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  1. No sale of vehicles without long-term insurance: Supreme Court

No sale of vehicles without long-term insurance: Supreme Court

Concerned over poor compliance of third-party insurance of vehicles that puts all road users at risk, the Supreme Court on Friday said that automobile companies in the country cannot sell four-wheelers and two-wheelers without a mandatory third-party insurance for a period of two years and five years, respectively, from September 1.

By: | New Delhi | Published: July 21, 2018 1:55 AM
The Supreme Court of India

Concerned over poor compliance of third-party insurance of vehicles that puts all road users at risk, the Supreme Court on Friday said that automobile companies in the country cannot sell four-wheelers and two-wheelers without a mandatory third party insurance for a period of two years and five years, respectively, from September 1.

A bench led by Justice Madan B Lokur endorsed the suggestion of the Supreme Court Committee on Road Safety chaired by former apex court judge KS Radhakrishnan that asked the Insurance Regulatory and Development Authority of India (Irda) to offer a mandatory two-year policy for cars and a five-year policy for two-wheelers at the time of sale and registration.
The long-term policy for two years for car and five years for two-wheelers will be offered only for third party insurance and not for the comprehensive cover. Driving any vehicle without third-party (TP) insurance is an offence and attracts a fine of up to Rs 1,000 with a possible jail term of three months.

According to sources, only 6.5-7 crore vehicles have insurance cover against approximately 18 crore registered vehicles. Almost 50% of vehicles plying on roads have no valid insurance and a large share of them were two-wheelers.
The apex court also directed the panel to look at developing some form of compensation mechanism for next of kin of pothole victims.

Earlier, the court had made it mandatory for states and Union territories to establish a Road Safety Fund, the corpus of which would come from traffic fines collected. The money would be used to meet the expenses for road safety.

The order came on a PIL filed by Coimbatore-based orthopaedician Dr S Rajaseekharan, who sought a direction to all states and Union territories to frame a Road Safety Policy and the setting up of a lead agencies to work as secretariats of State Road Safety Councils to co-ordinate on activities such as licensing issues like driving licences, registration of vehicles, road safety and features of vehicles. The orthopaedician had told the Supreme Court that 90% of the problem of deaths due to road accidents was the result of a lack of strict enforcement of safety rules on roads and strict punishment for those who do not obey rules.

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