From today, third party insurance mandatory for new cars, two wheelers

New Delhi, Sep 1: From today, it would become mandatory for new cars and two-wheelers to have third-party insurance cover of three and five years respectively, with the Supreme Court today refusing to extend the September 1 deadline.

A bench of Justices Madan B Lokur and S Abdul Nazeer dismissed an application filed by General Insurance Council (GIC), constituted under provision of the Insurance Act 1938 by Insurance Regulatory and Development Authority (IRDA), seeking extension of the deadline fixed by the top court.

The court had on July 20 this year said that third-party insurance cover for new cars should mandatorily be for a period of three years and for two wheelers, it should be for five years. Currently, the insurance cover period is one year.

The court had then directed that the decision be implemented from September 1.

The top court was hearing a petition filed by Coimbatore-based surgeon S Rajaseekaran which was treated as a PIL by it. The court had on April 22, 2014, constituted a committee on road safety which has submitted several reports since.

At the hearing today, advocate Gaurav Agarwal, who is assisting the court as an amicus curiae on road safety matter, told the bench that the IRDA has already given its approval for this.

He said the Supreme Court Committee on Road Safety, headed by former court judge Justice K S Radhakrishnan, had written to the IRDA and a circular was issued by the insurance regulator on August 28 in this regard.

The counsel appearing for GIC sought extension of the September 1 deadline, saying they needed to study the IRDA circular.

The amicus opposed the plea and said the concerned authorities have been asked not to register vehicles without third-party insurance.

The bench also rejected another application which said the police department should be asked to comply with the law and ensure that vehicles plying on roads have pollution under control (PUC) certificate.

"Who are we to say so? They (police) is bound to comply with the law," the bench observed.

The court had on July 20 said that third-party insurance of four-wheelers and two-wheelers be made mandatory so that the victims of road accidents could get compensation and the insurance firms should look at it from a "human point of view" and not take a commercial perspective.

The Supreme Court Committee on Road Safety had earlier recommended that at the time of sale of two and four wheelers, third-party insurance should be made mandatory for a period of five and three years respectively, instead of one year at present.

It had said that around 18 crore vehicles were plying on the roads in the country, of which only six crore have third-party insurance and the victims of road accidents were not getting compensation as vehicles did not have third-party insurance cover.

The court had in November last year issued a slew of directions on road safety and asked all states and union territories to set up a trauma centre in each district of the country and make safety norms part of the school curriculum.