The Motor Vehicle Act 1988 replaces the M V Act 1939 and it came into force from 1st July 1989. The Motor Vehicles (Amendment) Act, 1988 has introduced changes which have far-reaching consequences. Chapter (XI) provides for compulsory insurance of motor vehicles. No motor vehicle can be used in a public place unless there is in force in relation to that vehicle a policy of insurance issued by an authorized insurer. The policy is required to cover insured’s liability in respect of death of bodily injury of certain persons (.e.g. third parties, fare-paying passengers, paid drivers, etc) and damage to property of third parties. The limits of liabilities required to be covered are also prescribed in the act. The Act also provides for constitution of Motor Accidents Claims Tribunals by the State Government. The object of this amendment is to ensure speedy settlement of persons involved in Motor Vehicle accidents. The Act mandates payments of compensation to the victims of accidents arising out of the use of a motor vehicle or motor vehicles in public places by the owner or owners as the case may be. The Act provided for compensation of Rs. 50,000 in case of death and of Rs. 25,000 in the case of injury without burden of proof of fault on the part of the vehicle owner. A claimant may seek compensation the basis of the structured formula prescribed in the Act. Besides, a claimant may at his option approach the Tribunal having jurisdiction over the area (i) in which the accident occurred, or (ii) where he resides, or (iii) carries on business or (iv) Where the defendant resides.