Absence of valid driving licence justifies "pay and recover" order to protect interest of third-party claimants.

On December 12, 2016, the deceased was traveling as a cleaner in a Bolero Pickup when the driver, operating the vehicle in a rash and negligent manner, caused it to turn turtle.

The deceased succumbed to fatal injuries, leading the claimants to file MACP No. 370 of 2017.

The Motor Accident Claims Tribunal (MACT), Ahmedabad, awarded compensation but found that the driver lacked a valid driving license at the time of the accident.

Consequently, the Tribunal applied the "pay and recover" principle, directing the Insurance Company to satisfy the award first and then recover the amount from the owner.

The Insurance Company appealed, seeking total exoneration based on the license breach and the allegation that the deceased was an unauthorized passenger.

Whether the Insurance Company can be completely exonerated from liability toward a third party due to the driver’s lack of a valid license.

Whether the Tribunal was justified in invoking the "pay and recover" doctrine under the Motor Vehicles Act.

The court relied on Section 149(2)(a) of the Motor Vehicles Act, 1988, regarding the insurer's defenses and the overarching objective of the Act as social welfare legislation.

It applied precedents from the Hon’ble Supreme Court: *Bimla Devi v. H.R.T.C.* and *Parmeshwari Devi v. Amir Chand* regarding the appreciation of evidence in accidents.

It applied *Pappu v. Vinod Kumar Lamba*, which affirms the pay and recover principle when a driver lacks a valid license.

And *Oriental Insurance Co. Ltd. vs. Nanjappan*, establishing that the insurer must satisfy third-party claims and subsequently recover from the insured to balance contractual breaches with third-party rights.

The Court observed that the factum of the accident and insurance coverage were undisputed, and the driver’s negligence was established by the vehicle turning turtle.

While the Insurance Company proved a breach of policy conditions because the driver lacked a valid license (supported by adverse inference as the driver failed to produce a license despite notice), the Court held that such a breach is an inter se dispute between the insurer and the insured.

Because the claimant is a "third party," the court reasoned that the legislative intent of the Motor Vehicles Act—to provide social security to victims—supersedes the contractual breach.

Following the *Pappu* and *Nanjappan* precedents, the Court determined that the Tribunal did not err in directing the insurer to pay the claimant first and then seek recovery from the owner.

The Insurance Company is directed to pay the compensation to the claimants and is granted the right to recover the same from the owner of the offending vehicle.

The Registry was directed to transmit any deposited amounts to the Tribunal.