Highlights of the Bill

• The Bill amends the Motor Vehicles Act, 1988 to address issues such as third party insurance, regulation of taxi aggregators, and road safety.

• Under the Act, the liability of the third party insurer for motor vehicle accidents is unlimited.  The Bill caps the maximum liability for third party insurance in case of a motor accident at Rs 10 lakh in case of death and at five lakh rupees in case of grievous injury. 

• The Bill provides for a Motor Vehicle Accident Fund which would provide compulsory insurance cover to all road users in India for certain types of accidents.

• The Bill defines taxi aggregators, guidelines for which will be determined by the central government.

• The Bill also provides for: (i) amending the existing categories of driver licensing, (ii) recall of vehicles in case of defects, (iii) protection of good samaritans from any civil or criminal action, and (iv) increase of penalties for several offences under the 1988 Act.

• The Bill caps the maximum liability for third party insurance, but does not cap the compensation amount that courts can award.  In cases where courts award compensation higher than the maximum liability amount, it is unclear who will pay the remaining amount.

• Under the Act, compensation for hit and run victims comes from a Solatium Fund.  The Bill creates a new Motor Vehicle Accident Fund in addition.  With a Fund already existing to provide compensation for hit and run accidents, the purpose of the new Accident Fund is unclear. 

• State governments will issue licenses to taxi aggregators as per central government guidelines.  Currently, state governments determine guidelines for plying of taxis.  There could be cases where state taxi guidelines are at variance with the central guidelines on aggregators. 

• While the penalties for contravening provisions of the proposed scheme on interim relief to accident victims are specified in the Bill, the offences that would warrant such penalties have not been specified.  It may be argued that imposing penalties without knowing the nature of the offences is unreasonable.

• The Bill does not address several issues around road safety that have been highlighted by other committees such as: (i) creating road safety agencies, and (ii) improving road design and engineering.

Infographics on Road Accidents