The court clarified that an insurer's liability under the Motor Vehicles Act persists despite the driver's lack of a valid driving license, emphasizing a mandatory interest award on compensation.

1. Appellant No. 1 - Kajal Chib is wife, appellant No. 2 is father and appellant No. 3 is sister of deceased Sohan Singh, who died in accident which took place at Diyani Morh, Tehsil Samba on 3.1.2007 due to rash and negligent driving of respondent No. 1, the driver of the offending vehicle (bus) bearing registration No. JK 02 - N 2312. The respondent No. 2 is the registered owner of the offending vehicle. A claim petition was filed by the appellants against the respondents seeking compensation to the tune of Rs. 45,00,000 along with interest at the rate of 18 per cent per annum from the date of filing of the claim petition till its realization. The claim petition was contested by the respondent No. 3, the insurer of offending vehicle, whereas respondent Nos. 1 and 2 remained ex parte. On the basis of the pleadings of the parties, the Tribunal framed the following issues:
“(1) Whether an accident occurred on 3.1.2007 at Diyani Morh, NHW A1, Tehsil Samba by rash and negligent driving of offending vehicle No. JK 02 - N 2312 being driven in the hands of erring driver in which deceased Sohan Singh sustained fatal injuries? OPP
(2) If issue No. 1 is proved in affirmative, whether petitioners are entitled to the compensation? If so, to what amount and from whom? OPP
(3) Whether driver of offending vehicle at the time of accident was not
holding valid and effective driving licence and drove the vehicle in violation of terms and conditions of insurance policy? OPR - 3
(4) Whether the accident has occurred due to contributory negligence
of the driver of motor cycle and he is a necessary party to the case? If so, how? OPR - 3
(5) Relief.”

2. To prove their case and to discharge the burden, the appellants examined appellant No. 1, one Paramjit Singh and Jagdish Singh. The insurance company, however, produced Jagdish Raj, a clerk in the office of Regional Transport Office concerned. On the basis of the record and evidence adduced by the parties, the Tribunal held the issue No. 1 proved in favour of the appellants. The Tribunal found that the respondent No. 1 had caused the accident due to rash and negligent driving of the offending vehicle in which the deceased Sohan Singh sustained injuries to which he later on succumbed. So far as issue No. 3 is concerned, Tribunal returned the findings that since the licence possessed by the respondent No. 1, authorised him to drive only light transport vehicle or omnibus, therefore, he was not competent / authorised to drive heavy passenger motor vehicle which the offending vehicle was. Accordingly, Claims Tribunal held the issue No. 3 proved in favour of respondent No. 3 and against the appellants and held that the driver of the offending vehicle was not holding a valid and effective driving licence. Accordingly, the Tribunal found the appellants entitled to the compensation to the tune of Rs. 8,26,800 along with interest at the rate of 9 per cent per annum from the date of filing of the claim petition. Later on, the amount which was erroneously indicated in the award was corrected by the Tribunal vide its order dated 6.10.2009 and the appellants were held entitled to a sum of Rs. 16,36,464 instead of Rs. 8,26,800. The amount was held payable along with interest at the rate of 9 per cent per annum from the date of filing of the claim petition. However, no interest was paid on the amount awarded on account of loss of future earnings. The appellant insurance company was absolved of its liability to indemnify the owner and, accordingly, the owner of offending vehicle, the r