PART – A
Q1. Define the term ‘Potency’ under Consumer Protection Act, 2019.
Ans. Potency refers to the strength, power, or efficacy of a product that is required to be maintained by law, contract, or trade practice. A lack of claimed potency constitutes a product defect.
Q2. Define Unfair Trade Practices.
Ans. The term ‘Unfair Trade Practices’ is defined under Section 2(47) of the CPA, 2019.
It refers to the use of various deceptive, fraudulent, or unethical methods to obtain business. Unfair business practices include misrepresentation, false advertising, tied/tie-in selling, deceptive pricing and non-compliance with manufacturing standards. Such acts are considered unlawful by statute through the consumer protection laws.
Q3. What do you mean by “Service rendered free of charge”?
Ans. “Service rendered free of charge” refers to services provided without any cost, fee, or payment, which are excluded from the legal definition of “service” as under CPA, 2019.
Q4. What is “Insurance Interest”?
Ans. Insurance Interest refers to the legal or financial interest that a person must have in the subject matter of insurance, such that they would suffer a loss if the insured property or life is damaged or lost.
Q5. Define Public Utility Services.
Ans. Public utility services are facilities provided by the government which are essential to a citizens’ need. For instance, these services include supply of water to homes, supply of electricity, the postal service, the banking service, railways etc. The consumer protection laws enable the consumers to file a complaint about the public utility services.
Q6. For what purpose, Consumer Mediation Cell is established?
Ans. Section 2(25) of the act define the term mediation as a process by which the mediator mediates the consumer disputes.
A Consumer Mediation Cell is established for the purpose of facilitating amicable, efficient, and speedy settlement of consumer disputes between the consumer and the opposite party through mediation, instead of going through lengthy court proceedings. Consumer Mediation Cells are established under Section 74 of the CPA, 2019.
Q7. Who is a beneficiary of Insurance Services?
Ans. Under the Consumer Protection Act (CPA), 2019, a beneficiary of insurance services is any person who uses or is eligible to receive benefits from an insurance policy with the approval of the person who hired or availed the service (the policyholder).
Q8. Define Bargain Price.
Ans. Bargain Price refers to a kind of unfair trade practice. Where an advertisement is published in a newspaper, whereby goods/services are offered at a bargain price, when in fact there is no intention that the same may be offered at that price for a reasonable period of time. It shall amount to an unfair trade practice.
Q9. Who is a Consumer?
Ans. A ‘consumer’ is an individual who consumes goods – manufactured by firms or created by nature (air, water, etc.) and services offered by government or firms – hospital, educational institutions, etc. Any individual who purchases products/services for his personal use and not for manufacturing or resale. Thus, a consumer is a user of goods and services. The 2019 Act explicitly includes e-commerce transactions, teleshopping, and direct selling in the definition of a consumer; a major addition over the 1986 version.
Q10. Define Hazardous Substances.
Ans. Under the Consumer Protection Act, 2019, hazardous substances generally refer to goods or products that are detrimental to life and safety, or are injurious to human beings, animals, or the environment due to their inherent chemical, physical, or biological properties.
PART – B
Q11. Write down two functions of District Dispute Redressal Commission.
Ans. The District Consumer Disputes Redressal Commission (DCDRC) is a quasi-judicial body in India established under the Consumer Protection Act, 2019 to resolve consumer complaints at the district level. It provides an accessible, time-bound, and inexpensive forum for addressing grievances related to goods, services, and unfair trade practices.
The District Commission can adjudicate upon matters up to the monetary value of Rs.50 Lakhs.
Its two important functions are:
- To hear consumer complaints regarding defective goods, deficient services, unfair trade practices, or overcharging where the value falls within its pecuniary jurisdiction.
- To provide relief to consumers by ordering replacement of goods, refund of money, removal of defects, compensation for loss or injury, or discontinuation of unfair trade practices.
Q12. How can we attain ‘Insurance Claim’?
Ans. Insurance is an agreement between two parties, insurer, who indemnify (provides protection) the insured in case of any financial loss, according to the terms and conditions of the contract. If the insurance company defrauds or due to negligence of the company, the loss has been incurred by the insured, then the insurer can be sued.
Consumer Protection Act has the objective of providing cheap and expeditious redressal of grievance to the consumer affected by the non – performance on the part of the person providing services for a consideration.
An insurance claim can be attained by following these steps:
- Inform the Insurance Company: The insured person should immediately notify the insurance company about the loss, accident, theft, damage, or death covered under the policy.
