What is Motor Vehicle Act Amendment : History and purpose of insurance in India/ezeviral.com

What is motor vehicle Act amendments

The Motor Vehicles (Amendment) Bill, 2019 was introduced in Lok Sabha on July 15, 2019 by the Minister for Road Transport and Highways, Mr. Nitin Gadkari. The Bill seeks to amend the Motor Vehicles Act, 1988 to provide for road safety. The Act provides for grant of licenses and permits related to motor vehicles, standards for motor vehicles, and penalties for violation of these provisions.

1.Compensation for road accident victims:
The central government will develop a scheme for cashless treatment of road accident victims during golden hour. The Bill defines golden hour as the time period of up to one hour following a traumatic injury, during which the likelihood of preventing death through prompt medical care is the highest. The central government may also make a scheme for providing interim relief to claimants seeking compensation under third party insurance. The Bill increases the minimum compensation for hit and run cases as follows: (i) in case of death, from Rs 25,000 to two lakh rupees, and (ii) in case of grievous injury, from Rs 12,500 to Rs 50,000.

2.Compulsory insurance:

The Bill requires the central government to constitute a Motor Vehicle Accident Fund, to provide compulsory insurance cover to all road users in India. It will be utilised for: (i) treatment of persons injured in road accidents as per the golden hour scheme, (ii) compensation to representatives of a person who died in a hit and run accident, (iii) compensation to a person grievously hurt in a hit and run accident, and (iv) compensation to any other persons as prescribed by the central government. This Fund will be credited through: (i) payment of a nature notified by the central government, (ii) a grant or loan made by the central government, (iii) balance of the Solatium Fund (existing fund under the Act to provide compensation for hit and run accidents), or (iv) any other source as prescribed the central government.

3.Good samaritans:
The Bill defines a good samaritan as a person who renders emergency medical or non-medical assistance to a victim at the scene of an accident. The assistance must have been (i) in good faith, (ii) voluntary, and (iii) without the expectation of any reward. Such a person will not be liable for any civil or criminal action for any injury to or death of an accident victim, caused due to their negligence in providing assistance to the victim.

4.Recall of vehicles:

The Bill allows the central government to order for recall of motor vehicles if a defect in the vehicle may cause damage to the environment, or the driver, or other road users. The manufacturer of the recalled vehicle will be required to: (i) reimburse the buyers for the full cost of the vehicle, or (ii) replace the defective vehicle with another vehicle with similar or better specifications.

6.Road Safety Board:
The Bill provides for a National Road Safety Board, to be created by the central government through a notification. The Board will advise the central and state governments on all aspects of road safety and traffic management including: (i) standards of motor vehicles, (ii) registration and licensing of vehicles, (iii) standards for road safety, and (iv) promotion of new vehicle technology.

7.Taxi aggregators:
The Bill defines aggregators as digital intermediaries or market places which can be used by passengers to connect with a driver for transportation purposes (taxi services). These aggregators will be issued licenses by state Further, they must comply with the Information Technology Act, 2000


The main reasons behind drafting and enacting this legislation include the rapidly increasing number of vehicles in the country and the need for encouraging adoption of higher technology in the automotive sector. There also existed a need for effectively tracking down traffic offenders and providing more deterrent punishment for certain offences. There was also a growing concern for the framing of standards around vehicle components and road safety, as well as measures for pollution control. Additionally, there was a necessity for improved regulation around the registration of drivers, with there being a need for stricter protocol around granting driving licences. The system of vehicular registration also merited change, with an updated system being brought in place for registration marks, as well as for the maintenance of State registers for driving licenses and vehicle registration. The Act was also brought in to liberalise the grant of permits for vehicles carrying goods, as well as to rationalise definitions for types of vehicles.


1.Indian Motor Vehicles Act, 1914

The “Indian Motor Vehicles Act, 1914” was a central legislation passed and applicable in British India. Some princely states followed suit, with local modifications. Motor vehicles were first introduced in India towards the end of the 19th century, and the 1914 Act was the first legislation to regulate their use. It had 18 sections, and gave local governments the responsibility of registering and licensing vehicles and motorists, and enforcing regulations.

The “Indian Motor Vehicles Act, 1914” was amended by the “Indian Motor Vehicles (Amendment) Act, 1920” (Act No. XXVII of 1920) passed by the Imperial Legislative Council. It received assent from the Governor General of India on 2 September 1920. The Act amended sections 11 and 18 of the 1914 Act.

2.Indian Motor Vehicles (Amendment) Act, 1924

The Act was amended again by the “Indian Motor Vehicles (Amendment) Act, 1924” (Act No. XV of 1924). The Act received assent from the Governor General on 18 September 1924. It had the title, “An Act further to amend the Indian Motor Vehicles Act, 1914, for certain purposes” and amended section 11 of the 1914 Act by inserting the words “and the duration for which” after the words “area in which” in clause (a) of subsection (2) of section 11. It was replaced by the Motor Vehicles Act, 1939, which came into force in 1940. The motor vehicles act has again been replaced in 1988. The 1988 amendment was brought to address above mentioned statements of object and reasons.

  1. Motor Vehicles Act,1988

    The Motor Vehicles Act, 1988 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 vehicle:
Any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted from an external or internal source of power. The Motor Vehicles Act, 1988, like the earlier Act of 1939, makes the insurance of motor vehicles compulsory. The owner of every motor vehicle is bound to insure his vehicle against third party risk. The insurance company, i.e, the insurer covers risk of loss to the third party by the use of the motor vehicle.

Indian Motor Vehicles (Amendment) Act, 2019

This is similar to the Indian Motor Vehicles (Amendment) bill, 2017, although, introduced later in 2019 so the name. The earlier bill has lapsed at the end of the last session of 16th Lok Sabha. The bill was re-introduced in the first session of 17th Lok Sabha by union transport minister Nitin Gadkari which is then passed by both the houses before the end of the session. It came in to force on 1 September 2019, providing higher penalties for traffic offences.

Implementation of the Amended Law

As per the official notification issued by the central government on 28 August 2019, the 63 clauses of the Motor Vehicles (Amendment) Act,2019 to be implemented from 1 September 2019 as these clauses do not need any further modifications in the Central Motor Vehicles rules, 1989. These includes higher penalties for various traffic offences, national transportation policy among others

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