Motor Vehicles Act, 1939

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THE MOTOR VEHICLES ACT, 1939 
 
 
 
CONTENTS 
 
CHAPTER VII 
 
MOTOR VEHICLES TEMPORARILY 
LEAVING OR VISITING PAKISTAN 
 
92. Power of Federal Government to make rules 
 
CHAPTER VIII 
 
INSURANCE OF MOTOR VEHICLES 
AGAINST THIRD PARTY RISKS 
 
93. Definitions 
 
94. Necessity for insurance against third party risk 
 
95. Requirements of policies and limits of liability 
 
96. Duty of insurers to satisfy judgments against persons insured in respect of third party 
 risks 
 
97. Rights of third parties against insurers on insolvency of the insured 
 
98. Duty to give information as to insurance 
 
99. Settlement between insurers and insured persons 
 
100. Saving in respect of sections 97, 98 and 99 
 
101. Insolvency of insured persons not to affect liability of insured or claims by third parties 
 
102. Effect of death on certain causes of action 

 
  
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103. Effect of certificate of insurance 
 
104. Duty to surrender certificate on cancellation of policy 
 
105. Duty of insurer to notify registering authority cancellation or suspension of the policy 
 
106. Production of certificate of insurance 
 
107. Production of certificates of insurance on application for authority to use vehicle 
 
108. Co-operative insurance 
 
109. Duty to furnish particulars of vehicle involved in accident 
 
110. Power to appoint persons to investigate and report on accidents 
 
111. Power to make rules 
 
CHAPTER IX 
 
OFFENCES, PENALTIES AND PROCEDURE 
 
125.  Driving uninsured vehicle  
  
 
 
 
 
 
 
 
 
 
  
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THE MOTOR VEHICLES ACT, 1939 
1ACT NO. IV OF 1939 
[16th February, 1939] 
 
An Act to consolidate and amend the law relating to motor vehicles. 
 
 WHEREAS it is expedient to consolidate and amend the law, relating to motor vehicles in 
2[Pakistan]; it is hereby enacted as follows: ⸻ 
 
 [Chapters I to VI have been repealed in  its application to the P rovince of West Pakistan by 
the Provincial Motor Vehicles Ordinance, 1965 (XIX of 1965) section 122 and 14th Schedule.] 
 
CHAPTER VII 
 
MOTOR VEHICLES TEMPORARILY 
LEAVING OR VISITING 2[PAKISTAN] 
 
 92. Power of Federal Government to m ake rules.—(1) The 3[Federal Government] may , 
by notification in the official Gazette, make rules for all or any of the following purposes, namely:⸻ 
 
(a) the grant and authentication of traveling passes, certificates or authorisation s 
to persons temporarily taking motor vehicles out of 2[Pakistan] to any place 
4[outside Pakistan] or to  persons temporarily proceeding  out of 2[Pakistan] to 
any place 4[outside Pakistan] and desiring to drive a motor vehicle during their 
absence from 2[Pakistan]; 
 
(b) prescribing the conditions subject to which motor vehicles brought 
temporarily into 2[Pakistan] from 4[outside Pakistan] by persons intending to 
make a temp orary stay in 1[Pakistan] may be possessed and used in 
2[Pakistan]; and 
 1For Statement of Objects and Reasons, see Gazette of India , 1938, Pt. V, p. 114 ; for Report of the Select Committee, see ibid., p. 187. See 
 also the India Independence (Miscellaneous Transitional Provisions) Order, 1947 (G.G.O. 13 of 1947), Art. 3. 
 This Act has been applied to⸻ 
 Baluchistan, see Notification No. 41-F., dated the 14th  March, 1939, Gazette of India, 1939, Pt. I, p. 446, and Notification No. 126-F., dated 
 the 3rd  July, 1939, Gazette of India, 1939, Pt. I, p. 1180;  
 Phulera in the Excluded Area of Upper Tanawal to the extent the Act is applicable in the N.W.F.P., subject to certain modific ations, see 
 N.W.F.P. (Upper Tanawal) (Excluded Area) Laws Regulation, 1950; and extended to the Excluded Area of Upper Tanawal othe4r than 
 Phuera by the N.W.F.P. (Upper Tanawal) (Excluded Area) Laws Regulation, 1950 and declared to be in force in that area with ef fect from 
 the 1st June, 1951, see N.W.F.P. Gazette, Extraordinary, dated the 1st June, 1951; 
 Such of the Baluch Tribal Areas beyond the western border of Dera Ghazi Khan District of the Punjab, as are not included in t he 
 Balochistan Tribal Areas, see Gazette of India, 1939, Pt. I, p. 1562; and  
 Province of West Pakistan by West Pakistan Ordinance 11 of 1963 (With effect from the 16th May, 1963) 
 The Act has been amended in its application to⸻ 
  (i) Sind and Karachi, by the Motor Vehicles (Sind Amdt.) Act, 1948 (Sind Act 14 of 1948), 
  (ii) North-West Frontier Province by N.W.F.P. Act 8 of 1953, and 
  (iii)   The Province of West Pakistan by West Pakistan Acts 19 of 1958, 31 and 36 of 1964 and West Pakistan Ordinance 35 
   of 1960, s.2 (with effect from the 31st December, 1960). 
 The Act has been extended to⸻ 
  (i)       the Leased Areas of Baluchistan, see the Leased Areas (Laws) Order, 1950 (G.G.O.3 of 1950), and also applied in the 
   Federated Areas of Baluchistan, see Gazette of India, 1937, Pt.I, p.1499; 
  (ii) the Baluchistan States Union by the Baluchistan States Union (Federal Laws) (Extension) Order, 1953 (G.G.O.4 of 
   1953), as amended ; 
  (iii)    the Khairpur States, excluding sections 43 (4), 43A, 43B, 43C and 54 (2), by the Khairpur (Federal Laws) (Extension) 
   Order, 1953 (G.G.O.5 of 1953), as amended; and 
(iv)    the State of Bahawalpur, see the Bahawalpur (Extension of Federal Laws) Orde r, 1953 (G.G.O. 11 of 1953), as 
amended. 
 The Act has been and shall be deemed to have been brought into force in Gwadur with effect form the 8 th September, 1958, by the Gwadur 
 (Application of Central Laws) Ordinance, 1960 (37 of 1960), s.2. 
 This Act has been repealed in its application to the  Province of West Pakistan except Chapters VII, VIII and section 125 by the Provincial 
 Motor Vehicles Ordinance, 1965 (XIX of 1965), s.122 and 14th Schedule. 
 2Subs. by the Central Las (Statute Reform) Ordinance, 1960 (21 of 1960), s.3 and 2nd Sch. (with effect from the 14th October, 1955). 
 3Subs. by the Federal Adaptation of Laws Order, 1975 (F.A.O. No. 4 of  1975) , Art. 2 and Table. 
 4Subs. by A.O., 1949. 
 