- Submit Claim Form: A duly filled claim form must be submitted along with the policy details.
- Provide Necessary Documents: Relevant documents such as medical reports, FIR, bills, death certificate, repair estimates, photographs, etc., should be attached as proof of loss.
- Verification and Settlement: The insurance company verifies the claim through surveyors or investigators. After verification, the insurer approves and pays the compensation according to the terms of the insurance policy.
Q13. Is denial of medical service a violation of Human Rights?
Ans. Parmanand Katara v. Union of India was one of the earliest and most landmark Supreme Court cases dealing specifically with medico-legal responsibilities and emergency medical treatment in India. In this case a public spirited person has filed a PIL under Article 32 of the Constitution. The honourable Supreme Court held that it is a right of citizen and also an obligation of the state to preserve life, and doctors at hospital are therefore required to provide medical assistance to save life. The judgement was the first initiative taken by the Supreme Court to protect the rights of the citizens as per Article 21.
In the case of “Consumer Education and Research Centre v. UOI”, the Supreme Court held that timely medical aid is an integral part of the right of life as per Article 21. Social Justice, which is a device to ensure life to be meaningful with human dignity, required for the state to provide to workmen, facilities and opportunities to reach a minimum standard of health, economic security, and civilised living.
The Supreme Court has held that denial of emergency medical care is a violation of Article 21. Hence, it is the fundamental right of the citizen to be provided with emergency services without any condition.
Q14. Define No Fault Liability Principle.
Ans. The principle of No Fault Liability is a departure from the traditional common law principle of liability, where the onus is on the claimant to prove the negligence or fault of the defendant to seek compensation.
Under No Fault Liability, the victim of a motor vehicle accident or their legal representatives, are entitled to compensation without needing to prove any fault or negligence on the part of the vehicle owner or driver. This principle is particularly significant in cases where determining fault might be complex or where the victim might be partly at fault.
No Fault Liability under Sections 140 to 144 of Motor Vehicles Act, 1988:
The Motor Vehicles Act, 1988, under Chapter X (Sections 140 to 144), provides the statutory framework for No Fault Liability. Section 140 specifically deals with the liability to pay compensation in certain cases on the principle of No Fault Liability.
- Section 140:
This section mandates that the owner of a motor vehicle or the insurance company, as the case may be, must pay a fixed amount of compensation in the event of death or permanent disablement due to an accident, regardless of any wrongful act, neglect or default by the owner or driver of the vehicle.
- Compensation Amounts: The Act specifies the amount of compensation payable under No Fault Liability. If the accident results in death, the compensation is Rs. 50,000. In the case of permanent disability, the amount is Rs. 25,000.
- Note: - After the introduction of 2019 amendment, Section 164 is now related to No Fault Liability Principle. And the revised compensation amounts are: Rs. 5 Lakhs for death and Rs. 2.5 Lakhs for permanent disability.
- Section 141:
This section deals with the provision of interim relief. It allows the claimant to seek compensation under both Section 140 and any other provisions under the Act. However, if compensation is awarded under any other section, the amount already paid under Section 140 will be deducted from the total compensation awarded.
- Section 142:
It defines what constitutes “permanent disablement” for the purposes of claiming compensation under Section 140.
- permanent privation of the sight of either eye or the hearing of either ear, or privation of any member or joint; or
- destruction or permanent impairing of the powers of any member or joint; or
- permanent disfiguration of the head or face.
- Section 143:
Section 143 of the Motor Vehicles Act, 1988, previously allowed "no-fault liability" compensation (Section 140) to apply to claims under the Workmen’s Compensation Act, 1923. This allowed for interim compensation in work-related motor accidents.
Note: This section was omitted by Amendment Act, 2019.
- Section 144:
It gives overriding effect to the provisions of Chapter X, meaning that the provisions of this chapter will prevail over any other law that might be inconsistent with them.
Relevant Case Law:
Ishwarappa v. C.S. Gurusthanthappa: In this case, the court emphasised the purpose of Section 140 as being to provide immediate relief to the victim or the legal representatives of the deceased. The compensation under this section is to be paid at the threshold of the proceedings, underscoring the intention to provide quick relief without waiting for the lengthy determination of fault.
PART – C
Q15. Discuss the conceptualisation of “Consumer” under Consumer Protection Act, 2019 and its scope.
