New Delhi: In a significant national development impacting lakhs of vehicle owners in the country, the Supreme Court on Tuesday directed that the mandatory third-party insurance period for new vehicles be extended by one year, requiring four years of coverage for new cars and six years for new two-wheelers at purchase. A bench of Justices Sanjay Karol and P.K. Mishra issued the ruling to boost compliance with the Motor Vehicles Act and enhance road safety across the country.
Disposing of an appeal filed by National Insurance Company Ltd., the court noted that a large number of vehicles continue to ply without valid coverage. Despite earlier mandates prescribing three-year policies for cars and five-year policies for two-wheelers, the bench observed that persistent non-compliance necessitated extending the initial cover periods.
“We notice that despite eight years having passed from the said direction, a large number of vehicles remain uninsured. While the IRDA and GIC have recommended that this period not be enhanced, we are of the view that it is in the interest of road safety that the period be enhanced by one year,” the Justice Karol-led Bench said. “Therefore, it is directed that henceforth, third-party insurance for four years for new cars and six years for new two-wheelers be required to be purchased. IRDA to immediately issue necessary directions,” it added.
In its order, the apex court recorded that nearly 56 per cent of vehicles plying on Indian roads remain uninsured, defeating the very object of compulsory insurance under the MVA.
“It is shocking to learn that nearly 56 per cent of vehicles plying on Indian roads remain uninsured,” the judgment said, adding that victims of road accidents and their families are often left to engage in prolonged litigation to secure compensation.
In a significant direction, the apex court approved a four-layer insurance structure for private vehicles comprising a mandatory third-party policy, optional legal liability cover for occupants or pillion riders, optional personal accident cover for the owner-driver and passengers, and optional own-damage cover.
To curb the menace of uninsured vehicles, the Supreme Court directed that Automatic Number Plate Recognition (ANPR) cameras be integrated with the Insurance Information Bureau and VAHAN database to automatically detect uninsured vehicles and issue e-challans.
(With inputs from agencies)
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