Holding

A comprehensive motor‑vehicle insurance policy, as per the IRDA circular, covers occupants including the owner travelling as a passenger, and the High Court's award is upheld.

Summary

The appeal arose from a motor accident in which the deceased, Mr. T. Ramu, was killed when his car was rear‑ended by a lorry; his legal representatives claimed compensation from National Insurance Co. Ltd., the insurer of the vehicle. The High Court had held that the policy was a comprehensive one and thus covered the owner travelling as a passenger, awarding Rs. 10,00,500 with interest. The insurer challenged this, arguing that no additional premium was paid for occupant coverage. The Supreme Court examined the statutory requirement of Section 146 of the Motor Vehicles Act, 1988 for third‑party insurance, the need for a uniform policy structure, and the IRDA circular of 16‑Nov‑2009 that obliges insurers to compensate occupants under comprehensive policies. The Court affirmed that a hyper‑technical approach is inappropriate and that the High Court’s reasoning aligns with the IRDA circular, thereby dismissing the appeal. It also issued extensive directions to enforce compliance with mandatory insurance through technology, a four‑layer policy structure, and procedural reforms for motor‑accident claims.

Issues considered

The adequacy of compliance with Section 146 of the Motor Vehicles Act, 1988 requiring third‑party insurance for all vehicles.
Whether a comprehensive motor‑vehicle insurance policy automatically covers the vehicle owner travelling as a passenger without a separate premium.
The need for a uniform motor‑vehicle policy structure covering occupants in addition to statutory third‑party coverage.

Legislation cited

Insurance Act, 1938
Insurance Regulatory and Development Authority Act, 1999
Motor Vehicles Act, 1988s. 146, s. 159, s. 166, s. 196, s. 207

Headnote

Issue for Consideration Issue arose as regards the lack of compliance of s.146 of the Motor Vehicles Act, 1988 which requires all vehicles to have a valid insurance policy covering third-parties; whether there should be a uniform motor-vehicle policy structure covering all occupants of to the statutorily mandated coverage of third- party risks; whether the High Court rightly allowed the appeal filed by the respondents-claimants holding that the policy in question was a comprehensive policy and would cover the owner of the vehicle as well, who was travelling in the car as a

Subjects

Section 146 of the Motor Vehicles ActThird‑party motor vehicle insuranceUniform motor‑vehicle policy structureInsurance Regulatory and Development Authority of IndiaMotor accident claimsComprehensive/package policyThird‑Party Liability InsuranceOwn Damage CoverCommercial Vehicle Insurance PolicyRoad safetyMinistry of Road Transport and HighwaysInsurance Regulatory and Development Authority

Judgment

[2026] 8 S.C.R. 284 : 2026 INSC 793

National Insurance Co. Ltd.
v.
Smt. Thungala Dhana Laxmi & Ors.
(Civil Appeal No. 14369 of 2025)
04 August 2026
[Sanjay Karol* and Prashant Kumar Mishra, JJ.]

Issue for Consideration
Issue arose as regards the lack of compliance of s.146 of the
Motor Vehicles Act, 1988 which requires all vehicles to have a valid
insurance policy covering third-parties; whether there should be a
uniform motor-vehicle policy structure covering all occupants of a
vehicle, in addition to the statutorily mandated coverage of third-
party risks; whether the High Court rightly allowed the appeal filed
by the respondents-claimants holding that the policy in question
was a comprehensive policy and would cover the owner of the
vehicle as well, who was travelling in the car as a passenger.

Headnotes†
Directions by Supreme Court – Motor Vehicles Act, 1988 –
s.146 – Insurance policy covering third-party risks – Lack
of compliance with – Ensuring compliance with statutorily
mandated insurance – Directions issued – To be enforced
through the Ministry of Road Transport and Highways (MoRTH)
and Insurance Regulatory and Development Authority (IRDA):
Held: Currently, Automatic Number Plate Recognition (ANPR)
Cameras deployed on highways and roads are equipped with a
mechanism to catch and penalize road safety violations such as
high speed, red light jumping, driving on the wrong side of the
road, etc – Carrying this forward and as already deployed by the
MoRTH in certain states, ANPR Cameras are to be integrated
with data from the Insurance Information Bureau (established
under IRDA) and the VAHAN portal for issuance of automatic
e-challans to uninsured vehicles, in furtherance of the SOP for
Electronic Monitoring and Enforcement of Road Safety – As on
date, there is no uniform mechanism in place with State Police to
verify insurance status on the ground – State Police be provided
with handheld devices or downloadable apps, linked with the
data from Insurance Information Bureau (established under
* Author
[2026] 8 S.C.R. 285

