Whether you buy a car or a scooter, a tractor or a tempo, remember, you cannot take it on the road without a mandatory third party motor insurance. In fact it is in your own interest to take a full comprehensive policy and renew it on time. The financial institution from which you may have taken the loan may tell you that they will renew the insurance cover, but do not go by such assurances and make sure that you have the relevant insurance for your vehicle.

Look at what happened to Ram Saran in Uttar Pradesh. He purchased a tractor after taking a loan from the Allahabad Bank. Subsequently, the tractor met with an accident. The Motor Claims Tribunal passed an order directing him to pay Rs 15,000 to a third party who was probably injured in the accident. That’s when Saran found, much to his dismay, that the insurance on the vehicle had not been renewed at all and so he had no insurance to fall back on.

Holding the bank responsible for the failure to renew the policy as promised, Saran filed a complaint before the district consumer disputes redressal forum, seeking indemnification of the loss of Rs 3 lakh that he had suffered. The district forum, however, awarded only Rs 15,000, required to be paid to the third party.

In response to his appeal, the National Consumer Disputes Redressal Commission pointed to the decision of the Supreme Court in the case of Pradeep Kumar Jain vs City Bank (civil appeal No. 6618 of 1995 decided on August 12, 1999) and said as per the law laid down by the Supreme Court, the owner cannot absolve himself of the responsibility of not taking the insurance cover. It therefore dismissed his petition. (RP No. 1101 of 2008, decided on April 8, 2008)

In Pradeep Kumar Jain’s case, the apex court had pointed out that under Section 146 of the Motor Vehicles Act it was obligatory on the part of the owner of a vehicle to take an insurance policy covering third party risk. Driving a vehicle without such a policy was punishable under Section 196 of the Act. Thus the owner also had certain duties to discharge in the matter of obtaining an insurance policy. In view of this, the owner of the vehicle should have shown some anxiety in ensuring that such a policy as required under the law was duly renewed by the bank as promised.