THE MANAGER vs RAGHAVENDRA
- Court
- Karnataka High Court
HC-KAR
NC: 2026:KHC:54116
MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 29 DAY OF SEPTEMBER, 2026
BEFORE
HON'BLE MS. JUSTICE TARA VITASTA GANJU
MISCELLANEOUS FIRST APPEAL NO.5030 OF 2019
C/W
MISCELLANEOUS FIRST APPEAL NO.6200 OF 2019
(MV-I)
MISCELLANEOUS FIRST APPEAL NO.6654 OF 2019
(MV-I)
MISCELLANEOUS FIRST APPEAL NO.6656 OF 2019
(MV-I)
IN MFA No.5030/2019
BETWEEN:
SRI. RAGHAVENDRA
S/O NANJUNDACHARI
NOW AGED ABOUT 23 YEARS,
R/AT HADONAHALLI KASABA HOBLI
DODDABALLAPURA TALUK
BENGALURU RURAL DISTRICT-561 203
…APPELLANT
(BY SRI. RANGEGOWDA N R, ADVOCATE)
AND:
1. ILIYAZ AHAMED
S/O KHALEL AHAMED
AGED MAJOR
R/AT NO.104,
SIDDANAYAKA STREET,
MADHUGIRI
TUMKUR DISTRICT-572 132
Digitally signed
by JAI JYOTHI J
Location: HIGH
COURT OF
KARNATAKA
1
HC-KAR
NC: 2026:KHC:54116
MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
2. THE MANAGER
RELIANCE GENERAL INSURANCE
COMPANY LTD
TH
NO.28, 5 FLOOR
TH
4 M BLOCK, RAJAJINAGAR
BENGALURU-560 010
…RESPONDENTS
(BY SRI. B.PRADEEP, ADVOCATE FOR R2
NOTICE TO R-1 IS DISPENSED WITH V/O.DT.29.09.2026)
*
THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT PRAYING
TO MODIFY THE JUDGMENT AND AWARD PASSED BY THE COURT
OF THE XXIV ADDL. SMALL CAUSES JUDGE & XXII A.C.M.M. AT
BENGALURU (SCCH-26) IN MVC NO.1744/2018, DATED
05.04.2019 TO ENHANCE THE COMPENSATION FROM
RS.2,00,640/- TO RS.3,50,000/- BY ALLOWING THIS APPEAL IN
THE INTEREST OF JUSTICE AND EQUITY.
IN MFA NO. 6200/2019:
BETWEEN:
VARUN KUMAR
S/O NANJUNDACHARI
NOW AGED ABOUT 19 YEARS,
R/AT HADONAHALLI, KASABA HOBLI,
DODDABALLAPURA TALUK,
BENGALURU RURAL DISTRICT – 561 203
[PETITIONER IS BEING MINOR REPRESENTED
BY HIS GRAND FATHER VARDHACHAR
BEFORE TRIAL COURT]
…APPELLANT
(BY SRI. RANGEGOWDA N R, ADVOCATE)
AND:
1. ILIYAZ AHAMED
S/O KHALEL AHAMED,
2
HC-KAR
NC: 2026:KHC:54116
MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
AGED MAJOR,
R/AT NO.104,
SIDDANAYAKA STREET,
MADHUGIRI,
TUMKUR DISTRICT.
2. THE MANAGER
RELIANCE GENERAL INSURANCE
COMPANY LTD.,
TH
NO.28, 5 FLOOR,
TH
4 M BLOCK, RAJAJINAGAR
BENGALURU – 560 010.
…RESPONDENTS
(SRI. B.PRADEEP, ADVOCATE FOR R2;
NOTICE TO R1 DISPENSED WITH V/O.DT.30.05.2024)
*
THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT
PRAYING TO MODIFY THE JUDGMENT AND AWARD PASSED
BY THE COURT OF THE XXIV ADDL. SMALL CAUSES JUDGE
& XXII A.C.M.M. AT BENGALURU (SCCH-26) IN MVC
NO.1745/2018, DATED 05.04.2019 TO ENHANCE THE
COMPENSATION FROM RS.4,62,160/- TO RS.8,50,000/- BY
ALLOWING THIS APPEAL IN THE INTEREST OF JUSTICE AND
EQUITY.
