Page 47 - The Motor Vehicles Act, 1988

THE MOTOR VEHICLES (AMENDMENT) ACT, 2019 (xlvii)

judgment 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 147 (being a liability
covered by the terms of the policy) or under the provisions of section 164 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 award any sum not exceeding the sum
assured payable thereunder, as if that person were the decree holder, 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 its execution is
stayed 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 two-
wheeled vehicle; or
(ii) a condition excluding driving by a named person or by any person
who is not duly licenced or by any person who has been
disqualified for holding or obtaining a driving licence during the
period of disqualification or driving under the influence of alcohol
or drugs as laid down in section 185; 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 non-
disclosure of any material fact or by representation of any fact which
was false in some material particular; or
(c) that there is non-receipt of premium as required under section 64VB of
the Insurance Act, 1938 (4 of 1938).
(3) Where any such judgment or award as is referred to in sub-section (1)
is obtained from a court in a reciprocating country and in the case of a foreign