Motor Vehicle Act
Transcript of Motor Vehicle Act
Rosary College of Commerce & Arts
Insurance
A report on the Motor Vehicles Act 1938 and 1988, Marine Insurance Act 1963, Workmen Compensation Act, Public
Liability Act 1991 and ESI Act 1948
SUBMITTED BY
Group 2Morzenia Almeida Coutinho R-10-01Alency Dias R-10-11Asiel Lobo R-10-25Meliva Pereira R-10-29
Saturday, 18 August 2012
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Motor Vehicles Act
The motor vehicles Act, 1939 ( 4 of 1939), consolidates and amends the law relating
to motor vehicles. This has been amended several times to keep it up to date. The
need was, however, felt that this Act should, now inter alia, take into account also
changes in the road transport technology, pattern of passenger and freight movements,
developments, of the road network in the country and particularly the improved
techniques in the motor vehicles management. Various Committees, like, National
Transport Policy Committee, National Police Commission, Road Safety Committee,
Low Powered Two – Wheelers Committee, as also the Law Commission have gone
into different aspects of road transport. They have recommended updating, simplification
and rationalization of this law. Several Members of Parliament have also urged for
comprehensive review of the Motor Vehicles Act, 1939.
A Working Group was, therefore, constituted in January, 1984 to review all the
provisions of the Motor Vehicles Act, 1939 and to submit draft proposals for a
comprehensive legislation to replace the existing Act. This Working Group took into
account the suggestions and recommendations earlier made by various bodies and
institutions like Central Institute of Road Transport (CIRT), Automotive Research
Association of India (ARAI), and other transport organisations including, the
manufacturers and the general public, Besides, obtaining comments of State
Governments on the recommendations of the Working Group, these were discussed in
a specially convened meeting of Transport Ministers of all States and Union
territories.
Some of the more important modifications so suggested related for taking care of
(a) the fast increasing number of both commercial vehicles and personal
vehicles in the country ;
(b) the need for encouraging adoption of higher technology in automotive sector;
(c) the greater flow of passenger and freight with the least impediments so that
islands of isolation are not created leading to regional or local imbalances;
(d)concern for road safety standards, and pollution-control measures, standards for
transportation of hazardous and explosive materials;
(e) simplification of procedure and policy liberalization’s for private sector operations
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in the road transport field ; and
(f) need for effective ways of tracking down traffic offenders.
The Supreme Court in M. K. Kunhimohammed v. P. A. Ahmedkutty (1987) 4 S.C.C. 284,
has made certain suggestions to raise the limit of compensation payable as a result of
motor accidents in respect of death and permanent disablement in the event of there
being no proof of fault on the part of the person involved in the accident and also
in hit and run motor accidents and to remove certain disparities in the liability of the
insurer to pay compensation depending upon the class or type of vehicles involved in
the accident. The above suggestions made by the Supreme Court have been
incorporated in the Bill.
Some of the more important provisions of the Bill provide for the following matters,
namely:-
(a) rationalization of certain definitions with additions of certain new definitions of
new types of vehicles;
(b) stricter procedures relating to grant of driving licences and the period of
validity thereof;
(c) laying down of standards for the components and parts of motor vehicles;
(d) standards for anti-pollution control devices;
(e) provision for issuing fitness certificates of vehicles also by the authorised
testing stations;
(f) enabling provision for updating the system of registration marks;
(g) liberalised schemes for grant of stage carriage permits on non-nationalised
routes, all-India Tourist permits and also national permits for goods carriages;
(h) administration of the Solatium Scheme by the General Insurance
Corporation;
(i) provision for enhanced compensation in cases of “no fault liability” and in
hit and run motor accidents;
(j) provision for payment of compensation by the insurer to the extent of actual
liability to the victims of motor accidents irrespective of the class of vehicles;
(k) maintenance of State registers for driving licences and vehicle registration;
(l) constitution of Road Safety Councils.
