Madras HC withdraws its order on `mandatory bumper-to-bumper cover' for new vehicles

``it would appear that the order, mandating the coverage of bumper to bumper policy may not be logistically and economically feasible for effective implementation in the present legal dispensation.Considering the overall submissions made by the parties and and taking into account the concern of the IRDAI, this court feels that the direction issued earlier on making bumper to bumper cover for new vehicles may not be conducive and suitable for implementation in the current situation. Therefore the said direction in is hereby withdrawn for the present,'' said Justice S Vaidyanathan, who had issue earlier verdict.

 

Chennai:

In a big relief for the general insurers and automobile industry and its customers, the Madras High Court on Monday has withdrawn its earlier order, issued on Aug 4,2021, making ``bumper-to-bumper cover for new vehicles'' sold from September 1 mandatory.'

The Madras High Court withdrew its earlier order after the IRDAI , Society of Indian Automobile Manufacturers (SIAM),a non profit entity that has been espousing the cause of automobile industry,and General Insurance Council, the official reprsentative body for the domestic re/insurers, had filed a review petition seeking clarification about the court's order on ``mandatory bumper to bumper cover''.

They had pleaded that that the new order of the court has unintended impact, causing severe repercussions on the society and therefore may be withdrawn in the interest of policyholders, automobile Industry and public at large.

``it would appear that the order, mandating the coverage of bumper to bumper policy may not be logistically and economically feasible for effective implementation in the present legal dispensation.Considering the overall submissions made by the parties and and taking into account the concern of the IRDAI, this court feels that the direction issued earlier on making bumper to bumper cover for new vehicles may not be conducive and suitable for implementation in the current situation. Therefore the said direction in is hereby withdrawn for the present,'' said Justice S Vaidyanathan, who had issue earlier verdict.

The court hope and trust that law makers will look into this aspect and examine the need for suitable amendment in the Act, relating to wide coverage of vehicles so as to protect the innocent victims, said said Justice S Vaidyanathan..

In view of withdrawal of the direction regarding bumper to bumper policy, the circular dated 31.08.2021 issued by the Joint Transport Commissioner, Chennai also stood cancelled..

The IRDAI had submitted that the regulator would consider better and fuller insurance coverage to all unfortunate victims, be it drivers, owners or gratuitous occupants or pillion riders, as the case may be and had prayed for suitable modification / withdrawal of the earlier directions issued by the Court

The IRDAI also brought to the notice of the  court that the issue of long term third party insurance coverage has been mandated by the Suprem Court as early as in September, 2018, and it has been periodically monitoring over the changing scenario from time to and hence, there is no need for issuance of such compulsory directions..

All the parties had stated that the views expressed by Madras Court in respect of protective coverage to uninsured innocent victims, such as gratuitous occupants in a private car and pillion riders, will be duly taken care in consultation with IRDAI to safeguard the interest of innocent victims, which is the anxiety of the court.

 


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