Search This Blog

Wednesday, August 9, 2017

plight of road accident victims ~ esp when involving Transport Corpn buses

Every road in Chennai [be it every other Metropolis] are clogged with vehicles of various hues – two wheelers, autos, cars, taxis, trucks, buses and other miscellaneous vehicles.  The definition of ‘Motor vehicle’ as per Act is :  Any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted from an external or internal source of law

The increased traffic in roads also inversely increases the road accidents – road accident victims can claim for compensation in MACT –every MACT OP is but gory details of the tragic circumstances – human lives are precious and every such accident snatches not only life / or damage to limbs besides bringing untold hardship of financial strain, suddenly making the dependents defend themselves in the cruel World.  The Govt aims to provide some monetary compensation as a recompense - Motor vehicle insurance law in India is governed by the Motor Vehicles Act, Insurance Act and the like. 

Vehicles lined up for Nathu La  at picturesque Gangok

Though people tend to make a general statement that Motor Insurance is mandatory – it is not about insuring the vehicles but having insurance for the vehicle against third parties.  Motor Vehicles Act, 1988 is an Act of the Parliament of India which regulates all aspects of road transport vehicles. The Act came into force from 1 July 1989. It replaced Motor Vehicles Act, 1939 which earlier replaced the first such enactment Motor Vehicles Act, 1914. The Act provides in detail the legislative provisions regarding licensing of drivers/conductors, registration of motor vehicles, control of motor vehicles through permits, special provisions relating to state transport undertakings, traffic regulation, insurance, liability, offences and penalties, etc. For exercising the legislative provisions of the Act, the Government of India made the Central Motor Vehicles Rules 1989.

Motor Accidents Claims Tribunal MACT deals with matters related to compensation of motor accidents victims or their next of kin .The Tribunal deal with claims relating to loss of life/property and injury cases resulting from Motor Accidents. The value of the awards are increasing and Insurers often complain that the portfolio is increasingly bad.  Recently, MACT, Mohali  has awarded a compensation of more than Rs 7 crore to the family of an NRI who died while travelling in a private bus which fell into the SYL canal near Rajpura in October 2009 after the driver lost control of the vehicle. It was reported that the deceased was earning US$ 95000 per annum and the Tribunal concluded that the driver, owner of the vehicle and its Insurer are jointly and severally liable.  In effect it is the Insurance Company [a private Insurer in this case] who has to pay the huge compensation [and think of the premium that would have been paid for this vehicle !!]  The Court fixed compensation of 5.56 crores and then there is interest of 6% from the date of filing the claim to the date of satisfaction of the award.

Is there any other angle – other than the victim’s hardship and the Insurer’s mounting losses ?  ~  now read this newsitem in Times of India, Chennai edition titled :  ‘ TN loses Rs 4L a day as 520 buses lie idle, unable to pay accident relief’. 

Nearly 520 buses owned by state transport corporations (STCs) are lying idle at different locations, as they have all been impounded by courts for having failed to pay compensation to road accident victims. This has resulted in an operational loss of `4 lakh a day for the corporations. In the past six years since 2010, more than 40,000 road accidents involving state-owned buses were reported in TN, killing a total of 9,971people.

Due to court orders on motor accident claims proceedings, the transport managements owed `200 crore to relatives of road accident victims, according to government records accessed by TOI. Additional chief secretary to government PWC Davidar said they had paid `90.55 crore to transport managements, out of the total pending `292 crore. Acknowledging the gravity of the situation, additional chief secretary to government PWC Davidar said they had paid `90.55 crore to transport managements, out of the total pending amount of `292 crore. Government was in the process of clearing the remaining dues soon, he added.

Interestingly, none of the 22,000 odd buses owned by STUs (except AC buses) have insurance policy to cover third party risks, said accident cases specialist and advocate V S Suresh.  “Karnataka has proper insurance for all its state-run buses,“ he said, adding that at least sums ranging from `5 to 10 could be collected from passengers using long distance services, just as some private buses do. An investigating officer (accident claim section) with government-owned United India Insurance Company Limited, however, said paying the annual premium of `30,000-40,000 could be a challenge to cash-strapped STUs in Tamil Nadu. Also, accident claims would be released by insurance firms only if norms pertaining to seating capacity are met. “In most cases, state-owned buses are found overloaded at the time of the accident.“

The buses impounded by courts for defaulting payment of compensation were initially parked in the respective court premises. “As spare parts of these vehicles were stolen during the nights, the vehicles were later shifted to nearby STU depots where they are now rotting,“ said K Arumugam Nainar of the CITU. “The state government has not been able to meet the increase in passenger demand, as they have not added augment the number of new buses. Under the circumstances, buses getting impounded have worsened the situation,“ said K Anbazhgan of Nethaji Transport Union. Transport managements, including Metropolitan Transport Corporation (MTC), have begun to stop services on routes where the daily ticket collection was rated low, he said.

The plight of relatives of accident victims too keeps mounting every passing year. Besides running from pillar to post, they are made to fight legal battles at their own expenses to win a compensation they deserve. Wins in initial rounds of litigations do not guarantee any compensation immediately . “Local authorities invariably go for an appeal in case of death claims,“ said advocate Suresh, adding that it was a ploy to avoid or at least delay payment of compensation to victims or their kin. A TNSTC (Villupuram) official said they had powers to release only up to `5 lakhs, and that if compensation package was more than this sum they had to get the Board nod, comprising higher officials from multiple government agencies. In order to overcome this hiccup, the state government setup a corpus fund for speedy and out-of-court settlements. Accordingly,  `70 crore was released for years 2010-17. But, since the incidence of road accidents involving state-run buses are very high, the fund sanctioned by the state transport department would never be sufficient, say experts.

At one stage, a total of 4,771 buses in the state were lying impounded due to non-settlement of dues, prompting the comptroller of auditor-general (CAG) to submit a damning report last year.   Sad state of affairs indeed !!!

Section 146 in The Motor Vehicles Act, 1988 deals with the ‘Necessity for insurance against third party risk’. —
(1) 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: 26 [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).]
(2) Sub-section (1) shall not apply to any vehicle owned by the Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise.
(3) The appropriate Government may, by order, exempt from the operation of sub-section (1) any vehicle owned by any of the following authorities, namely:—
(a) the Central Government or a State Government, if the vehicle is used for Government 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.

With regards – S. Sampathkumar
9th Aug 2017.


  1. This is such an amazing site! I really enjoyed reading the content. Thanks!

    Insurance Dubai

  2. Your blog was absolutely fantastic! Great deal of great information and this can be useful some or maybe the other way. Keep updating your blog, anticipating to get more detailed contents

    Home Insurance Dubai

  3. You have done another good job by posting such an informative article for the visitors. You never fail to amaze us with your work.Keep it up