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The Act came into force with effect from 1st July, 1989 replacing the Motor Vehicles
Act, 1939.After the coming into force of the Motor Vehicles Act, 1988, Government
received a number of representations and suggestions from the state govt. transport
operators and members of public regarding the inconvenience faced by them because of
the operation of some of the provisions of the 1988 Act. A Review Committee was,
therefore, constituted by the Government in March, 1990 to examine and review the
1988 Act.
Marine Insurance Act, 1963
The Indian Marine Insurance Act came into operation on August 1, 1963 and is a
comprehensive document containing all regulations of marine insurance business in India.
Under the Marine Insurance Act, 1963, a Contract of Marine Insurance has been defined as
an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to
the extent thereby agreed, against marine losses, that is to say, the losses incidental to marine
adventure. The Act provides that a contract of marine insurance may, by its express terms, or
by usage of trade, be extended so as to protect the assured against losses on inland waters or
on any land risk which may be incidental to any sea voyage. Every lawful marine adventure
may be the subject of a contract of marine insurance. Subject to the provisions of this Act,
every person has an insurable interest who is interested in a marine adventure.
In India marine insurance is transacted by the subsidiaries of the General Insurance
Corporation of India- New India Assurance, National Insurance, Oriental Insurance and
United India Insurance. Marine and hull insurance contribute 20% to the total premium of the
general insurance industry in India.
Kinds of marine insurance
There are four classes of marine insurance:
a) Hull Insurance: covers physical damage to the ship or vessel. In addition it contains a
collision liability clause that covers the owner’s liability if the ship collides with another
vessel or damages its cargo.
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b) Cargo Insurance: covers the shipper of goods if the goods are damaged or lost. The
policy can be written to cover a single shipment. If regular shipments are made, an open
cargo policy can be used that insures the goods automatically when a shipment is made. The
open cargo policy has no expiration date and remains in force till it is cancelled.
c) Protection and Indemnity (P&I) insurance: is usually written as a separate contract that
provides comprehensive liability insurance for property damage or bodily injury to third
parties. P&I insurance protects the ship owner for damage caused by ship to piers, docks and
harbour installations, damage to ship’s cargo ,illness or injury to the passenger or crew and
fines and penalties.
d) Freight Insurance: indemnifies the ship owner from the loss of earnings if the goods are
damaged or lost and are not delivered.
The importance of marine insurance is described below in detail.
1. Importance of Marine Insurance for the Individual
A person has to import goods from another country which is located on the other side of sea
for his business. While carrying goods from other side of sea businessman may have to
face dacoits or goods may be damaged because of sinking of ship into the water. So
businessman has to experience economic loss. By the result of loss person may be
discouraged to engage in business. But when one insures his/her property in marine insurance
does not have to face with economic problem because marine insurance provides
compensation to the insured against the loss of property.
2. Importance of Marine Insurance for the Ship-owner
Expensive ship may be destroyed due to different types of risks on the marine venture. Ship-
owner may have to experience with larger amounts of loss due to the destruction of the ship.
Marine insurance provides compensation of loss to the ship-owner. So, marine insurance is
important insurance for ship-owner.
3. Importance of Marine Insurance for Freight
Freight insurance is also included under the marine insurance. Freight refers to the revenue
that a cargo ship earns or the money which is paid to the ship-owner for transportation of
goods from one part to another. If businessman does not pay freight of his goods to the ship-
owner, ship-owner may have to experience economic loss. If such types of loss occur,
insurance company indemnifies the ship-owner to marine insurance. So marine insurance is
very important for the freight.
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4. Importance of Marine Insurance for Cargo Owner
A businessman wants to be secured for his goods. Especially countries which are located on
the other side of sea, businessman may have to use marine venture. Marine insurance keeps
them away from worry and fear or all responsibility of cargo owner is transferred to the hand
of insurance company that provides compensation to the cargo owner if loss occurs.
5. Importance of Marine Insurance for the Government
International trade has been increased due to the marine insurance. As international trade
increases government also can receive economic profit. Government increases revenue by
including extra income tax. So marine insurance is important for the government also.
Types of marine losses
A loss arising in a marine adventure due to perils of the sea is a marine loss.