IN MFA NO. 6654/2019:
BETWEEN:
THE MANAGER
RELIANCE GENERAL INSURANCE
COMPANY LTD,
NO.28, CENTENARY BUILDING,
TH
EAST WING, 5 FLOOR,
M G ROAD, BENGALURU-01
3
HC-KAR
NC: 2026:KHC:54116
MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
...APPELLANT
(BY SRI. PRADEEP B, ADVOCATE)
AND:
1. RAGHAVENDRA
S/O NANJUNDACHARI,
NOW AGED ABOUT 23 YEARS
R/AT HADONAHALLI,
KASABA HOBLI,
DODDABALLAPURA TALUK,
BANGALORE RURAL DISTRICT
2. MR. ILLIYAZ AHAMED
S/O KHALEEL AHAMED,
NO.104, SIDDANAYAKAN STREET,
MADHUGIRI, TUMKUR DIST,
OWNER OF AUTO REG
NO.KA-64-1575
...RESPONDENTS
(BY SRI. RANGEGOWDA N R, ADVOCATE FOR R1;
R2 - SERVED & UN-REPRESENTED)
*
THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT
PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED
05.04.2019 PASSED MVC NO.1744/2018 BY THE XXIV
ADDITIONAL SMALL CAUSES JUDGE & XXII A.C.M.M.,
BENGALURU CITY (SCCH-26) AWARDING COMPENSATION
TO THE PETITIONER/RESPONDENT NO.1 HEREIN, IN A SUM
OF RS.2,00,640/- WITH INTEREST AT 6%, BY ALLOWING
THE ABOVE APPEAL, IN THE INTEREST OF JUSTICE AND
EQUITY.
IN MFA NO. 6656/2019:
BETWEEN:
THE MANAGER
RELIANCE GENERAL INSURANCE
4
HC-KAR
NC: 2026:KHC:54116
MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
COMPANY LTD,
NO.28, CENTENARY BUILDING,
TH
EAST WING, 5 FLOOR,
MG ROAD, BENGALURU-01
...APPELLANT
(BY SRI. PRADEEP B, ADVOCATE)
AND:
1. VARUN KUMAR
S/O KUMAR,
R/AT HADONAHALLI,
KASABA HOBLI,
DODDABALLAPURA TALUK,
BANGALORE RURAL DISTRICT,
RESPONDENT IS MINOR,
REPRESENTED BY HIS
GRAND FATHER VARDHACHAR
2. MR. ILLILYAZ AHAMED
S/O KHALEEL AHAMED,
NO.104, SIDDANAYAKAN STREET,
MADHUGIRI, TUMKUR DISTRICT,
OWNER OF AUTO REG,
NO.KA-64-1575
...RESPONDENTS
(BY SRI. RANGEGOWDA N R, ADVOCATE FOR R1;
R2 – SERVED & UN-REPRESENTED)
*
THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT
PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED
05.04.2019 PASSED MVC NO.1745/2018 BY THE XXIV
ADDITIONAL SMALL CAUSES JUDGE & XXII A.C.M.M. (SCCH-
26), BENGALURU, AWARDING COMPENSATION TO THE
PETITIONER/RESPONDENT NO.1 HEREIN, IN A SUM OF
5
HC-KAR
NC: 2026:KHC:54116
MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
RS.4,62,160/- WITH INTEREST AT 6%, BY ALLOWING THE
ABOVE APPEAL, IN THE INTEREST OF JUSTICE AND EQUITY.
THESE MFAs COMING ON FOR ADMISSION THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MS. JUSTICE TARA VITASTA GANJU
ORAL JUDGMENT
1. These four appeals seek to challenge a common
Judgment and Award dated 05.04.2019, passed in M.V.C.
