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The Motor Vehicles Act, 1988

146. Necessity for insurance against third party risk.

  1. No person shall use, except as a passenger, or cause or allow any other person to  use, a  motor vehicle in a public place, unless there is in  force in  relation to  the use  of the  vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter.

Explanation.--A person  driving a  motor vehicle merely as a paid employee, while  there is  in force  in relation  to the  use  of  the vehicle no  such policy  as is required by this sub-section, shall not be deemed  to act  in contravention of the sub-section unless he knows or has reason to believe that there is no such policy in force.

  1. Sub-section (1) shall not apply to any vehicle owned by the Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise.
  2. The appropriate Government may, by order, exempt from the operation of sub-section (1) any vehicle owned by any of the following authorities, namely:--
  1. the  Central Government  or a  State Government,  if the vehicle is  used  for  Government  purposes  connected  with  any commercial enterprise;
  2. Any local authority;
  3. Any State transport undertaking:

Provided that no such order shall be made in relation to any such authority unless a fund has been established and is maintained by that authority in accordance with the rules made in that behalf under this Act for meeting any liability arising out of the use of any vehicle of that authority which that authority or any person in its employment may incur to third parties.

Explanation.--For the  purposes of this sub-section, "appropriate Government" means the Central Government or a State Government, as the case may be, and--

  1. In relation to any corporation or company owned by the Central Government or any State Government, means the Central Government or that State Government;
  2. In relation to any corporation or company owned by the Central Government and one or more State Governments, means the Central Government;
  3. In relation to  any other State transport undertaking or any  local authority,  means that Government which has control over that undertaking or authority.

Motor Vehicles Act, 1988 Back

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