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

IRDA) and VAHAN portal be supplied to the State Police – This
is to monitor real-time insurance status of vehicles and impose
challans for violations, ensuring compliance with mandatory
insurance on the ground – Upon notification of the amendment to
s.196 of the MVA, strict compliance thereof is to be ensured – As
submitted by the IRDA, for private vehicles, a broad four layer
structure is to be implemented for private vehicles – This would
bring clarity to various policy options for the vehicle-owner so
as to allow them to make an informed choice – The structure
is as follows: I. Third Party only policy- this policy shall be a
base policy and minimum cover as required by s.146 of the
MVA – The pricing thereof will be fixed by a consultative process
between the IRDA and the Central Government – II. Additional
optional cover for the occupant(s)/pillion rider (other than owner,
driver and family of the insured)- this add on will be optional
and available at an additional premium, covering occupant(s)/
pillion riders of the insured vehicle – The pricing thereof will be
determined by the respective insurance companies – III. Personal
accident cover for the owner, driver and any occupant(s)/
pillion rider- this add-on will cover personal accident i.e. death
and/or permanent disability of the occupant(s)/pillion riders of
the insured vehicle including owner, driver and family of the
insured – The pricing thereof will be determined by the respective
insurance company – IV. Own damage cover- This add-on cover
will cover liability for loss or damage to the insured vehicle
itself – Consequently, every customer, at the time of purchase
of insurance, will be issued a ‘customer option form’, whether
offline or online, whereby they may ‘opt in’ via check box to the
add-on options – The IRDA is at liberty to modify the template,
if the need so arises – The IRDA in consultation with GIC and
insurance companies, shall formulate uniform policy wordings
for the aforesaid optional covers – The insurance companies
may innovate the coverage and determine the pricing of the
Own Damage covers, in consonance with market forces –
The suggestion of the IRDA for a consumer-friendly customer
information sheet will also have to be given to the prospective
customers outlining the above four-layered structure, i.e., who
is covered under mandatory and optional covers, is made
mandatory for the sale of motor-vehicle insurance, whether offline
or online – 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 –
The benefits of obtaining comprehensive motor-vehicle insurance
286 [2026] 8 S.C.R.

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policies to be displayed in easy-to-read format on the websites
of the insurance companies – Based upon the deliberations in
Court, a pilot-project be implemented allowing citizens to verify
insurance status, and ultimately assist with the implementation
of the statutory mandate under the MV Act – The insurance
status to specify the kind of insurance, whether mandatory (third
party only) insurance or comprehensive policy – The benefit
is two-fold – At first, it will allow citizens to know whether the
vehicle they are travelling in or sending goods in or transporting
employees has valid insurance – Secondly, it will allow for prompt
reporting of uninsured vehicles – The IRDA in consultation with
the MoRTH, to deliberate and evolve a pilot-project whereby
fuel for vehicles to be linked with valid insurance status – In
the absence thereof, the vehicle concerned would be refused
fuel at petrol pumps, until such time that valid insurance is
obtained – The benefit therein is two-fold – Firstly, it will assist
in identification of uninsured or unregistered vehicles – Secondly,
it will prompt the owners of these vehicles to ensure that they
have valid insurance status – Such projects would ensure
ground-level compliance with the statutory mandate of s.146,
MVA – This may be done through the use of ANPR cameras –
In view of the number of road accidents on national highways
and also the effect that long queues at toll plazas have on road
accidents, the MoRTH is to implement the said pilot projects
on certain corridors, substituting the process of stopping at toll
plazas with automatic detection of vehicles passing through toll
points – Insurance Regulatory and Development Authority Act,
1999 – Insurance Act, 1938. [Paras 23.1-23.11]

Directions by Supreme Court – Motor Accident Claims –
Average pendency of over four years in more than 50% of
motor accident claim cases – Directions issued:
Held: The State Police to promptly file Detailed Accident Report
(DAR) along with relevant documents such as FIR, MLC,
post-mortem report, insurance policy, permit, etc. before the
concerned MACT, in pending cases relating to accidents prior
to 31.03.2022 – State Police to assist with prompt service and
production of relevant witnesses before the concerned MACT,
to ensure speedy disposal of cases relating to accidents prior to
31.03.2022 – Directions to be forwarded by the registry to the
Secretary, High Court Legal Services Authority of all High Courts,
to be forwarded to the respective State Police. [Paras 24-24.2]
[2026] 8 S.C.R. 287

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

Insurance Policies – Categories:
Held: i. Third-Party Liability Insurance- This insurance covers
liability for injury, death or damage to property of third-parties –
This type of insurance is mandatory u/s.146 of the MVA and
is commonly referred to as Act Only Policy – It does not cover
damage to the insured vehicle itself – ii. Comprehensive Insurance
Policy- This type of insurance covers liability for injury, death, or
damage to the property of occupants of both vehicles concerned –
For instance, pillion riders of two-wheelers and other occupants
of a four-wheeler are also covered under this insurance –
iii. Own–Damage Cover- This is an optional standalone policy
which covers damage to the insured vehicle due to accidents, fire,
theft etc., depending on the terms of the policy – iv. Commercial
Vehicle Insurance Policy- This policy covers vehicles which are
used for commercial/business purposes – It covers third-party
liability as well as damage to the goods being carried/occupants
of the vehicle/damage to the vehicle itself – In addition to the
aforesaid, there are various add-on covers that are offered by
the insurance companies. [Para 13]

Motor Accident Claim – Deceased died when a lorry driven
in a rash and negligent manner struck his car from the back
side – Claim filed by respondents (legal representatives of
the deceased) – Tribunal held them not to be entitled to any
compensation – Appeal filed by respondents before High
Court stating that the Tribunal had erroneously absolved
the insurance company-insurer of the car of its liability to
pay compensation to them – High Court allowed the appeal;
awarded compensation of Rs. 10,00,500/- to the respondents
along with 7.5% interest p.a. holding that the policy in
question was a comprehensive policy and would cover the
owner of the vehicle as well, who was travelling in the car
as a passenger:
Held: In matters concerning motor accident claims, Courts should
not adopt a hyper-technical approach – As rightly submitted by
the respondents, in accordance with the circular of the IRDA
dtd.16.11.2009, insurance companies are liable to compensate
for any occupant in the vehicle under a comprehensive/package
policy – No reason to disagree with the reasoning adopted by
the High Court. [Para 34]
288 [2026] 8 S.C.R.