Nos.1744/2018 and 1745/2018 by the learned XXIV
Additional Small Causes Judge & XXII A.C.M.M. (SCCH-26)
at Bengaluru, (hereinafter referred to as the ‘Impugned
Award’). By the Impugned Award, the learned Tribunal has
awarded Rs.2,00,640/- to the petitioner in M.V.C.
No.1744/2018 and Rs.4,62,160/- to the petitioner in M.V.C.
No.1745/2018 along with interest at the rate of 6% per
annum from the date of petition till the date of deposit.
2. The challenge in the present appeals has been raised
by the two injured claimants in both the claim petitions as
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
well as by the Insurance Company/Respondent No.2, who
has filed two appeals against both the Awards qua
M.V.C.No.1744/2018 and M.V.C.No.1745/2018.
3. MFA No.5030/2019 has been filed by the petitioner in
M.V.C.No.1744/2018 and MFA No.6200/2019 has been filed
by the petitioner in M.V.C.No.1745/2018. For the sake of
convenience, the appellants in MFA No.5030/2019 and MFA
No.6200/2019 shall be referred to as ‘ petitioner No.1 ’ and
‘ petitioner No.2 ’, where petitioner in MVC No.1744/2018
is ‘ petitioner No.1 ’ and the petitioner in MVC
No.1745/2018 will be referred to as ‘ petitioner No.2 ’.
4. Although these appeals are posted for Admission,
given the pendency of the matter since seven years and
with the consent of the parties, they are taken up for
hearing and disposal.
5. The brief facts which are applicable to these appeals
are that on 03.10.2017 at about 1.30 p.m., the petitioners
were travelling on the Activa Honda bearing Registration
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
No.KA-43/U-7079 on the left side of the road on Tubgere-
Hadonahalli Road, near Tubgere Circle, Kere Eri, Kasaba
Hobli, Doddaballapura Taluk, Bangalore Rural District. At
that time, the driver of an Autorickshaw bearing
Registration No.KA-64/1575 stated to be driving in a rash
and negligent manner, hit the Activa Honda. Due to the
impact, both the petitioners sustained grievous injuries and
shifted to the Government Hospital, Doddaballapura, where
only first-aid was given and thereafter, they were shifted to
Ashwini Hospital, Bangalore, where they were admitted as
in-patient. The claimant (petitioner No.1) in MVC No.
1744/2018 was the rider, while the claimant (petitioner
No.2) in MVC No.1745/2018 was the pillion rider on the two-
wheeler vehicle.
6. Claim petitions were filed under Section 166 of the
Motor Vehicles Act, 1988 (hereinafter referred to as the ‘MV
Act’) by petitioner No.1 and petitioner No.2 separately. It
was stated by petitioner No.1 that he was aged about 22
years and working as a Carpenter, earning a sum of
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HC-KAR
NC: 2026:KHC:54116
MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
Rs.20,000/- per month. It was stated by petitioner No.2
that he was aged about 17 years and a student and also
doing part-time work and earning a sum of Rs.15,000/- per
month. It was stated therein that due to the accident, both
petitioners have incurred medical expenses and are unable
to attend their work and thus incurred loss of future income,
loss of income during laid-up period and other
opportunities.
7. The claim petitions were contested by both the owner
of the offending vehicle as well as the Insurance Company,
who appeared through their counsel and filed separate
Written Statements. The owner of the offending vehicle
contended that the petitioners have filed the claim petitions
on imaginary grounds, claiming excessive, and exorbitant
compensation, and that the accident has occurred on
account of the negligence contributed by the rider of the
Activa Honda also. The Insurance Company in the Written
Statement filed by them, denied the entire petitions’
averments. They contended that the owner of the offending
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
vehicle has not submitted his claim form and other
documents such as RC Book, DL and Fitness Certificate etc.
for verification. It was contended that the driver of the
offending vehicle drove the same without having a valid and
an effective Driving Licence and Fitness Certificate, in
contravention of the conditions of the Insurance Policy and
that the owner of the offending vehicle, knowing fully well
that the driver did not possess a valid and an effective
Driving Licence to drive the vehicle, entrusted the same in
violation of the conditions of the Insurance Policy. They
further contended that the insured vehicle Autorickshaw did
not possess a permit to ply the same in the place of accident
and thus prayed to dismiss both the claim petitions.
