In a crucial clarification on motor accident compensation law, the Supreme Court of India has held that an insurance company cannot outright deny a claim to a third-party victim solely on the grounds that the driver of the offending vehicle possessed an expired license at the time of the accident. The Court reiterated that the insurer’s primary duty is to compensate the victim first and then recover the amount from the insured vehicle owner for the breach of policy conditions.

This significant clarification came from a bench comprising Justice K. Vinod Chandran and Justice N.V. Anjaria , which applied the “pay and recover” doctrine to protect the interests of an accident victim’s family.

Factual Background of the Case

The question arose from an appeal filed by Rama Bai, the mother of

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