Point of Law : Word 'security' in Rule 391A of Motor Vehicles Rules is prefixed by word 'sufficient'.

ORDER :

What is the nature of security contemplated under Rule 391A of the Kerala Motor Vehicle Rules, 1989, (for short ‘the Rules’) for releasing a vehicle involved in an accident if it was not covered by a valid policy of insurance against third party risks at the time of the accident? The above issue arises for determination in these two cases.

2. Rule 391A of the Rules was incorporated into the statute book w.e.f 03-12-2018. The said rule reads as follows:

“391A. Prohibition against release of motor vehicle involved in accident.-(1) No Court shall release a motor vehicle involved in an accident resulting in death or bodily injury or damage to property, when such vehicle is not covered by the policy of insurance against third party risks taken in the name of owner or when the owner fails to furnish copy of such insurance policy despite demand by investigating police officer, unless and until the owner furnishes sufficient security to the satisfaction of the Court to pay compensation that may be awarded in a claim case arising out of such accident.

(2) Where the motor vehicle is not covered by a policy of insurance against third party risks, or when the owner of the motor vehicle fails to furnish copy of such policy in circumstance mentioned in sub rule (1), or the owner fails to furnish sufficient security as provided in sub rule (1), the motor vehicle shall be sold off in public auction by the Magistrate having jurisdiction over the area where accident occurred, on expiry of three months of the vehicle being taken in possession by the investigating police officer, and proceeds thereof shall be deposited with the Claims Tribunal having jurisdiction over the area in question, within fifteen days for the purpose of satisfying the compensation that may have been awarded, or may be awarded in a claim case arising out of such accident”.

3. The above amendment to the Rules was necessitated due to the directions in the judgment in Usha Devi and Ors. v. Pawan Kumar and Ors. [MANU/SC/1706/2018].

4. When a vehicle involved in an accident is found to be not covered by a valid policy of insurance against third party risks, on the date of accident, or when the owner fails to furnish copy of such insurance despite demand by the Investigating Officer, the court cannot release the vehicle without the owner furnishing sufficient security to its satisfaction to enable release of the vehicle.

5. In the decision in Jai Prakash v. National Insurance Company Limited and Others [(2010) 2 SCC 607], the Supreme Court had suggested a comprehensive scheme to provide security to the helpless victims of accidents when the vehicle is not covered by an insurance. In paragraph 41 of the said judgment, suggestion was made to insist on security adequate to satisfy the award that may be ultimately passed as a condition precedent for release of the vehicle. For the purpose of effective comprehension, the said paragraph is extracted as below :-

“41. Where there is no insurance cover for a vehicle, the owner should be directed to offer security or deposit an amount, adequate to satisfy the award that may be ultimately passed, as a condition precedent for release of the seized vehicle involved in the accident. If such security or cash deposit is not made, within a period of three months, appropriate steps may be taken for disposal of the vehicle and hold the sale proceeds in deposit until the claim case is disposed of. The appropriate Governments may consider incorporation of a rule on the lines of Rule 6 of the Delhi Motor Accident Claims Tribunal Rules, 2008 in this behalf.'

6. Despite the above direction, when State Governments failed to incorporate such a rule Supreme Court in Usha Devi's case (supra) directed the States to ensure that such a rule is introduced without delay.

7. Thus, it was pursuant to the aforesaid direction, that State of Kerala amended the Rules and incorporated the provision as extracted above.

8. The purpose of the rule is explicit. When read a