Insurer must satisfy third-party claims despite a licence breach, with recovery against the vehicle owner.

The claimant sustained injuries in a road traffic accident on 8 April 2020 involving motorcycle No. KA-51-HL-8402, allegedly ridden negligently by respondent No. 1.

The Tribunal awarded global compensation of ₹70,000 with 6% annual interest but placed liability on the motorcycle’s owner because the rider did not hold a driving licence.

The claimant appealed, challenging the liability arrangement and seeking enhanced compensation.

The Court considered Sections 3(1) and 181 of the Motor Vehicles Act, which concern the requirement to hold a driving licence and the consequence of driving without one; the charge sheet invoked these provisions against the rider.

It applied the principle that, where the claimant is a third party and the vehicle is insured, the insurer may be directed to pay the compensation and recover it from the owner when the policy condition has been breached.

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

The charge sheet showed that the rider was prosecuted for driving without a licence, establishing a breach of the policy condition and supporting the Tribunal’s finding against the owner.

However, because the claimant was a third party, the Court held that the insurer should first satisfy the award, with recovery available against the owner.

On quantum, the Court considered the claimant’s eight injuries, including four fractures, six days of hospitalisation, and documented medical expenses. It assessed compensation for pain and suffering, loss of amenities, medical expenses, laid-up-period income, and attendant, conveyance, food and nourishment charges.

The insurer was directed to deposit the Tribunal’s award and the enhanced compensation within six weeks, with liberty to recover the amount from the owner; the claimant was entitled to release of the entire enhanced compensation with interest.