An insurer cannot recover compensation from the vehicle owner simply on suspicion of a fake licence, unless actual negligence or collusion is proven.

The judgment overturns the High Court’s “pay and recover” order, reinforcing principles of fairness for insured parties.

Key Takeaways:

✅ Mere suspicion of a fake licence doesn't establish owner’s breach.

✅ Insurer’s right of recovery is conditional on proof of owner’s negligence or collusion.

✅ Supreme Court upholds fair protection for vehicle owners.

Statutes :

✅ Motor Vehicles Act, 1988: Sections 149, 168, 174

✅ Related Supreme Court precedents: United India Insurance Co. v. Lehru (2003), National Insurance Co. Ltd. v. Swaran Singh (2004), PEPSU RTC v. National Insurance Co. Ltd. (2013), IFFCO Tokio General Insurance Co. Ltd. v. Geeta Devi (2023)

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