Necessity for insurance against third party risk
Section 146 of the Motor Vehicles Act, 1988 deals with necessity for insurance against third party risk. No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force, in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of The Act came into force on 01 Jul 1989.
1[146. Necessity for insurance against third party risks. --(1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force, in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter:
Provided that in the case of a vehicle carrying, or meant to carry, dangerous or hazardous goods, there shall also be a policy of insurance under the Public Liability Insurance Act, 1991 (6 of 1991).
Explanation.--For the purposes of this sub-section, a person driving a motor vehicle merely as a paid employee, while there is in relation to the use of the vehicle no such policy in force as is required by this sub-section, shall not be deemed to act in contravention of the sub-section unless he knows or has reason to believe that there is no such policy in force.
(2) The provisions of sub-section (1) shall not apply to any vehicle owned by the Central Government or a State Government and used for purposes not connected with any commercial enterprise.
(3) The appropriate Government may, by order, exempt from the operation of sub-section (1), any vehicle owned by any of the following authorities, namely:--
(a) the Central Government or a State Government, if the vehicle is used for purposes connected with any commercial enterprise;
(b) any local authority;
(c) any State Transport Undertaking:
Provided that no such order shall be made in relation to any such authority unless a fund has been established and is maintained by that authority in such manner as may be prescribed by appropriate Government.
Explanation.--For the purposes of this sub-section, "appropriate Government" means the Central Government or a State Government, as the case may be, and--
(i) in relation to any corporation or company owned by the Central Government or any State Government, means the Central Government or that State Government;
(ii) in relation to any corporation or company owned by the Central Government and one or more State Governments, means the Central Government;
(iii) in relation to any other State Transport Undertaking or any local authority, means that Government which has control over that undertaking or authority.]
Section 146, The Motor Vehicles Act, 1988 (Act 59 of 1988).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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S. Iyyapan vs United India Insurance Co. Ld.
Court's Decision & Legal Precedent
An insurance company cannot deny or avoid its statutory liability to pay compensation to third-party accident victims merely on the ground that the driver, although holding a valid and effective driving licence to drive a light motor vehicle, did not possess a specific endorsement to drive that particular light motor vehicle when used for commercial purposes. The driver's possession of a valid light motor vehicle licence is sufficient authority to operate any type of light motor vehicle regardless of whether it is used for personal or commercial transportation. The statutory obligation of the insurer under Section 149 of the Motor Vehicles Act, 1988 to satisfy judgments and awards in respect of third-party liability cannot be defeated on such technical distinctions between subcategories of light motor vehicles. The compulsory insurance legislation is fundamentally a social welfare measure designed to ensure that accident victims receive compensation, and all relevant provisions must be interpreted to effectuate this paramount protective purpose.
On this section: Requirement for issuance of certificate of insurance for motor vehicles
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Eshwarappa @ Maheshwarappa vs C. S. Gurushanthappa
Court's Decision & Legal Precedent
The liability of a motor vehicle owner under Section 140 of the Motor Vehicles Act 1988 to pay no-fault compensation for death or permanent disablement resulting from a motor accident is absolute and independent of the owner's knowledge, consent, or involvement in the accident, and such compensation is a fixed sum determined by law that cannot be reduced, refused, or delayed based on the circumstances of the accident, the fault of the vehicle operator, the unauthorized use of the vehicle, or the procedural timing of the claim, as the statutory scheme under Chapter X (read with Sections 146-147) embodies a public policy mandate that all accident victims receive minimum compensation from the insurance fund to ensure immediate relief without exception or procedural impediment.
On this section: Prohibition on use of vehicle in public place without complying insurance policy; creates statutory requirement for insurance coverage to fund no-fault compensation
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United India Insurance Co. LTD vs Levis Strauss (india) Pvt. LTD
Court's Decision & Legal Precedent
Where an insured is covered under a marine policy and entitled to claim under it, an exclusion clause in a domestic fire policy (such as Condition No. 4 of the SFSP Policy) that excludes liability for losses covered by marine policies operates to exclude the domestic insurer's liability. The principle of indemnity in insurance contracts requires that an insured be fully indemnified but never more than fully indemnified. A legal obligation to obtain domestic insurance must arise from express statutory provisions, not merely from a prohibition on foreign insurance. Clause 47 of a marine policy (Admitted Insurance - Difference in Conditions Clause) applies only where there is a legal obligation to arrange insurance locally, and such obligation must be mandatory in nature. An insured cannot profit from double insurance by claiming from multiple insurers for the same loss.
