The Supreme Court has ruled that vehicles without a valid third-party insurance policy may be denied access to fuel at gas stations until they obtain mandatory insurance coverage.
A bench comprising Sanjay Karol and Prashant Kumar Mishra highlighted the large number of uninsured vehicles on Indian roads. According to the Permanent Committee on Finance report for 2024–25, approximately 56% of all vehicles remain uninsured.
The court directed the Insurance Regulatory and Development Authority of India (IRDAI), in conjunction with the Ministry of Road Transport and Highways (MoRTH), to hold discussions and develop a pilot project linking fuel dispensing to the valid insurance status of the vehicle.
The bench stated that if a vehicle lacks insurance, it will be refused fuel at petrol pumps until it secures proper insurance coverage. The court noted that denying fuel to uninsured cars could help identify such vehicles or unregistered ones, as well as incentivize owners to obtain legal insurance.
It was pointed out that such projects would ensure compliance with the requirements set forth in Section 146 of the Motor Vehicles Act, which could be implemented using Automatic Number Plate Recognition (ANPR) cameras. The Ministry of Petroleum and Natural Gas, as noted by the court, 'in principle, does not object' to this proposal.
Furthermore, the Supreme Court ordered an extension of the mandatory third-party insurance period for newly purchased vehicles. Previously, in 2018, the court had mandated three years of insurance for new passenger cars and five years for new two-wheelers at the time of purchase or registration. However, noting that a significant number of vehicles remained uninsured eight years after that directive, the court decided that third-party insurance should henceforth be for four years for new passenger cars and six years for new two-wheelers, instructing IRDAI to immediately issue the necessary directives.
The court emphasized that out of a total of 30.48 crore vehicles, 16.54 crore were uninsured, calling this figure 'shocking'. It was noted that lack of insurance can delay or completely deny victims of road accidents the right to compensation. The bench explained that the purpose of mandatory insurance under Section 146 of the Motor Vehicles Act is not only to compensate victims but also to prevent protracted legal proceedings.
The court also instructed IRDAI and MoRTH to implement ANPR cameras in specific states, integrating them with data from the Insurance Bureau and the VAHAN portal. This system is intended for automatically issuing electronic fines to uninsured vehicles. Additionally, it was ordered that police officers in the states be provided with portable devices or accessible applications linked to the Insurance Bureau and VAHAN data to check vehicle insurance status in real-time.
Subsequently, the court directed IRDAI to offer private vehicle owners various policy options, including additional coverages, accident coverage, and own damage coverage, alongside the basic policy providing the minimum required coverage under the Motor Vehicles Act.
The court also took into account issues related to road accidents on national highways and long queues at toll plazas. It instructed the Centre to implement pilot projects on selected corridors to replace toll plaza stops with automatic detection of passing vehicles. These directives were issued in the context of a motor accident claim case, as the court observed that compliance with legislative requirements for third-party vehicle insurance remains inadequate despite the existing legal framework, forcing victims and their families to 'run from pole to pole' to receive compensation.
