Severe penal action for refusal of 3rd party insurance: IRDA

Insurance companies, which are declining third party insurance, would face severe penalties that would be more onerous than the business they forgone, warns the insurance regulator

New Delhi: The Insurance regulatory and Development Authority (IRDA), has said "severe" penal action will be taken against those general insurance companies refusing third party motor insurance, reports PTI.
"Some companies are also declining third party insurance. They will find it not in their best interest to do so because if companies do not abide by the rules we have laid down such companies will be visited by very severe penalties which will be more onerous than the business they are foregone," IRDA Chairman J Hari Narayan said on the sidelines of a CII event.
Third party motor insurance provides cover mainly pedestrians, fare-paying and non fare paying passengers in a vehicle.
Private sector insurers try to avoid writing such policies because of the high claim ratio in the commercial vehicle space. This leads to the public sector companies being hit the most.
Recently, IRDA came out with guidelines for implementation of declined risk pool system. The regulator has laid down a method for transferring risks to the newly formed declined risk pool for third-party motor policies.
As per the guidelines, the declined risk pool would apply to commercial vehicles for standalone third-party liability insurance and no comprehensive motor insurance policy can be settled from the pool.
The size of the pool is likely to shrink to a quarter because of the comprehensive policy going out of the ambit of the pool.


Suprajit Engineering: High dividends

 Hefty dividends and rising share price of Suprajit Engineering make its shares a fine 'buy'...

Premium Content
Monthly Digital Access


Already A Subscriber?
Yearly Digital+Print Access


Moneylife Magazine Subscriber or MSSN member?

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
Gutkha ads and an eye-opener from a late minister's wife

Following ban on gutkha in several states, the manufacturer’s lobby has come out with ads in local newspapers. These ads are silent on the killer substance but try to tell people that gutkha is less poisonous than cigarette! However, all these tall claims has been rebutted by the wife of a victim, a former minister who succumbed to oral cancer

Since past few days, some mainline dailies from Mumbai and Delhi are seen carrying full page ads from gutkha manufacturer’s lobby, which try to claim that gutkha is less harmful than cigarette and it the cigarette manufacturers ‘powerful’ lobby that is hell-bent to destroy their “harmless industry”. This half-hearted claim has evoked anger among readers. One such reader, Sumitra Pednekar, has written a strong letter to editors of these newspapers, pointing out that these ads are not just untrue but may also be termed as contempt of court.
Ms Pednekar is the wife of Satish Pednekar, former minister for home and labour in Maharashtra. The 60 year-old Congressman Pednekar died of oral cancer last year caused by a habit of chewing mawa
Last month, the Bombay High Court upheld Maharashtra government’s decision to ban gutkha in the state. The high court also refused to give any relief to eight big manufacturers of gutkha, pan masala and allied products. Several states like Delhi and Gujarat have also banned gutkha.
Here is the letter written by Ms Pednekar...
Dear Sir,
In the past few days, readers of the Mumbai and Delhi editions of your esteemed dailies have been targeted by a front-page advertisement issued by the gutkha manufacturers’ lobby. I would like to caution you that not only are this ad full of lies and half-truths, but also, it constitutes an in-your-face contempt of court. Through this ad, the gutkha industry seeks to raise an outcry against the judgments of six high courts, including Bombay and Delhi High Court that have ruled in favour of the ban. 
Sir, are you aware that by publishing this ad, you are unwittingly made into accomplices in openly defying the judiciary? Have you considered the possibility of contempt of court notices being issued against your newspapers and you personally?
Let me introduce myself. I am Mrs Sumitra Pednekar, wife of Maharashtra’s former home and labour minister Satish Pednekar, who died of oral cancer last year. My husband’s illness happened because of his addiction to mawa, a mix of chewing tobacco and pan masala. In his last few months, my husband could not swallow even watery dal-khichdi. My daughters and I are still struggling to come to terms with the scars left by his extended illness and tragic demise.
gutkha ads, gutkha, cigarette
This ad that you have been publishing appears to be a last-gasp effort of this industry to get popular support for an unjust and inhuman industry that has made many victims like me and my family.
Below is our rebuttal to the untruths that the ad seeks to spread. We urge you to carry this rebuttal prominently to counter the misinformation spread by the ad:
1) This ad claims, “14 states in India believe that cigarettes are healthy”. This is patently untrue because cigarettes sold everywhere are forced to prominently carry a statutory pictorial warning that states that cigarette smoking is injurious to health. There is no state in India where cigarettes are considered ‘healthy’.
2) The ad argues, “gutkha with lesser tobacco is banned in 14 states, while cigarettes which have more tobacco are not.” This is a deeply flawed argument. Gutkha and cigarette are governed by two different legislations. Gutkha is a food product containing tobacco while cigarettes are not a food product. The sale of gutkha has been banned under the Food Safety Act, 2006, and Food Safety Regulations, whereas cigarettes and bidis are not governed under this act, as they are not food products. They are governed by the provisions of COTPA (Cigarettes & Other Tobacco Products Act). The gutkha manufacturers have tried hard to have it classified as “not a food”, but unfortunately for them, gutkha was defined as food item by Supreme Court in the Ghodavat Pan Masala case. The license for manufacturing gutkha is issued by the food ministry. So, the gutkha manufacturers are trying to mislead people by equating gutkha (a toxic food product) with cigarette/bidi (a harmful tobacco product that cannot be eaten). Please note, there is no ban on tobacco, which is simply an agricultural crop and a naturally occurring plant material. However, there is a ban on adding this plant material into any food meant for human ingestion, because it is toxic. Food Safety Act bans adding known toxins in food.
3) The ad claims, “One pouch of gutkha contains 0.2 g of tobacco, compared to 0.63 g in one cigarette”. This statistic tries to imply that less tobacco is safer. That is incorrect. There is no safe level of tobacco consumption, and it is harmful in any quantity and in all forms. This fact is well recognized by the Government of India, which is doing a lot to minimize its consumption in all forms.
4) The ad claims, “A cigarette has 4,000 chemicals, as opposed to 3,000 in smokeless tobacco”. This is a meaningless statistic thrown at half-literate people to mislead them. It has no scientific basis whatsoever.
5) The ad claims, “Unlike cigarettes, gutkha is not harmful for others around you”. This is an effort to obfuscate the issue of gutkha ban with the second-hand smoking issue. It implies that consuming gutkha is a “victimless crime”, and that the gutkha-eater is not harming anyone in society. That is untrue. When a person consuming gutkha suffers from oral cancer, his entire family is the sufferer; who should know this better than I? In many cases, the cheeks, upper and lower jaws of the gutkha consumer are removed. Such a person is unable to eat or speak normally, and must overcome many hurdles to function as in society and in any occupation. The spouse of the gutkha addict is a victim of his consumption in economic and social terms. Every gutkha addict who contracts oral cancer creates four to five scarred victims created in his family, for whom life will never be the same again. There is no complete cure. Even after surgery and treatment, such people and their families live in the lifelong fear of recurrence. Tata Memorial Hospital is full of such victims, queuing up for treatment and post-surgical check-ups.
6) Lastly, the ad claims, “Thousands of small gutkha manufacturers are being shut down by the powerful lobby of cigarette companies”. The effort here is to paint the powerful and influential gutkha lobby in the colours of a victim. It is most emphatically not a victim, but the perpetrator of a crime against humanity that is at long last being curbed. In states gutkha bans are not happening because of the cigarette lobby, but because of a central legislation, namely the Food Safety Act, 2006, which is simply being implemented by the states. It is happening because the government is simply doing its mandated duty to improve the nutritional status of its citizens, by preventing adulterants and toxic substances from being added into foods.
May we once again remind you that the ban on gutkha has been imposed after the High Courts of Rajasthan, MP, Bihar, Kerala, Bombay and Delhi applied their mind to the gutkha manufacturers’ pleas for stay on the ban, and rejected their pleas? By challenging this ban through advertisements, the gutkha manufacturers are treading on extremely dangerous territory… and so are you. In the interest of your readers, and in your own interest, we would urge you not to publish such ads.
With Best Wishes,
Sumitra Satish Pednekar