Marine loss may be classified into two categories:
1) Total Loss
A total loss implies that the subject matter insured is fully destroyed and is totally lost to its
owner. It can be
· Actual total loss, or;
· Constructive total loss.
In actual total loss, the subject matter is completely destroyed or so damaged that it ceases to
be a thing of the kind insured.
Example: Sinking of ship, complete destruction of cargo by fire, etc.
In case of constructive total loss, the ship or cargo insured is not completely destroyed but is
so badly damaged that the cost of repair or recovery would be greater than the value of the
property saved.
Example: When a vessel sinks in the deep ocean & the act of retrieving to ship back from the
water is costlier than the cost of the ship itself. Then the ship is left to rest and is taken as
constructive total loss.
2) Partial Loss
A partial loss occurs when the subject matter is partially destroyed or damaged. Partial loss
can be
· General average, or;
· Particular average.
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General average refers to the sacrifice made during extreme circumstances for the safety of
the ship and the cargo. This loss has to be borne by all the parties who have an interest in the
marine adventure.
Example: A loss caused by throwing overboard of goods is a general average and must be
shared by various parties.
Particular average may be defined as a loss arising from damage accidentally caused by the
perils insured against. Such a loss is borne by the underwriter who insured the object
damaged.
Example: If a ship is damaged due to bad weather the loss incurred is a particular average
loss.
Types of Risks/ Perils generally covered by a Marine Insurance Policy:
· Sinking, stranding and grounding of ship/vessel/boat or craft.
· Collision or contact of vessels, ships, boats with internal and external objects.
· Discharge of cargo at a port of distress.
· Average general sacrifice.
· Volcanic eruption or lightning or fire or explosion.
· Loss of goods or packages containing goods or articles, dropping of packets or package
during loading or unloading while on board or off the broad.
· Loss caused by delay, wrongful delivery, malicious damage.
· War, sea pirates, other perils like cyclones, typhoons, spirals.
· Strikes, riots, lockout, civil commotions & terrorism.
· Theft, pilferage, breakage & leakage.
· Loss caused by heating due to the closure of ventilators to prevent the entry of sea waters.
· Loss caused by rats i.e. a hole made in the bottom of the ship, through which sea water
enters the ship and damages the cargo.
Marine insurance apart from indemnifying the assured against the maritime perils also
includes liability of the third party incurred by the owner of the ship or other person
interested in the property assured on happening of the maritime event.
Workmen’s Compensation Act, 1923 & Workmen’s Compensation Rules, 1924
The objective of this Act is that in the case of an employment injury compensation be
provided to the injured workman and in case of his death to his dependants. Employer to pay
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compensation: In case a personal injury is caused to a workman by accident arising out of and
in the course of his employment, his employer is liable to pay compensation in accordance
with the provision of the Act within 30 days from the date when it fell due otherwise he
would also be liable to pay interest and penalty.
When employer is not liable: In case the disablement of workman is three or less days; except
in case of death when the injury is caused due to influence of drink or drug taken by the
workman or upon his wilful disobedience to obey safety rules or removal of safety guards by
him.
Amount of compensation :
(1) in case of death:- an amount equal to 50% of the monthly wage multiplied by the relevant
factor as given in Schedule IV of the Act or Rs. 80,000/- whichever is more.
(2) In case of permanent total disablement, it is 60% or Rs. 90,000/- whichever is more and
(3) In case of permanent partial disablement occurs then the compensation is proportionate to
the disability arrived as at (2) above.
Notice: An injured person or his dependants have to give a notice to the employer to pay
compensation.
Claim: Upon the failure or refusal of an employer to give compensation, an application is to
the made in Form - F to the Commissioner under the Workmen's Compensation Act, 1923
who is the Assistant Labour Commissioner or the Labour-cum-Conciliation Officer of the
area where the accident took place or where the claimant ordinarily resides or where the
employer has his registered office. After hearing both the parties, the Commissioner decides
the claim.
