Rama Bai Vs. M/s. Amit Minerals through Incharge Officer/Competent Officer & Anr. [Civil Appeal No. 9669 of 2024], delivered by N.V. Anjaria, J., Absence of Valid Driving Licence and Breach of Policy Conditions The Supreme Court accepted that on the date of the accident (13.10.2011), the driver of the offending vehicle did not possess a valid and effective driving licence. His licence had expired on 20.06.2010 and was renewed only on 03.11.2011, after the accident. Therefore, there was a clear breach of policy conditions, entitling the Insurance Company under Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 to avoid liability. High Court Correctly Found Violation but Erred in Denying “Pay and Recover” The Supreme Court observed that although the High Court correctly concluded that the Insurance Company could avoid liability due to the invalid licence, it ought to have applied the doctrine of “pay and recover” — meaning that the insurer should pay the compensation first and then recover it from the owner/driver. Doctrine of “Pay and Recover” Reaffirmed Referring to precedents such as Shamanna v. Divisional Manager, Oriental Insurance Co. Ltd. (2018), and Parminder Singh v. New India Assurance Co. Ltd. (2019), the Court reiterated that even if there is a technical violation by the insured, the rights of the third-party victims must be protected. The insurer must pay compensation to the claimant and subsequently recover the amount from the insured. Clarification Regarding Parvathneni Case The Court noted that although in National Insurance Co. Ltd. v. Parvathneni doubts were expressed about “pay and recover,” the issue was never finally decided, and the earlier rulings applying the principle (e.g., Swaran Singh, Yellamma, Samundra Devi, Darshana Devi) still hold the field. Balancing Statutory Defence and Victim Compensation The judgment strikes a balance between the statutory right of the insurer to defend against breach and the social purpose of motor accident law — ensuring that innocent victims are compensated promptly. Final Direction The Supreme Court therefore directed the Insurance Company to satisfy the award amount first, with liberty to recover the same from the insured-owner of the vehicle as per law. The appeal was accordingly allowed. TELUGU డ్రైవింగ్ లైసెన్స్ లేమి మరియు పాలసీ ఉల్లంఘన ప్రమాదం జరిగిన తేదీ (13.10.2011) నాటికి డ్రైవర్ వద్ద సరైన మరియు చెల్లుబాటు అయ్యే డ్రైవింగ్ లైసెన్స్ లేదు. ఆ లైసెన్స్ 20.06.2010 నాటికి ముగిసింది మరియు 03.11.2011 న తిరిగి పునరుద్ధరించబడింది. కాబట్టి, ఇది స్పష్టమైన బీమా పాలసీ నిబంధనల ఉల్లంఘన. మోటార్ వెహికల్స్ చట్టం, 1988 లోని Section 149(2)(a)(ii) ప్రకారం, బీమా సంస్థ బాధ్యత నుండి విముక్తి పొందడానికి హక్కు కలిగి ఉంది. హైకోర్ట్ తప్పు — “Pay and Recover” సిద్ధాంతం వర్తించకపోవడం సుప్రీం కోర్టు పేర్కొన్నది — హైకోర్ట్ డ్రైవర్ వద్ద చెల్లుబాటు అయ్యే లైసెన్స్ లేదని సరిగానే నిర్ధారించినా, అది “Pay and Recover” సిద్ధాంతాన్ని వర్తింపజేయాలి. అంటే, బీమా సంస్థ ముందుగా బాధితుడికి నష్టం పరిహారం చెల్లించి, తరువాత వాహన యజమానిపై ఆ మొత్తాన్ని వసూలు చేసుకోవాలి. “Pay and Recover” సిద్ధాంతానికి మద్దతు కోర్టు Shamanna v. Oriental Insurance Co. Ltd. (2018) మరియు Parminder Singh v. New India Assurance Co. Ltd. (2019) కేసులను ప్రస్తావిస్తూ, ఈ సిద్ధాంతాన్ని మరోసారి ధృవీకరించింది. వాహనదారుడు లేదా యజమాని పక్షాన సాంకేతిక ఉల్లంఘనలు ఉన్నా, తృతీయ పక్ష బాధితుల హక్కులు రక్షించబడాలి. Parvathneni కేసుపై వివరణ National Insurance Co. Ltd. v. Parvathneni లో ఈ సిద్ధాంతంపై సందేహాలు వ్యక్తం చేసినా, ఆ ప్రశ్నపై తుది తీర్పు రాలేదు. కాబట్టి Swaran Singh, Yellamma, Samundra Devi, Darshana Devi వంటి కేసుల్లో వర్తింపబడిన “Pay and Recover” సిద్ధాంతం ఇంకా అమల్లో ఉంది. సామాజిక న్యాయం మరియు చట్టబద్ధ హక్కుల సమతుల్యత సుప్రీం కోర్టు బీమా సంస్థకు ఉన్న చట్టపరమైన రక్షణ హక్కు మరియు బాధితుడికి నష్టం పరిహారం అందే సామాజిక న్యాయం మధ్య సమతుల్యతను కాపాడింది. తుది ఆదేశం కాబట్టి కోర్టు ఆదేశించింది — బీమా సంస్థ ముందుగా నష్టం పరిహారం మొత్తాన్ని చెల్లించాలి, తరువాత ఆ మొత్తాన్ని వాహన యజమాని నుండి వసూలు చేసుకోవచ్చు. అపీల్ అనుమతించబడింది. JUDGEMENT find reasons in the judgement in english and telugu in Rama Bai Vs. M/s. Amit Minerals through Incharge Officer/Competent Officer & Anr. [Civil Appeal No. 9669 of 2024] N.V. Anjaria, J. 1. Preferred by the appellant-claimants, the present Appeal is directed against judgment and award dated 11.06.2020 of the High Court of Chhattisgarh, Bilaspur in M.A. (C) No. 876 of 2013, whereby the High Court enhanced the compensation payable to the appellant-claimant and absolved respondent No. 3 - Insurance Company from the liability to pay the amount, fastening the same on respondent Nos. 1 and 2 - driver and the owner respectively. 