Motor Vehicles Act Section 172 — Award of compensatory costs in certain cases
CHAPTER XII CLAIMS TRIBUNALS
Civil
Summary
Sub-section (1) allows a Claims Tribunal that is deciding a compensation claim to order a party to pay special costs as compensation, but only in two specific situations. The first situation is when the insurance policy is void because it was obtained by making a false statement about a material fact. The second situation is when any party or insurer has put forward a false or vexatious claim or defence. In either case, the Tribunal must record its reasons in writing, and the order for payment is made by the party guilty of misrepresentation or who put forward the false claim or defence, to the insurer or the party against whom the claim or defence was made.
Sub-section (2) sets a limit on the amount of special costs that can be ordered under sub-section (1), stating that no Claims Tribunal can order an amount exceeding one thousand rupees.
Sub-section (3) clarifies that a person or insurer who has an order made against them under this section is not exempted from any criminal liability that may arise from the misrepresentation, claim, or defence referred to in sub-section (1).
Sub-section (4) provides that any amount awarded as compensation under this section for a misrepresentation, claim, or defence must be taken into account in any later lawsuit for damages or compensation relating to that same misrepresentation, claim, or defence.
Official Text
(1) Any Claims Tribunal adjudicating upon any claim for compensation under this Act, may in any case where it is satisfied for reasons to be recorded by it in writing that—
(a) the policy of insurance is void on the ground that it was obtained by representation of fact which was false in any material particular; or
(b) any party or insurer has put forward a false or vexatious claim or defence, such Tribunal may make an order for the payment, by the party who is guilty of mis-representation or by whom such claim or defence has been put forward of special costs by way of compensation to the insurer or, as the case may be, to the party against whom such claim or defence has been put forward.
(2) No Claims Tribunal shall pass an order for special costs under sub-section (1) for any amount exceeding one thousand rupees.
(3) No person or insurer against whom an order has been made under this section shall, by reason thereof be exempted from any criminal liability in respect of such mis-representation, claim or defence as is referred to in sub-section (1).
(4) Any amount awarded by way of compensation under this section in respect of any mis-representation, claim or defence, shall be taken into account in any subsequent suit for damages for compensation in respect of such mis-representation, claim or defence.