Unregistered use breaches the policy, but the insurer must pay third-party claims before recovering from the owner.

Ankit Mahajan died in a car accident on 22 July 2011.

The car had been sold and temporarily registered on 10 June 2011, but its temporary registration expired on 9 July 2011.

Although the vehicle’s documents and fee were submitted to the registering authority on 19 July 2011, it had not been registered when the accident occurred.

His mother, Santosh Kumari, obtained an award of ₹72,67,700 against the insurer.

The insurer appealed, arguing that the vehicle’s use without registration breached the insurance policy; the mother cross-objected, seeking enhancement for future prospects.

Whether the vehicle’s use on a public road without a valid registration certificate constituted a fundamental breach of the insurance policy, and whether the insurer could avoid liability to the third-party claimant.

Whether the compensation required enhancement to account for future prospects and the applicable conventional heads.

Section 39 of the Motor Vehicles Act, 1988 prohibits driving or permitting a vehicle to be driven in a public place unless it is registered; Section 192 provides the penalty for contravention.

Under Narinder Singh v. New India Assurance Co. Ltd., (2014) 9 SCC 302, use of a vehicle without registration is a fundamental breach of the policy.

However, the pay-and-recover principle recognised in National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297, and applied in Lehru, Kusum Lata and Amrit Paul Singh, permits an insurer required to satisfy a third-party award to recover the amount from the insured in appropriate cases.

Under National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, 40% is added for future prospects where a deceased below 40 was self-employed or on a fixed salary; a bachelor’s personal expenses are deducted at 50%, and the applicable multiplier is used.

Magma General Insurance Co. Ltd. v. Nanu Ram, (2018) 18 SCC 130, recognises filial consortium, while Sunita v. United India Insurance Co. Ltd. supports periodic enhancement of conventional heads.

The temporary registration had expired before the accident, and the owner had not established that a permanent registration certificate or extension had been obtained.

The subsequent submission of documents and fee did not itself authorise the vehicle’s use on the road; the court therefore found a fundamental breach and held that the insurer could recover the compensation from the owner.

On the cross-objection, the deceased’s established annual income after tax was ₹8,46,200. Adding 40% for future prospects, deducting 50% for personal expenses and applying multiplier 17 produced loss of dependency of ₹1,00,69,780.

The court also awarded ₹19,965 each for funeral expenses and loss of estate, and ₹53,240 for filial consortium.

The insurer was directed to pay the award to the claimant in the first instance, with the right to recover the amount from the vehicle’s owner in accordance with law.

The remaining terms of the Tribunal’s award, including interest, were left unchanged.