Supreme Court Reports

Insurance Regulatory and Development Authority Act, 1999 –
Insurance Act, 1938 – Motor Vehicles Act, 1988 – Statutory
framework under, discussed. [Paras 5-8]

Case Law Cited
S. Rajaseekaran v. Union of India [2025] 10 SCR 311 : 2025
SCC OnLine SC 2555; General Insurance Council v. State of
Andhra Pradesh [2007] 8 SCR 192 : (2007) 12 SCC 354; Jai
Prakash v. National Insurance Company [2009] 16 SCR 710 : 9
(2010) 2 SCC 607; M.R. Krishna Murthi v. New India Assurance
Company Limited [2019] 3 SCR 1088 : (2020) 15 SCC 493;
Shishu Pal @ Shish Ram & Ors v. Surjeet & Ors., 2026 INSC
634 : [2026] 7 SCR 445; In Re: Phalodi Accident v. National
Highways Authority of India and Ors., 2026 SCC OnLine SC 646;
S. Rajaseekaran v. Union of India [2017] 13 SCR 508 : (2018)
8 SCC 447 – referred to.
Abhijeet Kumar Pandey v. State of Bihar, 2023 SCC OnLine Pat
279 – referred to.

List of Acts
Motor Vehicles Act, 1988; Insurance Regulatory and Development
Authority Act, 1999; Insurance Act, 1938.

List of Keywords
Section 146 of the Motor Vehicles Act, 19888; Third-party motor
vehicle insurance; Third-party insurance; Insurance policy
covering third-party risks; Insurance policy covering third-parties;
Uniform motor-vehicle policy structure; Insurance Regulatory
Development Authority of India; Motor accident claims; Courts
should not adopt a hyper-technical approach; Comprehensive/
package policy; Insurance policies; Third-Party Liability Insurance;
Comprehensive Insurance Policy; Own Damage Cover;
Commercial Vehicle Insurance Policy; Road safety; Ministry of
Road Transport and Highways (MoRTH); Insurance Regulatory
and Development Authority (IRDA); Comprehensive motor vehicle
insurance policies.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14369
of 2025
[2026] 8 S.C.R. 289

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

From the Judgment and Order dated 30.07.2024 of the High
Court for the State of Telangana at Hyderabad in MACMA No.
1659 of 2012

Appearances for Parties
Advs. for the Appellant(s):
Ms. Meenakshi Midha, Garv Singh, Ms. Muskaan, Ms. Sindhoora
Ravindran, Chander Shekhar Ashri.
Advs. for the Respondent(s):
Mrs. Archana Pathak Dave, N.Venkataraman, ASGs,
N Venkataraman, Nachiketa Joshi, Joy Basu, Sr. Advs.,
Vamsikrishna Thota, T. Vishwarupa Chary, Ms. Munisha Anand,
Neeraj Kumar Sharma, Vikas Kumar, Mrs. Alisha Parvin, Anil
Kumar, Kamaldeep, Karunakar Mahalik, Mrs. Saloni Sharan,
Vishal Meghwal, Abhishek Kumar Gola, Nikhil Jain, Ms. Divya Jain,
Anshul Mehral, Siddharth, Gopal Singh,Rajeev Maheshwaranand
Roy, Gautam Jha, Ms. Sweta Jha, Mukesh Kumar, Abhay
Kumar, Rajat Khattry, Ravinder Agarwal, Manish Kumar Singh,
Vasu Agarwal, Raj Bahadur Yadav, Avinash Dave, Prasant
Singh Ii, Advitya Awasthi, Kamal Rattan Digpaul, Arun Kumar
Yadav, Jagdish Chandra Solanki, Vishal Meghwal, Aishwarya
Singh, Kamlesh Kumar, Ravinder Agarwal, Manish Kumar
Singh,Vasu Agarwal, Jagidsh Chandra Solanki, Vishal Meghwal,
Ms. Aishwarya Sinha, Kamlesh Kumar, Rajeev M. Roy, Nilesh
Kumar, P. Srinivasan.

Judgment / Order of the Supreme Court

Judgment

Sanjay Karol, J.

1. In the present appeal, this Court had proceeded on primarily two
issues, which arose for consideration. The first being, the lack of
compliance of Section 146 of the Motor Vehicles Act, 19881 which
requires all vehicles to have a valid insurance policy covering
third-parties. Secondly, whether there should be a uniform motor-
vehicle policy structure covering all occupants of a vehicle,

1 Hereinafter ‘MVA’.
290 [2026] 8 S.C.R.

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in addition to the statutorily mandated coverage of third-party
risks.2
2. Vide Order dated 18.11.2025, we had framed the above two issues
and summarized the procedural history of the case at hand as follows:
“4. We had issued notice in the present matter on
24.03.2025. Vide Order dated 09.09.2025, this Court
had impleaded twenty two insurance companies as party
respondent, given the nature of the issue before this Court:
“We are of the considered view that larger
issue of issuance of various policies by the
different Insurance Companies covering
the motor vehicles is pending consideration
before us, in this view of the matter, we
implead the following insurance companies.”
5. Thereafter on 13.10.2025, after hearing the learned
counsel for the insurance companies, this Court
impleaded the Insurance Regulatory and Development
Authority (hereinafter ‘IRDA’) constituted under the
IRDA Act, 1999. The Ministry of Road Transport and
Highways was added as party respondent vide Order
dated 30.10.2025.”
3. Vide the very same order, this Court had sought the response
from the Ministry of Road Transport and Highways3, the Insurance
Regulatory Development Authority of India4, the General Insurance
Council of India, and all the insurance companies having business
in India, on the abovementioned issues. We reiterate some pertinent
observations, made in the order:
“7… The ignorance of a statutory mandate results in
motor accidents involving uninsured vehicles, which
directly cause innocent victims having to run from pillar
to post for compensation. Therefore, in furtherance of
public interest, this Court seeks the response of the
Ministry of Road Transport and the IRDA, on what steps