  
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(c) prescribing the conditions subject to which persons entering 1[Pakistan] from 
any place 2[outside Pakistan] for a temporary stay in 1[Pakistan] may drive 
motor vehicles in 1[Pakistan]. 
 
 (2) No rule made under this section shall operate to confer on any person any immunity in 
any Province from the payment of any tax levied in that Province on motor vehicles or their users. 
 
3*  *            *   *             *             *              *        * 
 
(4) Nothing in thi s Act or in any rule made there under by a Pr ovincial Government relating 
to⸻ 
 
(a) the registration and identification of motor vehicles, or 
 
(b) the requirements as to construction s, maintenance and equipment of motor 
vehicles, or 
 
(c) the licensing and the qualifications of drivers of motor vehicles; 
 
 shall apply to any motor vehicle to which or to any driver of a motor vehicle to whom any 
rules made under clause (b) or clause (c) of sub-section (1) apply. 
 
CHAPTER VIII 
 
INSURANCE OF MOTOR VEHICLES AGAINST THIRD PARTY RISKS 
 
 93. Definitions. In this Chapter⸻ 
 
4[(a)  “authorised insurer” means an insurer in whose case the requirements of the 
Insurance Act, 1938 (VI of 1938). 5* * * with respect to the registration of 
insurers are complied with and includes, where the business of insuring motor 
vehicles against third party risks is carried on by the 5[Federal Government] or 
a Provincial Government 5* * * such Government;] 
 
(b)  “certificate of insurance” means a certificate issued by an authorised insurer in 
pursuance of sub -section (4) of section 95; and includes 6[a cover not e 
complying with such requirements as may be prescribed, and] where more 
than one certificate has been issued in connection with a policy, or where a 
copy of certificate has been issued, all those certificates or that copy, as the 
case may be; 
 
7*             *              *                *                *                 *              * 
 
 
 1Subs. by the Central Law (Statute Reform) Ordinance, 1960 (21 of 1960), s.3 and 2nd Sch. (with effect from the 14th October, 1955).  
 2Subs. by A.O., 1949.  3Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (XXVII of 1981)., s.3 and Sch., II.) 
 4Subs. by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.2. (with effect from the 1st March, 1949). 
 5Subs. Ordinance No. XXVIII of 1981. 
 6Ins. by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.2 (with effect from the 1st March, 1949). 
  7Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s.3 and Sch.II., which was previously 
 amended by various enactments. 
 
  
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 94. Necessity for insurance against third party risk .—(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 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. 
 
 Explanation.⸻A person driving a motor vehicle merely as a paid employee, while there is in 
force in relation to the use of t he vehicle no such policy as is required by this sub -section, shall 
not be deemed to act in contravention of the sub -section unless he know or has reason to believe that 
there is no such policy in force. 
 