Contracting out: Any contract or agreement whereby an injured person or his dependant
relinquishes or reduce his right to receive compensation is null and void to that extent.
Appeal: An appeal lie to the High Court against the orders of the Commissioner with regard
to the awarding or refusing to award compensation, or imposing interest or penalty, or
regarding distribution of compensation etc.
Recovery: The amount of compensation awarded by the Commissioner is to be recovered as
arrears of land revenue.
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Public Liability Act
With the growth of hazardous industries, risks from accidents processes and operations, not
only to the persons employed in such undertakings but also to the public who may be in
vicinity, have increased. The people who are affected by accidents in the hazardous
installations are, very often, economically weaker sections and suffer great hardships because
of delayed relief and compensation. While the workers and employees of hazardous
installations are protected under separate laws, members of the public are not assured of any
relief except through long legal process. To ameliorate the sufferings of members of the
public due to accidents which take place in hazardous installations it was found essential to
provide for mandatory Public Liability Insurance. To achieve this objective the Public
Liability Insurance Bill was introduced in the Parliament.
Public Liability Insurance covers the individual or the company in the event of an accident on
your premises or their premises. The Public Liability Insurance Act, 1991 enacted on
22nd January 1991 is one of the most important legislative measures enacted in India to
provide immediate relief to victims of accidents which occur while handling hazardous
substances.
Provisions of Public Liability Insurance Act, 1991:
Following are some of the relevant provisions of the act-
“accident” means an accident involving a fortuitous or sudden or unintended occurrence
while handling any hazardous substance resulting in continuous or intermittent or repeated
exposure to death of, or injury to, any person or damage to any property but does not include
an accident by reason only of war or radio-activity;
“handling”, in relation to any hazardous substance, means the manufacture, processing,
treatment, package, storage, transportation by vehicle, use, collection, destruction,
conversion, offering for sale, transfer or the like of such hazardous substance;
“Hazardous substance” means any substance or preparation which is defined as hazardous
substance under the Environment (Protection) Act, 1986 (29 of 1986), and exceeding such
quantity as may be specified, by notification, by the Central Government;
“Owner” means a person who owns, or has control over handling, any hazardous substance at
the time of accident and includes -
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(I) in the case of a firm, any of its partners;
(ii) In the case of an association, any of its members; and
(iii) in the case of a company, any of its directors, managers, secretaries or other officers who
is directly in charge of, and is responsible to, the company for the conduct of the business of
the company;
Benefits:
1. Provides cover against claims:
Public Liability Insurance Act provides cover against claims made by members of the public
who have suffered injury or damage to property in connection with the business. If a member
of the public is injured on your property you may be held responsible. For example, a
customer might slip on a wet shop floor.
2. Imposes no fault liability:
The Public Liability Insurance Act, 1991 imposes a no-fault liability in case of accident and
injury upon the owner of hazardous industry. The industry had to compulsorily insure itself
and compensation for death, injury, medical expenses and damage to property was to be paid
on a no fault basis under this statute while preserving the right of the injured to claim
additional compensation under the ordinary law.
4. Relief and reimbursement:
Where death or injury to any person (other than a workman) or damage to any property has
resulted from an accident, the owner shall be liable to give such relief as is specified in the
Schedule for such death, injury or damage.
4. Power to approach courts:
According to Section 13 of the act If the Central Government or any person authorized by
that Government is this behalf has reason to believe that any owner has been handling any
hazardous substance in contravention of any of the provisions of this Act, that Government
or, as the case may be, that person may make an application to a Court not inferior to that of a
Metropolitan Magistrate or a Judicial of a first class for restraining such owner from such
handling and the court may pass any restraining order as it may deem fit.
5. Imposes penalty for contravention and failure to comply with direction:
Section 14 and 15 are penalty sections whereby whoever contravenes any of the provisions of
Section 4, fails to comply with any of the directions issued under section 9 and 12 or
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obstructs any person in discharge of his functions under section 10 or 11, and then
various penalties are imposed on the defaulters as provided in the act.
