Insurer must satisfy the award first, then recover from the owner and driver for driving without a valid licence.

On 17 October 2020, Meghraj alias Karan Dhruv was riding pillion on a motorcycle driven by Sagar Yadav when it collided with a parked tractor; he died from his injuries.

His parents sought compensation under Section 166 of the Motor Vehicles Act, 1988.

The Tribunal awarded ₹13,30,600 with interest at 9% per annum and held the insurer liable.

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

The driver and owner had neither filed written statements nor adduced evidence; the insurer’s witness proved the policy and police final report, which recorded prosecution for driving without a licence.

Whether the insurer established a breach of policy conditions because the motorcycle was driven by a person without a valid driving licence

Whether, despite being exonerated from ultimate 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 requires the driver or person in charge of a vehicle involved in an accident to provide the insurer with information including the driver’s identity and licence particulars.

Under Pappu v. Vinod Kumar Lamba, (2018) 3 SCC 208, the owner must plead and prove the basic facts within the owner’s knowledge—that the driver was authorised and held a valid licence—before the burden shifts to the insurer.

The Court also relied on Rama Bai v. Amit Minerals, 2025 SCC OnLine SC 2067, in directing the insurer to pay the award first, with liberty to recover from the owner and driver.

The owner adduced no evidence to establish that the driver was authorised and held a valid licence.

The seizure memo showed no licence had been seized or produced, and the police final report reflected prosecution of the driver and owner in relation to the absence of a valid licence.

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

Since the vehicle was insured, the Court nevertheless applied the pay-and-recover approach identified in Rama Bai.

The insurer was directed to satisfy the award in the first instance and was granted liberty to recover the amount from the owner and driver.