Madras HC withdraws order mandating Bumper To Bumper insurance for new vehicles

By Legal Wires 3 Minutes Read

The Madras High Court modified its earlier order dated August 4 that had mandated bumper to bumper insurance for all new vehicles for a period of five years in order to safeguard the lives of passengers, drivers and vehicle owners.

The New India Assurance Co Ltd v. K Parvathi

The Court had passed the direction while setting aside the award by the Motor Accident Claims Tribunal (MACT) wherein a sum of Rs 14,65,800 was directed to be paid by the insurance company to the claimants who were relatives of the deceased, as compensation for his death in an accident.

The Bench of Justice S Vaidyanathan while withdrawing the earlier order observed that the previous order may not be ‘may not be logistically and economically feasible for effective implementation in the present legal dispensation’.

The Joint Transport Commissioner, Chennai had issued the circular w.r.t to the earlier court order which was thereby cancelled.

The court urged the lawmakers to look into this aspect and accordingly bring about an amendment to the Act.

The General Insurance Council had moved the High Court seeking clarifications on the order passed last month. The Insurance company contended that the order mandating bumper to bumper coverage policy was not logistically and economically feasible to implement and that such a direction would have an unintended impact, causing severe repercussions on society.

The court was notified that there was no requirement for compulsory directions to be issued in this matter as long-term third-party insurance cover had already been mandated by the Supreme Court in September 2018 and the Insurance Regulatory and Development Authority of India (IRDAI) had been periodically monitoring it.

Therefore the court directed,

“Registry is directed to remove Paragraph No.13 from the earlier order of this Court dated 04.08.2021 and issue a fresh copy of the order to the parties concerned”

Read Order