6. Additional Claims
The relief claimed under this Act shall be in addition to any other right to claim compensation
under any law for the time being in force. However the amount of compensation under any
other law shall be reduced by an amount of relief paid under this Act.
ESI Act
The announcement of Employees’ State Insurance Act, 1948 envisioned an integrated need
based social insurance scheme that would protect the interest of workers in contingencies
such as sickness, maternity, temporary or permanent physical disablement, and death due to
employment injury resulting in loss of wages or earning capacity. The Act also guarantees
reasonably good medical care to workers and their immediate dependants.
Following the promulgation of the ESI Act the Central Govt. set up the ESI Corporation to
administer the Scheme. The Scheme thereafter was first implemented at Kanpur and Delhi on
24th February 1952. The Act further absolved the employers of their obligations under the
Maternity Benefit Act, 1961 and Workmen’s Compensation Act 1923. The benefits provided
to the employees under the Act are also in conformity with ILO conventions.
It is applicable to non-seasonal power using factories employing 10 or more persons and non-
power using factories employing 20 or more persons. The Scheme has been extended to
shops, hotels, restaurants, cinemas including preview theatre, road motor transport
undertakings and newspaper establishment employing 20 or more persons. The existing wage-
limit for coverage under the Act, is Rs.7500/- per month (with effect from 1.4.2004).
Contribution
The employee’s contribution rate is 1.75% of the wages and that of employer’s is 4.75% of
the wages paid/payable in respect of the employees in every wage period.
There are two contribution periods each of six months duration and two corresponding benefit
periods also of six months duration as under.
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Contribution period
1st April to 30th Sept.
1st Oct. to 31st March
Corresponding Cash Benefit period
1st January of the following year to 30th June.
1st July to 31st December of the year following
Medical Benefits
The Employees’ State Insurance Scheme provides full medical care in the form of medical
attendance, treatment, drugs and injections, specialist consultation and hospitalization to
insured persons and also to members of their families where the facility for Specialist
consultation, hospitalization has been extended to the families.
For the families, this benefit has been divided into two categories as under:-
Full Medical Care
This consists of hospitalization facilities and includes specialist services, drugs and dressings
and diets as required for in-patients.
Expanded Medical Care
This consists of consultation with the specialists and supply of special medicines and drugs as
may be prescribed by them in addition to the out-patient care. This also includes facilities for
special laboratory tests and X-Ray examinations.
Scale of Medical Benefit
To Insured Persons: - Insured Persons are entitled to avail treatment in ESI
dispensary/Hospital/Diagnostic Centre and recognised institutions, to which he is attached
such as: -
Outpatient treatment
Domiciliary treatment by visits at their residences.
Specialists Consultation.
In-patient treatment (Hospitalisation)
Free supply of drugs dressings and artificial limbs, aids and appliances.
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Imaging and laboratory services.
Integrated family welfare, immunisation and MCH Programme and other national
health programme etc.
Ambulance service or re-imbursement of conveyance charges for going to hospitals,
diagnostic centres etc.
Medical Certification and
Special provisions.
To Family Members of Insured Persons:- While in all implemented areas, IPs are entitled to
medical care as detailed above, members of a family of an IP are entitled to one or other of
the following scales of Medical Benefits:-
i. Full" Medical Care i.e., all facilities as for IPs including hospitalisation.
ii. Expanded Medical Care i.e., all facilities as for IPs except hospitalisation. A small number
of IPs in the States of Gujarat and Bihar fall under this category.
Sickness Benefit represents periodical cash payments made to an IP during the period of
certified sickness occurring in a benefit period when IP requires medical treatment and
attendance with abstention from work on medical grounds.
Sickness benefit is roughly 50% of the average daily wages and is payable for 91 days during
2 consecutive benefit periods.
