Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9669 OF 2024
RAMA BAI ….APPELLANT (S)
VERSUS
M/S AMIT MINERALS
THROUGH INCHARGE OFFICER/
COMPETENT OFFICER & ANRS.
….RESPONDENT(S)
JUDGEMENT
N.V. ANJARIA, J.
Preferred by the appellant-claimants, the
present Appeal is directed against judgment and award
dated 11.06.2020 of the High Court of Chhattisgarh,
Bilaspur in M.A. (C) No. 876 of 2013, whereby the High
Signature Not Verified
Court enhanced the compensation payable to the
Digitally signed by
SONIA BHASIN
Date: 2025.09.25
17:19:37 IST
Reason:
appellant-claimant and absolved respondent No. 3 –
Page 1 of 10
Insurance Company from the liability to pay the amount,
fastening the same on respondent Nos. 1 and 2 – driver
and the owner respectively.
2. The case and grievance of the appellant is that the
High Court ought to have applied the doctrine of “pay and
recover” requiring the Insurance Company to satisfy the
amount of compensation to the claimant and
subsequently allow the Insurance Company to recover the
amount in accordance with law.
2.1 In support of the plea that principle of ‘pay
and recover’ should have been applied, the appellant
pressed into service the decisions of this Court in
Shamanna and Another v. Divisional Manager,
1
Oriental Insurance Company Limited and others and
in Parminder Singh v. New India Assurance Company
2
Limited and Others .
3. The appellant happens to be the mother of one
Nand Kumar who died in a vehicular accident that
1
[(2018) 9 SCC 650]
2
[(2019) 7 SCC 217]
Page 2 of 10
occurred on 13.10.2011. A truck bearing registration No.
CG-04-J-1233 driven by respondent No. 1 met with an
accident with a tractor-trolley, tractor bearing separate
registration No.CG-04-DM-9357. The said Nand Kumar
was a conductor in the truck who died succumbing to
injuries suffered in the accident.
nd
3.1 The 2 Additional Motor Accident Claims
Tribunal, Raipur, Chhattisgarh in Claim Case No.64 of
2012 instituted by the parents of the deceased awarded
compensation of Rs.3 Lakhs by applying the relevant
parameters for determination of compensation. The
compensation amount was ordered to be deposited by
respondent Nos. 1 and 2 – driver and the owner and to be
disbursed in accordance with the directions issued. It was
found that respondent No.1–Driver was not holding a valid
licence on 13.10.2011 which was the date of the accident.
3.2 In the appeal preferred by the appellant
before the High Court, the amount of compensation was
enhanced, assessing it under different heads, totalling to
Rs.5,33,600/- instead of Rs.3 Lakhs awarded by the
Page 3 of 10
Tribunal, with interest at the rate of 7% per annum from
the date of the filing of the claim application till the
realisation. While enhancing the compensation, the High
Court fastened the liability to pay the amount on the
respondent No. 1 – driver and respondent No. 2 – owner
holding that respondent No. 3 – Insurance Company was
entitled in law to avoid the liability.
3.3 The aforesaid conclusion reached by the High
Court, concurring with what was held by the Accidents
Claim Tribunal on the said issue, was arrived at on the
basis that respondent No.1 Paras Satnami–driver’s driving
licence No. CG.04/2002/0006140, issued from the
Regional Transport Office, for driving the transport vehicle
was not valid from 20.06.2010 to 02.11.2011 as the
validity of the license had expired on 20.06.2010 and only
renewed from 03.11.2011 to 02.11.2014. The accident
took place on 13.10.2011.
3.4 In other words, on the date of the accident a
valid licence was not held by respondent No. 2 – driver.
Therefore, it was not legally permissible for him to drive
Page 4 of 10
the vehicle on the date of accident. The factum that there
was no driving licence on 03.10.2011 was proved from the
Insurance Document (Ex. D-1C) and the Driving Licence
(Ex. D-2C). Thus, the driver of the offending vehicle was
found not to have a valid license on the date of accident.
3.5 While endorsing to the view of the Tribunal
that there was no valid license of the driver on the date of
accident which would render the insurance company not
liable to pay the compensation, the High Court referred to
the relevant provisions of the Motor Vehicles Act,
including Section 15 which prescribes for “Renewal of
Driving Licences”. The High Court proceeded to rely on the
decision of this Court in Ram Babu Tiwari v. United
3
India Insurance Company Limited and Others and
other decisions.
