Supreme Court Halts Time Limit for Motor Accident Claims, Impacting Insurance Sector

The Supreme Court of India has issued an interim order directing all Motor Accident Claims Tribunals and High Courts nationwide not to reject compensation claims from road accident victims due to delays in filing. This order stays the operation of Section 166(3) of the Motor Vehicles Act, 1988, which imposed a strict six-month limitation period for filing such petitions. The Court questioned the Central government on how this time limit aligns with the legislative intent of providing relief to accident victims. This decision came while hearing a case challenging the constitutional validity of the 2019 amendment that reintroduced this limitation. Petitioners argued that the six-month bar is arbitrary, curtails victims' access to justice, and undermines the welfare nature of the Motor Vehicles Act. Historically, the law allowed claims to be filed without a strict time limit or with condonable delays. The reintroduction of the six-month bar in 2019 was seen as an unreasonable restriction. The Supreme Court's interim order provides a crucial reprieve, protecting claims from dismissal based on delay until the core legal issue is resolved.

Impact: This ruling could lead to an increase in the number of compensation claims processed, potentially increasing the payout liabilities for motor insurance companies. It represents a significant regulatory intervention that could affect the financial provisioning and claims settlement processes for insurers. Rating: 6/10.

Difficult Terms Explained: Motor Accident Claims Tribunals (MACT): Special courts or bodies established to adjudicate claims for compensation arising from road accidents. Section 166(3) of the Motor Vehicles Act, 1988: A provision within the Act that specifies the time limit within which a claim petition for compensation must be filed. The 2019 amendment introduced a six-month limit under this sub-section. Constitutional Validity: The legal principle of determining whether a law or action conforms to the provisions and principles of the Constitution of India. Limitation Period: A statutory time frame within which legal proceedings must be initiated. If a claim is filed after this period, it may be barred.