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

Amaresh died from injuries sustained in a motorcycle accident on 25 January 2021 while travelling as a pillion rider.

His wife and three children claimed compensation, alleging that the motorcycle was ridden rashly and negligently.

The Motor Accident Claims Tribunal awarded ₹13,30,000 but dismissed the claim against the insurer, holding the rider-cum-owner liable.

The claimants appealed seeking enhancement and a direction that the insurer satisfy the award.

1. Whether the compensation awarded by the Tribunal was inadequate and required enhancement

2. Whether the Tribunal was justified in fastening liability on the rider-cum-owner rather than requiring the insurer to satisfy the award

Under Sarla Verma v. Delhi Transport Corporation, the multiplier is selected according to the deceased’s age; for ages 36–40, the multiplier is 15.

Under National Insurance Co. Ltd. v. Pranay Sethi, future prospects are added to established income, personal expenses are deducted according to the number of dependants, and conventional heads—including consortium, funeral expenses and loss of estate—are governed by the prescribed amounts and escalation.

Under National Insurance Co. Ltd. v. Swaran Singh and Shamanna v. Divisional Manager, where a third-party claim is involved and breach of a policy condition, such as absence of a valid driving licence, is established, the insurer may be directed to pay the claimant first and recover the amount from the insured.

The Court also relied on New India Assurance Co. Ltd. v. Gopu concerning pillion-rider cover under a package policy.

The Court also relied on the Karnataka High Court Full Bench decision in New India Assurance Co. Ltd. v. Yallavva on the insurer’s statutory obligations under Section 149 of the Motor Vehicles Act, 1988.

The Court found that the claimants had not proved the deceased’s asserted income of ₹25,000 per month and therefore applied the Karnataka Legal Services Authority’s notional-income figure of ₹14,250 for an accident in 2021.

Treating the deceased as aged 40, it added 25% for future prospects, deducted one-fourth for personal expenses because he left four dependants, and applied a multiplier of 15, producing dependency compensation of ₹24,04,800.

It awarded consortium of ₹44,000 to each of the four dependants and ₹16,500 each for funeral expenses and loss of estate, while disallowing a separate award for love and affection.

On liability, the Court noted that the motorcycle was covered by a package policy and that the deceased was a third party.

Although the rider had no driving licence, the Court applied the pay-and-recover principle and directed the insurer to satisfy the award before recovering it from the owner.

The compensation was enhanced from ₹13,30,000 to ₹26,13,800, with the enhanced amount carrying interest at 6% per annum.

The respondents were held jointly and severally liable; the insurer was directed to deposit the compensation with accrued interest before the Tribunal within four weeks of receiving the certified judgment and could then recover the amount from the owner.