3.6 The following specific findings extracted
below were recorded by the High Court in Paragraph 16 of
its judgment,
"In view of aforementioned specific
provisions of M.V. Act and authoritative
3
[(2008) 8 SCC 165]
Page 5 of 10
pronouncement of Hon’ble Supreme Court
as well as the facts and circumstances of
the case at hand where the license of
respondent No. 1 was not renewed from
20.06.2010 to 02.11.2011 and the
accident took place on 13.10.2011, we do
not find any error in the finding recorded
by the learned Claims Tribunal that on the
date of accident, respondent No.1 was not
possessing valid and effective driving
license leading to breach of conditions of
insurance policy and exonerating the
Insurance Company from its liability.”
4. Heard learned advocate Mr. Kaustubh Shukla for
the appellant and learned advocate Mr. Gopal Singh for the
respondent- Insurance Company.
5. The submission on part of the appellant that the
High Court ought to have applied the “pay and recover”
principle rests on the decision of this Court in
1 2
Shamanna (supra) and Parminder Singh (supra). In
1
Shamanna (supra) this Court dealt with the claim of
compensation by third party victim of the motor accident.
In para 5 of the judgment, this Court referred to its own
earlier decision in National Insurance Co. Ltd. v.
4
Swaran Singh and Others to reiterate that the insurer
4
[(2004) 3 SCC 297]
Page 6 of 10
has to pay the compensation amount payable to the third
party and the insurance company may recover the same
thereafter from the insured.
1
5.1 In Shamanna in which the doctrine of “pay
and recover” was considered, the driver had no valid
licence and the insurance policy was violated. Similar
2
principle, as applied in Parminder Singh in which the
driver of the offending vehicle was found driving the
vehicle in breach of the policy conditions, the insurance
company was absolved and the principle of ‘pay and
recover’ was applied.
5.2 It was pointed out on behalf of respondent
No. 3 - Insurance Company that in subsequent decision
in National Insurance Company Limited v.
5
Parvathneni and Another , this Court doubted the
justification of applying the principle of pay and recover
on the ground that if the Insurance Company was found
not liable in law to pay the compensation, the direction
5
[(2009) 8 SCC 785]
Page 7 of 10
regarding pay and recover can be said to be beyond the
legal propriety.
5.2.1 In the earlier decisions in National Insurance Co.
6
Ltd. v. Yellamma , Samundra Devi v. Narendra
7
Kaur , Oriental Insurance Co. Ltd. v. Brij
8
Mohan and New India Insurance Co. v. Darshana
9
Devi this Court had applied the very principle, about the
correctness of which, reservations were expressed in
5
Parvathneni .
1
5.2.2 However, as found in Shamanna the reference
was not answered and the case was disposed of on
17.09.2013, keeping the question of law open to be
decided in an appropriate case.
6. In the present case as stated above, on the date of
accident, the driver had no valid license and the licence
was not renewed. The insurance company was entitled to
take a valid defence in that regard under Section 149
6
(2008) 7 SCC 526
7
(2008) 9 SCC 100
8
(2007) 7 SCC 56
9
(2008) 7 SCC 416
Page 8 of 10
(2)(a)(ii) as the driver of the offending vehicle was not duly
licensed, to avoid its liability to pay the compensation. The
conditions in law are satisfied to absolve the insurance
company from the payment of compensation.
6.1 The High Court in the impugned judgment
3
relied upon the decision in Ram Babu Tiwari to find that
as per the specific provisions of the Motor Vehicles Act, if
the driver does not possess a valid and effective driving
licence, it results in a breach of conditions of the
insurance policy, exonerating the insurer from its liability.
But while affirming the order of the High Court, absolving
the liability for breach of conditions in the policy, this
Court refused to interfere with orders of ‘pay and recover’
as directed by the High Court.
7. In the above circumstances, going by the series of
decisions of this Court, it is only proper that the insurer
be directed to satisfy the award, which however can be
recovered by the insurer from the insured-owner of the
vehicle. The appeal stands allowed.
Page 9 of 10
Pending application, if any, shall stand
disposed of.
………………………………….. J.
K. VINOD CHANDRAN
…..…………………………….. J.
