Madras HC orders for mandatory bumper to bumper insurance for 5 years for new vehicles

Read Judgment: New India Assurance Company Ltd vs. K. Parvathi & Ors

LE Staff

Chennai, August 27, 2021: In view of untoward incidents of deaths during driving, the Madras High Court has directed for mandatory coverage of bumper to bumper insurance every year pursuant to the sale of every new vehicle after September 1, 2021, in addition to covering the driver, passengers and owner of the vehicle, for a period of five years. 

A Single Bench of Justice S. Vaidyanathan observed that the owner of the vehicle must be cautious in safeguarding the interest of the driver, passengers, third parties and himself/herself, so as to avoid unnecessary liability being foisted on the owner of the vehicle, as beyond five years, as on date there is no provision to extend the bumper to bumper policy.

“It is saddening to point out that when a vehicle is sold, the purchaser / buyer is not clearly informed about the terms of policy and its importance. Similarly, at the time of buying the vehicle, the buyer is also not interested in thoroughly understanding the terms and conditions of the policy,” added Justice Vaidyanathan. 

The observation came pursuant to the judgment and decree awarded by the Motor Accidents Claims Tribunal (MACT), Special District Court, Erode, whereby the appellant (Insurance Company) was directed to pay the Claimants a sum of Rs.14,65,800/- as compensation for the death of the deceased Sadayappan @ Dhanapal due to the accident that occurred in 2016. 

The MACT passed the compensation award after analyzing the evidence on record, and came to the conclusion that the entire policy conditions in respect of the car have not been produced by the Insurance Company and that the premium for a sum of Rs. 5,081/- was paid as T.P. Premium. 

It was opined by the Tribunal that unless or otherwise the entire policy conditions have been produced, it would be very difficult to analyze as to whether the Insurance Company is liable to pay the compensation or not to the driver. 

After considering the arguments, the High Court found that in the present case on hand, not even a pie has been paid towards premium with regard to the driver and for other passengers, who are going to travel in the vehicle. 

“That apart as stated earlier, the stand taken in the Claim Petition filed before the Tribunal was in total contra to the contents in the F.I.R., on the side of the Claimants. That being the case, the Tribunal completely erred in granting compensation only on the ground that the conditions of the policy have not been produced,” added the Court. 

Justice Vaidyanathan therefore opined that the Tribunal should have rejected the claim petition for non-filing of the details of the Policy by the Claimants, as it was the claimants who had approached the Tribunal, with unclean hands, by taking a different stand.

The High Court accordingly set aside the award passed by the MACT, but at the same time, made it clear that the Claimants and others will not be precluded from claiming compensation for the death of the deceased from the owner of the Car / 4th Respondent, who also travelled in the Car along with them. 

Moreover, Justice Vaidyanathan passed an order for mandatory coverage of bumper to bumper insurance for five years and directed that such order shall be circulated by the Additional Chief Secretary, Transport Department, Chennai, to all the Insurance Companies to be followed scrupulously in letter and spirit without any deviation.

Finally, the matter is listed for Sep 30, 2021 for reporting compliance.