Insurer's liability to third parties persists under "pay and recover" principle despite vehicle plying without valid permit.

On December 31, 2005, the claimant, Smt. Rajwati, was hit by a truck (HR 38 L-0049) driven by Sh. Dharambir while crossing the road near Ali Mor, Delhi

The accident resulted in crush injuries necessitating the amputation of her right leg below the knee

The Motor Accident Claims Tribunal (MACT) awarded Rs. 8,30,244/- with 9% interest, assessing her functional disability at 60% based on her occupation as a maid and a disability certificate from Safdarjung Hospital

The Appellant (Insurer) challenged the award on grounds of unproven disability, excessive compensation for pain and suffering, and the absence of a valid vehicle permit

During the pendency of the appeal, the claimant passed away on December 23, 2021

1. Whether the Tribunal erred in assessing loss of future income based on minimum wages in the absence of documentary proof of employment

2. Whether the disability certificate (PW1/23) could be relied upon without examining a member of the Medical Board

3. Whether the compensation of Rs. 1,50,000/- for "pain and suffering" was excessive

4. Whether the Insurance Company should be completely exonerated from liability, rather than granted "pay and recover" rights, due to the vehicle plying without a valid permit

The Court applied the principle that minimum wage notifications serve as a guiding factor for income assessment when documentary evidence is lacking, as held in Jitendra v. Sadiya (2025)

It relied on Raj Kumar v. Ajay Kumar (2011) and Supreme Court directions (2021) stating that disability certificates from authorized government boards are admissible without summoning witnesses unless there is a reason for suspicion

Regarding non-pecuniary damages, the court followed Mohd. Sabeer v. U.P. SRTC (2023) and K.S. Muralidhar v. R. Subbulakshmi (2024), which emphasize a liberal approach to compensation for life-altering injuries

Finally, the "pay and recover" doctrine established in National Insurance Co. Ltd. v. Swaran Singh (2004) and Amrit Paul Singh v. Tata AIG (2018) was applied to address policy breaches

The Court rejected the challenge to income assessment, noting that for unskilled workers like maids, minimum wage benchmarks are legally sound

Regarding disability, the Court found the certificate (PW1/23) from Safdarjung Hospital carried sufficient authenticity (stamps and signatures) and held that per Supreme Court mandates, experts need not be summoned for formal proof of government-issued certificates absent fraud

The Court determined that a 60% functional disability was appropriate given that a maid requires full mobility

On the issue of "pain and suffering," the Court maintained the Rs. 1,50,000/- award, citing that monetary compensation for amputation must reflect the subjective, lifelong trauma

Regarding the permit violation, the Court held that while the insurer proved a breach of policy, the "pay and recover" principle protects third-party victims by requiring the insurer to satisfy the award first and seek recovery from the owner later

It held that the "pay and recover" direction was correct despite the lack of a permit

Due to the claimant's death during the appeal, the Court directed that the balance amount, along with accrued interest, be apportioned equally among her identified legal heirs

The statutory deposit was ordered to be refunded to the appellant