Page 55 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

Q6. Discuss the duty of insurers to satisfy the
Ans : judgment of court in respect of a third party claim
under motor policy.
Section 149 of Motor Vehicle Act, 1988 provides that: if
after a Certificate of Insurance complying with
compulsory insurance provisions of the Act has been
issued, judgment for compulsory third party liability is
obtained again as Insured person, then the insurer has
to pay to the third party the amount decreed plus costs
and interest awarded, subject to the sum insured under
the policy.

The important point to be noted here is that the insurers
have to pay the third parties even though they may be
entitled to avoid or cancel the policy or may have avoided
or cancelled the policy.

However, this Section provides certain rights to the
insurers. Before the commencement of the proceedings,
the insurers are entitled to receive notice through the
Tribunals, of the bringing of the proceedings.

The insurer who receives the notice is entitled to be
made a party there to and to defend the action to the
extent provided under section 149(2) Motor Vehicles
Act, 1988.

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