Rama Bai vs M/S Amit Minerals through Incharge Officer/ Competent Officer and Another

CIVIL APPEAL NO. 9669 OF 2024

RAMA BAI ….APPELLANT (S)

VERSUS

M/S AMIT MINERALS THROUGH INCHARGE OFFICER/ COMPETENT OFFICER & ANRS. ….RESPONDENT(S)

JUDGEMENT

N.V. ANJARIA, J.

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 Signature Not Verified Digitally signed by SONIA BHASIN Date: 2025.09.25 Court enhanced the compensation payable to the 17:19:37 IST Reason:

appellant-claimant and absolved respondent No. 3 –

Page 1 of 10 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

1 [(2018) 9 SCC 650] 2 [(2019) 7 SCC 217]

Page 2 of 10 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

Page 3 of 10 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

Page 4 of 10 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 and

other decisions.

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

3 [(2008) 8 SCC 165]

Page 5 of 10 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

4 [(2004) 3 SCC 297]

Page 6 of 10 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

5 [(2009) 8 SCC 785]

Page 7 of 10 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 6 (2008) 7 SCC 526 7 (2008) 9 SCC 100 8 (2007) 7 SCC 56 9 (2008) 7 SCC 416

Page 8 of 10 (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.

Page 9 of 10 Pending application, if any, shall stand

disposed of.

………………………………….. J.

K. VINOD CHANDRAN

…..…………………………….. J.

N.V. ANJARIA

NEW DELHI;

September 24, 2025

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