8. Based on the contentions of the parties, the following
common issues were framed by the Ld. Tribunal in both the
claim petitions:
“1. Whether the petitioners prove that, they were
sustained grievous injuries in RTA that alleged to have
been occurred on 3-10-2017 at about 1.30 p.m. near
Tubgere Circle, on Tubgere Hadonahalli road, Kere
Eri, Kasaba Hobli, Doddaballapura Taluk, Bangalore
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
Rural Taluk due to rash and negligent driving of auto
bearing Reg.No.KA-64-1575?
2. Whether the petitioners are entitled for
compensation as claimed? If so, to what amount and
from whom?
3. What order or award?”
9. In order to prove their claims, the petitioners
examined petitioner No.1 as PW.1 and examined the
guardian of the petitioner No.2 as PW-2, the Medical Record
Officer at KIMS Hospital as PW-3 and one Dr. Nagaraj B.N.
as PW-4 and got marked twenty six documents, which
included Ex.P-1 (FIR), Ex.P-2 (complaint), Ex.P-3 (wound
Certificate), Exs.P-4 and P-5 (seizure mahazar and spot
mahazar), Ex.P-6 (IMV report), Ex.P-7 (charge sheet),
Ex.P-8 (discharge summary), Exs.P-9 & P-10 (Aadhar Card
and Driving Licence), Ex.P-11 (Medical Bills), Ex.P-12
(prescriptions), Ex.P-13 (X-ray), Ex.P14 (Wound
Certificate), Ex.P-15 (Discharge Summary), Ex.P-16
(medical bills), Ex.P-17 (advance medical prescriptions),
Ex.P-18 (prescriptions), Ex.P-19 (Lab report), Ex.P-20 (X-
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
ray), Ex.P-21 (Authorisation letter), Ex.P-22 (case sheet),
Ex.P-23 (clinical notes), Ex.P-24 (x-ray film) Ex.P-25
(clinical notes) and Ex.P-26 (X-ray film) qua the accident.
9.1 The respondent No.2/Insurance Company examined
one M.K. Prasanna, Regional Transport Officer [RTO] as
RW-1 and Thrinethra M.N., its Legal Officer as RW-2 and
got marked three documents, i.e. Ex.R-1 (Authorisation
letter), Ex.R-2 (copy of permit) and Ex.R-3 (Insurance
Policy).
10. The learned Tribunal, based on the evidence placed
before it, found that the petitioner No.1 was entitled to a
sum of Rs.2,00,640/- and petitioner No.2 was entitled to a
sum of Rs.4,62,160/-. Interest was awarded to both
petitioners at the rate of 6% per annum.
10.1 The learned Tribunal, based on the oral evidence of
RW-1 (RTO) and RW-2 (Legal Officer of the Insurance
Company) and documentary evidence adduced by the
parties and also relying upon two judgments of the Supreme
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
Court, in the case of National Insurance Co. Ltd. Vs.
1
Paramjit Kaur and others and Reliance General
2
Insurance Co. Ltd. Vs. Devi Bai and Another , found
that there was no violation of the permit conditions and that
the Insurance Company cannot deny the compensation to
the petitioners. In addition, it was found that based on the
evidence produced the petitioners had proved the issue of
negligence.
