’No insurance, no fuel’: Supreme Court directs Centre to launch pilot project

’No insurance, no fuel’: Supreme Court directs Centre to launch pilot project

Mangalore Today News Network

New Delhi, Aug 5, 2026: Taking serious note of the large number of uninsured vehicles on Indian roads, the Supreme Court has directed the Central Government to introduce a pilot project under which vehicles without valid third-party insurance could be denied fuel at petrol pumps.

A Bench of Justices Sanjay Karol and Prashant Kumar Mishra, in its judgment on Tuesday, asked the Insurance Regulatory and Development Authority of India (IRDAI) and the Ministry of Road Transport and Highways (MoRTH) to develop the pilot project in consultation with each other. Under the proposal, fuel stations would verify the insurance status of vehicles, and those without valid third-party insurance would not be supplied fuel until the insurance is renewed.

The court observed that nearly 56% of vehicles on Indian roads are uninsured, citing the Standing Committee on Finance Report 2024–25. It described the situation as alarming, noting that around 16.54 crore of the country’s 30.48 crore registered vehicles currently do not have valid insurance.

According to the court, linking fuel supply to insurance status would help identify uninsured and unregistered vehicles while encouraging owners to comply with the mandatory insurance requirement under Section 146 of the Motor Vehicles Act. The project may use Automatic Number Plate Recognition (ANPR) cameras to verify vehicle details, and the Ministry of Petroleum and Natural Gas has reportedly expressed no objection to the proposal.

Third-Party Insurance Period Extended

The Supreme Court also revised its 2018 direction regarding mandatory long-term third-party insurance for new vehicles. It ordered that:

New cars must now have four years of third-party insurance, instead of three years.
New two-wheelers must now have six years of third-party insurance, instead of five years.

The court directed IRDAI to issue the necessary guidelines immediately.

Automatic E-Challans for Uninsured Vehicles

The bench further instructed IRDAI and MoRTH to deploy ANPR cameras in selected states and integrate them with the Insurance Information Bureau and the VAHAN database to automatically detect uninsured vehicles and issue e-challans.

It also directed state police departments to be equipped with handheld devices or mobile applications connected to these databases so officers can instantly verify a vehicle’s insurance status during inspections.

Additionally, IRDAI has been asked to offer a range of insurance options, including add-on covers, personal accident insurance and own-damage policies, while ensuring that every vehicle owner has access to the minimum third-party insurance required by law.

The directions were issued while hearing a motor accident compensation case, with the court observing that despite a clear legal framework, poor compliance with mandatory third-party insurance often delays or deprives accident victims and their families of rightful compensation.