MOTOR VEHICLES ACT, 1939

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MOTOR VEHICLES ACT, 1939 
(IV of 1939) 
CONTENTS 
CHAPTER VII 
Motor Vehicles temporary leaving or visiting Pakistan 
92. Power of Central Government to make Rules 
CHAPTER VIII 
Insurance of motor vehicles against third party risks 
93. Definitions 
94. Necessity for insurance against third part 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 lia bility of insured or claims 
by third parties 
102. Effect of death on certain causes of action 
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 vehicles involved in accidents 
110. Power to appoint person to investigate and report on accident 
111. Power to make rules 
125. Driving uninsured vehicle 
TEXT 
MOTOR VEHICLES ACT, 1939 
(IV of 1939) 
[16th February, 1939] 
[See Section 122 and Fourteenth Schedule of W.P. Motor Vehicles Ordinance, 1965] 
CHAPTER VII 
Motor Vehicles temporary leaving or visiting Pakistan 
92. Power of Central Government to make Rules .– (1) The Central 
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 travelling passes, certificates or 
authorisation to persons temporarily taking motor vehicles out of 
Pakistan to any place outside Pakis tan or to persons temporarily 
proceedings out of Pakistan to any place outside Pakistan and desiring 
to drive a motor vehicle during their absence from Pakistan; 
(b) prescribing the conditions subject to which motor vehicles brought 
temporarily into Pakistan from outside Pakistan by persons intending to 
make a temporary stay in Pakistan may be possessed and used in 
Pakistan; and 
(c) prescribing the conditions subject to which persons entering Pakistan 
from any place outside Pakistan for a temporary stay in Pakistan  may 
drive motor vehicle in 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 vehicle or their users. 
(3) Rules made under clauses ( b) and (c) of sub-section (1) shall, in case 
of motor vehicles and persons entering Pakistan from the French and Portuguese  
settlements bounded by India, be applicable only to motor traffic to which the 
International Convention relating to motor traffic co ncluded at Paris on the 24th day 
of April 1926 or any Convention modifying the same applies. 
(4) Nothing in  this Act or in any rule made thereunder by a Provincial 
Government relating to– 
(a) the registration and identification of motor vehicle, or 
(b) the requirements as to construction, maintenance and equipment of 
motor vehicles, or 
(c) the licensing an 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:– 
(a) “authorised insurer” means an insurer in whose case the requirements 
of the Insurance Act, 1938, or of the corresponding law of a 
reciprocating territory with respect to the registration of insurers are 
complied with and inc ludes, where the business of insuring  motor 
vehicles against third part y risks is carried on by the Central 
Government or a Provincial Government or the Government of an 
Acceding State or a non-Acceding State which is reciprocating territory, 
such Government; 
(b) “certificate of insurance”  means a certificate issued by an authorized 
insurer in pursuance of sub -section (4) of section 95; and i ncludes a 
cover not 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; 
(c) “reciprocating territory” means any such Acceding State or a non -
Acceding State as may be notified by the Central Government in the 
official Gazette to be a reciprocating territory for the purposes of this 
Chapter. 
94. Necessity for insurance against third part risk .– (1) No person shall use 
except as a passenger cause or allow any other person to use a motor vehicle in a 
public place, unless there is in force in relation to 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 the vehicle such policy 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) Subject to any prescribed conditions, sub -section (1) shall not apply  to 
any vehicle owned by any of the following authorities, namely:– 
(i) the Central Government; 
(ii) [* * * * * * * * * * *   ] 
(iii) any Provincial Government; 
(iv) the Government; of any Acceding State or a non-Acceding State; 
(v) the Government; of the French or  Portuguese Settlements bounded by 
India; 
(vi) any local authority in Pakistan exempted from the operation of the sub-
section (1) by order of the Central Government; or a Provincial 
Government; 
(vii) any local authority established or continued by  the authority of the 
Crown Representative exempted from the operation of sub -section (1) 
by order of the Central Government; 
(viii) any local authority in an Acceding State or a non -Acceding State within 
policies of insurance are required by provision of law to be taken out in 
relation to the use of motor vehicle, which has been exempted from the 
operation of such provision. 
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 issued by a person who is an authorized insurer or by a co-operative 
society allowed under section 108 to transact the business of an 
insurer; and 
(b) Insures the person or classes of persons 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 in Pakistan or in a reciprocating territory: 
Provided that a policy shall not required:– 
(i) To cover liability in respect of the death, arising out of and in the course 
of 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 , other than a liability arising 
under the Workmen’s Compensation Act, 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 occurr ence 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 upto the following limits , 
namely:– 
(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, in respect  of the death of, or bodily injury to  employs 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 pursuance of a contract of employment,  
in respect of persons other tha n 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 individual 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 ve hicle is registered to carry 
more than six passengers excluding the driver; 
(c) where the vehicle is vehicle of any other class the amount of the 
liability incurred. 