2 Order dated 18.11.2025.
3 Hereinafter ‘MoRTH’.
4 Hereinafter ‘IRDA’.
[2026] 8 S.C.R. 291

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

can be taken to ensure that all vehicles have a valid
insurance policy. Valuable suggestions have been made
by counsel for all other parties during the course of the
hearings. Therefore, they are also permitted to file their
suggestions/responses in this regard.
9. From a reading of the above, it is clear that the IRDA
has been tasked with the protection of consumer interest
when it comes to matters involving insurance.”
4. Thereafter, on 09.12.2025, we had asked the abovementioned
stakeholders to sit amongst themselves, discuss all these issues and
file a supplementary affidavit. We have heard the learned counsel
for the parties. We have also perused the affidavits on record, filed
by the respective parties. In our view, it is appropriate for certain
directions to be issued, in the public interest.

Statutory Framework
5. At the outset, before proceeding to the directions, it is imperative to
discuss the statutory scheme concerning the issues at hand. The
IRDA Act, 1999, was enacted to “protect the interests of holders of
insurance policies, to regulate, promote and ensure orderly growth
of the insurance industry and for matters connected therewith
or incidental thereto.” The IRDA came to be established under
Section 3 of the Act. As per Section 4, the IRDA is to consist of
one Chairperson, not more than five whole-time members and not
more than four part-time members.
6. Section 14 of the Act, spells out the duties, powers and functions of
the Authority. Section 14 (2)(b) states that the powers and functions
of the Authority extends to “protection of the interests of the policy-
holders in matters concerning assigning of policy, nomination by
policy-holders, insurable interest, settlement of insurance claim,
surrender value of policy and other terms and conditions of contracts
of insurance.” Section 26 empowers the Authority to make regulations
consistent with this Act, to carry out the purposes of the Act.
7. The purported intent behind enacting the Insurance Act, 1938,
was to consolidate and amend the law relating to the business of
insurance. Section 64C, constituted the General Insurance Council of
India. Section 64L spells out the functions of the General Insurance
Council, as:
292 [2026] 8 S.C.R.

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“(a) to aid and advise insurers, carrying on general
insurance business, in the matter of setting up standards
of conduct and sound practice and in the matter of
rendering efficient service to holders of policies of
general insurance;”
8. The MVA mandates an insurance policy covering third-party risks
under Section 146 under Chapter XI – Insurance of Motor Vehicles
against Third Party Risks. No person is allowed to use a vehicle in
the absence of such policy. Section 147 spells out the requirements
of a policy and limits of liability. Section 149 of the Act mandates
the duty of insurers to satisfy awards against persons in respect of
third-party risks. Section 207 empowers a police officer or authorized
person by the Government to seize and detain vehicles which do
not possess valid registration or permit etc.
9. In this backdrop, we proceed to examine the suggestions given
by the respective parties. We have heard Mr. N. Venkataraman,
learned Additional Solicitor General; Mrs. Archana Pathak Dave,
learned Additional Solicitor General; Mr. Joy Basu, learned Senior
Counsel; Ms. Meenakshi Midha, learned counsel and other learned
counsels at length. On 09.12.2025, during the deliberations in Court,
the following issues came to be discussed:
a. Road safety is an often-discussed but still unaddressed issue.
On average, there are more than four lakh road accidents in
India every year.
b. In India, more than half of the vehicles plying do not possess a
valid insurance policy. Additionally, there are a large number of
vehicles that do not possess active or valid registration. There
is a stark gap between the statutory mandate and enforcement
mechanism on the ground.
c. When it comes to purchase of insurance, there is a lack of
uniformity of clauses contained in different insurance policies.
Moreover, there is scope for improvement when it comes to
customer awareness about the different coverage of insurance
policies.
10. In furtherance of our order dated 09.12.2025, the IRDA, after
consulting all stakeholders vide a meeting on 12.12.2025, including
[2026] 8 S.C.R. 293

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

the General Insurance Council, and twenty-four insurance companies,
has made the following suggestions:

On uninsured vehicles
a. The mParivahan App can be deployed by State Law
Enforcement Agencies, to identify uninsured vehicles and take
appropriate punitive action in line with the MVA.
b. Uninsured vehicles can also be identified by using Automatic
Number Plate Recognition5 by cameras that are already
installed at highways, toll plazas and city roads.
c. Enforcement through hand-held devices with the Traffic Police
will enable challans for this purpose under Section 196 of the
MVA. The fine enumerated thereunder is Rs. 2,000/- for the
first violation and Rs. 4,000/- for subsequent violations, which
is not having the desired effect, as such, the same may be
enhanced. Section 207 also permits seizure of the vehicle in
question, if being driven without permits. The Database of
Insurance Information Bureau (established under IRDA) and
VAHAN portal can be deployed for identification of uninsured
vehicles.

On insurance policies
d. Third-Party Only Policy is the mandatory cover as per the
MVA. For add-on covers, covering pillion riders, occupants etc.
the IRDA will draft uniform policy wordings for these heads,
while the coverage and pricing will be left to the insurance
companies.
e. Customer Option Form would be made mandatory before
purchasing a new vehicle, through distributors. A consumer-
friendly information sheet will also be given to the prospective
customers outlining who is covered under mandatory and
optional covers, specifically highlighting the option for coverage
of the occupants, pillion rider and driver of the vehicle in
question.

