In a far-reaching move aimed at strengthening road safety compliance, the Supreme Court has asked the Union government and the Insurance Regulatory and Development Authority of India (IRDAI) to examine whether fuel stations can be linked to a vehicle’s insurance status, potentially preventing uninsured vehicles from refuelling.
A Bench comprising Justices Sanjay Karol and Prashant Kumar Mishra suggested the creation of a pilot project under which petrol pumps could verify whether a vehicle carries valid third-party insurance before dispensing fuel. The proposal, however, is only a recommendation and not a binding order.
The Court asked IRDAI and the Ministry of Road Transport and Highways (MoRTH) to jointly deliberate on the feasibility of such a system. According to the judges, the idea could help identify uninsured vehicles and encourage owners to comply with the legal requirement of maintaining valid insurance coverage.
Section 146 of the Motor Vehicles Act, 1988, makes third-party insurance mandatory for every vehicle operating on public roads. The Bench noted that widespread violations of this provision continue despite its importance in protecting accident victims.
The judges observed that technology such as Automatic Number Plate Recognition (ANPR) cameras could play a central role in implementing the proposed system. Such technology, they said, could instantly verify insurance records and assist authorities in identifying both uninsured and unregistered vehicles.
The Court also asked the transport ministry to explore pilot projects on select highway corridors that would reduce dependence on conventional toll plazas by introducing automatic vehicle detection systems. The Bench noted that congestion at toll booths often contributes to accidents on national highways.
The recommendations emerged while the Court was deciding an insurance dispute arising from a fatal road accident in Andhra Pradesh. T. Ramu, who was returning home in his Maruti 800 after visiting Tirupati, died after his vehicle was hit by an unidentified truck. His family sought compensation, arguing that he was the sole earning member of the household.
The Motor Accident Claims Tribunal rejected the family’s claim against the insurer, holding that no additional premium had been paid to cover the personal risk of the vehicle owner. However, the High Court reversed that decision and awarded compensation of ₹10 lakh along with interest.
The Supreme Court upheld the High Court’s ruling, relying on an IRDAI circular issued in 2009. The Bench held that occupants travelling in a vehicle covered by a comprehensive insurance policy are entitled to compensation in the event of injury or death.
Emphasising transparency, the Court directed insurance companies to prominently display the scope and benefits of comprehensive motor policies on their websites in a simple and accessible format.
The judgment also carries significant implications for future insurance coverage norms. The Court directed that mandatory third-party insurance for newly purchased cars should extend from three years to four years, while the minimum coverage period for new two-wheelers should be increased from five years to six years.
The Bench said these measures are necessary to improve compliance, reduce uninsured vehicles on the roads and strengthen protection for accident victims across the country.