1
[(3) * * * * * * * * * * *   ] 
(4) A policy shall be of no effect for the purposes of thi s 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 
2
[* * *]  in the prescribed form and containing the 
prescribed particulars of any conditions subject to which the policy is issued and of  
any other prescribed matter s; and different forms, particulars 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 sh all be liable to indemnify the 
person or classes of persons 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 persons. 
96. Duty of insurers to satisfy judgments against persons insured in respect 
of third party risks .– (1) If, after a certificate of insurance 
3
[******] has been issued 
under sub -section (4) of section 95 in favour of the person b y 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 Section 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 av oid or cancel or may have 
avoided or cancelled, the policy, the insurer shall, subject 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 w as the judgment-debtor in respect of 
the liability, together with any amount payable in respect of costs and any sum 
payable in respect of interest of that sum by virtue of any enactment relating to 
interest on judgments. 
(2) No sum shall be payable by an insurer und er 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 ex ecution is stayed 
thereon pending an appeal; and 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 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 lost or destroyed, or 
that either before or not later than fourteen days after the happening of 
                                                           
1Omitted by the Motor Vehicles (Amdt.) Act, 1947 (XXVII of 1947). 
2Certain words omitted, ibid. 
3Certain words omitted by Motor Vehicles (Admt.) Act, 1947 (XXVII of 1947). 
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 i s on the date of the contract of 
insurance a vehicle not covered by a permit to ply for hire or reward; 
(b) for organized racing and speed testing; or 
(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 duly licensed, or by any person who has been 
disqualified for holding or obtaining a driving licence during the period 
of disqualification; 
(iii) a condi tion excluding liability for inju ry caused or contributed to by  
conditions of war, civil war, riot or civil commotion; or 
(e) that the policy is void on th e 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
[(2-A) Where any such judgment as is referred 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 1938J),  
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 b y a Court in 
Pakistan: 
(3) Where a certificate of insurance 
2
[******] has been issued under sub -
section (4) of section 95 to the pe rson 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 than 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 discharge of any 
liability of any person which is covered by the policy by virtue only of thi s 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 woul d 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. 
                                                           
1Inserted by Motor Vehicles (Admt.) Act, 1947 (XXVII of 1947). 
2Certain word omitted, ibid. 
(5) In this section the expression “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 pol icy” means a liability which is covered by the policy or which would be so 
covered but for the fact that the insurer is entitled to avoid or cancel or has avoided 
or cancelled the policy. 
(6) No insurer to whom the notice referred to in sub -section (2) or sub-
section (2 -A) has been issued  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) or 
sub-section (2-A) otherwise than in the manner provided for in sub-section (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 the 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 prov ision 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 t he 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 Chapter, 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 indirectl y 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 es tate 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– 
(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  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 pa rty, 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 i nformation 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 liabilit y 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 arrangement 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 Law of 
Insolvency, or in the event of a winding up order being made or a resolution for a 
voluntary winding up being passed with respect to any company or of a receiver o r 
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 o f the insolvent debtor, personal representative of the deceased debtor or 
company, as the case may be, or the official assignee or receiver in insolvency, 
trustee, liquidator, receiver or manager, or person in possession of the property to 
give at the requ est of any person claiming than 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 a ny 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 part ies thereunder upon t he 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 other wise, 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. 
 (2) Where a person who is insured under a policy issued for the purposes 
of this Chapter has become insolvent, or where, if suc h 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 u p, as the case may be, nor 
any w aiver, 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 respect 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 capacity 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. Insolvency of insured persons not to affect  liability of insured or clai ms 
by third parties.– Where a certificate of insurance has been issued to the pe rson by 
whom a policy has been effected, the happening in relation to any person insured by 
the policy of any 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 de ath on certain causes of action .– Notwithstanding any thing 
contained in section 306 of the Succession Act, 1925, the death of a person in 
whose favour a certificate of insurance had been issued, if it occurs after the 
happening of an event which has given rise to a claim under the provisions of this 
chapter, 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 insur er and the 
insured person, then– 
(a) If and so long as the pol icy 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  insured, be deemed to have 
issued to the insured person a policy of insurance confirming in all 
respects with the descriptions and particulars  stated in such certificate; 
and  
(b) If the insurer has issued to the insured the policy described in the 
certificate, but the actual terms of the policy or less favorable to 
persons claiming under or by virtue of t he policy against the insurer 
either directly or through the insured than the particulars of the policy 
as stated in the certificate,  the policy shall, as between the insurer and 
any other person ex cept the insured, be deemed to be in terms 
confirming all respects with the particulars stated in the said certificate. 
