Home  /  Motor Vehicles Act  /  Section 154

Section 154: Saving in respect of sections 151, 152 and 153

Motor Vehicles Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1988
Section 153 All 217 Sections of Motor Vehicles Act Section 155

Legal Commentary & Landmark Judgments: Section 154

Section 154 of the Motor Vehicles Act, 1988 functions as a comprehensive saving clause preserving third-party rights against an insured's estate upon insolvency, clarifying the statutory definition of third-party liabilities and safeguarding concurrent remedies available under general common law, the Fatal Accidents Act, and insolvency legislation.

  • Extended Definition of Liabilities to Third Parties: Section 154(1) establishes that statutory references to 'liabilities to third parties' across Sections 151, 152, and 153 expressly encompass liabilities incurred by an insured towards any deceased person's estate, ensuring the complete survival and enforceability of post-mortem claim liabilities.
  • Preservation of Common Law and Inter-Party Rights: Section 154(2) clarifies that the statutory transfer of insurance rights to third parties on the insolvency of the insured person does not prejudicially curtail the third party's independent causes of action against the insured under general tort law or the Fatal Accidents Act, 1855.
  • Insurer's Residual Rights Against the Insured: Maintains the insurer's contractual and equitable rights to recover from the insolvent insured's estate any excess sums paid out to third parties that were not covered by the fundamental policy covenant or where policy warranties were breached.
Key Landmark Precedents:
  • Parminder Singh v. New India Assurance Co. Ltd. (2019) 7 SCC 217: The Supreme Court held that in motor accident claims involving permanent functional disability, compensation must be calculated to achieve full restitution of earning capacity and medical care; procedural or technical statutory objections cannot be deployed by insurers to defeat substantive tortious liabilities preserved under the Act.
  • Gujarat State Road Transport Corpn. v. Ramanbhai Prabhatbhai (1987) 3 SCC 234: The Supreme Court recognized that the statutory provisions of the Motor Vehicles Act relating to compensation are remedial social legislation that expand, rather than restrict, common law tort remedies, ensuring that claims against tortfeasors and their insurers survive for the benefit of dependants and estates.
Courtroom Practice & Strategic Litigation Guidance:

Where an insured owner undergoes corporate insolvency resolution under the IBC, 2016 or individual insolvency, claimants' counsel should invoke Section 154 r/w Section 151 to maintain direct enforcement against the insurer before the MACT. The moratorium under Section 14 of the IBC does not immunize the third-party motor insurance proceeds from satisfaction of the MACT award.

Section 153 All 217 Sections of Motor Vehicles Act Section 155