11. On the aspect of compensation, after examining the
injuries sustained by the petitioners, the learned Tribunal
found that the petitioner No.1 (M.V.C.No.1744/2018) had
sustained whole body disability at 6% and that since he had
not produced any document regarding his avocation as
Carpenter and income of Rs.20,000/-, Rs.9,000/- was taken
as the notional income. Since the petitioner No.1 was aged
about 22 years at the time of the accident, adopting the
1
2016 SCC OnLine P&H 11190
2
2015 SCC OnLine Kar 9473
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
multiplier of ‘18’, the loss of future earnings was calculated
as follows:
Rs.9,000/-x12x’18’x6% = Rs.1,16,640/-
11.1 In addition, the petitioner No.1 was also awarded
amounts towards pain and suffering, medical expenses and
loss of earnings during laid-up period and food, conveyance
and nourishment in the following manner:
Amount (Rs.)
Sl.No. Particulars
1 Towards pain and suffering and
mental agony
40,000/-
2 Towards loss of future earnings
due to disability
[Rs.9,000/-x12x’18’x6%]
1,16,640/-
3 Towards Medical Expenses 14,000/-
4 Towards loss of earning during
the period of treatment
10,000/-
5 Towards Food, conveyance and
nourishment
20,000/-
Total 2,00,640/-
12. So far as concerns petitioner No.2 (MVC No.1745/
2018), the learned Tribunal found that the disability was
proved through the evidence of the Doctor (PW-4), who
stated that the petitioner No.2 had sustained physical
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
disability of lower limb at 43% and whole body physical
disability at 14%. Since the petitioner No.2 was a minor,
aged about 17 years at the time of the accident and did not
produce any evidence, the notional income was taken at
Rs.9,000/- per month and adopting the multiplier of ‘18’,
the loss of future earnings was calculated in the following
manner:
Rs.9,000/- x 12 x ‘18’ x 14% = 2,72,160/-
12.1 In addition, considering the nature of injuries, period
of treatment and surgery, as well the pain and suffering,
medical expenses, loss of earnings during the period of
treatment, food, conveyance and nourishment and future
medical expenses was also awarded in the following
manner:
Amount (Rs.)
Sl.No. Particulars
1 Towards pain and suffering and
mental agony
50,000/-
2 Towards loss of future earnings
due to disability
[Rs.9,000/-x12x’18’x14%]
2,72,160/-
3 Towards Medical Expenses 80,000/-
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
4 Towards loss of earning during
the period of treatment
20,000/-
5 Towards Food, conveyance and
nourishment
20,000/-
6 Towards Future medical expenses 20,000/-
Total 4,62,160/-
Thus, the petitioner No.1 (MVC No.1744/2018) (appellant
in MFA No.5030/2019 was held entitled to a sum of
Rs.2,00,640/- and the petitioner No.2 (MVC No.1745/
2018) (appellant in MFA No.6200/2019) was held entitled
to a sum of Rs.4,62,160/-.
13. As stated above, the challenge in these appeals has
been made by the two injured claimants as well as the
Insurance Company.
14. Although notice was served on respondent No.1/
owner in the appeals filed by Insurance Company in MFA
No.6654/2019 and MFA No.6656/2019, the said respondent
remained absent and un-represented. In the appeals filed
by the injured claimant in MFA No.6200/2019, notice to
respondent No.1/owner was dispensed with vide order of
this Court dated 30.05.2024.
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
14.1 The learned counsel for the injured claimant in MFA
No.5030/2019 submitted that notice to respondent
No.1/owner in this appeal may be dispensed with in view of
the fact that notice has already been dispensed with to the
said respondent in the connected appeal in MFA
No.6200/2019 and that the said respondent has remained
served and un-represented in the appeals filed by the
Insurance Company also.
14.2. As stated above, these matters are being listed
together and there is no appearance on behalf of the Owner
despite service. Given the pendency of the Appeals since
more than seven years, with the consent of the parties, they
are taken up for hearing and disposal.
15. MFA No.5030/2019 and MFA No.6200/2019 are filed
by the injured claimants seeking enhancement of the
compensation awarded by the learned Tribunal.
