Page 140 - The Motor Vehicles Act, 1988

126 THE MOTOR VEHICLES ACT, 1988 SECTION 149

subject to any rules which may be made under section 164, such policy of insurance shall be
effective throughout the route or area in respect of which, the arrangement has been made, as if
the policy of insurance had complied with the requirements of this Chapter.
149. Duty of insurers to satisfy judgments and awards against persons insured
in respect of third party risks
(1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in
favour of the person by whom a policy has been effected, judgement or award in respect of any
such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section
1
147 (being a liability covered by the terms of the policy) [or under the provisions of section
163A] is obtained against any person insured by the policy, then, notwithstanding that the
insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the
insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of
the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment
debtor, in respect of the liability, together with any amount payable in respect of costs and any
sum payable in respect of interest on that sum by virtue of any enactment relating to interest on
judgments.
(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment
or award unless, before the commencement of the proceedings in which the judgment or award is
given the insurer had notice through the court or, as the case may be, the Claims Tribunal of the
bringing of the proceedings, or in respect of such judgment or award so long as execution is
stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such
proceedings is so given shall be entitled to be made a party thereto and to defend the action on
any of the following grounds, namely,—
(a) that there has been a breach of a specified condition of the policy, being one of the
following conditions, namely,—
(i) a condition excluding the use of the vehicle—
(a) for hire or reward, where the vehicle is on the date of the contract of
insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used,
where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person
who is not duly licensed, or by any person who has been disqualified for
holding or obtaining a driving licence during the period of disqualification;
or
(iii) a condition excluding liability for injury caused or contributed to by conditions
of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the non-disclosure of
a material fact or by a representation of fact which was false in some material
particular.
(3) Where any such judgment as is referred to in sub-section (1) is obtained from a court
in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of
section 13 of the Code of Civil Procedure, 1908 conclusive as to any matter adjudicated upon by
it, the insurer (being an insurer registered under the Insurance Act, 1938 and where or not he is
registered under the corresponding law of the reciprocating country) shall be liable to the person