Ans. The Consumer Protection Act (CPA), 2019, is a milestone in Indian legislation designed to protect the interests of consumers in an increasingly complex marketplace. At its core, the Act aims to provide a fast-track grievance redressal mechanism. However, to benefit from this "shield," one must first qualify as a "Consumer."
Section 2(7) of the Act defines a consumer, but just as important is understanding who the law excludes. By drawing a line in the sand, the Act ensures it remains a tool for individual protection rather than a forum for resolving complex commercial or industrial disputes.
Who is a consumer?
A ‘consumer’ is an individual who consumes goods – manufactured by firms or created by nature (air, water, etc.) and services offered by government or firms – hospital, educational institutions, etc. Any individual who purchases products/services for his personal use and not for manufacturing or resale. Thus, a consumer is a user of goods and services.
Section 2(7) of the Act defines ‘consumer’ as ANY person who:
- buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
- hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.
The 2019 Act explicitly includes e-commerce transactions, teleshopping, and direct selling in the definition of a consumer; a major addition over the 1986 version.
Beneficiary of Services is also a Consumer
When A hire services from B, may hire it for himself or for any other person. In such a case, the beneficiary (user) of these services is also a consumer.
Example – A takes his son ‘B’ to a doctor for B’s treatment. Here ‘A’ is hirer of services of the doctor and ‘B’ is beneficiary of these services. For the purpose of the act, both A and B are consumers. This is an exception to the rule of Privity of Contract.
Who is NOT a consumer?
Under the CPA 2019, the definition of a consumer is strictly tied to the concepts of consideration (payment) and purpose. A person is excluded from the definition of a "consumer" if they fall into any of the following categories:
1. Persons Obtaining Goods or Services Free of Charge
The bedrock of the consumer-provider relationship is Consideration. If you receive a product as a gift or avail of a service without any payment (current or promised), you are not a consumer.
Example: A patient treated for free in a charitable hospital where no one is charged cannot sue under the CPA (though they may have remedies under Law of Torts for negligence).
2. Persons Obtaining Goods for Resale or Commercial Purposes
The Act is designed to protect the "end-user." If a person buys goods to sell them again or to use them in a large-scale profit-making activity, they are considered a commercial entity, not a consumer.
Exception (Self-Employment): If a person buys a car to use it as a taxi which they drive themselves to earn a living, they are a consumer. If they buy a fleet of 50 taxis to start a company, they are not.
3. Persons Availing Services under a "Contract of Service"
There is a fine legal distinction between a contract for services and a contract of service:
- Contract for Services: (Consumer Category) You hire a professional (like a doctor or a plumber) to do a job.
- Contract of Service: (Excluded) This refers to a master-servant or employer-employee relationship. An employee cannot sue their employer under the CPA for issues related to their employment.
Relevant Case Laws
To understand the nuances, we must look at how the courts have interpreted these exclusions.
- Franchise Holder is not a Consumer - In The General Manager, Madras Telephones v. R. Kannan, it was held that a franchise holder is an agent of the principal, not a consumer.
- Purchase Made for Commercial Purpose, the Complainant was not a Consumer - In Godrej Computers v. International Data Management Ltd., the purchase of a computer for commercial use disqualified the buyer from being a consumer. Similarly, photocopiers or electronic typewriters bought for business use fall outside the CPA’s protection.
- Student is not a Consumer - In Chairman, Board of Examination, Madras v. Mohidin Abdul Quadin, the board performing a statutory duty (conducting exams) was not seen as "rendering a service" for a consumer.
- Teachers Employed in Govt. Aided School/College are not Consumer - In Principal, RSM Inter College v. Smt. Rekha, teachers in govt-aided schools were not considered consumers in the context of their employment/service conditions.
- Sale of Immovable Property can’t be Subject Matter of Complaint under the CPA - In Ravin Bharti Land Development and Finance Pvt. Ltd. v. Punjab National Bank, it was established that the sale of immovable property (land/buildings) does not typically fall under the CPA, as these are governed by specific property laws (and now RERA). [Take note: - the construction service (the act of building the house) is definitely a service. This is why homebuyers can go to Consumer Courts against builders for delays, even with RERA in existence.]
- Vehicles Possessed under a Hirer Purchase Agreement, Hirer Complainant would not be a Consumer - In Tata Motors Ltd. v. Sant Bahadur Singh, a person possessing a vehicle under a hire-purchase agreement (where ownership hasn't transferred) was found not to be a consumer in that specific context.