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
16. It is the contention of learned counsel for the injured
claimants, i.e. petitioner No.1 (MVC No.1744/2018) and
petitioner No.2 [MVC No.1745/2018] is that the amounts
awarded for loss of future earnings was incorrect as the
notional income for the year 2017 was Rs.11,000/- per
month, but the learned Tribunal has taken the notional
income at the rate of Rs.9,000/- per month. In addition, it
is stated that the compensation towards loss of income
during the laid-up period has been inadequately given and
no compensation is awarded towards loss of amenities.
17. The learned counsel for the Insurance Company, on
the other hand, does not dispute that the notional income
for the year 2017 was Rs.11,000/- per month. However, he
submits that the amounts awarded towards other heads are
in accordance with law. Further, he submits that the
Insurance Company's appeals are primarily filed on the
ground that although the terms of the Insurance Policy were
breached and the learned Tribunal did not pass a pay and
recovery order.
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
17.1 Reliance by the Insurance Company in this behalf is
placed on the judgment of the Supreme Court in the case
of Amrit Paul Singh and another Vs. Tata AIG General
3
Insurance Company Limited and Others .
18. This Court has examined the Impugned Award. There
is no challenge on the aspect of negligence. The only
challenge is on the fact that the offending vehicle was plying
outside the permitted zone. So far as concerns the quantum
of compensation awarded, since the notional income for the
year 2017 was Rs.11,000/- per month, the loss of future
earnings and loss of income during laid-up period are
required to be re-calculated. In addition, no compensation
is awarded towards loss of amenities.
19. Accordingly, taking the disability at 6%, notional
income at Rs.11,000/- per month, the amounts awarded to
petitioner No.1 [MVC No.1744/2018] are re-calculated in
the following manner:
3
(2018) 7 SCC 558
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C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
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Amount (Rs.)
Sl.No. Particulars
1 Towards pain and suffering and
mental agony
40,000/-
2 Towards loss of future earnings due
to disability
[Rs.11,000/-x12x’18’x6%]
1,42,560/-
3 Towards Medical Expenses 14,000/-
4 Towards loss of earning during the
period of treatment for a period of
three months.
[i.e Rs.11,000/- x 3 months]
33,000/-
5 Towards Food, conveyance and
nourishment
20,000/-
6 Towards Loss of amenities 30,000/-
Total 2,79,560/-
Less: Awarded by Tribunal 2,00,640/-
Enhanced compensation 78,920/-
20. Further, taking the disability at 14%, notional income
at Rs.11,000/- per month, the amounts awarded to
petitioner No.2 [MVC No.1745/2018] are re-calculated in
the following manner:
Amount
Sl.No. Particulars
(Rs.)
1 Towards pain and suffering and
mental agony
50,000/-
2 Towards loss of future earnings due to
disability
[Rs.11,000/-x12x’18’x14%]
3,32,640/-
3 Towards Medical Expenses 80,000/-
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MFA No. 5030 of 2019
C/W MFA No. 6200 of 2019
MFA No. 6654 of 2019
AND 1 OTHER
CNR: KAHC010386362019
4 Towards loss of earning during the
period of treatment for a period of
three months
[i.e Rs.11,000/- x 3 months]
33,000/-
5 Towards Food, conveyance and
nourishment
20,000/-
6 Towards Future medical expenses 20,000/-
7 Towards loss of amenities 30,000/-
Total 5,65,640/-
Less: awarded by Tribunal 4,62,160/-
Enhanced compensation 1,03,480/-
21. Thus, an amount of Rs.2,79,560/- and Rs.5,65,640/-
was awarded to petitioner No.1 [MVC No.1744/2018] and
petitioner No.2 [MVC No.1745/2018], respectively, with
interest at 6% per annum.
22. So far as concerns the contention that was raised by
the Insurance Company before the learned Tribunal that the
offending vehicle was plying outside its permissible area, an
examination of the record reflects that this aspect was also
adverted by the Insurance Company in its Written
Statement, wherein it was stated that the insured vehicle
had no permit to ply the vehicle in the area of accident. In
addition, the evidence of RW-1 (RTO) and RW-2 (Legal
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Officer), clearly set out that although the offending vehicle
had a valid permit, but the same was found plying beyond
the permissible limit.
