Examining non-compliance with Section 146 of the Motor Vehicles Act, 1988 (mandatory third-party insurance) and inconsistent motor policy structures across insurers, a bench of Justices Sanjay Karol and Prashant Kumar Mishra held that a comprehensive or package motor policy covers vehicle occupants and cannot be equated with a bare third-party policy.
Finding that 56% of vehicles on Indian roads are uninsured, the Court issued nationwide directions including ANPR-linked automatic e-challans for uninsured vehicles, a fuel-insurance linkage pilot, and extension of mandatory third-party cover from one year to four years for new cars and six years for new two-wheelers, with compliance affidavits due from stakeholders and further review hearings to follow.
Vehicle owners will need to budget for a longer, prepaid block of mandatory third-party insurance at the time of purchase, and insurers and regulators face court-mandated enforcement infrastructure — ANPR e-challans and fuel-linkage — aimed at closing India's large uninsured-vehicle gap.