 1[(2) Subject to any prescribed conditions, sub -section (1) shall not apply to any vehicle 
owned by any of the following authorities, namely:⸻ 
 
(i) the 2[Federal Government]; 
 
3*               *            *              *                *                *               * 
 
(iii) any Provincial Government; 
 
4*               *            *              *                *                *               * 
 
(vi) any local authority in 5[Pakistan] exempted from the operation of sub -section 
(1) by order of the 2[Federal Government] or of a Provincial Government; 
 
6*          *       *    *  *  *  
  
 95. Requirements of policies and limits of liability .—(1) In order to comply with the 
requirements of this Chapter, a policy of insurance must be a policy which⸻ 
 
(a)  is issue d by a person who is an authoris ed insurer 7[or by a co -operative 
society allowed under section 108 to transact the business of an insurer], and
  
(b)  insurers the person or classes of person  specified in the policy to the extent 
specified in sub-section (2) against any liability which may be incurred by him 
or them in respect of the death of or bodily injury to any person caused by or 
arising out of the use of the vehicle in a public place 7[in 5[Pakistan]  6*   *   *: 
 
 Provided that a policy shall not, 8*   *   *, be required⸻ 
 
 
 
 
 
 1Subs. by Act. XXVII of 1947, s.3. (with effect from the 1st March, 1949). 
 2Subs. by the Federal Adaptation of Laws Order, 1975 (F.A.O. No. 4 of  1975) , Art. 2 and Table. 
 3Omitted by A.O., 1949. 
 4Omitted by Ordinance, 27 of 1981, s,.3 and Sch. II. 
 5Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (XXI of 1960),s. 3 and 2nd Sch. (with effect from the  14th October, 1955). 
 6Omitted by the Federal Laws (Revision and Declaration) Ordinance 1981 (XXVII of 1981), s.3 and Sch.II. 
 7Ins. by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.4 (with effect from the 1st March, 1949). 
 8Omitted by Act 27 of 1947, s.4 (with effect from the 1st March,  1949). 
 
 
  
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(i)  to cover liability in respect of the death, arising out of and in the course o f his 
employment, of the employee of a person insured by the policy or in respect of 
bodily injury sustained by such an employee arising out of and in the course of 
his employment, 1[other than a liability arising under the Workmen’s 
Compensation Act, 1923  (VIII of 1923), in respect of the death of, or bodily 
injury to, any such employee⸻ 
 
(a)  engaged in driving the vehicle, or 
 
(b)  if it be a public service vehicle, engaged as a conductor of the vehicle 
or in   examining tickets on the vehicle, or 
 
(c)  if it be a goods vehicle, being carried in the vehicle,] or 
 
(ii)  except where the  vehicle is a vehicle in which passengers are carried for hire 
or reward or by reason of or in pursuance of contract of employment, to cover 
liability in respect of the death of or bodily injury to persons being carried in 
or upon or entering or mounting or alighting from the vehicle at the time of the 
occurrence of the event out of which a claim arises, or 
 
(iii)  to cover any contractual liability. 
  
 (2) Subject to the proviso to sub -section (1), a policy of insurance shall cover any liability 
incurred in respect of any one accident up to the following limits, namely.__ 
 
2[(a)  where the vehicle is a goods vehicle, a limit of twenty thousand rupees in all, 
the liabilities, if any, arising under the Workmen’s Compensation Act, 1923 
(VIII of 1923), in respect of  the death of, or bodily injury to , employees other 
than the driver being carried in the vehicle being limited to six such 
employees;] 
 
(b)  where the vehicle is a vehicle in which passengers are carried for hire or 
reward or  by reason of or in purs uance of a contract of employment, in 
respect of persons other than passengers carried for hire or reward, a limit of 
twenty thousand rupees; and in respect of passengers a limit of twenty 
thousand rupees in all, and four thousand rupees in respect of an i ndividual 
passenger, if the vehicle is registered to carry not more than six passengers 
excluding the driver or two thousand rupees in respect of an individual 
passenger, if the vehicle is registered to carry more than six passengers 
excluding the driver; 
 
(c)   where the vehicle is a vehicle of any other class the amount of the liability 
incurred. 
 
3*        *        *       *     *    * 
 
 1Ins. by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.4 (with effect from the 1st March, 1949). 
 2Subs. by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.4. (with effect from the 1st March, 1949). 
 3Omitted, ibid. 
 
  
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 (4) A policy shall be of no effect for the purposes of this Chapter unless and until there is 
issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance 
1* * * in the prescribed form and containing the prescribed particulars of any conditions subject to 
which the policy is issued and of any other prescribed matters; and different forms, particular s and 
matters may be prescribed in different cases. 
  
 (5) Notwithstanding anything elsewhere contained in any law, a person issuing a policy of 
insurance under this section shall be liable to indemnify the person or classes of person specified in 
the policy in respect of any liability which the policy purports to cover in the case of that person or 
those classes of person. 
 
