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The Supreme Court has directed each state and Union Territories to frame rules so as to put uninsured motor vehicles on public auction and pay compensation to the victims from the sale proceeds of the auction. A civil appeal has been filed as a result of the motor accident claim where Justice DipakMisra, took note of the issue raised by the counsel that various accidents occur and there is no valid insurance of the vehicles concerned and therefore it is difficult to pass and executable award. Thus, the counsel has submitted that the state should bear the responsibility where the owners cannot pay. However, the Bench agreed with the Attorney General and observed that the State cannot be held liable because of the failure of the owner to insure the vehicle.
The bench further noted that State Governments have failed to frame a rule in this regard, despite the fact that a direction has been issued to put uninsured vehicles on public auction in the case, Jai Prakash vs. National Insurance Company Limited. In this case, the Court has observed that the owner should offer security, in case of uninsured vehicle so as to satisfy the award that may be passed for the release of seized vehicle and on failure to pay such security, the vehicle shall be sold and the sale proceeds must be kept in deposit till the claim case is disposed off. It recommended the governments to incorporate a rule in the lines of Rule 6 of the Delhi Motor Accident Claim Tribunal Rules, 2008. Relevant portion of the rule has also been quoted.
The bench disposed off the appeal and held that certain states have issued notifications which have the same effect as that of notification issued by the Govt. of Delhi and while the other states are under the process of issuing notifications. It further directed the Chief Ministers of the State to issue notification. Such direction was estimated by the Court to be completed within twelve weeks.
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