Insurer must satisfy third-party claims despite a licence breach, then recover from the vehicle owner.

On 2 October 2021, Ghatigeppa Basappa Badiger was struck by a motorcycle and died the following day from his injuries.

His claimants sought compensation before the MACT, which awarded ₹7,24,392 with interest at 6% per annum and directed the insurer to pay the award and recover it from the vehicle owner.

The insurer appealed, contending that the rider had no valid driving licence and that the Tribunal therefore erred in directing it to pay and recover.

Whether the Tribunal’s direction requiring the insurer to pay compensation to the claimants and recover it from the vehicle owner was illegal or perverse, given that the rider had no valid driving licence

The appeal was brought under Section 173(1) of the Motor Vehicles Act, 1988.

Where the vehicle was insured and the claimants were third parties, the insurer was required to satisfy the compensation award despite the rider’s lack of a valid driving licence, while retaining the right to recover the amount from the vehicle owner for breach of policy conditions.

The Court treated the accident and the rider’s lack of a driving licence as undisputed.

It noted that the motorcycle had valid insurance on the date of the accident, the claimants were third parties, and the owner had not appeared to contest the proceedings.

In those circumstances, the rider’s breach of the policy conditions did not defeat the claimants’ entitlement to payment by the insurer; the insurer could recover the amount from the owner.

The Tribunal’s direction was therefore not illegal.

It dismissed the insurer’s appeal and directed the Registry to transmit the trial court record to the Tribunal; pending interlocutory applications, if any, were also disposed of.