5 Hereinafter ‘ANPR’.
294 [2026] 8 S.C.R.

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f. Extended mandatory covers will not be in the larger public
interest. The premium rates are revised at regular intervals
depending upon claims ratio, and fixing a longer tenure for
insurance will prevent this revision, increasing premiums.
11. The General Insurance Council has agreed with the IRDA and made
the following suggestions, on affidavit, before this Court:

On uninsured vehicles
a. A comprehensive, technology-enabled framework for consumer
awareness on motor insurance is necessary. Efforts such as
digital education and local outreach may be implemented.
b. A handheld-digital device or digital application be provided
to the traffic police to monitor real-time insurance status of
vehicles and impose challans for violations. The platform will be
based upon data from the Vahan Parivahan Portal, integrated
with the Insurance Information Bureau of India, which already
possesses the insurance status of vehicles.

On insurance policies
c. For the insurance companies, each insurer shall host on its
website a section that explains the importance of obtaining
insurance, so as to make sure that prospective policyholders
are well-informed. Along with websites, digital media and
social media platforms will be used to amplify this information.
d. Since intermediaries such as agents and brokers are directly
in contact with the public, their education should be conducted
through structured training modules and materials developed
by the General Insurance Council.
e. Lastly, long-term policies in the past have not brought down
the percentage of uninsured vehicles plying on the road.
Moreover, long-term policies will only add to the financial
burden for the vehicle owners.
f. Modify and adopt Forms VI, XIII & XIV as uniform claim
application forms across India. Frequency of Lok Adalats may
be increased, where around 40-50% of matters are settled.
12. We now proceed to examine the affidavit on behalf of the MoRTH.
The following submissions have been made qua uninsured vehicles:
[2026] 8 S.C.R. 295

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

a. On the aspect of use of ANPR cameras, it is submitted that
a SOP for Electronic Monitoring and Enforcement of Road
Safety, duly vetted by the Supreme Court Committee on Road
Safety, has been issued to States on 28.10.2025.
b. In 7 states, e-detection has been initiated for identification
and penalizing of uninsured vehicles. They are Odisha, West
Bengal, Rajasthan, Gujarat, Himachal Pradesh, Chhattisgarh
and Uttarakhand.
c. Awareness campaigns are being conducted such as “Sadak
Suraksha Abhiyaan” is being launched to create awareness
on programs and policies related to road safety.
d. 22% road accidents involve uninsured vehicles as per data
from e-DAR Accident Data.
e. The Ministry has requested States to use eDAR to verify the
insurance status of vehicles involved in accidents and issue
challans under Section 196 for uninsured vehicles.
f. ANPR cameras may be integrated with VAHAN data for
issuance of challans, when a vehicle is found uninsured on
the roads.
g. Uninsured vehicles may be impounded to create a strong
deterrent.
h. Uninsured vehicles can be flagged as ‘not to be transacted
with’ in the VAHAN portal to prevent them from availing any
transport-related services till such time the insurance for such
vehicles is renewed.
i. Amendment to Section 196 of the MVA, which is yet to be
notified, imposed progressive fines on driving uninsured
vehicles. For the first offence, a fine of three times the basic
premium of the vehicle or five thousand rupees, whichever
is higher, has been imposed. For subsequent infractions, a
fine of five times the basic premium or ten thousand rupees,
whichever is higher, has been imposed.
j. The Ministry has started adoption of barrier-less tolling, also
called Multi Lane Free Flow Tolling. This involves the use of
ANPR cameras and other advanced equipment which reads
296 [2026] 8 S.C.R.

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the FASTag along with the vehicle number, and thereafter
deducts the applicable fee from the wallet attached with the
FASTag. This eliminates the need for the vehicle to stop at the
Toll Plaza. The current average waiting time is 40 seconds.
Moreover, the manpower involved, costs 12-15% of the toll
collection. For testing of this system, bids have been invited
for 20 – 25 plazas across India. Two have already been
commissioned and made operational.
13. The various insurance companies before us have submitted that
insurance policies can broadly be categorized as follows:

i. Third-Party Liability Insurance
This insurance covers liability for injury, death or damage to
property of third-parties. This type of insurance is mandatory
under Section 146 of the MVA and is commonly referred to
as Act Only Policy. It does not cover damage to the insured
vehicle itself.

ii. Comprehensive Insurance Policy
This type of insurance covers liability for injury, death,
or damage to the property of occupants of both vehicles
concerned. For instance, pillion riders of two-wheelers and
other occupants of a four-wheeler are also covered under
this insurance.

iii. Own – Damage Cover
This is an optional standalone policy which covers damage to
the insured vehicle due to accidents, fire, theft etc., depending
on the terms of the policy.

iv. Commercial Vehicle Insurance Policy
This policy covers vehicles which are used for commercial/
business purposes. It covers third-party liability as well as
damage to the goods being carried/occupants of the vehicle/
damage to the vehicle itself.
14. In addition to the above, there are various add-on covers that are
offered by the insurance companies. It has further been submitted
[2026] 8 S.C.R. 297

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

that pursuant to the directions of this Court in S. Rajaseekaran v.
Union of India6, at the time of registration of new vehicles, a
three-year third-party liability only policy for private cars, a five-
year third-party liability only policy for new two-wheelers, to be
bundled with a one-year Own Damage cover, has been made
mandatory.
15. In view of the nature of the issue involved, Mr. J.R. Midha, learned
senior counsel, has also put forth certain submissions regarding the
motor accident claims process. It has been submitted that:
a. On a conjoint reading of Sections 159 [formerly Section
158(6)] and Section 166 of the MVA reveals that the object
behind their enactment was to allow the Motor Accident Claims
Tribunal7 to take cognizance of a claim directly on the basis
of the accident information report of the police, without the
formal requirement of a separate claim petition. The form of
such report is prescribed under Form 54 of the Central Motor
Vehicles Rules.
b. The non-compliance of Section 159 [formerly Section 158(6)]
of the MVA, requiring the police to forward the accident
information report to the MACT, was noticed by this Court in
General Insurance Council v. State of Andhra Pradesh8
and directions were passed to all State Governments and
Union Territories to ensure strict compliance. The same were
reiterated by this Court in Jai Prakash v. National Insurance
Company9.
c. In M.R. Krishna Murthi v. New India Assurance Company
Limited10, this Court reiterated that earlier directions issued
by this Court for speedy disposal of motor accident claims,
within a period of 90/120 days of the accident, are not being
complied with.

