Supreme Court – Seize-and-sell order on cars

The Supreme Court has asked all states and Union territories to frame a policy to strictly enforce a law that requires immediate confiscation and eventual sale of vehicles after an accident if it does not have a third-party insurance policy. The objective is to use the sale proceeds of the vehicle to pay compensation to the accident victims or their families. In line with the prevailing rule, the court said the vehicle owner should be given an opportunity to pay adequate compensation to the victim or his family. If the owner fails to do so within three months, the vehicle can be sold and the money kept as a deposit till the accident claim is settled. Usha Devi had challenged a Punjab and Haryana High Court order that had declined to direct the Punjab government to compensate her family although her husband was killed in an accident involving a vehicle that did not have third-party insurance. Usha Devi had contended that since the state had a liability to prevent the unauthorised movement of vehicles, the failure to check cars without the mandatory third-party insurance policy was a breach of conditions imposed under Section 196 of the Central Motor Vehicles Act, 1988. In her appeal filed through advocate Radhika Gautam, Usha Devi said that as early as in 2010, the apex court had passed a series of directives to the states and Union territories to ensure that in all cases where there is no third-party insurance policy, the offending vehicle should be seized, sold and the money paid to the victim or survivors. However, despite the directives, no state other than Delhi had framed a policy.