23. The Supreme Court in the case of Lakshmi Chand
4
Vs. Reliance General Insurance , has relied upon the
judgment in National Insurance Co. Ltd. v. Swaran
5
Singh , to observe that the Insurance Company, in order
to avoid liability must not only establish the defence claimed
in the proceeding concerned, but also establish breach on
the part of the owner/insured of the vehicle for which the
burden of proof would rest with the Insurance Company.
The relevant extract of the judgment is set out below:
“ 14. Further, in National Insurance Co. Ltd. v. Swaran
Singh [National Insurance Co. Ltd. v. Swaran Singh,
(2004) 3 SCC 297 : 2004 SCC (Cri) 733] a three-Judge
Bench of this Court has held as under : (SCC pp. 325 &
330-31, paras 49, 52 & 69)
“ 49. Such a breach on the part of the insured must
be established by the insurer to show that not
only the insured used or caused or permitted to
be used the vehicle in breach of the Act but also
that the damage he [Ed.: The victim.] suffered flowed
from the breach.
*
4
(2016) 3 SCC 100
5
(2004) 3 SCC 297
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52. In Narcinva case [Narcinva V. Kamat v. Alfredo
Antonio Doe Martins, (1985) 2 SCC 574 : 1985 SCC
(Cri) 274] a Division Bench of this Court observed :
(SCC p. 578, para 12)
‘12. … The insurance company complains of breach
of a term of contract which would permit it to disown
its liability under the contract of insurance. If a
breach of a term of contract permits a party to the
contract to not to perform the contract, the burden
is squarely on that party which complains of breach
to prove that the breach has been committed by the
other party to the contract. The test in such a
situation would be who would fail if no evidence is
led.’
*
69. The proposition of law is no longer res integra
that the person who alleges breach must prove the
same. The insurance company is, thus, required to
establish the said breach by cogent evidence. In the
event the insurance company fails to prove that
there has been breach of conditions of policy on the
part of the insured, the insurance company cannot
be absolved of its liability.”
(emphasis supplied)
15. The judgment in Swaran Singh [National Insurance
Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC
(Cri) 733] has been followed subsequently in Oriental
Insurance Co. Ltd. v. Meena Variyal [Oriental Insurance
Co. Ltd. v. Meena Variyal, (2007) 5 SCC 428 : (2007) 2
SCC (Cri) 527] , wherein this Court held as under : (SCC
pp. 440-41, para 16)
“16. We shall now examine the decision in Swaran
Singh [National Insurance Co. Ltd. v. Swaran Singh,
(2004) 3 SCC 297 : 2004 SCC (Cri) 733] on which
practically the whole of the arguments on behalf of the
claimants were rested. On examining the facts, it is
found that, that was a case which related to a claim by
a third party. In claims by a third party, there cannot
be much doubt that once the liability of the owner is
found, the insurance company is liable to indemnify the
owner, subject of course, to any defence that may be
. In a
available to it under Section 149(2) of the Act
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case where the liability is satisfied by the
insurance company in the first instance, it may
have recourse to the owner in respect of a claim
available in that behalf
. Swaran Singh [National
Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297
: 2004 SCC (Cri) 733] was a case where the insurance
company raised a defence that the owner had
permitted the vehicle to be driven by a driver who
really had no licence and the driving licence produced
by him was a fake one. Their Lordships discussed the
position and held ultimately that a defence under
Section 149(2)(a)(ii) of the Act was available to an
insurer when a claim is filed either under Section 163-
A or under Section 166 of the Act. The breach of a
policy condition has to be proved to have been
committed by the insured for avoiding liability by
the insurer. Mere absence of or production of fake or
invalid driving licence or disqualification of the driver
for driving at the relevant time, are not in themselves
defences available to the insurer against either the
insured or the third party. The insurance company
to avoid liability, must not only establish the
available defence raised in the proceeding
concerned but must also establish breach on the
part of the owner of the vehicle for which the
burden of proof would rest with the insurance
company. Whether such a burden had been
discharged, would depend upon the facts and
circumstances of each case. Even when the
insurer is able to prove breach on the part of the
insured concerning a policy condition, the insurer
would not be allowed to avoid its liability towards
the insured unless the said breach of condition is
so fundamental as to be found to have
contributed to the cause of the accident .”