Types Of Sickness Benefits
Extended Sickness Benefits
An IP suffering from certain long term diseases is entitled to ESB, only after exhausting
Sickness Benefit to which he may be eligible. A common list of these long term diseases for
which ESB is payable is as follows
Infectious Diseases
Neoplasms
Endocrine,
Nutritional and Metabolic Disorders,
Disorders of Nervous System,
Disease of Eye,
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Diseases of Cardiovascular System,
Chest Diseases,
Diseases of the Digestive System,
Orthopaedic Diseases,
Psychoses, and
Others (More than 20% burns with infection/complication, Chronic Renal Failure, and
Reynaud’s disease/Burger’s disease)
Enhanced Sickness Benefits
Insured Persons eligible to ordinary sickness benefit are paid enhanced sickness benefit at
double the rate of sickness benefit i.e., about full average daily wage for undergoing
sterilization operations for family welfare. Duration of enhanced Sickness Benefits is
- Up to 7 days in the case of Vasectomy and
- Up to 14 days in the case of the Tubectomy
from the date of operation or from the date of admission in the hospital as the case may be.
The period is extendable in case of post-operative complications.
Maternity Benefit
- Maternity Benefit is payable to an Insured Woman in the following cases subject to
contributory conditions
- Confinement-payable for a period of 12 weeks (84 days)
- Miscarriage or Medical Termination of Pregnancy (MTP)-payable for 6 weeks (42 days)
from the date following miscarriage-on the basis of Form 20 and 23.
- Sickness arising out of Pregnancy, Confinement, Premature birth-payable for a period not
exceeding one month-on the basis of Forms 8, 10 and 9.
- In the event of the death of the Insured Woman during confinement leaving behind a child,
Maternity Benefit is payable to her nominee.
- Maternity benefit rate is double the Standard Benefit Rate, or roughly equal to the average
daily wage
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Disability Benefits
Temporary Disability Benefit
There is no prescribed limit for the duration of TDB. This is payable as long as temporary
disablement lasts and significant improvement by treatment is possible. If a Temporary
Disablement spell lasts for less than 3 days (excluding day of accident), IP will be paid
sickness benefit, if otherwise eligible. A special point for IMOs/IMPs is that some IPs may
resist taking a Final Certificate especially before 3 days for fear of loss of TDB.
Permanent Disability Benefit
PDB is payable to an IP who suffers permanent residual disablement and results in loss of
earning capacity.
The duration of PDB may be for the period given by Medical Board, if assessment is
provisional or for entire life if assessment is final.PDB Rate: The PDB rate is calculated as
percentage of loss of earning capacity as assessed by the Medical Board/MAT/EI Court in
relation to TDB. List of injuries deemed to result in permanent total disablement. The
maximum rate of PDB can be equal to the rate of TDB.
Dependant’s Benefit
The dependants’ benefit is payable to the dependants in cases where an IP dies as result of EI.
The minimum rate of DB is Rs.14/- per day and these rates of the DB are increased from time
to time. (The latest enhancement is with effect from 01.08.2002)
Funeral Benefit
Funeral expenses not exceeding Rs. 2500/- is payable towards expenditure on the funeral of a
deceased IP.
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References
http://www.rfhha.org/images/pdf/Hospital_Laws/Workmen's_compensation_act_1923.pdf
http://www.google.co.in/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&ved=0CE8QFjAB&url=http%3A%2F
%2Flawcommissionofindia.nic.in%2F51-
100%2FReport62.pdf&ei=dwAvUOHMMInkrAfevYDICA&usg=AFQjCNFwV3bztdk90aGl
8WdOeDAOOLYoRw&sig2=NGWcReZb4Mb90RyZ6TwFNw
http://pblabour.gov.in/pdf/forms_procedures/
procedure07_workmens_compensation_act_1923.pdf
http://www.tn.gov.in/sta/mvact1988.pdf
http://indiacode.nic.in/fullact1.asp?tfnm=198859
http://esic.nic.in/act.htm
http://www.saipra.com/statue/ESI_Act.pdf
http://www.helplinelaw.com/docs/THE%20MARINE%20INSURANCE%20ACT,%201963
http://www.brus.in/publications/shipping/MI.pdf
http://envfor.nic.in/legis/public/public1.html
http://aptransport.org/html/acts-rules/The_Public_Liability_Insurance_Act_1991.pdf
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