claims. According to the present Act, the insurer’s liability regarding compensation claims in case of death or bodily harm due to motor vehicle use is unlimited.

As per the new Amendment, there will be a cap on compensation up to Rs.5 lakh in case of bodily harm and Rs.10 lakh in case of death. In other words, claimants will be able to receive a maximum of Rs.10 lakh in case of death and Rs.5 lakh in case of bodily harm or injury arising out of operating a motor vehicle under third party claim.

As per the new recommendation, the Central Government can fix the premium as well as the liability for insurers in consultation with the IRDA (Insurance and Regulatory Development Authority of India).

As per this provision, the insurer could be liable to pay less than the ceiling rates of Rs.10 and Rs.5 lakh depending on the case.

Hit and Run Scheme

As per the recommendations under the Amendment Bill, compensation for victims of hit and run cases (under Section 161 of the current Act) has been increased from Rs.25,000 in case of death to Rs.2 lakhs. In case of bodily injury, the compensation amount has been increased from Rs.12,500 to Rs.50,000.

Thus hit and run victims stand to receive a higher compensation for their injuries or in case of demise due to a hit and run.

Motor Vehicle Accident Fund:

The Committee has made a recommendation to set up a Motor Vehicle Accident Fund under Section 164B. This fund will be used to provide immediate relief to motor vehicle accident victims and hit cases. The funds provided would be deductible from the compensation paid out to the victim by a tribunal at a later date.

The money to set up the fund would be provided through levying a cess or tax specially delineated for this purpose.

Community Service as Punishment:

The Committee has recommended the enforcement of community service as a means of punishment in cases where the violation is not of a very serious nature. As per the recommendation, community service would be unpaid social service work to be undertaken by the individual as punishment for an offence.

This particular recommendation is to bring in an element of corrective sanctions that are not incarceration or financial penalties.

Penalties for Road Violations:

The Committee has recommended increasing the fines and penalties for road traffic violations, in the hope they will serve as a deterrent to offenders. As per the recommendations, the penalty for driving without a licence will be a fine of Rs.5,000 compared to the existing fine of Rs.500.

Drunken drivers would have to pay Rs.10,000 compared to the current fine of Rs.2,000.

Driving without a seatbelt would incur a fine of Rs.1,000 as opposed to the current fine of Rs.100.

The complete list of changes in penalties for road traffic violations can be found on the official website of the Ministry of Road Transport and Highways.

New Laws Concerning Juveniles:

Given the rising number of cases involving juveniles caught driving or riding, the Committee has recommended that juvenile violators be tried under the Juvenile Justice Act.

If convicted, the motor vehicle’s registration would be cancelled.

This rule has been recommended as there have been complaints that the juvenile offenders were not adequately punished for their offences, as under the existing law, only the vehicle owner is penalised for any violation.

Protection of Good Samaritans:

The Committee has made provision for the safeguarding of Good Samaritans, who are defined as ‘individuals who render emergency service and assistance to road accident victims without expectation of a reward or compensation’.

As per the provisions of the Bill, such individuals are provided protection from harassment through civil or criminal proceedings, with the Central Government empowered to enact additional legislation in this regard.

Given above are some of the salient points made in the report and recommendations submitted by the Committee to the Ministry. The Bill has made several noteworthy provisions such as the trying of juveniles for road offences and hiking the penalties for road violations.

They have been included in the Bill, which is awaiting parliamentary approval before it is enacted as a law.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

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