Home Legal News New Circular By IRDAI Asks Insurance Company To Take Valid Pollution Under Control Certificate From Policy Holders During Insurance Renewal

New Circular By IRDAI Asks Insurance Company To Take Valid Pollution Under Control Certificate From Policy Holders During Insurance Renewal

by Preeti Dhoundiyal
IRDAI insurance

A circular has been issued by the Insurance Regulatory and Development Authority (IRDAI) to insurance companies asking them to ensure that policyholders provide a valid Pollution under Control (PUC) Certificate at the time of renewal of their motor insurance policy.

On August 20, 2020, the circular advised that without the owner providing a valid PUC certificate, as per Supreme Court’s Orders, the general insurance providers need not renew any motor vehicle’s insurance policy.

The specific emphasis has been laid on compliance in the National Capital Region of Delhi (Delhi-NCR) and the insurance regulator asked insurers to generally abide by Supreme Court’s Order.

All CEOs and CMDs of general insurance companies have been addressed in the operative part of the IRDAI circular.

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“Central pollution control board (CPCB) has raised concerns regarding the status of compliance of above direction of Hon’ble Supreme Court of India in 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).”

On August 10, 2017, the Supreme Court had passed orders in the MC Mehta case mandating insurance providers to obtain valid PUC certificates for the vehicle while renewing its motor insurance policy and was stipulated that vehicle owners who don’t have a valid pollution certificate will not be able to renew the insurance of their vehicles.

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The direction was given by the Supreme Court to all insurers in India with an aim to ensure that polluting vehicles could be kept off the roads.

After considering suggestions given by the SC-appointed Environment Pollution Control Authority (EPCA), the IRDAI Order was issued. 

Court was informed by the EPCA that the current enforcement strategy based on “onroad” checks and challans also did not ensure 100 per cent pollution certificate compliance.


Compliance by linking annual vehicle insurance with PUC certificates was recommended by EPA ensuring 100 per cent.

The Ministry of Road Transport and Highways expressing that the move might be “counter-productive” noted:

“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”.

The order was given by the bench comprising Justices Madan B Lokur and Deepak Gupta:

Madan Lokur
Justice Madan Lokur

“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”.

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The Ministry of Road Transport and Highways was also questioned by the court to ensure that all fuel refilling centres in NCR have PUC centres. Four weeks’ time to the Centre to ensure that there are functional PUC centres in NCR and to ensure that vehicles have PUC certificate was granted by the Court.

Due to the menace of air pollution year-on-year, alarming levels of toxic emissions continue to harm its citizens. Delhi-NCR has been suffering and it appears that the Supreme Court’s Orders were not complied with, which prompted IRDAI to issue this new circular.

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