An insurer cannot recover compensation from the owner absent proof of policy breach.

The appellant sustained injuries in a 13 November 2003 road accident involving a Hero Honda motorcycle.

The Motor Accident Claims Tribunal awarded the appellant ₹1,15,000 with 7% interest from the date of the claim and granted the insurer a right to recover the amount from the vehicle owner.

The appellant appealed, challenging the quantum of compensation.

Whether the Tribunal’s grant of a right to recover compensation from the vehicle owner could be sustained in the absence of evidence establishing a breach of policy conditions.

Whether the compensation awarded to the appellant should be increased.

The appeal was brought under Section 173(1) of the Motor Vehicles Act, 1988.

The Court relied on the principle that an insurer’s right to recover compensation from the insured must have a basis in an established breach of policy conditions; an unsupported plea of breach does not suffice.

In addressing the compensation, the Court referred to Taslim Parvin & Another v. (Smt.) Usha Devi & Another, 2018(2) TAC 22 (SC), in the context of fixing compensation in the circumstances before it.

The insurer had not challenged the Tribunal’s findings on the accident or liability, and the record disclosed no evidence proving a policy breach.

The insurer’s own pleading acknowledged that the rider’s licence remained valid on the accident date. The Court therefore set aside the recovery direction as unsupported.

On quantum, the Court noted that the parties had previously negotiated a settlement of ₹1,50,000 in a Lok Adalat, which was not processed because the appellant and counsel were absent.

After further discussion, the appellant’s counsel accepted the same consolidated sum, while the insurer’s counsel left the matter to the Court’s discretion.

It directed the insurer to pay that amount to the appellant within eight weeks; any deposited amount was to be disbursed in cash, and proper court fee was to be realised.