Insurer must pay third-party compensation first and recover it from the owner despite the driver’s invalid licence.

On 13 February 2023, the deceased, aged 18 years, was travelling as a pillion rider on a motorcycle when a tractor allegedly driven rashly and negligently collided with it near Tenkodipakkam on the Tindivanam–Puducherry National Highway.

The deceased sustained fatal injuries.

His parents and minor sister instituted MCOP No. 220 of 2023 before the Motor Accidents Claims Tribunal, Puducherry, claiming compensation on the basis that the deceased was a plumber earning Rs.1,000 per day.

The Tribunal found the tractor driver negligent, held that he did not possess a valid driving licence, and directed the insurer to pay the compensation and recover it from the vehicle owner.

It awarded a total compensation of Rs.26,86,584.

The insurer filed the present appeal under Section 173 of the Motor Vehicles Act, 1988, challenging the findings on negligence, alleged contributory negligence arising from non-wearing of a helmet, and the pay-and-recover direction.

1. Whether the accident was caused by the rash and negligent driving of the tractor, or whether the deceased/motorcycle rider was contributorily negligent, including by allegedly travelling without a helmet.

2. Whether, despite the tractor driver’s absence of a valid driving licence and the 2019 amendments to the Motor Vehicles Act, the insurer could be directed to satisfy the award and recover the amount from the vehicle owner.

3. Whether the compensation of Rs.26,86,584 awarded by the Tribunal was excessive or otherwise liable to interference.

The Court applied the principle that proceedings before a Motor Accidents Claims Tribunal are summary in nature and negligence is determined on the basis of preponderance of probabilities.

It relied on M. Nithya v. SBI General Insurance Co. Ltd., 2025 Supreme (SC) 1508, holding that a contributory-negligence argument based on non-wearing of a helmet cannot ordinarily be considered where no issue was framed and the insurer led no supporting evidence.

The Court held that breach of the policy condition arising from the driver’s lack of a valid licence may absolve the insurer contractually vis-à-vis the insured, but does not defeat the insurer’s statutory obligation to satisfy a third-party award; the insurer may thereafter recover the amount from the insured/owner.

It followed The Branch Manager, ICICI Lombard, Thanjavur v. Mariyapushpam, CMA(MD) Nos.517 of 2025, decided on 01 June 2026, which interpreted Sections 147(2), 150(1) and 150(2) of the Motor Vehicles Act, 1988, as amended by Act 32 of 2019, and the Third-Party Insurance (Base Premium and Liability) Rules, 2022.

The recovery procedure was linked to National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297.

For quantification, the Court applied Sarla Verma v. Delhi Transport Corporation, 2009 (2) TNMAC 1 (SC), and National Insurance Co. Ltd. v. Pranay Sethi, 2017 (2) TNMAC 609 (SC), concerning the multiplier, deduction for personal expenses, and future prospects.

The Court upheld the Tribunal’s finding of negligence because the eyewitness, PW2, supported the claimants’ version, the final report attributed the accident to the tractor driver, and the material relating to the motorcycle also indicated the tractor’s negligent involvement.

Although the insurer alleged that the deceased was riding without a helmet and was therefore contributorily negligent, it neither examined a witness nor produced evidence establishing that omission or its causal connection with the death; moreover, no contributory-negligence issue had been framed.

Applying M. Nithya, the Court rejected the contention as a bare assertion.

The tractor driver’s lack of a valid licence constituted a policy breach, but the deceased was a third party and the policy was admittedly in force.

Accordingly, under the statutory third-party liability framework, the insurer was required to satisfy the award first and was entitled to recover the amount from the tractor owner.

On quantum, the Court accepted the deceased’s age as 18 years, the monthly income fixed by the Tribunal at Rs.16,678, the addition of 40% towards future prospects, the multiplier of 18, and the 50% deduction towards personal expenses, concluding that the total award was just and reasonable.

It held that the accident resulted from the tractor driver’s rash and negligent driving; no contributory negligence was established against the deceased; and the insurer remained statutorily liable to pay the third-party compensation notwithstanding the driver’s invalid licence, subject to recovery from the vehicle owner.

The Court found no error in the compensation of Rs.26,86,584 and dismissed CMA No.2429 of 2026, confirming the Tribunal’s award dated 17 November 2025.

No costs were imposed, and CMP No.18654 of 2026 was also dismissed.