Daijiworld Media Network – New Delhi
New Delhi, Aug 5: The Supreme Court has directed the Centre to formulate a pilot project under which petrol pumps would deny fuel to vehicles without valid third-party insurance, as part of a series of measures aimed at improving road safety and ensuring compliance with mandatory motor insurance laws.
A Bench comprising Justices Sanjay Karol and Prashant Kumar Mishra issued the directions while hearing a motor accident compensation case, expressing concern over the rising number of road accidents and the large number of uninsured vehicles on Indian roads.
The court also directed the Centre to implement pilot projects on selected national highway corridors to replace conventional toll plazas with an Automatic Number Plate Recognition (ANPR)-based vehicle detection system, allowing vehicles to pass toll points without stopping and reducing congestion.
Citing the Parliamentary Standing Committee on Finance's 2024-25 report, the Bench noted that nearly 56 per cent of registered vehicles in the country do not have mandatory third-party insurance.
To improve compliance, the court asked the Insurance Regulatory and Development Authority of India (IRDAI), in consultation with the Ministry of Road Transport and Highways (MoRTH), to prepare a pilot project linking fuel sales to a vehicle's insurance status. Under the proposed mechanism, uninsured vehicles would not be supplied fuel until valid insurance is obtained. The court observed that the Ministry of Petroleum and Natural Gas had expressed no objection to the proposal in principle.
The Bench also recalled its 2018 order mandating three years of third-party insurance for new cars and five years for new two-wheelers at the time of purchase. It has now directed that the mandatory insurance period be extended to four years for new cars and six years for new two-wheelers, asking IRDAI to issue the necessary directions immediately.
According to the court, around 16.54 crore of India's 30.48 crore registered vehicles remain uninsured, undermining the objective of ensuring timely compensation for road accident victims and often forcing families into prolonged legal battles.
To strengthen enforcement, the Bench directed IRDAI and MoRTH to deploy ANPR cameras in selected states and integrate them with the Insurance Information Bureau and VAHAN database to automatically detect uninsured vehicles and issue e-challans.
The court further instructed state police to be equipped with handheld devices or mobile applications linked to the Insurance Information Bureau and VAHAN portal for real-time verification of vehicle insurance during inspections.
Additionally, IRDAI has been asked to offer multiple insurance options for private vehicle owners, including add-on covers, personal accident cover and own-damage cover, along with a basic policy that satisfies the minimum legal requirement under the Motor Vehicles Act.
The court observed that mandatory vehicle insurance is intended not only to compensate accident victims but also to spare them and their families from prolonged litigation while securing timely financial relief.