No Insurance, No Fuel: Supreme Court Directs Pilot Project to Refuse Petrol to Uninsured Vehicles

The Supreme Court of India has directed the central government to formulate a tech-driven pilot project linking fuel sales directly to valid third-party motor insurance, Under the proposed framework, vehicles lacking valid third-party insurance could be turned away at petrol pumps and denied fuel until they obtain mandatory coverage.

A Supreme Court bench comprising Justices Sanjay Karol and Prashant Kumar Mishra expressed serious concern over national data showing that nearly 56% of vehicles -amounting to approximately 16.54 crore out of 30.48 crore registered vehicles on Indian roads - are currently operating without valid insurance. The bench emphasized that Section 146 of the Motor Vehicles Act, 1988 mandates compulsory third-party insurance to ensure road accident victims receive timely financial compensation rather than being forced into long legal battles.

To enforce ground-level compliance, the apex court directed the Insurance Regulatory and Development Authority of India (IRDAI) and the Ministry of Road Transport and Highways (MoRTH) to collaborate on the pilot scheme. The system proposes utilizing Automatic Number Plate Recognition (ANPR) cameras linked with the Insurance Information Bureau (IIB) database and the government's VAHAN portal. This technology will automatically flag uninsured vehicles at fuel outlets and on highways, triggering digital penalty notices (e-challans). The Ministry of Petroleum and Natural Gas has, in principle, raised no objection to testing the fuel verification project.

Beyond the fuel station proposal, the Supreme Court introduced broader enforcement measures. The bench ordered IRDAI to extend the mandatory long-term third-party insurance period for newly purchased private cars from three years to four years, and for new two-wheelers from five years to six years. Additionally, traffic police personnel will be provided with handheld mobile devices connected to central databases for instant on-the-spot verification during routine checks.