 96. Duty of insurers to satisfy judgments against persons insured in respect of third 
party risks.—(1) If, after a certificate of ins urance 1*  *  * has been issued under sub -section (4) of 
section 95 in favour of the person by whom a policy has been effected, judgment in respect of  any 
such liability as is required to be covered by a policy under clause ( b) of sub-section (1) of  sect ion 
95 (being a liability covered by the terms of the policy) is obtained against any person insured by the 
policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or  may have avoided 
or cancelled the policy, the insurer shall, s ubject to the provisions of this section, pay to the person 
entitled to the benefit of the decree any sum not exceeding the sum assured  payable thereunder, as if 
he were the judgment-debtor, in respect of the liability, together  with any amount payable in  respect 
of costs and any sum payable in respect on interest of that  sum by virtue of any enactment relating to 
interest on judgments. 
  
 (2) No sum shall be payable by an insurer under sub -section (1) in respect of any judgment 
unless before or after the  commencement of the proceedings in which the judgment is given the 
insurer had notice through the Court of the bringing of the proceedings, or in respect of  any 
judgment so long as execution is stayed thereon pending an appeal; and  an insurer to whom notice of 
the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to 
defend the action on any of the following grounds, namely:⸻ 
 
(a)  that the policy was cancelled by mutual consent or by virtue of any provision 
contained therein before the accident giving rise to the liability, and that either 
the certificate of insurance was surrounded to the insurer or that the person to 
whom the certificate was issued has made an affidavit stating that the 
certificate has been los t  or destroyed, or that either before or not later than 
fourteen days after the happening of the accident the insurer has commenced 
proceedings for cancellation of the certificate after compliance with the 
provisions of section 105; or  
 
(b)  that there has been a breach of a specified condition of the policy, being one of 
the following conditions, namely:⸻ 
 
(i)  a condition excluding the use of the vehicle⸻ 
 
(a)  for hire or reward, where the vehicle is on the date of the 
contract of insurance a vehicle n ot covered by a p ermit to ply 
for hire or reward, or 
 
(b)  for organised racing and speed testing, or 
 
 1Omitted by Act, 1947 (XXVII of 1947), ss.4 and 5. (with effect from the 1st March, 1949). 
 
  
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(c)  for a purpose not allowed by the permit under which the 
vehicle is used, where the vehicle is a public service vehicle or 
a goods vehicle, or 
 
(d)  without side -car being attached, where the vehicle is a motor 
cycle; or 
 
(ii)  a condition excluding driving by a named person or persons or by any 
person who is  not duly licensed, or by any person who has been 
disqualified for holding or obtaining a driving licence during the period 
of disqualification; or 
 
(iii)  a condition excluding liability for injury caused or contributed to by 
conditions of   war,  civil war, riot or civil commotion; or 
 
(c)  that the policy is void on the ground that it was obtained by the non -disclosure 
of a material fact or by a representation of fact which was false in some 
material particular. 
  
 1[(2A)  Where any such judgment as is refe rred to in sub -section (1) is a foreign judgment  
and is, by virtue of the provisions of section 13 of the Code of Civil Procedure, 1908 (V of 1908),  
conclusive as to any matter adjudicated upon by it, the insurer (being an insurer) registered under  the 
Insurance Act, 1938 (IV of 1938), shall be liable to the person entitled to the benefit of the decree in 
the manner and to the extent specified in sub -section (1) as if the judgment were given by a Court in 
Pakistan:] 
  
 Provided that no sum shall be payab le by the insurance in respect of any such judgment 
unless, before or after the commencement of the proceedings in which the judgment is given, the 
insurer had notice through the Court in the reciprocating territory of the bringing of the proceedings 
and t he insurer to whom notice is so given is entitled under the corresponding law of the 
reciprocating territory, to be made a party to the proceeding s and to defend the action on ground s 
similar to those specified in sub-section (2).] 
  
 (3) Where a certifica te of insurance 2*  *  * has been issued under sub -section (4) of section 
95 to the person by whom a policy has been effected, so much of the policy as purports to restrict the 
insurance of the persons insured thereby by reference to any conditions other t han those in clause (b) 
of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under 
clause (b) of sub-section (1) of section 95, be of no effect: 
 
 Provided that any sum paid by the insurer in or towards the disch arge of any liability of any 
person which is covered by the policy by virtue only of this sub -section shall be recoverable by the 
insurer from that person. 
  
 (4) If the amount which an insurer becomes liable under this section to pay in respect of a 
liability incurred by a person insured by a policy exceeds the amount for which the insurer would 
apart from the provisions of this section be liable under the policy in respect of that liability, the 
insurer shall be entitled to recover the excess from that person. 
 
 1Subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (XXVII of 1981), s.3 and Sch.II.  
 2Omitted by the Motor Vehicle (Amdt.) Act, 1947 (XXVII of 1947), s.5 (with effect from the 1st March, 1949). 
 
  
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 (5) In this section the expressio ns “material fact” and “material particular” mean,  
respectively, a fact or particular of such a nature as to influence the judgment of prudent insurer in 
determining whether he will take the risk and, if so, at what premium and on what conditions, and 
the expression “liability covered by the terms of the policy” means a liability which is covered by the 
policy or which would be so covered but for the f act that the insurer is entitle  to avoid or  cancel or 
has avoided or cancelled the policy. 
 
