RAMA BAIversusM/S AMIT MINERALS THROUGH INCHARGE OFFICER/COMPETENT OFFICER & ANRS.

                 [2025] 9 S.C.R. 1599 : 2025 INSC 1162

                         Rama Bai
                             v.
   M/s Amit Minerals Through Incharge Officer/Competent
                      Officer & Anrs.
                        (Civil Appeal No. 9669 of 2024)
                               24 September 2025
             [K. Vinod Chandran and N.V. Anjaria,* JJ.]


                             Issue for Consideration
       Whether 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.

                                    Headnotes†
       Motor Vehicle Accident Claim – Victim-deceased died in a
       vehicular accident – Truck was driven by respondent no.1 –
       The said truck met with an accident with a tractor-trolley –
       Victim was a conductor in the truck – Claim petition – Tribunal
       awarded compensation of Rs.3 lakhs – It was found that
       respondent no.1-driver was not holding a valid licence on
       date of the accident – The High Court enhanced the amount
       of compensation to Rs.5,33,600/- – 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 – Correctness:
       Held: The High Court in the impugned judgment relied upon
       the decision in Ram Babu Tiwari 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 – 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. [Paras 6.1, 7]
* Author
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                               Case Law Cited
    Shamanna and Another v. Divisional Manager, Oriental Insurance
    Company Limited and Others [2018] 9 SCR 486 : (2018) 9 SCC
    650; Parminder Singh v. New India Assurance Company Limited
    and Others [2019] 8 SCR 986 : (2019) 7 SCC 217; Ram Babu
    Tiwari v. United India Insurance Company Limited and Others
    [2008] 11 SCR 725 : (2008) 8 SCC 165; National Insurance Co.
    Ltd. v. Swaran Singh and Others [2004] 1 SCR 180 : (2004) 3
    SCC 297; National Insurance Company Limited v. Parvathneni
    and Another [2009] 13 SCR 1034 : (2009) 8 SCC 785; National
    Insurance Co. Ltd. v. Yellamma [2008] 7 SCR 860 : (2008) 7 SCC
    526; Samundra Devi v. Narendra Kaur [2008] 11 SCR 714 : (2008)
    9 SCC 100; Oriental Insurance Co. Ltd. v. Brij Mohan [2007] 6 SCR
    843 : (2007) 7 SCC 56; New India Insurance Co. v. Darshana Devi
    [2008] (2) SCR 810 : (2008) 7 SCC 416 – referred to.

                              List of Keywords
    Doctrine of ‘pay and recover’; Insurance company to satisfy
    amount of compensation; Determination of compensation; Vehicular
    accident; Valid license; Driver not holding valid license; Offending
    vehicle; Breach of policy conditions; Ineffective driving license;
    Insurer satisfying award.

                              Case Arising From
    CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9669 of 2024
    From the Judgment and Order dated 11.06.2020 of the High Court
    of Chhatisgarh at Bilaspur in MAC No. 876 of 2013

                        Appearances for Parties
    Adv. for the Appellant:
    Kaustubh Shukla.
    Advs. for the Respondents:
    Manish Kumar, Gopal Singh, Shivam Singh, Shubham Janghu.

               Judgment / Order of the Supreme Court

                                 Judgment
    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
[2025] 9 S.C.R.                                                          1601

    Rama Bai v. M/s Amit Minerals Through Incharge Officer/Competent
                             Officer & Anrs.

       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


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


3   (2008) 8 SCC 165
[2025] 9 S.C.R.                                                              1603

    Rama Bai v. M/s Amit Minerals Through Incharge Officer/Competent
                             Officer & Anrs.

                    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,



4    (2004) 3 SCC 297
5    (2009) 8 SCC 785
6    (2008) 7 SCC 526
7    (2008) 9 SCC 100
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                               Supreme Court Reports


                        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.

      Result of the case: Appeal allowed.




      †
          Headnotes prepared by: Ankit Gyan



8    (2007) 7 SCC 56
9    (2008) 7 SCC 416