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It is in your own interest to take a full comprehensive policy for your vehicle, writes Pushpa Girimaji Whether you buy a car or a scooter, a tractor or a tempo, remember, you cannot take it on the road without the mandatory third party motor insurance. It is in your own interest to take a full comprehensive policy and renew it on time. The financial institution from which you may have taken the loan may tell you that they will renew the insurance cover, but do not go by such assurances and make sure that you have the relevant insurance for your vehicle. Look at what happened to Ram Saran in Uttar Pradesh. He purchased a tractor, after taking a loan from Allahabad Bank. Subsequently, the tractor met with an accident. In addition to bearing the cost of repairs, Saran also had to pay, as per the orders of the Motor Claims Tribunal, Rs 15,000 to a third party who was probably injured in the accident. That’s when Saran found, much to his dismay, that the insurance on the vehicle had not been renewed at all and so he had no insurance to fall back on. Holding the bank
responsible for the failure to renew the insurance policy as promised,
Saran filed a complaint before the District Consumer Disputes Aggrieved by this order, Saran filed an appeal before the consumer court at the state level, which held that as per the loan agreement with the bank, the tractor owner was to take the insurance. It is only if he failed to do so, was the bank free to take the policy. So the responsibility to renew the policy rested with the owner of the tractor, the State Commission held, while dismissing the appeal. Saran then filed a revision petition before the National Consumer Disputes Redressal Commission. In deciding the case, the apex consumer court referred to the decision of the Supreme court in the case of Pradeep Kumar Jain VS City Bank and said as per the law laid down by the Supreme Court, Mr Saran cannot absolve himself of the responsibility of not taking the insurance cover. (RP NO 1101 of 2008, decided n April 8, 2008) It, therefore, dismissed his petition. For proper understanding of this decision, a brief account of Pradeep Kumar Jain’s case (Civil appeal no 6618 of 1995 decided on 12-8-1999) is in order. Jain’s case goes back to August 15, 1990, when he met with an accident while driving his car. He not only had to deal with the extensive damage to his car, but also the claim for Rs 18 lakh filed by the legal heirs of the five occupants of the car who died in the accident. That’s when he realised that he did not even have an insurance policy for the vehicle. Citibank, which financed part of the cost of his car had undertaken to renew the policy for the next two years and had even collected from him, two cheques addressed to the insurance company. It however had failed to renew the policy. The apex consumer court before which Mr Jain filed a case, directed the bank to pay the consumer compensation calculated at Rs 76,990 towards the loss of the car, along with interest at 18 per cent. In so far as the liability towards third party claim was concerned, the Commission said it had no jurisdiction to decide on that issue as it came under the ambit of the Motor Accidents Claims Tribunal. Jain then filed an appeal before the Supreme Court. His argument was that having failed to renew the policy, it was the bank’s responsibility to pay the damages awarded by the Motor Accidents Tribunal also. The Supreme Court, however, rejected this claim. While doing so, it pointed out that Section 146 of the Motor Vehicles Act made it obligatory on the part of the owner of a vehicle to take an insurance policy covering third party risk. Driving a vehicle without obtaining such an insurance policy was punishable under Section 196 of the Act. Thus the owner also had certain duties to discharge in the matter of obtaining an insurance policy. He should, therefore, have shown some anxiety in ensuring that the policy was duly renewed by the bank as promised. In the absence of any evidence to that effect, he could not claim that merely because he had passed on the cheques to the bank, the entire liability to pay all damages would be on the bank, the Supreme Court said. So make sure that you have the requisite insurance for your vehicle and that it is always renewed on time.
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