 (6) No insur er to whom the notice referred to in sub -section (2) 1[or sub -section (2A)] has 
been given shall be entitled to avoid his liability to any person entitled to the benefit of any such 
judgment as is referred to in sub -section (1) 1[or sub -section (2A)] other wise than in the manner  
provided for in sub-section (2) 2* * *. 
 
 97. Rights of third parties against insurers on insolvency of the insured .—(1) Where 
under any contract of insurance effected in accordance with the provisions of this Chapter a person is 
insured against liabilities which he may incur to third parties then— 
 
(a)  in the event of the person becoming insolvent or making a composition or 
arrangement with his creditors, or 
 
(b)  where the insured person is a company, in the event of a winding up  order 
being made or a resolution for a voluntary winding up being passed with 
respect to the company or of a receiver or manager of the company’s business 
or undertaking being duly appointed, or of possession being taken by or on 
behalf of the holders of any debentures secured by a floating charge of any 
property comprised in or subject to the charge.  
 
 if, either before or after that event, any such liability is incurred by the insured person, his 
rights against the insurer under the contract in respect of the liability shall, notwithstanding anything 
to the contrary in any provision of law, be transferred to and vest in the third party to whom the 
liability was so incurred. 
  
 (2) Where an order for the administration of the estate of a deceased debtor is made according 
to the law of insolvency, then, if any debt provable in insolvency is owing by the deceased in respect 
of a liability to a third party against which he was insured under a contract of  insurance in 
accordance with the provisions of this Ch apter, the deceased debtor’s rights against  the insurer in 
respect of that liability shall, notwithstanding anything to the contrary in any provision of law, be 
transferred to and vest in the person to whom the debt is owing. 
 
 (3) Any condition in a policy issued for the purposes of this Chapter purporting either directly 
or indirectly to avoid the policy or to alter the rights of the parties thereunder upon the happening to 
the insured person of any of the events specified in clause ( a) or in clause ( b) of sub-section (1) or 
upon the making of an order for the administration of the estate of a deceased debtor according to the 
law of insolvency shall be of no effect. 
 
 (4) Upon a transfer under sub -section (1) or sub -section (2) the insurer shall be under  the 
same liability to the third party as he would have been to the insured person, but— 
 
 1Ins. by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.5 (with effect from the 1st March, 1949). 
 2Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (XXVII of 1981),s. 3 and Sch.II. 
 
  
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(a)  if the liability of the insurer to the insured person exceeds the liability of the 
insured person to the third party, nothing in this Chapter shall affect the right s 
of the insured person against the insurer in respect of the excess, and 
 
(b)  if the liability of the insurer to the insured person is less than the liability of 
the insured person to the third party, nothing in this Chapter shall affect the 
rights of the third party against the insured person in respect of the balance. 
 
 98. Duty to give information as to insurance. —(1) No person against whom a claim is 
made in respect of any liability referred to in clause ( b) of sub -section (1) of section 95 shall on 
demand by or on behalf of the person making the claim refuse to state whether or not he was  insured 
in respect of that liability by any policy issued under provisions of this Chapter, or would have been 
so insured if the insurer had not avoided or cancelled the policy, nor shall he refuse, if  he was or 
would have been so insured, to give such particulars with respect to that policy as were specified in 
the certificate of insurance issued in respect thereof.  
 
 (2) In the event of any person becoming insolvent or making a composition or  arrange ment 
with his creditors or in the event of an order being made for the administration of the estate of a 
deceased person according to the l aw of insolvency, or in the event of a winding up order being 
made or a resolution for a voluntary winding up being p assed with respect to any company or of a 
receiver or manager of the company’s business or undertaking being duly appointed or of possession 
being taken by or on behalf of the holders of any debentures secured by a floating charge on any 
property comprised in or subject to the charge, it shall be the duty of  the insolvent debtor, personal 
representative of the deceased debtors or company, as the case may be, or the official assignee or 
receiver in insolvency, trustee, liquidator, receiver or manager  or pe rson in possession of the 
property to give at the request of any person claiming that the insolvent debtor, deceased debtor or 
company is under such liability to him as is covered by the provisions of this Chapter, such 
information as may reasonably be required by him for the purpose of ascertaining whether any rights 
have been transferred to and vested in him by section 97, and for the purpose of enforcing such 
rights, if any; and any such contract of insurance as purports whether directly or indirectly to  avoid 
the contract  or to alter the rights of the parties thereunder upon the giving of such information in the 
events aforesaid, or otherwise to prohibit or  prevent the giving thereof in the said events, shall be of 
no effect. 
 
 (3) If, from the information given to any person in pursuance of sub -section (2) or otherwise, 
he has reasonable ground for supposing that there have or may have been transferred to him under 
this Chapter rights against any particular insurer, that insurer shall be subject to the  same duty as is 
imposed by the said sub-section on the persons therein mentioned. 
 
 (4) The duty to give the information imposed by this section shall include a duty to allow all 
contracts of insurance, receipts for premiums, and other relevant documents in the possession or 
power of the person on whom the duty is so imposed to be inspected and copies thereof to be taken. 
 
