1. This appeal is filed by the appellants/claimants challenging the award and decree dated 19.07.2012 passed in M.V.O.P.No.326 of 2008 by the Chairman, Motor Accidents Claims Tribunal-cum-District Judge, Adilabad (for short, “the Tribunal”), whereby the Tribunal granted compensation of Rs.1,88,000/- with interest @ 7.5% per annum from the date of petition till the date of realization as against the claim of Rs.2,50,000/- and dismissed the claim against the respondent No.2/Insurance Company.

2. The brief facts of the case are that on 10.04.2008, the deceased by name P.Raj Kumar, aged about 15 years, was travelling in a jeep bearing No.AP.1.T.5483 from Bela to Nirala village and at about 10.00 p.m., the driver of the said jeep drove the same in a rash and negligent manner and at high speed, due to which the jeep turned turtle, resulting in the death of the deceased and injuries to other inmates of the vehicle. In connection with the said accident, the police registered a case in Crime No.20 of 2008 for the offences under Sections 304-A and 337 IPC against the driver of the offending vehicle. The claimants, being the parents of the deceased, filed the aforesaid claim petition seeking compensation of Rs.2,50,000/-. The Tribunal, upon considering the oral and documentary evidence available on record, held that the accident occurred due to the rash and negligent driving by the driver of the offending vehicle and awarded compensation of Rs.1,88,000/- with interest @ 7.5% per annum against respondent No.1 alone, while dismissing the claim against respondent No.2/Insurance Company. Aggrieved by the quantum of compensation as well as fastening of liability solely upon respondent No.1, the appellants filed the present appeal.

3. It is the case of the appellants that the Tribunal erred in fixing the notional income of the deceased at meager amount and failed to award just and reasonable compensation. It is contended that the deceased was aged about 15 years and was studying 8th standard and had bright future prospects. The Tribunal ought to have awarded higher compensation by properly assessing the contribution of the deceased to the family. It is further contended that the Tribunal ought not to have exonerated the Insurance Company from liability merely on the ground that the driver of the offending vehicle did not possess valid transport endorsement. Therefore, the appellants sought enhancement of compensation and also prayed to fasten liability on the insurer.

4. On the other hand, it is the case of respondent No.1 that the compensation awarded by the Tribunal is reasonable and that the accident did not occur due to the negligence of the driver of the jeep. It is further case of the respondent No.1 that since the vehicle was validly insured with respondent No.2 for the period from 14.05.2007 to 13.05.2008, any liability to pay compensation must be borne entirely by the Insurance Company.

5. It is the case of respondent No.2/Insurance Company that though the offending vehicle was covered by insurance policy, the driver of the vehicle was not holding a valid and effective transport driving licence as on the date of accident and thereby there was violation of policy conditions. Hence, the insurer is not liable to indemnify the owner.

6. There is no dispute with regard to the manner in which the accident occurred, negligence by the driver of the offending vehicle and the resultant death of the deceased. The Tribunal, after considering the evidence of PWs.1 and 2 coupled with Exs.A.1 to A.6, rightly recorded a finding that the accident occurred solely due to the rash and negligent driving of the driver of the offending jeep. The said finding has attained finality.

7. Coming to the aspect of compensation, the Tribunal assessed the notional income of the deceased at Rs.2,000/- per month and after deducting 1/3rd towards personal expenses, arrived at the loss of dependency. However, this Court is of the considered view that the said assessment is on the lower side. Though the deceased was aged about 15 years and was studying 8th standard, having regard to the year of accident i.e., 2008 and the future prospects of the deceased, the monthly income can safely be taken at Rs.3,000/- per month. Since the deceased was a bachelor, 50% of the income has to be deducted towards personal and living expenses as held by the Hon’ble Supreme Court in Sarla Verma vs. Delhi Transport Corporation((2009) 6 SCC 121). Thus, after deducting 50% towards personal expenses, the contribution of the deceased to the family comes to Rs.1,500/- per month, i.e., Rs.18,000/- per annum. Since the age of the deceased was 15 years, the appropriate multiplier applicable is ‘18’. Therefore, the loss of dependency comes to Rs.18,000/- x 18 = Rs.3,24,000/-.

8. It may be noted that as per the judgment of Hon’ble Apex Court in National Insurance Co. Ltd. vs. Pranay Sethi((2017) 16 SCC 680), the claimants are entitled to Rs.39,000/- (Rs.15,000/- for loss of estate and Rs.15,000/- for funeral expenses + 10% enhancement for every three years) under the conventional heads and further as per the judgment of the Hon’ble Apex Court in Magma General Insurance Co. Ltd. vs. Nanu Ram Alias Chuhru Ram(2018 LawSuit (SC) 904), the appellants, being the parents of the deceased are entitled to Rs.40,000/- each towards loss of filial consortium. Thus, the total compensation payable to the appellants/claimants comes to Rs.4,43,000/- (Rs.3,24,000/- + Rs.39,000/- + Rs.80,000/-).

9. At this stage, it is necessary to observe that as per the decision of the Hon’ble Supreme Court in Nagappa vs. Gurdayal Singh and others((2003) 2 SCC 274), under the Motor Vehicles Act, there is no restriction that the Tribunal/Court cannot award compensation exceeding the amount so claimed. The Tribunal/Court can award ‘just’ compensation which is reasonable in the facts relying upon the evidence produced on record.

10. Coming to the issue of liability, the Tribunal concluded that the driver of the offending vehicle did not possess a valid and effective driving licence as on the date of the accident, and on that basis fastened the liability exclusively on respondent No.1, absolving the respondent No.2/Insurance Company. Once the policy admittedly covers third-party risk, the claimant’s entitlement cannot be defeated by internal breaches between the insured and insurer. The deceased was a third party, and the claim arises out of statutory liability. In Kusum Lata & Others v. Satbir & Others(AIR 2011 SC 1234), the Hon’ble Supreme Court held that even in cases of breach of licence conditions, the insurer must first satisfy the award and then recover the amount from the owner. Similarly, in the recent decision in Rama Bai vs. M./s.Amit Minerals through Incharge Officer/ Competent Officer and another(2025 SCC Online SC 2067), the Hon’ble Supreme Court applied the doctrine of “pay and recover”, holding that the insurer must satisfy the award at the first instance and thereafter recover the amount from the owner. In view of the settled position, the Tribunal erred in fastening absolute liability on the owner without extending recovery rights to the insurer. Accordingly, respondent No.2–Insurance Company shall pay the compensation at the first instance and shall thereafter entitled to recover the amount from respondent No.1 in accordance with law.

11. In the result, this appeal is allowed and the compensation awarded by the Tribunal is enhanced from Rs.1,88,000/- to Rs.4,43,000/-, with interest at 7.5% per annum from the date of petition till the date of realization. The respondent No.2-insurer shall satisfy the award at the first instance and thereafter recover the amount from respondent No.1. The appellants shall pay deficit court fee on the enhanced amount. The remaining terms and conditions of the Tribunal shall stand unaltered. No order as to costs.

As a sequel, the miscellaneous petitions pending, if any, shall stand closed.