The apex court granted the governments time till second week of July to amend the rules, failing which it would pass the order in this regard.
"Nobody bothers about fine. In this country no one takes law seriously unless harsher measures are taken for violation of law," a bench of justices G S Singhvi and Kurian Joseph observed after it was told that amount of fine imposed for most of the violation of Motor Vehicles Act is around Rs 100.
The bench also asked the governments to "drastically" restrict the use of red beacon by VIPs and to provide it only to the heads of political executive, legislature, judiciary and persons holding constitutional posts.
"Having red beacon on vehicle has become a fashion and status symbol. Enforce a fine of Rs 10,000 for misuse of beacon by the people who are allowed to have red light on their cars," the bench said, adding, "In other countries violation of traffic rules results in impounding of vehicles and cancellation of licence.
"We deem it proper to give opportunity to Centre, state governments and Union Territories to amend relevant provisions of the rule and issue notification.