 99. Settlement between insurers and insured persons .—(1) No settlement made by an 
insurer in respect of any claim which might be made by a third party in respect of any liability of  the 
nature referred to in clause ( b) of sub-section (1) of section 95 shall be valid unless such third party 
is a party to the settlement. 
 
 
  
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 (2) Where a person who is insured under a policy issued for the pu rposes of this Chapter has 
become insolvent, or where, if such insured person is a company, a winding up order  has been made 
or a resolution for a voluntary winding up has been passed with respect to the  company no 
agreement made between the insurer and the insured person after liability has been incurred to a third 
party and after the commencement of the insolvency or winding up, as the case may be, nor any 
waiver, assignment or other disposition made by or payment made to the insured person after the 
commencement aforesaid shall be effective to defeat the rights transferred to the third party under 
this Chapter, but those rights shall be the same as if no such agreement, wavier,  assignment or 
disposition or payment has been made. 
 
 100. Saving in respec t of sections 97, 98 and 99 .— (1) For the purposes of sections 97, 98 
and 99 a reference to “liabilities to third parties” in relation to a person insured under any policy of  
insurance shall not include a reference to any liability of that person in the c apacity of insurer  under 
some other policy of insurance. 
 
 (2) The provisions of sections 97, 98 and 99 shall not apply where a company is wound up 
voluntarily merely for the purposes of reconstruction or of an amalgamation with another company. 
 
 101. In solvency of insured persons not to affect liability of insured or claims by third 
parties.—Where a certificate of insurance has been issued to the person by whom a policy has been 
effected, the happening in relation to any person insured by the policy of a ny such event as  is 
mentioned in sub -section (1) or sub -section (2) of section 97 shall, notwithstanding anything in the 
Chapter, not effect any liability of that person of the nature referred to in clause (b) of sub-section (1) 
of section 95; but nothing  in this section shall affect any rights against the insurer conferred under 
the provisions of section 97, 98 and 99 on the person to whom the liability was incurred. 
 
 102. Effect of death on certain causes of action . Notwithstanding anything contained in  
section 306 of the Succession Act, 1925 (XXXIX of 1925), the death of a person in whose favour a 
certificate of  insurance 1* * * had been issued, if it occurs after the happening of an event which has 
given rise to a claim under the provisions of this Ch apter, shall not be a bar to the survival of any 
cause of action arising out of the said event against his estate or against the insurer. 
 
 103. Effect of certificate of insurance . When an insurer has issued a certificate of insurance 
in respect of a contract of insurance between the insurer and the insured person, then – 
 
(a)  if and so long as the policy described in the certificate has not been issued by 
the insurer to the insured, the insurer shall, as between himself and any other 
person except the ins ured, be deemed to have issued to the insured pe rson a 
policy of insurance confo rming in al l respects with the description  and 
particulars stated in such certificate; and  
 
(b)  If the insurer has issued to the insured the policy described in the certifica te, 
but the actual terms of the policy are less favorable to persons claiming under 
or by virtue of  the policy against the insurer either directly or through the 
insured than the particulars of the  policy as stated in the certificate, the policy 
shall, a s between the insurer and any other person except the insured , be 
deemed to be in terms confo rming in all respects with the particulars stated in 
the said certificate. 
 
 1Omitted by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.6 (with effect from the 1st March, 1949). 
 
  
Page 12 of 15 
 
 104. Duty to surrender certificate on cancellation of policy .— (1) Whenever the period of 
cover under a policy of insurance issued under the provisions of this Chapter is terminated or  
suspended by any means before its expiration  by effluxion of time, the insured person shall within 
seven days after such termination or suspension deliver to the insurer by whom  the policy was issued 
the latest certificate of insurance given by the insurer in respect of the said policy, or, if the s aid 
certificate has been lost or destroyed, made an affidavit to that effect. 
  
 (2) Whoever fails to surrender a certificate of insurance or to make an affidavit, as the case 
may be, in accordance with the provisions of this section shall be punishable wi th fine which may 
extend to fifteen rupees for every  day that the offence continues  subject to a maximum of five 
hundred rupees. 
 
 105. Duty of insurer to notify registering authority cancellation or suspension of the 
policy. Whenever a policy of insurance  issued under the provisions of this Chapter is cancelled or 
suspended by the insurer who has issued the policy, the insurer shall within seven days notify such 
cancellation or suspension to the registering authority in whose records the registration of the vehicle 
covered by the policy of insurance is recorded or to such other authority as the Prov incial 
Government may prescribe. 
 