On this section: Cited as an example of legislation that mandates specific insurance coverage
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Chairman, R. S. R. T. C. vs Santosh
Court's Decision & Legal Precedent
A vehicle is a motor vehicle under Section 2(28) of the Motor Vehicles Act, 1988 if it is mechanically propelled and adapted for use upon roads, regardless of its primary purpose or actual use. The test is the vehicle's suitability for road use and mechanical propulsion, not whether it is primarily used for agriculture or other purposes. Accordingly, Jugaads are motor vehicles subject to all provisions of the Act including registration, insurance, and driver licensing requirements, unless specifically exempted by state notification for vehicles exclusively used for agricultural purposes with appropriate specifications. This classification is enforceable through statutory authority actions, and the Supreme Court may issue directions to ensure compliance with existing law to address public safety concerns and legislative gaps.
On this section: Prohibition on use of vehicle at public place unless insured; mandates insurance coverage for Jugaads
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Dev S/o Gopinath Pawar vs Ibrahim S/o Gonisab Mujawar
Court's Decision & Legal Precedent
In a petition under Section 164 of the IMV Act, the aspect of negligence has no role to play; only the involvement of the vehicle in the accident must be proved.
On this section: Driving/owning a vehicle without insurance; used to fix liability on the owner.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… The learned Tribunal acknowledged that the offending vehicle had been stolen and that the owner had reported the theft. However, it also noted that the statutory insurance requirement under Section 146 of the Motor Vehicles Act, 1988, had not been met. The learned Tribunal emphasized that compensation under the Motor Vehicles Act, 1988, is a beneficial provision, and in cases of hit-and-run accidents, the State may bear the liability to compensate the victims' families, especially when the owner of the vehicle was …
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… He further deposed that the vehicle was without insurance and on 27.04.2013, he has collected original medical bills and discharge summary of injured Yogita from her father and also filed kalandra under Section 146/196 of Motor Vehicles Act against the registered owner of offending vehicle i.e. Mr. Ravi Ahuja. 9. Respondent no.l1examined himself as R1W1 and in his affidavit Ex.RlWl/A, he reiterated the facts of his written statement. He deposed that he has been falsely implicated in the present case on the basis of some …
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… Learned counsel contends that the trailer admittedly was not insured and as per the Motor Vehicles Act the trailer itself being a separate vehicle requires to be registered as contemplated under Section 146 of the Motor Vehicles Act. Section 146 contemplates the necessity for insurance against 3rd party, which reads as under: "146. Necessity for insurance against third party risks— (1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless …
Questions about Section 146
What have the courts held on Section 146 of the Motor Vehicles Act?
S. Iyyapan vs United India Insurance Co. Ld. (01 Jul 2013) is the leading judgment on this section among those set out below: Requirement for issuance of certificate of insurance for motor vehicles. Another 4 judgments on this section are set out below, 4 of them from the Supreme Court. They run from 2010 to 2025.
How do I find court cases under Section 146 of the Motor Vehicles Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: MV Act 146, section 146 MV Act, section 146 of the Motor Vehicles Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 5 reported judgments on this section are set out on this page, beginning with S. Iyyapan vs United India Insurance Co. Ld. (01 Jul 2013).
What should I read with Section 146 of the Motor Vehicles Act, and has it changed?
3 other provisions in this corpus refer back to it.
When did Section 146 of the Motor Vehicles Act come into force?
Section 146 of the Motor Vehicles Act, commonly called third party insurance, and cited as MV Act 146, came into force on 01 Jul 1989, having been enacted on 14 Oct 1988. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions1948 words
- 88. Validation of permits for use outside region in which granted1560 words
- 51. Special provisions regarding motor vehicle subject to hire-purchase agreement, etc1199 words
- 150. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks1102 words
- 96. Power of State Government to make rules for the purposes of this Chapter995 words
- 72. Grant of stage carriage permits868 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.