6 2025 SCC OnLine SC 2555.
7 Hereinafter ‘MACT’.
8 (2007) 12 SCC 354
9 (2010) 2 SCC 607.
10 (2020) 15 SCC 493.
298 [2026] 8 S.C.R.

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d. The abovementioned directions are summarized as follows:
i. In respect of motor accidents, the police have to carry out
complete investigation and submit a Detailed Accident
Report (DAR) before the MACT within 30 days of the
accident.
ii. In cases pending for the service on the driver, owner or
eye witness, the Police shall ensure their service and
production before the concerned MACT.
iii. The Insurance Company shall compute the compensation
within 30 days of DAR and submit their report to the
Tribunal.
iv. If the amount offered is fair and acceptable to the claimant,
consent award shall be passed, and compensation be
paid within 30 days thereafter.
v. If the offer is not acceptable or the Tribunal finds it
unfair, then the Tribunal shall pass an award within 30
days thereafter.
e. It has been submitted that a number of these directions
have been incorporated in the scheme of the Central Motor
Vehicles Rules, notified on 28.02.2022, which came into force
on 01.04.2022.
f. However, with respect to accidents before 31.03.2022, there are
a number of cases where claim petitions are pending due to
service being pending on some witnesses or non-production of
relevant documents. In view thereof, it has been submitted that
the above directions must be implemented qua those accidents.

Our View
16. An unfortunate reality of road safety in India is that despite the
existence of a statutory framework mandating third-party motor
vehicle insurance, the compliance thereof is found to be lacking.
Consequently, victims or families affected by motor accidents often
have to run pillar to post in order to receive compensation. Recently,
in Shishu Pal @ Shish Ram & Ors v. Surjeet & Ors11, this Court

11 2026 INSC 634.
[2026] 8 S.C.R. 299

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

had pointed out a pendency of over four years in more than 50%
of motor accident claim cases.
17. This situation is compounded when the vehicle in question has no
valid insurance policy. It is shocking to learn that nearly 56% of
vehicles plying on Indian roads remain uninsured as per the Report of
the Standing Committee on Finance 2024–25, titled ‘Action taken by
the Government on the Observations/Recommendations contained
in Sixty Sixth Report on the subject - Performance Review and
Regulation of Insurance Sector’, dated December 2024. In absolute
terms, the stark figure of uninsured vehicles stands at 16.54 crore
vehicles out of 30.48 crore vehicles.12 The consequent effect is that
the statutory safeguard of victim compensation is often delayed, if not
defeated. The object behind mandatory insurance under Section 146
of the MVA is not just that victims of road accidents are compensated,
it is also that they are not drawn into prolonged litigation.
18. The result of vehicles remaining uninsured is that the victims of
the accident and their families have no recourse to adequate
compensation, within a reasonable time period. They often have to
enter into prolonged litigation concerning the quantum as well as
liability for compensation. The consequence is even more severe
for families where the victim is deceased or has suffered permanent
disability, as the financial impact on the family is significantly
heightened.
19. This is further compounded by a number of vehicles not possessing
valid or active registration. Therein, the process of tracing the identity
of the driver/owner involved in the accident becomes improbable
and time-consuming. Such circumstances defeat the very purpose
and statutory mandate behind the MVA.
20. The number of road accidents in India also points towards the
scale of this problem. As per response to Unstarred Question No.
1227 of the Rajya Sabha, answered on 10.12.2025, the number of
road accidents for 2024 stood at 4,87,705; 2023 stood at 4,80,583
and 2022 stood at 4,61,312. Recently, this Court in the case of In
Re: Phalodi Accident v. National Highways Authority of India

12 Answer of the Government of India to Lok Sabha Unstarred Question No. 3211 on 20.03.2023; except
vehicles from Madhya Pradesh, Andhra Pradesh and Lakshadweep.
300 [2026] 8 S.C.R.

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and Ors.13 had recognized the linkage between Article 21 of the
Constitution and the road safety of a commuter. It was observed:
“5. It is seen that National Highways constitute
approximately 2% of India’s total road length but account
for nearly 30% of all road fatalities. A road, particularly
a high-speed Expressway, must not become a corridor
of peril due to administrative lethargy or infrastructural
gaps. The loss of even a single life to avoidable hazards
like illegal parking or blackspots etc., represents a failure
of the State’s protective umbrella. The ‘Right to Life’
enshrined under Article 21 of the Constitution of India
is not merely a guarantee against the unlawful taking
of life, but a positive mandate upon the State to ensure
a safe environment where human life is preserved and
valued. Therefore, recognizing the safety of the commuter
as an integral facet of the right to live with dignity as a
constitutional obligation under Article 21 of Constitution
of India, it is necessary in the interest to address the
systematic root causes that these interim directions are
issued in exercise of powers under Article 142 of the
Constitution of India. We reiterate that no pecuniary or
administrative constraint can outweigh the sanctity of
human life, and the strict timelines provided herein reflect
the urgency of this constitutional obligation.”
(emphasis supplied)

21. Similarly, the High Court of Judicature at Patna in Abhijeet Kumar
Pandey v. State of Bihar14 had recognized the intrinsic relationship
between Article 21 of the Constitution and the right to safe travel.
It was observed:
“110. We hold, that a right to safe travel is inherent to
the right to free movement under article 19(1)(d) and the
right to life and liberty under Article 21 of the Constitution
of India.”