2. The case and grievance of the appellant is that the High Court ought to have applied the doctrine of "pay and recover" requiring the Insurance Company to satisfy the amount of compensation to the claimant and subsequently allow the Insurance Company to recover the amount in accordance with law. 2.1 In support of the plea that principle of 'pay and recover' should have been applied, the appellant pressed into service the decisions of this Court in Shamanna and Another v. Divisional Manager, Oriental Insurance Company Limited and others1 and in Parminder Singh v. New India Assurance Company Limited and Others2. 3. The appellant happens to be the mother of one Nand Kumar who died in a vehicular accident that occurred on 13.10.2011. A truck bearing registration No. CG-04-J-1233 driven by respondent No. 1 met with an accident with a tractor-trolley, tractor bearing separate registration No.CG-04-DM-9357. The said Nand Kumar was a conductor in the truck who died succumbing to injuries suffered in the accident. 3.1 The 2nd Additional Motor Accident Claims Tribunal, Raipur, Chhattisgarh in Claim Case No.64 of 2012 instituted by the parents of the deceased awarded compensation of Rs.3 Lakhs by applying the relevant parameters for determination of compensation. The compensation amount was ordered to be deposited by respondent Nos. 1 and 2 - driver and the owner and to be disbursed in accordance with the directions issued. It was found that respondent No.1-Driver was not holding a valid licence on 13.10.2011 which was the date of the accident. 3.2 In the appeal preferred by the appellant before the High Court, the amount of compensation was enhanced, assessing it under different heads, totalling to Rs.5,33,600/- instead of Rs.3 Lakhs awarded by the Tribunal, with interest at the rate of 7% per annum from the date of the filing of the claim application till the realisation. While enhancing the compensation, the High Court fastened the liability to pay the amount on the respondent No. 1 - driver and respondent No. 2 - owner holding that respondent No. 3 - Insurance Company was entitled in law to avoid the liability. 3.3 The aforesaid conclusion reached by the High Court, concurring with what was held by the Accidents Claim Tribunal on the said issue, was arrived at on the basis that respondent No.1 Paras Satnami-driver's driving licence No. CG.04/2002/0006140, issued from the Regional Transport Office, for driving the transport vehicle was not valid from 20.06.2010 to 02.11.2011 as the validity of the license had expired on 20.06.2010 and only renewed from 03.11.2011 to 02.11.2014. The accident took place on 13.10.2011. 3.4 In other words, on the date of the accident a valid licence was not held by respondent No. 2 - driver. Therefore, it was not legally permissible for him to drive the vehicle on the date of accident. The factum that there was no driving licence on 03.10.2011 was proved from the Insurance Document (Ex. D-1C) and the Driving Licence (Ex. D-2C). Thus, the driver of the offending vehicle was found not to have a valid license on the date of accident. 