Insurer may recover compensation from the owner and driver after satisfying the award for unlicensed driving.

On 10 March 2019, a Bolero insured by the appellant overturned while being driven on the Bilaspur–Kewanchi road, causing the death of passenger Mahesh Kumar.

His parents obtained an award of ₹14,26,952, with interest at 9% per annum, against the insurer.

The insurer appealed, contending that the driver lacked a valid driving licence.

It relied on the police final report and its witness’s evidence; neither the driver nor the owner adduced evidence or produced a licence.

Whether the insurer established a breach of policy conditions because the driver did not hold a valid driving licence at the time of the accident

Whether, despite being exonerated from liability, the insurer should satisfy the award first and recover the amount from the owner and driver

Section 134(c) of the Motor Vehicles Act, 1988 requires the driver or person in charge of a vehicle involved in an accident to provide the insurer with specified accident and driving-licence information.

Under Pappu v. Vinod Kumar Lamba, (2018) 3 SCC 208, the owner must plead and prove the foundational facts that the driver was authorised to drive and held a valid licence; the evidential onus shifts to the insurer only after that burden is discharged.

The Court also relied on Rama Bai v. Amit Minerals through Incharge Officer/Competent Officer, 2025 SCC OnLine SC 2067, to direct the insurer to satisfy the award first, with liberty to recover from the owner and driver.

The owner adduced no evidence that the driver was authorised and licensed, and no driving licence was produced.

The insurer’s witness proved the policy and police final report, which showed that the driver and owner had been prosecuted in connection with the alleged absence of a valid licence.

Applying Pappu, the Court held that the owner had not discharged the initial burden and found a breach of the policy condition.

Since the vehicle was insured, the Court applied Rama Bai to preserve the claimants’ recovery by requiring the insurer to pay first, while permitting recovery from the owner and driver.

The insurer was exonerated from ultimate liability for the award but was directed to satisfy it at the first instance, with liberty to recover the amount from the vehicle’s owner and driver.