13 2026 SCC OnLine SC 646. See also: Abhijeet
14 2023 SCC OnLine Pat 279.
[2026] 8 S.C.R. 301

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

22. Considering the submissions discussed above, it is apparent that
integration of the enforcement system with technology is the need
of the hour. Existing offline technology for issuance of challans and
road-safety management is required to be integrated with e-models,
specifically when it comes to ensuring compliance with statutorily
mandated insurance. There is a consensus of all stakeholders on
the above aspects.
23. Therefore, in the interest of justice, we issue the following directions,
to be enforced through the MoRTH and IRDA:
23.1. Currently, ANPR Cameras deployed on highways and roads are
equipped with a mechanism to catch and penalize road safety
violations such as high speed, red light jumping, driving on the
wrong side of the road, etc. Carrying this forward and as already
deployed by the MoRTH in certain states, ANPR Cameras are to
be integrated with data from the Insurance Information Bureau
(established under IRDA) and the VAHAN portal for issuance of
automatic e-challans to uninsured vehicles, in furtherance of the
SOP for Electronic Monitoring and Enforcement of Road Safety.
23.2. This Court is informed that as on date, there is no uniform
mechanism in place with State Police to verify insurance status
on the ground. It is directed that State Police be provided with
handheld devices or downloadable apps, linked with the data
from Insurance Information Bureau (established under IRDA)
and VAHAN portal be supplied to the State Police. This is to
monitor real-time insurance status of vehicles and impose
challans for violations, ensuring compliance with mandatory
insurance on the ground.
23.3. Upon notification of the amendment to Section 196 of the
MVA, strict compliance thereof is to be ensured.
23.4. As submitted by the IRDA, for private vehicles, a broad four-
layer structure is to be implemented for private vehicles. This
would bring clarity to various policy options for the vehicle-
owner so as to allow them to make an informed choice. The
structure is as follows:
I. Third Party only policy – this policy shall be a base policy
and minimum cover as required by Section 146 of the
MVA. The pricing thereof will be fixed by a consultative
process between the IRDA and the Central Government.
302 [2026] 8 S.C.R.

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II. Additional optional cover for the occupant(s)/pillion rider
(other than owner, driver and family of the insured) – this
add-on will be optional and available at an additional
premium, covering occupant(s)/pillion riders of the
insured vehicle. The pricing thereof will be determined
by the respective insurance companies.
III. Personal accident cover for the owner, driver and any
occupant(s)/pillion rider – this add-on will cover personal
accident i.e. death and/or permanent disability of the
occupant(s)/pillion riders of the insured vehicle including
owner, driver and family of the insured. The pricing thereof
will be determined by the respective insurance company.
IV. Own damage cover – This add-on cover will cover liability
for loss or damage to the insured vehicle itself.
Consequently, every customer, at the time of purchase of insurance,
will be issued a ‘customer option form’, whether offline or online,
whereby they may ‘opt in’ via check box to the add-on options.
A broad template of which is as under:
S. Nature of cover Brief coverage details Choice of cover Premium
No. which the payable
customer wishes
to opt for
1. Mandatory Third- Coverage of third party √ Rs._____/-
Party Only Policy liability as per Section 146
of the Motor Vehicles Act
2. Optional Cover I Coverage of liability for Rs._____/-
occupant(s)/pillion rider
Legal Liability Cover (other than owner, driver
and family of the insured)
3. Optional Cover II Coverage of liability for Rs._____/-
the owner, driver and any
Personal Accident occupant(s)/pillion rider
Cover
4. Optional Cover III Coverage for loss/damage to Rs._____/-
the insured vehicle
Own Damage Cover

The IRDA is at liberty to modify this template, if the need so arises.
23.5. The IRDA in consultation with GIC and insurance companies,
shall formulate uniform policy wordings for the above optional
covers. Needless to add, that the insurance companies may
[2026] 8 S.C.R. 303

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

innovate the coverage and determine the pricing of the Own
Damage covers, in consonance with market forces.
23.6. The suggestion of the IRDA for a consumer-friendly customer
information sheet will also have to be given to the prospective
customers outlining the above four-layered structure, i.e., who
is covered under mandatory and optional covers, is made
mandatory for the sale of motor-vehicle insurance, whether
offline or online.
23.7. Another aspect to be considered is that this Court in S.
Rajaseekaran v. Union of India15 on 12.07.2018, while noting
the large number of vehicles plying without third-party insurance,
had issued directions mandating purchase of third-party
insurance for three years for new cars and five years for two
wheelers, at the time of purchase/registration of new vehicles.
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.
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.
23.8. The benefits of obtaining comprehensive motor-vehicle
insurance policies to be displayed in easy-to-read format on
the websites of the insurance companies.
23.9. Based upon the deliberations in Court, a pilot-project be
implemented allowing citizens to verify insurance status, and
ultimately assist with the implementation of the statutory mandate
under the MV Act. The insurance status to specify the kind of
insurance, whether mandatory (third party only) insurance or
comprehensive policy. The benefit is two-fold. At first, it will allow
citizens to know whether the vehicle they are travelling in or
sending goods in or transporting employees has valid insurance.
Secondly, it will allow for prompt reporting of uninsured vehicles.

15 (2018) 8 SCC 447.
304 [2026] 8 S.C.R.

