SC revisits its own order: PUC not mandatory to renew car insurance

SG Tushar Mehta, representing GIC, submitted that the court order was proving detrimental for motor accident victims as nearly 55% vehicles don’t have insurance cover

New Delhi: The Supreme Court on Friday abolished its own directive issued in 2017 that made a valid pollution under control (PUC) certificate mandatory for renewal of third-party insurance policy.

The 2017 order was passed on the recommendation of the Environment Pollution (Prevention and Control) authority, a statutory body assisting the court on environment and pollution-related issues. (Ronjoy Gogoi/HT Photo)

In an order passed by a bench headed by justice AS Oka, it was held: “If said direction is allowed to be implemented in letter and spirit, it will have disastrous consequences as some vehicles will continue to ply without third-party insurance.”

The order came on an application moved by the General Insurance Council (GIC) – an apex body of insurance firms – which highlighted the problem arising out of the implementation of apex court’s August 10, 2017 passed in the MC Mehta case relating to pollution in Delhi.

Revisiting its own order, the bench, also comprising justice Augustine George Masih said, “We are inclined to allow the application by deleting the aforesaid direction.”

Solicitor general Tushar Mehta, representing GIC, submitted that the order of the court was proving detrimental for motor accident victims as nearly 55% vehicles do not have insurance cover. This posed great difficulty for victims seeking settlement of compensation claims in road accidents.

The 2017 order came to be passed when pollution levels in Delhi were on the rise and the court initiated drastic measures to keep it under control. In May this year, while issuing notice on the application, the court had said, “A right balance has to be struck that vehicles remain compliant with PUC norms and all vehicles must also have insurance cover.”

Senior advocate Aparajita Singh, assisting the court as amicus curiae, had held discussions with solicitor general to devise a way out to overcome the problem. On Friday, Singh supported the application moved by GIC to recall the earlier order.

The 2017 order was passed on the recommendation of the Environment Pollution (Prevention and Control) authority, or EPCA, a statutory body assisting the court on environment and pollution-related issues.

The 2017 order said, “It is made clear that the insurance companies will not insure a vehicle unless it has a valid PUC certificate on the date of renewal of insurance policy.” The GIC claimed that the order was passed without hearing it or any insurance companies. In February 2018, GIC moved an application for modification that was rejected by the SC registry on the ground that the application sought review of the top court’s order.

Challenging this order of rejection by SC registrar, GIC urged the apex court to consider its application as it raised an issue of “serious public importance”. Mehta, who has been representing GIC in this case, had said: “The resultant effect of this court’s order was that if there is no PUC, there will be no third-party insurance. This linking of PUC with annual insurance policy is creating problems. PUC is issued for six months and since they are not renewed, insurance policy cannot be renewed. This is affecting victims of accidents the most.”