- Complaint by Wife of a Govt. Servant, she is not a Consumer - In Manoranjan Tiwari v. State Govt. of Rajasthan, it was held that the wife of a government servant (complaining about his service conditions/benefits) does not qualify as a consumer.
One thing is plain and clear from the decided cases that what is important to decide is - Whether a particular good is used for commercial purposes or not. If it is used for commercial purpose(s), the buyer/user is not a consumer, and if it is not - the buyer/user is a consumer.
The Consumer Protection Act, 2019 (CPA 2019), serves as the primary legislation for protecting consumer interests in India, replacing the older 1986 Act to address the complexities of the modern marketplace. Central to its application is the concept of "service," which determines whether a person can seek redressal for "deficiency" before Consumer Commissions.
The scope of “consumer” under the Consumer Protection Act, 2019 is expansive and dynamic, covering traditional buyers, service users, beneficiaries, and digital consumers, while excluding purely commercial and employment-related relationships. It reflects a shift from a narrow contractual approach to a rights-based consumer protection framework.
Q16. Explain about the powers of Central Consumer Protection Authority.
Ans. A central government protection authority to be known as the central authority for regulating matters related to the violation of rights of consumers, unfair trade practices, and false or misleading advertisement which are pre-judicial to the interest of the public and consumers and for promoting, protecting, and enforcing the rights of the consumers as a class to be established under the act.
Composition of CCPA [Section 10(2)], CPA 2019:
The central authority shall consist of a chief commissioner and such number of other commissioners as may be prescribed to be appointed by the central government to exercise the power and discharge the functions under this act.
Qualification, Method of Recruitment etc. of chief commissioners and other commissioners (Section 11):
The central government may by notification make rules to provide for the qualification for appointment, method of recruitment, procedure for appointment, term of office, salaries and allowances, resignation, removal, and other terms and conditions of the service of the chief commissioner and other commissioners of the central authority.
Vacancy etc. not to invalidate proceedings of CCPA (Section 12):
No acts or proceedings of the central authority shall be invalid merely by the reason of: -
- Any vacancy in, or any defect in the constitution of the central authority.
- Any defect in the appointment of a person acting as chief commissioner or as a commissioner.
- Any irregularity in the procedure of the central authority.
Establishment of CCPA (Section 10):
The central government established the Central Consumer Protection Authority to regulate matters relating to violation of rights of consumers, unfair trade practices, and false or misleading advertisement which are pre-judicial to the interest of the public and the consumer, and to promote, protect, and enforce the rights of the consumers as a class, as a body corporate by the said name having perpetual succession and a common seal with power subject to the provisions of the act and the rules and regulations made thereunder, to acquire, hold and dispose of property, both movable and immovable and to contract, and shall by the said name, sue or be sued, having its headquarters at New Delhi. It shall have regional and other offices in any other place in India, as the central government may decide.
Powers and functions of CCPA (Section 18):
The central authority or CCPA shall: -
- Protect, promote and enforce the rights of the consumers as a class, and prevent violation of consumers’ rights under this act.
- Prevent unfair trade practices.
- Ensure that no false or misleading advertisement is made of any goods or services which contravenes the provision of this act.
- Ensure that no person takes part in the publication of any advertisement which is false or misleading.
The central authority may, for any of the purposes aforesaid:
- Inquire or investigation to be made into violation of consumers’ rights or UTP, either suo moto or a complaint receipt.
- File complaint before the District Commission, State Commission, or Central Commission as the case may be.
- Intervene in any proceedings before the State Commission or National Commission, as the case may be, in respect of any allegation of violation of consumer rights.
- Recommend adoption of international practices on consumer rights to ensure effective enforcement of consumer rights.
- Undertake and promote research in the field of consumer rights.
- Spread and promote awareness on the consumer rights.
- Issue safety notices to alert consumers against dangerous or hazardous or unsafe goods.
- Advise the ministries and departments of the Central and State government on consumer welfare measures.
- Issue necessary guidelines to prevent UTP and protect consumers’ interests.
Power of Central Authority to recall goods, etc. (Section 20):
Where the Central Authority is satisfied on the basis of investigation that there is sufficient evidence to show violation of consumer rights or UTP by a person, it may pass such order as may be necessary, including:
- Recalling of goods or withdrawal of services, which are dangerous or unsafe.
- Reimbursement of prices of goods or services.
- Discontinuation of practices which are unfair and pre-judicial to consumers’ interest.
Provided that the Central Authority shall give the person an opportunity of being heard before passing an order under this section.
Q17. Discuss the constitution and procedure of Central Consumer Protection Council.
