Insurer must pay third-party compensation despite the driver’s lack of licence, then recover from the insured without separate proceedings.

On 1 December 2011, the appellant was driving an autorickshaw when it was struck by a Tata Winger.

He sustained simple injuries and the autorickshaw was damaged.

He brought a claim under Section 166 of the Motor Vehicles Act, 1988.

The Tribunal awarded ₹5,000 for personal injuries and ₹20,000 for vehicle damage, but dismissed the claim against the insurer because the charge sheet alleged that the Tata Winger’s driver had driven without a licence.

The claimant appealed, challenging both the insurer’s liability and the amount awarded

Whether the Tribunal was justified in dismissing the claim against the insurer where the offending vehicle’s driver was alleged to have no valid driving licence

Whether the claimant was entitled to enhanced compensation for his injuries and damage to the autorickshaw

The Court considered Sections 166 and 173(1) of the Motor Vehicles Act, 1988, concerning a claim for compensation and an appeal from the Tribunal’s award.

It also considered the charge-sheet allegation under Section 3(1), read with Section 181, of the Act that the offending vehicle’s driver had driven without a licence.

The Court held that, in the circumstances of this third-party claim, the insurer was required to pay the claimant first and could then recover the amount from the insured without separate proceedings

The charge sheet named the driver for offences under Sections 279 and 337 of the IPC and Section 3(1), read with Section 181, of the Motor Vehicles Act; there was no evidence that the driver held a valid and effective licence.

The Court therefore found that the insurer’s liability could not be treated as unconditional, but that this did not justify dismissing the third-party claim against it.

The insurer had to satisfy the award first, with a right to recover from the insured without separate proceedings.

On compensation, the wound certificate described the injury as simple, supporting the existing ₹5,000 award.

For vehicle damage, the claimant’s and repairer’s evidence was not tested in cross-examination, and the Court considered that evidence alongside the repair documents sufficient to support the estimated repair cost of ₹37,270.

It declined to award lost earnings during the repair period for want of specific evidence

The claimant’s total compensation was enhanced to ₹42,270—₹5,000 for personal injuries and ₹37,270 for damage to the autorickshaw—with interest at 8% per annum from the date of the petition until deposit.

The insurer was directed to pay the claimant and was granted liberty to recover the amount from the insured without separate proceedings