Despite the driver’s lack of a valid licence, the insurer must pay the third-party claimant first and recover from the owner.

The claimant was injured while riding pillion on a motorcycle that collided with the insured motorcycle, allegedly driven negligently.

The Motor Accident Claims Tribunal awarded ₹5,76,540 with 9% annual interest and, finding that the offending motorcycle’s driver did not hold a valid driving licence, directed the insurer to pay the award and recover it from the vehicle’s owner.

The insurer appealed against that direction.

The claimant did not appear at the High Court hearing.

Whether the Tribunal erred in directing the insurer to satisfy the compensation award first and recover the amount from the owner, despite the finding that the driver lacked a valid driving licence.

Section 173 of the Motor Vehicles Act, 1988 provides for an appeal against an award of the Claims Tribunal, while the claim in this case was brought under Section 166.

The court relied on Jawahar Singh v. Bala Jain, (2011) 6 SCC 425, in which the Supreme Court upheld a direction requiring the insurer to pay compensation to the victims and then recover it from the responsible owner where the vehicle was driven without a licence.

The governing principle applied was that a breach concerning the driver’s licence did not prevent a pay-and-recover direction in the circumstances of this case.

The Tribunal had found that the driver did not produce a valid licence, and the charge-sheet supported the finding of a breach of the policy condition.

The High Court nevertheless held that the Tribunal had committed no error in directing the insurer to pay the compensation first and recover it from the owner, relying on the principle in Jawahar Singh.

It therefore declined to disturb the Tribunal’s order.

It directed the Tribunal to disburse the compensation to the claimants after verification and in accordance with due procedure.