Ans. Constitution and procedure of CCPC under CPA, 2019:
Section 3(1): requires the central government to establish by notification a Central Consumer Protection Council (CCPC) for the purpose of the act. The central government has made the consumer protection council rules, 2020, which came into force on 20 July, 2020. The rules provide for the establishment and constitution of the central council.
Composition of the Central Council:
Section 3(2) of the act provides that the central council shall be an advisory council and consist of the following members namely: -
- The minister in-charge of the department of consumer affairs in the central government; who shall be the chairperson of the central council.
- The minister of state in-charge of the consumer affairs in the central government; who shall be the vice-chairperson.
- The minister in-charge of the consumer affairs of two of the states from each region as mentioned in Schedule 1, to be changed by rotation on expiration of the term of the council.
- An administrator of a Union Territory to represent that UT, as mentioned in Schedule 2, to be changed by rotation on expiration of the term of the council.
- Two members of parliament, one from the Lok Sabha and one from the Rajya Sabha.
- Representatives of departments of the central government, autonomous organisations, or regulator, concerned with the consumer interest – not exceeding 5, to be nominated by the central government.
- The chief commissioner of the CCPA.
- The Registrar, National Consumer Dispute Redressal Commission, New Delhi.
- Representatives of active consumer organisations - not exceeding 5, to be nominated by the central government.
- Representatives with proven expertise and experience, who are capable of representing consumer interest. One from each of 5 regions; at least one woman.
- The secretaries in-charge of the consumer affairs in the state to be nominated by the central government – not exceeding 3.
- The secretary in-charge of the consumer affairs in the central government, shall be the member secretary in the central council.
Term of CCPC:
The term of CCPC shall be of 3 years. The council shall continue to function for the period further of 3 months or till it is reconstituted, whichever is earlier.
Number of meetings:
Section 4(1) of the CPA, 2019, makes it obligatory that the council must hold at least one meeting in a year. This is a minimum requirement, but the council is entitled to hold as many meetings as it deems necessary.
Objective of the CCPC:
The objective of the central council is to render advice on promotion and protection of the consumers’ rights which have been listed in the clause 9 of Section 2, of CPA 2019. The role of the central council is primarily advisory with regards to promotion and protection of consumers’ rights and interests.
Procedure for the meeting of Central Council:
- The first essential requirement of a valid meeting is that it should be called by a proper authority; a meeting of the central council with the approval of the chairperson.
- Notice – a proper notice of the meeting must be given to all the members of the central council. The notice should be in writing and must be given at least 15 days prior to the date of the meeting. Every notice of the meting shall specify the place, and the day and the hours of the meeting, and shall contain the items of agenda for the meeting.
- Place of Meeting – the meeting of the council shall ordinarily be held in the NCT of Delhi. However, the council may also hold its meeting at any other place in India, wherever in the opinion and discretion of the chairperson.
- Presiding Office – the meeting of the central council shall be presided by the chairperson of the council. In the absence of the chairperson, the vice-chairperson shall preside over the meeting. In the absence of both of them, the central council shall elect a member to preside over the meeting of the council.
- Quorum and Conduct – Business is conducted as per prescribed rules. Decisions are generally taken through consensus or majority view.
- Defect in the constitution of the council – the proceeding of the CCPC shall not be invalid merely by a reason of existence of any vacancy in or any defect in the constitution of the council.
- Maintenance of Records – Minutes and proceedings of meetings are properly recorded and maintained.
Conclusion
The CCPC is an important advisory institution under the Consumer Protection Act, 2019, which ensures wide representation from government, consumer organisations, experts, and legislators. Its structured composition and procedure ensure effective policy guidance for safeguarding consumer interests in India.
Q18. What are the various objectives and reasons behind the enactment of Motor Vehicles Act, 1988?
Ans. The MV Act comes within the ambit of law of torts. The law of torts is based on the Latin maxim ‘Ubi Jus Ibi Remedium’, means where there is right, there is remedy. The MV Act, 1988, is considered a law of welfare aiming to provide relief to those injured in an accident.
The main objective of the act is to provide relief to innocent road users who often through no fault of their own, becomes victim of accident and struggle to receive the compensation they deserve. Under this act beyond the laws relating to licensing and registration, various other aspects of road transport vehicles are also covered.
