Motor Vehicles Act Section 164B — Motor Vehicle Accident Fund
CHAPTER IX MOTOR VEHICLES TEMPORARILY LEAVING OR VISITING INDIA
Civil
Summary
Sub-section (1) establishes the Motor Vehicle Accident Fund, which the Central Government will create. Money will be added to this Fund from four sources: payments of a type that the Central Government notifies and approves; any grant or loan the Central Government gives to the Fund; the leftover balance from a Fund created under a scheme framed under section 163 as it existed just before the Motor Vehicles (Amendment) Act, 2019 came into force; and any other income source that the Central Government prescribes.
Sub-section (2) states that the Fund is created to provide compulsory insurance cover to all road users across India.
Sub-section (3) lists the purposes for which the Fund will be used. Under clause (a), it will pay for the treatment of people injured in road accidents, following the scheme the Central Government frames under section 162. Under clause (b), it will pay compensation to the representatives of a person who died in a hit and run motor accident, following schemes framed under section 161. Under clause (c), it will pay compensation to a person grievously hurt in a hit and run motor accident, following schemes framed under section 161. Under clause (d), it will pay compensation to such other persons as the Central Government prescribes.
Sub-section (4) says that the maximum amount the Fund will pay in each case will be whatever the Central Government prescribes.
Sub-section (5) deals with cases covered by clause (a) of sub-section (3), which concern treatment of injured persons. When a claim becomes payable in such a case, if any amount has already been paid out of this Fund to that person, that same amount will be deducted from the claim that person later receives from the insurance company.
Sub-section (6) says the Fund will be managed by an authority or agency that the Central Government chooses, based on certain considerations. Under clause (a), the agency must have knowledge of the insurance business. Under clause (b), the agency must have the capability to manage funds. Under clause (c), the Central Government may prescribe any other criteria for choosing the agency.
Sub-section (7) requires the Central Government to keep proper accounts and relevant records, and to prepare an annual statement of accounts of the Fund. The form of this statement will be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.
Sub-section (8) states that the accounts of the Fund will be audited by the Comptroller and Auditor-General of India at intervals that he specifies.
Sub-section (9) gives the Comptroller and Auditor-General of India, or any person he appoints for the audit, the same rights, privileges and authority in auditing the Fund's accounts as they have in auditing government accounts. In particular, they have the right to demand the production of books, accounts, connected vouchers and other documents and papers, and to inspect any of the offices of the Authority.
Sub-section (10) says that the accounts of the Fund, as certified by the Comptroller and Auditor-General of India or his appointed person, along with the audit report, will be sent annually to the Central Government. The Central Government will then place these before each House of Parliament.
Sub-section (11) states that any scheme framed under sub-section (3) of section 161, as it stood just before the Motor Vehicles (Amendment) Act, 2019 came into force, will be discontinued. All rights and liabilities arising under that scheme will be met out of the Fund, starting from the date this Act comes into force.
Official Text
(1) The Central Government shall constitute a Fund to be called the Motor Vehicle Accident Fund and thereto shall be credited—
(a) payment of a nature notified and approved by the Central Government;
(b) any grant or loan made to the Fund by the Central Government;
(c) the balance of the Fund created under scheme framed under section 163, as it stood immediately before the commencement of the Motor Vehicles (Amendment) Act, 2019; and
(d) any other source of income as may be prescribed by the Central Government.
(2) The Fund shall be constituted for the purpose of providing compulsory insurance cover to all road users in the territory of India.
(3) The Fund shall be utilised for the following, namely:—
(a) treatment of the persons injured in road accidents in accordance with the scheme framed by the Central Government under section 162;
(b) compensation to representatives of a person who died in hit and run motor accident in accordance with schemes framed under section 161;
(c) compensation to a person grievously hurt in a hit and run motor accident in accordance with schemes framed under section 161; and
(d) compensation to such persons as may be prescribed by the Central Government.
(4) The maximum liability amount that shall be paid in each case shall be such as may be prescribed by the Central Government.
(5) In all cases specified in clause (a) of sub-section (3), when the claim of such person becomes payable, where amount has been paid out of this Fund to any person, the same amount shall be deductible from the claim received by such person from the insurance company.
(6) The Fund shall be managed by such authority or agency as the Central Government may specify having regard to the following:—
(a) knowledge of insurance business of the agency;
(b) capability of the agency to manage funds; and
(c) any other criteria as may be prescribed by the Central Government.
(7) The Central Government shall maintain proper accounts and other relevant records and prepare an annual statement of accounts of the Fund in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.
(8) The accounts of the Fund shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him.
(9) The Comptroller and Auditor-General of India or any person appointed by him in connection with the audit of the accounts of the Fund under this Act shall have the same rights, privileges and authority in connection with such audit of the Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Authority.
(10) The accounts of the Fund, as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf, together with the audit report thereon, shall be forwarded annually to the Central Government and the Central Government shall cause the same to be laid before each House of the Parliament.
(11) Any scheme framed under sub-section (3) of section 161, as it stood immediately before the commencement of the Motor Vehicles (Amendment) Act, 2019, shall be discontinued and all rights and liabilities accruing thereunder shall be met out of the Fund with effect from the date of commencement of this Act.