Page 49 - The Motor Vehicles Act, 1988

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

151. Rights of third party against insurers on insolvency of insured
(1) Where under any contract of insurance affected in accordance with
the provisions of this Chapter, a person is insured against liabilities which he
may incur to third party, then—
(a) in the event of the person becoming insolvent or making a composition
or arrangement with his creditors; or
(b) where the insured person is a company, in the event of a winding-up
order being made or a resolution for a voluntary winding-up being passed
with respect to the company or of a receiver or manager of the company’s
business or undertaking being duly appointed, or of possession being
taken by or on behalf of the holders of any debentures secured by a
floating charge of any property comprised in or subject to the charge,
if, either before or after that event, any such liability is incurred by the insured
person his rights against the insurer under the contract in respect of the liability
shall, notwithstanding anything to the contrary in any provision of law, be
transferred to and vest in the third party to whom the liability was so incurred.
(2) Where an order for the administration of the estate of a deceased debtor
is made according to the law of insolvency, then, if any debt provable in
insolvency is owing by the deceased in respect of a liability to a third party
against which he was insured under a contract of insurance in accordance with
the provisions of this Chapter, the deceased debtor’s rights against the insurer
in respect of that liability shall, notwithstanding anything to the contrary in
any provision of law, be transferred to and vest in the person to whom the debt
is owing.
(3) Any condition in a policy issued for the purposes of this Chapter
purporting, either directly or indirectly, to avoid the policy or to alter the rights
of the parties thereunder upon the happening to the insured person of any of
the events specified in clause (a) or clause (b) of sub-section (1) or upon the
making of an order for the administration of the estate of a deceased debtor
according to the law of insolvency, shall be of no effect.
(4) Upon a transfer under sub-section (1) or sub-section (2), the insurer
shall be under the same liability to the third party as he would have been to the
insured person, but—
(a) if the liability of the insurer to the insured person exceeds the liability of
the insured person to the third party, nothing in this Chapter shall affect
the rights of the insured person against the insurer in respect of the excess
amount; and
(b) if the liability of the insurer to the insured person is less than the liability
of the insured person to the third party, nothing in this Chapter shall
affect the rights of the third party against the insured person in respect
of the balance amount.
152. Duty to give information as to insurance
(1) No person against whom a claim is made in respect of any liability
referred to in clause (b) of sub-section (1) of section 147 shall, on demand by or
on behalf of the person making the claim, refuse to state whether or not he was