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23.10. As deliberated upon in Court, the IRDA in consultation
with the MoRTH, to deliberate and evolve a pilot-project
whereby fuel for vehicles to be linked with valid insurance
status. In the absence thereof, the vehicle concerned would
be refused fuel at petrol pumps, until such time that valid
insurance is obtained. The benefit therein is two-fold. Firstly,
it will assist in identification of uninsured or unregistered
vehicles. Secondly, it will prompt the owners of these
vehicles to ensure that they have valid insurance status.
Such projects would ensure ground-level compliance with
the statutory mandate of Section 146 of the MVA. This may
be done through the use of ANPR cameras. The Ministry of
Petroleum and Natural Gas, has in principle, no objection
to the same.
23.11. Lastly, based upon the deliberations in Court, and as rightly
submitted by the Ministry, we are cognizant of the number
of road accidents on national highways16 and also the effect
that long queues at toll plazas have on road accidents.
Consequently, the MoRTH is to implement the said pilot
projects as submitted above on certain corridors, substituting
the process of stopping at toll plazas with automatic detection
of vehicles passing through toll points.
24. Having already noticed above the average pendency of MACT
cases as observed in Shishupal (supra) and directions issued in
General Insurance Counsel (supra) and M.R. Krishna Murthi
(supra), on the submissions put forth by Mr. J.R. Midha, learned
senior counsel, we pass the following directions:
24.1. The State Police to promptly file DAR along with relevant
documents such as FIR, MLC, post-mortem report, insurance
policy, permit, etc. before the concerned MACT, in pending
cases relating to accidents prior to 31.03.2022.
24.2. The State Police to assist with prompt service and production
of relevant witnesses before the concerned MACT, to ensure
speedy disposal of cases relating to accidents prior to
31.03.2022.

16 Out of 4,80,583 road accidents in India in 2023, nearly 1/3rd i.e. 1,50,177 took place on national highways
as per Report of the MoRTH on Road Accidents in India, 2023.
[2026] 8 S.C.R. 305

National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi & Ors.

The above directions be forwarded by the registry of this Court to
the Secretary, High Court Legal Services Authority of all High Courts,
to be forwarded to the respective State Police.
25. We thank the learned senior counsels and all counsels for their
invaluable assistance in this matter.
26. Lastly, despite the larger public interest involved, we cannot lose
sight of the genesis of the appeal. This appeal is directed against
the judgment and order dated 30.07.2024 passed in Motor Accident
Civil Miscellaneous Appeal No. 1659 of 2012 by the High Court of
Telangana at Hyderabad, which, in turn, was preferred against the
order dated 08.12.2009 in M.V.O.P. No. 9 of 2003 by the MACT,
L.B. Nagar, Hyderabad.
27. The brief facts giving rise to this appeal are that on 13.07.1996,
the deceased, namely Mr. T. Ramu, was returning from Tirupathi to
his village Venkanur in his Maruti 800 vehicle bearing registration
number AP 21A 1666. Near, Singarayakonda at about 5:00 AM, an
unknown lorry being driven in a rash and negligent manner struck
the car of the deceased from the back side. As a result of the said
accident, he suffered injuries and passed away during treatment.
28. An application seeking compensation was filed by the claimant-
respondents, being the legal representatives of the deceased,
before the Tribunal under Section 166 of the MVA (later amended to
Section 163-A), to the tune of Rs. 10,00,000/. It was stated therein
that the deceased was in the business of seafood and was earning
at least Rs. 1,00,000/- per annum. He was the sole breadwinner of
his family. The appellant insurance company was the insurer of the
Maruti 800 car, in which the deceased was travelling.
29. The Tribunal, vide its order dated 08.12.2009, held the claimant-
respondents not to be entitled to any compensation. The Tribunal
relied upon the testimony of the Assistant Manager of the appellant
insurance company and observed that no extra premium was paid
to cover the personal risk of the owner’s vehicle.
30. Aggrieved thereof, the claimant-respondents preferred an appeal
before the High Court. It was stated therein that the Tribunal had
erroneously absolved the insurance company of its liability to pay
compensation to the claimant-respondents.
306 [2026] 8 S.C.R.

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31. The High Court, vide, the impugned judgment, allowed the appeal
and awarded a compensation of Rs. 10,00,500/- to the claimant-
respondents along with 7.5% interest per annum. The Court observed
that the policy in question is a comprehensive policy and would
cover the owner of the vehicle as well, who was travelling in the car
as a passenger. In the absence of any evidence qua the monthly
income of the deceased, the Court assessed his monthly income
as Rs. 4,500/- on a notional basis.
32. Dissatisfied, the appellant insurance company is now before us.
The significant ground of challenge taken is that the Court below
has erred in holding the insurance company liable.
33. We have perused the submissions of the parties on this aspect.
34. It is well settled that in matters concerning motor accident claims,
Courts should not adopt a hyper-technical approach.17 As rightly
submitted by the claimant-respondents, in accordance with the
circular of the IRDA dated 16.11.2009, insurance companies are
liable to compensate for any occupant in the vehicle under a
comprehensive/package policy. Consequently, we find no reason to
disagree with the reasoning adopted by the High Court. The present
Civil Appeal is dismissed to that extent.
35. All stakeholders to comply with the above directions and file
responses before 14.08.2026. Appeal stands disposed of accordingly.
For perusal of affidavits of compliance, list on 18.08.2026 at 2 PM.
Pending application(s), if any, shall also stand disposed of.

Result of the case: Directions issued; matter to be listed on 18.08.2026
for perusal of affidavits of compliance.

†
Headnotes prepared by: Divya Pandey

17 See: Surekha and Ors. v. Santosh and Ors. [(2021) 16 SCC 467].