3.5 While endorsing to the view of the Tribunal that there was no valid license of the driver on the date of accident which would render the insurance company not liable to pay the compensation, the High Court referred to the relevant provisions of the Motor Vehicles Act, including Section 15 which prescribes for "Renewal of Driving Licences". The High Court proceeded to rely on the decision of this Court in Ram Babu Tiwari v. United India Insurance Company Limited and Others3 3.6 The following specific findings extracted below were recorded by the High Court in Paragraph 16 of its judgment, "In view of aforementioned specific provisions of M.V. Act and authoritative pronouncement of Hon'ble Supreme Court as well as the facts and circumstances of the case at hand where the license of respondent No. 1 was not renewed from 20.06.2010 to 02.11.2011 and the accident took place on 13.10.2011, we do not find any error in the finding recorded by the learned Claims Tribunal that on the date of accident, respondent No.1 was not possessing valid and effective driving license leading to breach of conditions of insurance policy and exonerating the Insurance Company from its liability." 4. Heard learned advocate Mr. Kaustubh Shukla for the appellant and learned advocate Mr. Gopal Singh for the respondent- Insurance Company. 5. The submission on part of the appellant that the High Court ought to have applied the "pay and recover" principle rests on the decision of this Court in Shamanna1 (supra) and Parminder Singh2 (supra). In Shamanna1 (supra) this Court dealt with the claim of compensation by third party victim of the motor accident. In para 5 of the judgment, this Court referred to its own earlier decision in National Insurance Co. Ltd. v. Swaran Singh and Others4 to reiterate that the insurer has to pay the compensation amount payable to the third party and the insurance company may recover the same thereafter from the insured. 5.1 In Shamanna1 in which the doctrine of "pay and recover" was considered, the driver had no valid licence and the insurance policy was violated. Similar principle, as applied in Parminder Singh2 in which the driver of the offending vehicle was found driving the vehicle in breach of the policy conditions, the insurance company was absolved and the principle of 'pay and recover' was applied. 5.2 It was pointed out on behalf of respondent No. 3 - Insurance Company that in subsequent decision in National Insurance Company Limited v. Parvathneni and Another5, this Court doubted the justification of applying the principle of pay and recover on the ground that if the Insurance Company was found not liable in law to pay the compensation, the direction regarding pay and recover can be said to be beyond the legal propriety. 5.2.1 In the earlier decisions in National Insurance Co. Ltd. v. Yellamma6, Samundra Devi v. Narendra Kaur7, Oriental Insurance Co. Ltd. v. Brij Mohan8 and New India Insurance Co. v. Darshana Devi9 this Court had applied the very principle, about the correctness of which, reservations were expressed in Parvathneni5. 5.2.2 However, as found in Shamanna1 the reference was not answered and the case was disposed of on 17.09.2013, keeping the question of law open to be decided in an appropriate case. 6. In the present case as stated above, on the date of accident, the driver had no valid license and the licence was not renewed. The insurance company was entitled to take a valid defence in that regard under Section 149 (2)(a)(ii) as the driver of the offending vehicle was not duly licensed, to avoid its liability to pay the compensation. The conditions in law are satisfied to absolve the insurance company from the payment of compensation. 6.1 The High Court in the impugned judgment relied upon the decision in Ram Babu Tiwari3 to find that as per the specific provisions of the Motor Vehicles Act, if the driver does not possess a valid and effective driving licence, it results in a breach of conditions of the insurance policy, exonerating the insurer from its liability. But while affirming the order of the High Court, absolving the liability for breach of conditions in the policy, this Court refused to interfere with orders of 'pay and recover' as directed by the High Court. 7. In the above circumstances, going by the series of decisions of this Court, it is only proper that the insurer be directed to satisfy the award, which however can be recovered by the insurer from the insured-owner of the vehicle. The appeal stands allowed. Pending application, if any, shall stand disposed of. .....................J. (K. Vinod Chandran) .....................J. (N.V. Anjaria) New Delhi