Objectives of Motor Vehicles Act, 1988:
- Implementing strict procedures for issuing licenses and determining their validity period - The Act ensures that driving licenses are issued only after proper testing of driving skills and knowledge of traffic rules. It also defines clear validity periods for licenses and requires periodic renewal, ensuring that only competent and medically fit individuals are allowed to drive on roads.
- Ensuring road safety by regulating transportation of hazardous and explosive materials and enforcing pollution control measures - The Act lays down strict guidelines for transporting dangerous goods like chemicals, fuels, and explosives. It also mandates safety precautions such as labelling, special permits, and trained drivers. In addition, it enforces emission standards to control vehicle pollution and reduce environmental damage.
- Manage the rapid increase in the number of personal and commercial vehicles in the country - With rising urbanization and economic growth, vehicle numbers have increased significantly. The Act introduces regulations for vehicle registration, fitness certification, and insurance to ensure systematic management and reduce congestion and unsafe vehicles on roads.
- Increase the amount of compensation available to the victim of hit and run accidents - The Act provides financial relief to victims of hit-and-run cases through a dedicated compensation scheme. It increases the compensation amount and ensures quicker relief to families affected by such accidents, even when the offending vehicle or driver cannot be identified.
- Remove the time limit for traffic accident victims to file compensation claim - Earlier, victims had to file claims within a fixed time period. The updated provisions remove or relax this limitation, allowing victims or their families more flexibility to seek compensation, especially in cases involving delayed treatment, legal delays, or late discovery of injuries.
Reasons for the enactment of Motor Vehicles Act, 1988:
- Rise in vehicle population - The rapid increase in the number of motor vehicles in India led to higher traffic density on roads. This resulted in more road accidents, frequent congestion, and increased environmental pollution, making stronger and updated regulations necessary.
- Need for comprehensive legislation – The earlier Motor Vehicles Act, 1939 had been amended many times but had become outdated. It lacked a unified and modern framework covering licensing, insurance, penalties, and road safety, which created the need for a comprehensive new law.
- Improvement in road transport technology - With advancements in automobile design, safety features, and road infrastructure, older legal provisions were insufficient. New standards such as improved emission norms (like BS-6) and vehicle safety requirements needed updated legal backing.
- Stronger penalties for violation - Traffic violations were increasing, and existing penalties were not strict enough to deter offenders. The 1988 Act introduced stricter fines, punishments, and enforcement mechanisms to improve compliance with traffic rules.
- Protection of third parties - The Act strengthened provisions for third-party insurance, ensuring that victims of road accidents or their families receive fair and timely compensation, even if the driver is uninsured or unidentified.
- Adaptability to future changes - The Act was designed with flexibility so that it could be amended over time to accommodate new technologies, changing traffic conditions, improved safety norms, and evolving transportation needs.
- Alignment with international standards - The legislation aimed to bring India’s road transport laws in line with global practices, especially in areas like road safety, vehicle regulation, pollution control, and insurance systems, ensuring better integration with international norms.
Special provision for insurance in the Motor Vehicle Act, 1988:
|
Sections |
Provision |
Description |
|
146 |
Necessity for Insurance |
Mandatory insurance against third-party risks for all vehicles used in public places. |
|
147 |
Requirements of Insurance Policy |
Must cover death/injury to third parties, passengers, and property damage (with limits). |
|
149 |
Insurers’ Duty to Satisfy Judgements |
Insurer must pay compensation awarded by courts to third parties, even if policy terms are breached. |
|
150 |
Right of Third Parties |
Right under the policy transfer to third-party claimants in case of insured’s insolvency or death. |
|
157 |
Transfer of Insurance |
Insurance automatically transfers to new vehicle owner upon sale. |
|
161 |
Hit and Run Compensation |
Fixed Compensation: 2 lakhs (Death), 50,000 (Injury); paid from a government fund. |
|
163A |
Structured Compensation |
The 2019 Amendment effectively replaced the old "Structured Formula" (Section 163A) with a new Section 164. |
|
164 |
Fixed No-Fault Compensation |
5 lakhs (death), 2.5 lakhs (grievous injury) without proving fault. |
|
164A |
Interim Relief Scheme |
Government can set up schemes to provide temporary financial relief to accident victims. |
|
162 |
Golden Hour Scheme |
Government can provide for cashless treatment during the first hour after an accident. |
|
164B |
Motor Vehicle Accident Fund |
Central fund to support hit-and-run victims, emergency medical care, and uninsured vehicle cases. |
|
196 |
Penalty for No Insurance |
Fine up to Rs. 2000, imprisonment up to 3 months, or both for driving without valid insurance. |