N.V. ANJARIA
NEW DELHI;
September 24, 2025
Page 10 of 10
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9669 OF 2024
RAMA BAI ….APPELLANT (S)
VERSUS
M/S AMIT MINERALS
THROUGH INCHARGE OFFICER/
COMPETENT OFFICER & ANRS.
….RESPONDENT(S)
JUDGEMENT
N.V. ANJARIA, J.
Preferred by the appellant-claimants, the
present Appeal is directed against judgment and award
dated 11.06.2020 of the High Court of Chhattisgarh,
Bilaspur in M.A. (C) No. 876 of 2013, whereby the High
Signature Not Verified
Court enhanced the compensation payable to the
Digitally signed by
SONIA BHASIN
Date: 2025.09.25
17:19:37 IST
Reason:
appellant-claimant and absolved respondent No. 3 –
Page 1 of 10
Insurance Company from the liability to pay the amount,
fastening the same on respondent Nos. 1 and 2 – driver
and the owner respectively.
2. The case and grievance of the appellant is that the
High Court ought to have applied the doctrine of “pay and
recover” requiring the Insurance Company to satisfy the
amount of compensation to the claimant and
subsequently allow the Insurance Company to recover the
amount in accordance with law.
2.1 In support of the plea that principle of ‘pay
and recover’ should have been applied, the appellant
pressed into service the decisions of this Court in
Shamanna and Another v. Divisional Manager,
1
Oriental Insurance Company Limited and others and
in Parminder Singh v. New India Assurance Company
2
Limited and Others .
3. The appellant happens to be the mother of one
Nand Kumar who died in a vehicular accident that
1
[(2018) 9 SCC 650]
2
[(2019) 7 SCC 217]
Page 2 of 10
occurred on 13.10.2011. A truck bearing registration No.
CG-04-J-1233 driven by respondent No. 1 met with an
accident with a tractor-trolley, tractor bearing separate
registration No.CG-04-DM-9357. The said Nand Kumar
was a conductor in the truck who died succumbing to
injuries suffered in the accident.
nd
3.1 The 2 Additional Motor Accident Claims
Tribunal, Raipur, Chhattisgarh in Claim Case No.64 of
2012 instituted by the parents of the deceased awarded
compensation of Rs.3 Lakhs by applying the relevant
parameters for determination of compensation. The
compensation amount was ordered to be deposited by
respondent Nos. 1 and 2 – driver and the owner and to be
disbursed in accordance with the directions issued. It was
found that respondent No.1–Driver was not holding a valid
licence on 13.10.2011 which was the date of the accident.
3.2 In the appeal preferred by the appellant
before the High Court, the amount of compensation was
enhanced, assessing it under different heads, totalling to
Rs.5,33,600/- instead of Rs.3 Lakhs awarded by the
Page 3 of 10
Tribunal, with interest at the rate of 7% per annum from
the date of the filing of the claim application till the
realisation. While enhancing the compensation, the High
Court fastened the liability to pay the amount on the
respondent No. 1 – driver and respondent No. 2 – owner
holding that respondent No. 3 – Insurance Company was
entitled in law to avoid the liability.
3.3 The aforesaid conclusion reached by the High
Court, concurring with what was held by the Accidents
Claim Tribunal on the said issue, was arrived at on the
basis that respondent No.1 Paras Satnami–driver’s driving
licence No. CG.04/2002/0006140, issued from the
Regional Transport Office, for driving the transport vehicle
was not valid from 20.06.2010 to 02.11.2011 as the
validity of the license had expired on 20.06.2010 and only
renewed from 03.11.2011 to 02.11.2014. The accident
took place on 13.10.2011.
3.4 In other words, on the date of the accident a
valid licence was not held by respondent No. 2 – driver.
Therefore, it was not legally permissible for him to drive
Page 4 of 10
the vehicle on the date of accident. The factum that there
was no driving licence on 03.10.2011 was proved from the
Insurance Document (Ex. D-1C) and the Driving Licence
(Ex. D-2C). Thus, the driver of the offending vehicle was
found not to have a valid license on the date of accident.
3.5 While endorsing to the view of the Tribunal
that there was no valid license of the driver on the date of
accident which would render the insurance company not
liable to pay the compensation, the High Court referred to
the relevant provisions of the Motor Vehicles Act,
including Section 15 which prescribes for “Renewal of
Driving Licences”. The High Court proceeded to rely on the
decision of this Court in Ram Babu Tiwari v. United
3
India Insurance Company Limited and Others and
other decisions.
