An insurer cannot avoid liability for a learner driver without proving breach of Rule 3.

Babu Ram died after being struck by a motorcycle on 3 May 2013.

His widow and children brought a claim under Section 166 of the Motor Vehicles Act, 1988.

The Tribunal awarded them Rs. 33,97,440 with interest at 7.5% per annum, directing the insurer to pay.

The insurer appealed, contending that the driver held only a learner’s licence and that the policy had been breached; it also challenged the amount of compensation.

The claimants supported the award and sought enhancement.

1. Whether the insurer could avoid liability because the motorcycle was driven by a person holding a learner’s licence, allegedly in breach of the licence conditions or insurance policy.

2. Whether the Tribunal’s compensation award required alteration, and what constituted just compensation in the circumstances.

Sections 2(10), 2(19), and 3(2) of the Motor Vehicles Act, 1988, and Rule 3 of the Central Motor Vehicles Rules, 1989, govern learner’s licences and the conditions for driving while learning.

Relying on National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297, and National Insurance Co. Ltd. v. Bhagwani, AIR 2004 SC 2874, the Court treated a learner’s licence as a valid licence for the purposes of third-party insurance liability, subject to applicable conditions.

For compensation, the Court applied National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, on conventional heads and Magma General Insurance Co. Ltd. v. Nanu Ram, (2018) 18 SCC 130, on spousal, parental, and filial consortium.

The Court found that the driver’s learner’s licence was valid and that the insurer had not proved that Anu Mehra, said to be accompanying and instructing the driver, lacked an effective licence.

The insurer could have called him as a witness but did not do so.

The Court further reasoned, on its reading of Rule 3 and the rule concerning driving instruction, that an instructor was not legally required to accompany a learner riding a motorcycle.

It therefore rejected the alleged policy breach.

On compensation, the Court recalculated the deceased’s annual income, added 50% for future prospects, deducted tax and one-fourth for personal expenses, and applied a multiplier of 15, producing dependency compensation of Rs. 32,13,030.

It then substituted the conventional heads in accordance with Pranay Sethi and awarded consortium to all four claimants under Magma General.

It modified the compensation, enhancing it from Rs. 33,97,440 to Rs. 34,03,030, with interest at 7.5% per annum; the Tribunal’s award stood modified accordingly.