Despite a policy breach, the insurer must satisfy the award first and recover from the owner and driver.

The appellants, children of Jangluram Netam, appealed under Section 173 of the Motor Vehicles Act, 1988, seeking enhancement of compensation awarded for his death in a road accident on 26 June 2019.

The Claims Tribunal awarded ₹9,24,400, assessed the deceased’s monthly income at ₹8,000, and exonerated the insurer for breach of policy conditions.

The deceased’s wife died during the claim proceedings, leaving the three appellants as claimants.

The appellants sought reassessment of income and application of the “pay and recover” principle; the insurer opposed interference with the award.

Whether the compensation should be enhanced by reassessing the deceased’s income and applying the governing compensation principles.

Whether the insurer should be directed to pay the compensation to the claimants first and then recover it from the vehicle’s owner and driver, despite breach of policy conditions.

Section 173 of the Motor Vehicles Act, 1988 provides for an appeal against an award of the Claims Tribunal.

In calculating motor-accident compensation, the Court relied on National Insurance Co. Ltd. v. Pranay Sethi, Sarla Verma v. Delhi Transport Corporation and Magma General Insurance Co. Ltd. v. Nanu Ram, applying their principles to future prospects, deductions, multiplier and conventional heads.

The Court used the applicable Chhattisgarh minimum-wage notification to assess income.

It also relied on Amrit Paul Singh v. Tata AIG General Insurance Co. Ltd. and Sunita v. United India Insurance Co. Ltd. for the “pay and recover” direction where the vehicle was insured but a policy breach existed.

The Tribunal had assessed monthly income at ₹8,000, but the Court found that the applicable minimum-wage notification supported an assessment of ₹8,400.

Applying the cited compensation precedents, it recalculated the award, including future prospects, deduction for personal expenses, multiplier and conventional heads, and arrived at total compensation of ₹9,63,120.

As to liability, the Court found that the policy had been breached but the vehicle was insured on the accident date; applying the cited Supreme Court decisions, it directed the insurer to satisfy the award first and recover from the owner and driver thereafter.

The award was enhanced from ₹9,24,400 to ₹9,63,120, entitling the appellants to an additional ₹38,720 with interest at 6% per annum from the date of the claim application until realization.

The insurer was directed to pay the compensation first and then recover it from the vehicle’s owner and driver.

The Registry was also directed to communicate the enhanced amount to the claimants in Hindi Devanagari, with paralegal assistance if required.