3.6 The following specific findings extracted
below were recorded by the High Court in Paragraph 16 of
its judgment,
"In view of aforementioned specific
provisions of M.V. Act and authoritative
3
[(2008) 8 SCC 165]
Page 5 of 10
pronouncement of Hon’ble Supreme Court
as well as the facts and circumstances of
the case at hand where the license of
respondent No. 1 was not renewed from
20.06.2010 to 02.11.2011 and the
accident took place on 13.10.2011, we do
not find any error in the finding recorded
by the learned Claims Tribunal that on the
date of accident, respondent No.1 was not
possessing valid and effective driving
license leading to breach of conditions of
insurance policy and exonerating the
Insurance Company from its liability.”
4. Heard learned advocate Mr. Kaustubh Shukla for
the appellant and learned advocate Mr. Gopal Singh for the
respondent- Insurance Company.
5. The submission on part of the appellant that the
High Court ought to have applied the “pay and recover”
principle rests on the decision of this Court in
1 2
Shamanna (supra) and Parminder Singh (supra). In
1
Shamanna (supra) this Court dealt with the claim of
compensation by third party victim of the motor accident.
In para 5 of the judgment, this Court referred to its own
earlier decision in National Insurance Co. Ltd. v.
4
Swaran Singh and Others to reiterate that the insurer
4
[(2004) 3 SCC 297]
Page 6 of 10
has to pay the compensation amount payable to the third
party and the insurance company may recover the same
thereafter from the insured.
1
5.1 In Shamanna in which the doctrine of “pay
and recover” was considered, the driver had no valid
licence and the insurance policy was violated. Similar
2
principle, as applied in Parminder Singh in which the
driver of the offending vehicle was found driving the
vehicle in breach of the policy conditions, the insurance
company was absolved and the principle of ‘pay and
recover’ was applied.
5.2 It was pointed out on behalf of respondent
No. 3 - Insurance Company that in subsequent decision
in National Insurance Company Limited v.
5
Parvathneni and Another , this Court doubted the
justification of applying the principle of pay and recover
on the ground that if the Insurance Company was found
not liable in law to pay the compensation, the direction
5
[(2009) 8 SCC 785]
Page 7 of 10
regarding pay and recover can be said to be beyond the
legal propriety.
5.2.1 In the earlier decisions in National Insurance Co.
6
Ltd. v. Yellamma , Samundra Devi v. Narendra
7
Kaur , Oriental Insurance Co. Ltd. v. Brij
8
Mohan and New India Insurance Co. v. Darshana
9
Devi this Court had applied the very principle, about the
correctness of which, reservations were expressed in
5
Parvathneni .
1
5.2.2 However, as found in Shamanna the reference
was not answered and the case was disposed of on
17.09.2013, keeping the question of law open to be
decided in an appropriate case.
6. In the present case as stated above, on the date of
accident, the driver had no valid license and the licence
was not renewed. The insurance company was entitled to
take a valid defence in that regard under Section 149
6
(2008) 7 SCC 526
7
(2008) 9 SCC 100
8
(2007) 7 SCC 56
9
(2008) 7 SCC 416
Page 8 of 10
(2)(a)(ii) as the driver of the offending vehicle was not duly
licensed, to avoid its liability to pay the compensation. The
conditions in law are satisfied to absolve the insurance
company from the payment of compensation.
6.1 The High Court in the impugned judgment
3
relied upon the decision in Ram Babu Tiwari to find that
as per the specific provisions of the Motor Vehicles Act, if
the driver does not possess a valid and effective driving
licence, it results in a breach of conditions of the
insurance policy, exonerating the insurer from its liability.
But while affirming the order of the High Court, absolving
the liability for breach of conditions in the policy, this
Court refused to interfere with orders of ‘pay and recover’
as directed by the High Court.
7. In the above circumstances, going by the series of
decisions of this Court, it is only proper that the insurer
be directed to satisfy the award, which however can be
recovered by the insurer from the insured-owner of the
vehicle. The appeal stands allowed.
Page 9 of 10
Pending application, if any, shall stand
disposed of.
………………………………….. J.
K. VINOD CHANDRAN
…..…………………………….. J.
N.V. ANJARIA
NEW DELHI;
September 24, 2025
Page 10 of 10