A circular has been issued by the Insurance Regulatory and Development Authority (IRDAI) mandating insurance companies to ensure that policyholders provide a valid Pollution under Control (PUC) Certificate at the time of renewal of their motor insurance policy.
By: Divyansh Saini
IRDAI, on August 20, 2020, issued a circular advising general insurance providers to not renew any motor vehicle’s insurance policy without the owner providing a valid PUC certificate as per Supreme Court’s Orders.
The Apex Court, on August 10, 2017, had passed orders after suggestions given by SC-appointed Environment Pollution Control Authority (EPCA) in the MC Mehta case mandating insurance providers to obtain valid PUC certificates for the vehicle while renewing its motor insurance policy.
It was stipulated that the vehicle owners who don’t have a valid pollution certificate will not be able to renew the insurance of their vehicles with the intent to ensure that polluting vehicles could be kept off the roads.
And since Delhi-NCR has been suffering due to the menace of air pollution year-on-year, and alarming levels of toxic emissions continue to harm its citizens, it appears that the Supreme Court’s Orders were not complied with, thereby prompting IRDAI to put specific emphasis for compliance in the National Capital Region of Delhi (Delhi-NCR) in the circular.
“Central pollution control board (CPCB) has raised concerns regarding the status of compliance of the above direction of Hon’ble Supreme Court of India in the National Capital Region of Delhi (Delhi – NCR). Please ensure that the direction of the Supreme Court of India is followed scrupulously with a special focus on compliance in the National Capital Region of Delhi (Delhi-NCR)”, reads the operative part of the circular which is addressed to all CEOs and CMDs of general insurance companies.
However, the Ministry of Road Transport and Highways stated the move to be “counter-productive”,
and said “While linkage of renewal of Insurance with PUC certificates may be desirable, it may be noted that the vehicle insurance renewal is an annual feature whereas the periodicity for PUC norms for any vehicle should be at shorter intervals. It has been observed with serious concern that the coverage of third party insurance for motor vehicles is very low at this stage. Linkage of PUC certificate with Insurance may be counter-productive to that extent. MoRTH is of the view that with the linkage of PUC Centres with VAHAN database and other enforcement measures, the PUC compliance by motor vehicle owners is likely to improve considerably”.
To this, a bench comprising of Justices Madan B Lokur and Deepak Gupta ordered that
“There is now no dispute or disagreement about this. However, 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 the insurance policy. This should be implemented at the earliest”.