As per case facts, an accident occurred where a truck cleaner sustained injuries due to rash driving. The claims tribunal awarded compensation, but the insurance company appealed, contending that the ... vehicle was operating without a valid permit in the state where the accident happened, constituting a breach of policy terms. The question arose whether the insurance company was liable for compensation despite the vehicle being used outside its permitted area. Finally, the High Court, citing Supreme Court precedents, ruled that the insurance company was not primarily liable due to the permit violation and breach of policy conditions. However, to ensure victim compensation, the court applied the "pay and recover" principle, directing the insurance company to first pay the compensation to the claimants and subsequently recover it from the owner/driver of the vehicle.