Malegiri Das

4 years ago

Good eye opener.. thanks money life for bringing such wonderful and people friendly articles which we otherwise do not see in any so called main stream news papers..


4 years ago

Even though the argument is touching and correct in its interpretation, the question is why should gutkha and cigarettes be not treated as equal? Both are equally harmful. Banning gutkha will not prevent the addicts from switching to paan or cigarette. Even an underground industry will be created for selling gutkha. My sympathies are with the poor lady but gutkha industry did not compel his husband to consume gutkha. It is a self inflicted industry and there are thousands of helpless widows whose husbands have died from lung cancer due to smoking. Both gutkha and cigarette are bad and lets treat both as equal.

Dr Anantha K Ramdas

4 years ago

Lot of us get into the habbit of smoking or eating gutka due to our circumstances of people "around" us who are themselves victims of these habbits. We need to get this education at the early age and this must form part of the curriculam.

Ban on tobacco products, whether in the form of "smoke" in beedies, cigarettes, hokkah, or through the media of snuff, gutka and direct chewing of raw tobacco is the urgent need to prevent our children falling victims to "fashion" of using these. These must be off the shelf everywhere.

As for thousands who are employed in these trade, including farming of tobacco, yes, they need to be gainfully employed in other areas. That kind of revolutionary idea will take a minimum of a decade to accomplish, if not more.

Yet, we can make a start. We must appreciate Mrs Sumitra for courageously coming forward to state her case in the best interest of the family.


4 years ago

Gutka is just as problematic as cigarette, the only saving grace is it does not cause secondary and tertiary problems. Think again what about the spitting out?
But Banning Gutka sale is not the solution, for it would only tap a black market segment. What ever state revenue coming would be lost in addition to being unable to curb the the gutka. One way is control production, and second way is to hike its price.

Sharad Jain

4 years ago

The ban on Gutka is a big farce being perpetrated on us by the Government and the Gutka lobby. Now the same "poison" is available in separate pouches!!LOL

We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)