 106. Production of certificate of insurance.—(1) Any person driving a motor vehicle in any 
public place shall on being so requ ired by a police officer in uniform 1[authorised in this behalf by 
the Provincial Government] produce the certificate of insurance relating to the use of the vehicle ; 
 
 2*  *  *  *  *  *  *
  
 (2) If, where owing to the presence of a motor vehicle in a pub lic place an accident occurs 
involving bodily injury to another persons, the driver of the vehicle does not at the time produce the 
certificate of insurance to a police officer, he shall produce the certificate of insurance at the police 
station at which he makes the report required by section 89: 
 
 2*  *  *  *  *  *  *   
 3[(2A) No person shall be liable to conviction under sub -section (1) or sub -section (2) by 
reason only of the failure to produce the certificate of insurance if, within seven days from the date 
on which its production was required under sub -section (1) or, as the case may be, from the date of 
occurrence of the accident, he produces the certificate at such police station as may have been 
specified by him to the police officer who required its production or, as the case may be, to the police 
officer at the site of accident or to the officer in charge of the police station at which he reported the 
accident:   
 Provided that, except to such extent and with such modifications as may be prescrib ed the 
provisions of this sub-section shall not apply to the driver of a transport vehicle.]   
 (3) The owner of a motor vehicle shall give such information as he may be required by or on 
behalf of a police officer empowered in this behalf by the provincial  Government to give for the 
purpose of determining whether the vehicle was or was not being driven in contravention of section 
94 and on any occasion when the driver was required under this section to produce his certificate of 
insurance. 
 
 1Ins. by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.7 (with effect from the 1st March, 1949). 
 2Omitted, ibid. (with effect from the 1st March, 1949). 
 3Ins. ibid. (with effect from the 1st March, 1949). 
 
  
Page 13 of 15 
 
 (4) In this section the expression “produce his certi ficate of insurance” means produce for 
examination the relevant certificate of insurance or such other evidence as may be prescribed that the 
vehicle was not being driven in contravention of section 94. 
 
 107. Production of certificates of Insurance on app lication for authority to use vehicle . 
A Provincial Government may make rules requiring the owner of any motor vehicle when applying 
whether by payment of a tax or otherwise for authority to use the vehicle in a public place to produce 
such evidence as may be prescribed by those rules to the effect that either— 
 
(a)  on the date when the authority to use the vehicle comes into operation there 
will be in force the necessary policy of insurance in relation to the use of the 
vehicle by the applicant or by othe r persons on his order or with his 
permission, or 
 
(b)  the vehicle is a vehicle to which section 94 does not apply. 
 
 108. Co-operative Insurance.— (1) A Provincial Government may, on the application of a 
co-operative society of 1[transport vehicle] owner s registered or deemed to have been registered 
under  the Co-operative Societies Act, 1912 (II of 1912), or under an  Act of a Provincial Legislature  
governing the registration of Co -operative Societies and subject to the control of the Registrar  of 
Co-operative Societies of the Province, allow the society to transact  the business of an insurer for 
the purposes of this Chapter 2* * *, subject to the following conditions, namely:__ 
 
(a)  the society shall establish and maintain a fund of not less than twent y-five 
thousand rupees for the first fifty vehicles or fractional part thereof and pro 
rata for every additional vehicle in the possession of members of 3[and insured 
with,] the society and the said fund shall be lodged in such custody as the 
Provincial Government may prescribe and shall not be available for meeting 
claims or other expenses except in the event of the winding up of the society;  
 
4 [(b)  the insurance business of the society shall except to the extent permitted under 
clause ( cc) be limited t o transport vehicles owned by its members, and its 
liability shall be limited as specified in sub-section (2) of section 95;] 
 
(c)  the society shall, if required by the Provincial Government , re-insure against 
claims above 5[such amount as may be specifie d by the Provincial 
Government]; 
 
6[(cc)  the society may, if permitted by the Provincial Government and subject to 
such conditions and limitations as may be imposed by it, accept reinsurances 
from other societies allowed to transact the business of an ins urer under this 
section;] 
 
(d)  the provisions of this Chapter, in so far as they relate to the protection of third 
parties and to the issue and production of certificates, shall apply in respect of 
any insurance effected by the society; 
 
 1Subs. by the  Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.8 (with effect from the 1st March, 1949). 
 2Omitted ibid. (with effect from the 1st March, 1949). 
 3Ins. ibid, (with effect from the 1st March, 1949). 
 4Subs. ibid., (with effect from the 1st March, 1949). 
 5Subs. ibid., (with effect from the 1st March, 1949). 
6Ins. by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.8 (with effect from the 1st March, 1949). 
 
  
Page 14 of 15 
 
(e)  an independent authority not associated with the society shall be appointed by 
the Provi ncial Government to facilitate and assist in the settling of claims 
against the society; 
 
(f)  the society shall operate on an insurance basis, that is to say,__ 
 
(i)  it shall levy its premiums in respect of a period not exceeding twelve 
months, during wh ich period the insured shall be held covered in 
respect of all accidents arising,  subject to the limits of liability 
specified in 1* * *  sub-section (2) of section 95; 
 
(ii)  it shall charge premiums estimated to be sufficient, having regard to 
the risks, to meet  the capitalis ed value of all claims arising during the 
period of cover, together with an adequate charge for expenses 
attaching to the issue of policies and to the settlement of claims arising 
thereunder; 
 
(g) the society shall furnish to the 2[Controller] of Insurance the returns required 
to be furnished by insurers under the provisions of the Insurance Act, 1938 (IV 
of 1938), and the 2[Controller] of Insurance may exercise in respect thereof 
any of the powers  exercisable by him in respect of r eturns made to him under 
the said Act; and 
 
3[(h)  the society shall, in respect of any business transacted by it of the nature 
referred to in clause (i) of the proviso to sub -section (1) of section 95, be 
deemed to be an insurer  within the meaning o f sub-section (1) of section 10 
and sub-section (6) of section 13 of  the Insurance Act,1938 (IV of 1938)]. 
 
