The Supreme Court reiterated the principle of “pay and recover” in road accident cases. According to this rule, if the driver of the offending vehicle has no license or there is a violation of insurance policy by the owner, the insurance company has to pay the compensation determined by the motor accident claims tribunal and then recover it from the owner.
The insurance company has to meet the immediate needs of the claimants. In this case, Shamanna vs Oriental Insurance Co, the driver of the vehicle did not have valid license. The tribunal applied the ‘pay and recover’ principle. But the Karnataka High Court held the only the owner was liable. The Supreme Court set aside the ruling.
