Insurers must pay third-party awards first, then recover from owners for unlicensed driving.

On 10 June 2022, the claimant, aged 65, was struck by a Bajaj Pulsar motorcycle while crossing a road in Belagavi and sustained fractures and other injuries.

The Tribunal awarded her ₹3,49,929 and directed the insurer to pay first and recover the amount from the vehicle owner, finding a breach of policy conditions because the rider had no valid driving licence.

The insurer appealed, disputing contributory negligence and the direction to pay and recover.

Whether the claimant’s negligence contributed to the accident.

Whether the Tribunal was justified in directing the insurer to pay the compensation and recover it from the owner, despite the rider’s lack of a valid driving licence.

Under Section 149 of the Motor Vehicles Act, 1988, an insurer may be required to satisfy a third-party award in the first instance and, where a policy breach is established, recover the amount from the insured.

The Supreme Court’s decisions in National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297, and New India Assurance Co. Ltd. v. Kamla, (2001) 4 SCC 342, support that approach; Shamanna v. Oriental Insurance Co. Ltd., (2018) 9 SCC 650, and Parminder Singh v. New India Assurance Co. Ltd., (2019) 7 SCC 217, apply it where the driver lacks a valid licence.

The Court also relied on K. Nagendra v. The New India Insurance Company Limited, 2025 SCC OnLine 2297, and Ram Bai v. Amit Minerals, 2025 SCC OnLine SC 2067, in support of protecting third-party victims through pay-and-recover directions.

The Court found no cogent evidence that the claimant contributed to the accident: the suggestion that she fell because of her age was denied, and the insurer’s witness provided no supporting evidence.

Although the rider lacked a valid driving licence, the policy was valid on the accident date.

Applying the cited Supreme Court authorities, the Court concluded that the claimant should not be left to pursue the owner directly for compensation; the insurer should satisfy the award first and may then recover from the owner.

It directed the insurer to deposit the compensation with accrued interest before the Tribunal within four weeks of receiving the certified judgment, with liberty to recover the amount from the motorcycle owner; the amount already deposited was to be transmitted to the Tribunal.