The Supreme Court on Tuesday (Aug 4) proposed that vehicles fuel supply at petrol pumps should be linked to insurance status of vehicles as part of a pilot project aimed at improving compliance with mandatory third-party motor insurance under the Motor Vehicles Act. A Bench comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra directed the Insurance Regulatory and Development Authority of India (IRDAI), in consultation with the Ministry of Road Transport and Highways (MoRTH), to develop a pilot mechanism under which vehicles without valid insurance could be denied fuel until their insurance is renewed.
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What the top court suggested?
Expressing concern over the lack of insurance coverage, the Supreme Court said that nearly 56 per cent of vehicles on Indian roads do not have valid insurance. The Bench noted that about 16.54 crore of the country’s 30.48 crore vehicles are uninsured. Linking this to road accidents, the court referred to official data showing that India recorded 4,87,705 road accidents in 2024, saying stronger enforcement of the mandatory insurance regime was necessary to improve road safety and ensure accident victims receive adequate protection through third-party insurance. To tackle the problem, Supreme Court proposed several measures. The direction from the top court came while hearing an appeal filed by the National Insurance Company Ltd.
In its 23-page judgment, the Bench said that IRDAI and MoRTH should work together to design a pilot project linking fuel supply with valid vehicle insurance.
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“Based upon the deliberations in Court, the IRDA in consultation with the MoRTH, to deliberate and evolve a pilot-project whereby fuel for vehicles to be linked with valid insurance status," the court said. It added that if a vehicle does not have valid insurance, fuel should be refused at petrol pumps until the insurance is renewed. According to the judgment, the proposed system is intended to identify uninsured or unregistered vehicles while encouraging owners to keep their insurance valid by making it a condition for refuelling.
The Court also observed that the mechanism would strengthen enforcement of Section 146 of the Motor Vehicles Act, which makes third-party insurance compulsory for all vehicles. It suggested implementing the project through Automatic Number Plate Recognition (ANPR) cameras, adding that ANPR cameras installed on highways and roads be integrated with the Insurance Information Bureau database and the VAHAN portal .The Bench noted that the Ministry of Petroleum and Natural Gas has, “in principle, no objection" to the proposal.

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