Insurer Must Pay Compensation First and Recover It from the Owner Despite a Driving-Licence Breach

The Claims Tribunal recorded a breach of the policy condition concerning the driver’s licence and exonerated the insurer from liability

In the subsequent appeal, the applicants sought a “pay and recover” direction; that request was recorded in the appellate order, but was inadvertently omitted from its operative paragraph

The applicants therefore sought modification of that order, stating that the requested correction would not affect the compensation amount or other findings

Whether the omission of a “pay and recover” direction from the operative part of the appellate order, despite the request being recorded, could be rectified as an inadvertent omission

Whether the insurer should be directed to pay the compensation in the first instance, with liberty to recover it from the vehicle owner

The Court relied on the Supreme Court’s decision in Rama Bai v. Amit Minerals through Incharge Officer/Competent Officer and Another, (2025) SCC OnLine SC 2067, as governing the issue of breach of a driving-licence policy condition and “pay and recover”

It treated an omission apparent from the record—where the relevant submission had been recorded but not reflected in the operative order—as capable of correction in the interest of justice

The applicants’ request for a “pay and recover” direction appeared in the appellate order, while the Tribunal had found a driving-licence policy breach and exonerated the insurer

Because the operative paragraph failed to address the recorded request, the Court found an inadvertent omission on the face of the record

Applying Rama Bai to the policy-breach issue, it directed the insurer to satisfy the compensation award first, while preserving its right to recover the amount from the owner

The enhanced compensation of ₹3,13,960, over and above the Tribunal’s award of ₹16,89,800, was to carry interest at 6% per annum from the date of filing of the claim application until realization; the insurer was directed to pay the compensation in the first instance, with liberty to recover from the owner in accordance with law

All other conditions remained unchanged, and the modification formed part of the appellate order