Motor Vehicles Act 1988

For carriage of goods by road transportation, Department of Road Transport and Highways, Government of India has passed the following regulations.

Motor Vehicles Act 1988
Central Motor vehicles Rules 1989
Carriers Act 1865
Indian Railways Act 1890

The government enacted the Motor Vehicles Act 1988 to take into account.

Replace the existing Motor Vehicles Act 1939 which had been amended several times for updation.
Changes in road transport technology
Changes in the pattern of passenger and freight movements
Developments of the road network in the country
Improved techniques in the vehicle management system

The improved provisions in the new Act can be summarised as under.

rationalization of certain definitions with additions of certain new definitions of new types of vehicles;
stricter procedures relating to grant of driving licences and the period of validity thereof;
laying down of standards for the components and parts of motor vehicles;
standards for anti-pollution control devices;
provision for issuing fitness certificates of vehicles also by the authorised testing stations;
enabling provision for updating the system of registration marks;
liberalised schemes for grant of stage carriage permits on non-nationalised routes, all-India Tourist permits and also national permits for goods carriages;
administration of the Solatium Scheme by the General Insurance Corporation;
provision for enhanced compensation in cases of “no fault liability” and in hit and run motor accidents;
provision for payment of compensation by the insurer to the extent of actual liability to the victims of motor accidents irrespective of the class of vehicles;
maintenance of State registers for driving licences and vehicle registration;
Constitution of Road Safety Councils.

After enactment of the Act, it has been amended three times in 1994, 2000 and 2001.

Amendment Act 54 of 1994

Based on the representations and suggestions from the state governments, transport operators and members of public regarding the problems faced by them due to certain provisions of this Act, the Amendment 54 of 1994 was passed. The amendment provided for.

Modification and amplification of certain definitions of new type of vehicles;
simplification of procedure for grant of driving licences;
putting restrictions on the alteration of vehicles;
certain exemptions for vehicles running on non-polluting fuels;
ceilings on individuals or company holdings removed to curb “benami” holdings;
states authorised to appoint one or more State Transport Appellate Tribunals;
punitive checks on the use of such components that do not conform to the prescribed standards by manufactures, and also stocking / sale by the traders;
increase in the amount of compensation of the victims of hit and run cases;
removal of time limit for filling of application by road accident victims for compensation;
punishment in case of certain offences is made stringent;
a new pre-determined formula for payment of compensation to road accident victims on the basis of age / income, which is more liberal

Amendment Act 27 of 2000

The amendment provided for.

Reduction in vehicular pollution and to ensure the safety of the road users. Therefore alteration of vehicles in any manner is prohibited. However, the alteration of vehicles with a view to facilitating the use of eco-friendly fuel including Liquefied Petroleum Gas (LPG) is permitted. Power given to Central Government to allow the alteration of vehicles for certain specified purposes.
Education institutions which did not require permits to operate the buses owned by them are now required to obtain permits.
Renewal of permits, driving licences and registration certificates granted under the Motor Vehicles Act, 1939 to be renewed under the Motor Vehicles Act, 1988

Amendment Act 39 of 2001

This amendment addressed the following.

A large number of vehicles have come on the road which are operating without any requirement of permits and are not subject to any control of the \state governments. The number of such vehicles is expected to increase substantially.
As this situation is likely to lead to indiscipline on the road and consequent increase in road accidents, it is essential that vehicles which operate on eco-friendly fuels are also covered by the terms and conditions applicable to all other vehicles.

The contents of the Motor Vehicles Act 1989 can be summarised as under.

Chapter	Sections	Title
I	1-2	Preliminary
II	3-28	Licensing of drivers of motor vehicles
III	29-38	Licensing of conductors of stage carriages
IV	39-65	Registration of motor vehicles
V	66-96	Control of transport vehicles
VI	97-108	Special provisions relating to Sate Transport Undertaking
VII	109-111	Construction, equipment and maintenance of motor vehicles
VIII	112-138	Control of Traffic
IX	139	Motor vehicles temporarily leaving or visiting India
X	140-144	Liability without fault in certain cases
XI	145-164	Insurance of motor vehicles against third party risks
XII	165-176	Claims tribunals
XIII	177-210	Offences, penalties and procedure
XIV	211-217	Miscellaneous

The Motor Vehicles (Amendment) Bill, 2016

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.

Key Issues

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.

Features of the proposed Motor Vehicle Act (Amendment) Bill 2017

Aadhaar will become mandatory for driving licence and vehicle registration.
For deaths in hit-and-run cases, the government will provide a compensation of Rs 2 lakh or more to the victim’s family. Currently, the amount is just Rs 25,000.
In traffic violations by juveniles, the guardian or owner of the vehicle would be held responsible unless they prove the offense was committed without their knowledge or they tried to prevent it. The registration of the motor vehicle in question will be cancelled. The juvenile will be tried under the Juvenile Justice Act.
No civil and criminal liability on those coming forward to help accident.
Minimum penalty for drunk driving will increase from Rs 2,000 to Rs 10,000.
The fine for rash driving will shoot up to Rs 5,000 from Rs 1,000.
Driving without a licence attracts a penalty of up to Rs 5,000 against the present Rs 500.
The fine for over-speeding will increase to Rs 1,000-2,000.
Not wearing seat-belt will attract a fine of Rs 1,000 against Rs 100 at present.
A Motor Vehicle Accident Fund will provide compulsory insurance cover to all road users in India for certain types of accidents.
It will be mandatory to alter vehicles for specially-abled people.
Contractors, consultants, and civic agencies would be charged for faulty design, construction or poor maintenance of roads leading to accidents.
A time limit of six months has been specified for an application of compensation to the Claims Tribunal with regard to road accidents.
The Bill removes the cap on liability for third-party insurance. The 2016 Bill had held the maximum liability at Rs 10 lakh in case of death and Rs 5 lakh in case of grievous injury.