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 delivered to the insurer by whom policy was issued the latest certificate 
of insurance given by the insurer in respect  of the said policy, for if the said 
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 with fine which may extend to fifteen rupees for every day that the 
offence continuous subject to a maximum of five hundred rupees. 
105. Duty of insurer to notify registering authority cancellation or suspension 
of the poli cy.– 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 with in 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 Provincial 
Government may prescribed. 
106. Production of certificate of insurance. – (1) Any person drivi ng a motor 
vehicle in any publi c place shall on being so required by a police officer in uniform 
authorised in this behalf by the Provincial Government produce the certificate of 
insurance relating to the use of the vehicles. 
 (2) If, where owing to the presence of a motor vehicle in a public place an 
accident, occurs involving bodily injury to an other 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-A) No person shall be liable to conviction under sub section (1) or sub 
section 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 he may be, from the date of occurrence of the accident, 
he produces the certificate at such police station as may hav e 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 t o the officer-in-charge of the Police S tation at which 
he reported the accident: 
 Provided that, except to such extent and with such modifications as may be 
prescribed, the provisio ns 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 g ive for the purpose of determining  whether the vehicle was or was 
not being driven in contravention of Section  94 and on any occasion when t he driver 
was required under this section to produce his certificate of insurance. 
 (4) In this section the expressio n “ produce his certificate  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 o f insurance on application 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 s uch 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 other 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 transport ve hicle owners registered or 
deemed to have been registered under the co -operative Societies Act, 1912, or 
under an Act of a Provincial Legislative 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, subject to the following conditions, namely:– 
(a) the society shall establish and maintain a fund of not less than twenty -
five thousand  for the first fifty vehicles or fraction al part thereof and 
prorate for every addition vehicle in the possession of members of and 
insured with the society and the said fund shall be  lodged in such 
custody as the P rovincial Government may prescribe and sh all not be 
available for meeting claims or other expenses except in the event of 
the winding up of the society;  
(b) the insurance business of the society shall except to the extent 
permitted under clause (cc) be limited to transport vehicles owned by 
its members, and its liability shall be limited as specifies in sub -section 
(2) of section 95; 
(c) the society shall, if required by the provincial Government reinsure 
against claims above such amount as may be specified by the 
Provincial Government; 
(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 insurer under this section; 
(d) the provisions of this Chapter, insofar 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; 
(e) an independent authority not associated with the soc iety shall be  
appointed by the P rovincial 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 which period the insured shall be held 
covered in respect of all accidents arising, subject to the limits of 
liability specified in sub-section (2) of section 95; 
(ii) it shall charge premium estimated to be sufficient, having regard 
to the  risks, to meet the capitalized value of all claims arising 
during the period of cover, together with and adequate charge 
for expenses attaching to the issue of policies and to the 
settlement of claims arising thereunder; 
(g) the society shall furnish to t he Controller of Insurance the returns 
required to be furnished by insurers under the provisions of the 
Insurance Act, 1938, and the Controller of Insurance may exercise in 
respect thereof the powers  exercisable by him in respect of returns 
made to him under the said Act; and 
(h) the society shall, in respect of any business transacted by it of the 
nature referred to in cl ause (i) of the proviso to sub -section (1) Section 
95, be deemed to be an insurer within the meaning of sub -section (1) 
of Section 10, sub-section(6) of Section 13 of the insurance Act,1938. 
 (2) The provisions of the insurance Act, 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 shall not apply to such society. 
109. Duty to furnish particulars of vehicles involved in accidents .– A 
registering authority or the officer-in-charge of a police station  shall, if so required by 
a person who allege that he is entitled to claim compensation in respect of an 
accident a rising 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 a ny motor vehicle, furnish to that 
person or  to that insurer, as the case may be, on payment of prescribed fee any 
information at th e disposal of the said authority or the said Police Officer relating to 
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 person to investigate and report on accident. – 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 and to advise and assist 
such persons or representatives presenting their claims for compensation: 
 Provided that nothing in this section s hall 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 Federal Government may make rules for the 
purpose of carrying into effect the provisions of the 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 application for and the issue of certificates of insurance; 
(c) the issue of duplicates to replace certificates of insurance mutilated, 
defaced, lost or destroyed; 
(d) the custody, production, cancellation and surrender of certificates of 
insurance; 
(e) the records to be maintained by insurers of policies of insurances 
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 policy of insurance by insurer; 
(h) the carrying into effect of the provisions of section 108; 
(i) adapting the provisions of this Chapter to vehicles brought into 
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. 
125. Driving uninsured vehicle. – Whoever drives a motor vehicle or causes or 
allows motor vehicle to be driven in contravention of the provisions of secti on 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.