An invalid driving licence does not defeat the insurer’s pay-and-recover liability toward third-party claimants.

The claimants sought compensation under Section 166 of the Motor Vehicles Act, 1988, for the death of Ghasiyaram in a road accident on 17 October 2021 involving a vehicle driven by its owner, Amal Maurya.

They alleged the deceased was 45 years old and earned ₹15,000 per month.

The Motor Accident Claims Tribunal assessed his age as 60 years and monthly income as ₹9,000, deducted one-fourth for personal expenses, applied a multiplier of 9, and awarded ₹9,11,900. It directed the insurer to pay and recover the amount from the driver-owner after finding a breach concerning the driver’s licence.

The insurer appealed the pay-and-recover direction; the claimants appealed seeking enhancement.

1. Whether the Tribunal erred in directing the insurer to pay the compensation and recover it from the driver-owner, despite the driver not holding a valid and effective driving licence.

2. Whether the compensation of ₹9,11,900 was inadequate and required enhancement.

Section 173 of the Motor Vehicles Act, 1988, provides for appeals against awards of Claims Tribunals, while Section 166 provides the basis for a claim for compensation arising from a motor accident.

Relying on National Insurance Company Ltd. v. Swaran Singh, AIR 2004 SC 1531, the Court applied the principle that, where the insurer’s defence concerns the absence of a valid and effective driving licence, the insurer may be directed to satisfy the award and recover the amount from the insured or responsible party.

Compensation must be just; its assessment here involved the deceased’s income, deduction for personal expenses, multiplier, and other heads of compensation.

On the insurer’s appeal, the Court held that the Tribunal’s finding on the driving-licence issue did not justify setting aside the pay-and-recover direction. Applying Swaran Singh, it rejected the insurer’s request for exoneration.

On the claimants’ appeal, the Court noted that the Tribunal’s finding that the deceased was 60 was based on the evidence and post-mortem report, and that no other document established a different age.

It also accepted the Tribunal’s income assessment and calculation of compensation, concluding that the award was just and did not warrant interference.

It upheld the direction requiring the insurer to pay the compensation and recover it from the driver-owner, and declined to enhance the award of ₹9,11,900.