NEW DELHI: The Supreme Court on Tuesday directed the Centre to evolve a pilot project under which vehicles without valid third-party insurance could be denied fuel at petrol pumps until they obtain the mandatory insurance cover.

A bench of Justices Sanjay Karol and Prashant Kumar Mishra took note of the large number of uninsured vehicles on Indian roads and said nearly 56% of vehicles remain uninsured, citing the Report of the Standing Committee on Finance 2024-25.

The court directed the Insurance Regulatory and Development Authority of India (IRDAI), in consultation with the Ministry of Road Transport and Highways (MoRTH), to deliberate and evolve a pilot project linking fuel supply to a vehicle's valid insurance status.

âAs deliberated upon in court, the IRDA (Insurance Regulatory and Development Authority) in consultation with the MoRTH (Ministry of Road Transport and Highways) to deliberate and evolve a pilot project whereby fuel for vehicles to be linked with valid insurance status. In the absence thereof, the vehicle concerned would be refused fuel at petrol pumps, until such time that valid insurance is obtained,â the bench said.

The court said denying fuel to uninsured vehicles could help identify uninsured or unregistered vehicles and encourage owners to obtain valid insurance.

âSuch projects would ensure ground-level compliance with the statutory mandate of Section 146 of the MVA. This may be done through the use of ANPR (Automatic Number Plate Recognition) cameras,â it said. The Ministry of Petroleum and Natural Gas, the court noted, has âin principle, no objectionâ to the proposal.

The Supreme Court also directed that the mandatory third-party insurance period for newly purchased vehicles be extended.

In 2018, the court had mandated third-party insurance for three years for new cars and five years for new two-wheelers at the time of purchase or registration.

âWe notice that despite eight years having passed from the said direction, a large number of vehicles remain uninsured,â the bench observed.

It directed that third-party insurance henceforth be purchased for four years for new cars and six years for new two-wheelers, and directed IRDAI to issue the necessary directions immediately.

16.54 crore vehicles uninsured The court said 16.54 crore out of 30.48 crore vehicles were uninsured, describing the figure as âstarkâ.

It said the lack of insurance can delay or defeat the statutory safeguard of compensation for road accident victims.

âThe object behind mandatory insurance under Section 146 of the MVA is not just that victims of road accidents are compensated, it is also that they are not drawn into prolonged litigation,â the bench said.

It noted that uninsured vehicles often leave accident victims and their families facing prolonged litigation over the quantum and liability for compensation. The impact, it said, is particularly severe when a victim dies or suffers permanent disability.

The court also directed IRDAI and MoRTH to deploy ANPR cameras in certain states, integrating them with data from the Insurance Information Bureau and the VAHAN portal.

The system is intended to enable automatic issuance of e-challans to uninsured vehicles.

The court also directed that state police be provided with handheld devices or downloadable applications linked to the Insurance Information Bureau and VAHAN data to verify the insurance status of vehicles in real time.

âThis is to monitor real-time insurance status of vehicles and impose challans for violations, ensuring compliance with mandatory insurance on the ground,â the court said.

The court further directed IRDAI to provide private vehicle owners with various policy options, including add-on covers, personal accident cover and own-damage cover, alongside a base policy offering the minimum coverage required under the Motor Vehicles Act.

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The court also took note of road accidents on national highways and the problem of long queues at toll plazas. It directed the Centre to implement pilot projects on selected corridors to replace stopping at toll plazas with automatic detection of vehicles passing through toll points.

The directions were issued in a motor accident claim case, with the court observing that compliance with the statutory requirement for third-party motor vehicle insurance remains inadequate despite the existing legal framework.

It said accident victims and their families often have to ârun from pillar to postâ to receive compensation.