Insurer must first satisfy the award, then recover it from the owner and driver despite an invalid licence.

On 3 March 2007, minor Afnan, aged approximately four years, was struck by motorcycle No. GJ-6-CG-3753, allegedly driven rashly and negligently by Opponent No. 1 at Vasedi Naaka.

Afnan was initially taken to Kesar Hospital and thereafter shifted to SSG Hospital, Vadodara, where he died from his injuries on the following day.

An FIR was registered at Chhotaudepur Police Station.

His parents filed a claim petition under Section 163-A of the Motor Vehicles Act, 1988.

The Motor Accident Claims Tribunal, Vadodara, awarded Rs.1,54,500 with 9% interest, but exonerated the insurer on the ground that the driver did not possess a valid and effective driving licence.

The parents challenged both the insurer’s exoneration and the allegedly inadequate compensation.

Whether the insurer, despite the driver’s lack of a valid and effective driving licence, could be directed to satisfy the award initially and recover the amount from the owner and driver of the offending vehicle.

Whether the compensation awarded by the Tribunal was inadequate and required enhancement.

The Court considered the compensation claim under Section 163-A of the Motor Vehicles Act, 1988, which provides for compensation under the structured formula, and referred to Section 164 as the statutory provision prescribing compensation of Rs.5,00,000 in case of death.

It relied on Jawahar Singh v. Bala Jain, (2011) 6 SCC 425, for the principle that where the driver lacks a licence, the owner bears the ultimate responsibility and the insurer may be directed to pay the compensation in the first instance and recover it from the owner and driver.

The Court also relied on Sudhir Kumar Rana v. Surinder Singh, (2008) 12 SCC 436, which holds that driving without a licence, by itself, does not establish negligence or contributory negligence in causing the accident.

The Tribunal’s finding that the driver did not possess a valid and effective driving licence was sustained.

However, following Jawahar Singh, the Court held that this finding did not justify leaving the claimants without an effective remedy against the insurer.

The insurer was therefore required to satisfy the award first, with liberty to recover the amount from Opponent Nos. 1 and 2, jointly or severally.

The Court also noted that absence of a driving licence does not, by itself, prove negligence under Sudhir Kumar Rana.

Regarding quantum, the Court accepted the claimants’ submission that compensation for death under the statutory framework was Rs.5,00,000 and enhanced the award from Rs.1,54,500 to Rs.5,00,000.

The claimants were held entitled to total compensation of Rs.5,00,000 with 9% simple interest from the date of filing of the claim petition until realization, payable by Opponent Nos. 1 and 2 jointly and severally.

Opponent No. 3—the insurer—was directed to deposit and satisfy the award within eight weeks, after which it could recover the amount from Opponent Nos. 1 and 2 by executing the judgment.

The Tribunal was directed to disburse the deposited amount to the claimants after due verification.