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Motor Vehicles Act 1988

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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.

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