Court applies "pay and recover" principle where driver’s license expired and enhances compensation under minimum wages.

The Appellant Insurance Company challenged an award dated 26.02.2019 passed by the 1st Additional Motor Accident Claims Tribunal, Manendragarh, which awarded ₹5,74,000/- to the claimants (Respondents 1-6) following a fatal motor accident

The accident occurred on 11.11.2012

The Insurance Company contended that the driver lacked a valid and effective driving license at the time of the accident, as his license had expired on 20.08.2012 and was only renewed on 18.01.2013

The claimants cross-appealed for enhancement of the compensation amount

1. Whether the principle of "pay and recover" should be applied given the driver’s lack of a valid driving license at the time of the accident.

2. Whether the compensation awarded by the Claims Tribunal was just and proper or required enhancement.

The Court applied Section 173 of the Motor Vehicles Act, 1988 regarding appeals against awards

It relied heavily on the precedent established by the Supreme Court in National Insurance Co. Ltd. v. Swaran Singh and Others (2004) 3 SCC 297, which mandates that even in cases of policy breach (such as an invalid license), the insurer must first pay the third party and subsequently recover the amount from the owner/insured

For compensation calculation, the Court applied the "Minimum Wages" standard for income assessment and the "Future Prospects" doctrine

The Court found that the driver and owner both admitted in testimony that there was no valid license on the date of the accident

Evidence from the insurance witness confirmed a gap in licensure from 21.08.2012 to 17.01.2013, covering the date of the accident

Consequently, the Tribunal’s failure to apply the "pay and recover" principle was deemed an error

Regarding the cross-objection, the Court re-calculated the dependency by increasing the monthly income to ₹4,646 (based on minimum wages), adding 25% for future prospects, and applying a multiplier of 14

The Court also significantly increased the consortium award by granting ₹40,000 to each of the six claimants

It held that the "pay and recover" principle applies; the Appellant must pay the claimants first and then recover the sum from the owner

The total compensation was enhanced from ₹5,74,000/- to ₹10,01,738/-, with the additional amount of ₹4,27,738/- carrying 7% interest per annum from the date of the claim application

The Insurance Company is directed to deposit the enhanced amount within 45 days