 4[(2) The provisions of the I nsurance Act, 1938 (IV of 1938), relating to the winding up of 
insurance companies shall, to the exclusion of any other law inconsistent therewith and subject to 
such modifications as may be prescribed, apply to the winding up of a co -operative society allowed 
to transact the business of an insurer under this section as if it were an insurance company; but save 
as hereinbefore provided, the Insurance Act, 1938 (IV of 1938), shall not apply to such society.] 
 
 109. Duty to furnish particulars of vehicle involved in accident.  A registering authority or  
the officer in charge of a police station shall, if so required by a person who alleges that he is entitled 
to claim compensation in respect of an accident arising out of the use of a motor  vehicle, or if so 
required by an insurer against whom a claim has been made in respect of any motor vehicle, furnish 
to that person or to that insurer, as the case may be, on payment of  prescribed fee any information at 
the disposal of the said authority or the said police  officer  relating to  the identification marks and 
other particulars of the vehicle and the name and address of  the person who was using the vehicle at 
the time of the accident or was injured by it. 
 
 110. Power to appoint persons to investigate and repo rt on accidents . A Provincial 
Government may, by notification in the official Gazette, appoint a person or a body of persons to 
investigate and report on accidents involving the death of or bodily injury to any person arising out 
of the use of motor vehicles and the extent to which their claims to compensation have been satisfied 
 
 1The words “clause (b) of  omitted ibid. 
 2Subs. by the Motor Vehicles (Amdt.) Act, 1953 (XIX of 1953),s.6. (with effect from the 15th May, 1950). 
 3Subs. by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.8 (with effect from the 1st March, 1949). 
 4Subs. ibid. (with effect from the 1st March, 1949). 
 
  
Page 15 of 15 
 
and to advise and assist such persons or their representatives in presenting their claims for 
compensation: 
 
 Provided that nothing in this section shall confer on any such person or body of persons the 
right to adjudicate in any way on the liability of the insurer or on the amount of damages to be 
awarded except at the express desires of the insurer concerned. 
 
 111. Power to make rules.— (1) The 1[Federal Government] may make rules for the purpose 
of  carrying into effect the provisions of this Chapter. 
 
 (2) Without prejudice to the generality of the foregoing power, such rules may provide for— 
  
(a)  the forms to be used for the purposes of this Chapter; 
 
(b)  the making of applications for and the issue of certificates of insurance; 
 
(c)  the issue of duplicates to replace certificates of insurance 2[mutilated, 
defaced,] lost or destroyed; 
 
(d)  the custody, production, canc ellation and surrender of certificates of 
insurance; 
 
(e)  the records to be maintained by in surers of policies of insurance  issued  under 
this Chapter; 
 
(f)  the identification by certificates or otherwise of persons or vehicles exempted 
from the provisions of this Chapter; 
 
(g)  the furnishing of information respecting policies of insurance by insurers; 
 
(h)  the carrying into effect of the provisions of section 108; 
 
(i)  adapting the provisions of this Chapter to vehicles brought into 3[Pakistan] by 
persons making only a temporary stay therein by applying those provisions 
with prescribed modifications; and 
 
(j)  any other matter which is to be or may be prescribed. 
 
CHAPTER IX 
 
OFFENCES, PENALTIES AND PROCEDURE 
 
 125. Driving uninsured vehicles . Whoever drives a motor vehicle or causes or allows a 
motor vehicle to be driven in contravention of the provisions of section 94 shall be punishable with 
imprisonment which may extend to three months, or with fine which may extend to five hundred 
rupees, or with both. 
 
 [Chapters IX, X (except section 125) and Schedules I to XI have been repe aled in its 
application to the Province of West Pakistan by the Provincial Motor Vehicles Ordinance, 1965 (XIX 
of 1965), section 122 and 14th Schedule.]      Date: 11-11-2024 
157439 
 1Subs. by the Federal Adaptation of Laws Order, 1975 (F.A.O. No. IV of  1975) , Art. 2 and Table. 
 2Ins. by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947), s.9 (with effect from the 1st March, 1949). 
 3Subs. by the Central Laws (Statute Reform) Ordi nance, 1960 (21 of 1960), s.3 and 2 nd Sch. (with effect from the 14 th October, 1955), for 
 “the Provinces and the Capital of the Federation” which had been subs. by A.O., 1949, for “British India”.