[Emphasis Supplied]
24. The Supreme Court in the case of Amrit Paul Singh
case has observed that use of a vehicle in a public place
without a permit is a fundamental statutory infraction. It
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held that the principles laid down in Swaran Singh case
and Lakshmi Chand case in that regard would not be
applicable to the case at hand and that nothing has been
brought on record by the insured to prove that he had a
permit of the vehicle to ply in the area of accident. The
relevant extract of the judgment in Amrit Paul Singh case
is set out below:
“ 24. In the case at hand, it is clearly demonstrable
from the materials brought on record that the
vehicle at the time of the accident did not have a
permit. The appellants had taken the stand that the
vehicle was not involved in the accident. That apart,
they had not stated whether the vehicle had
temporary permit or any other kind of permit. The
exceptions that have been carved out under Section 66 of
the Act, needless to emphasize, are to be pleaded and
proved. The exceptions cannot be taken aid of in the
course of an argument to seek absolution from liability.
Use of a vehicle in a public place without a permit is
a fundamental statutory infraction. We are disposed
to think so in view of the series of exceptions carved out
in Section 66. The said situations cannot be equated with
absence of licence or a fake licence or a licence for
different kind of vehicle, or, for that matter, violation of a
condition of carrying more number of passengers.
Therefore, the principles laid down in ch Singh
(supra) and Lakhmi Chand (supra) in that regard
would not be applicable to the case at hand. That
apart, the insurer had taken the plea that the vehicle in
question had no permit. It does not require the wisdom of
the "Tripitaka", that the existence of a permit of any
nature is a matter of documentary evidence. Nothing
has been brought on record by the insured to prove
that he had a permit of the vehicle. In such a
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situation, the onus cannot be cast on the insurer.
Therefore, the tribunal as well as the High Court had
directed the insurer was required to pay the
compensation amount to the claimants with
interest with the stipulation that the insurer shall
be entitled to recover the same from the owner and
the driver. The said directions are in consonance
with the principles stated in Swaran Singh (supra)
and other cases pertaining to pay and recover
principle.”
[Emphasis Supplied]
25. The Supreme Court in the case of Swaran Singh has
observed that the Insurance Company may not be liable to
satisfy the decree and, therefore, its liability may be zero,
but it does not mean that it did not have initial liability at
all. Thus, if the Insurance Company is made liable to pay
any amount, it can recover the entire amount paid to the
third party on behalf of the assured.
26. While discussing this aspect, the Supreme Court has
held that the principles laid down in Swaran Singh case
and Lakshmi Chand case in regard to invalid licence or a
fake licence would not be applicable whereupon a valid
permit is not produced. It has been held that in case the
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vehicle is plying outside the permissible area, then it would
be a breach of the Insurance Policy and the insurer would
have the liberty to recover the amounts from the insured.
27. This Court, while sitting in a Division Bench and
considering a similar issue in the case of M/s. V. Link
Taxies Pvt. Ltd. v. National Insurance Company Ltd.
6
& Ors. , relied upon the judgment of the Supreme Court in
7
K. Nagendra v. New India Insurance Co. Ltd. , and held
that where an offending vehicle operates beyond the
territorial limits prescribed under a valid permit, the
Insurance Company is liable to satisfy the compensation
awarded to the third-party claimants in the first instance,
with liberty to recover the amount so paid from the owner
of the offending vehicle. Accordingly, the principle of “pay
and recover” was applied. The relevant extract is set out
below:
“ 23. While considering a similar issue, the Supreme Court
in the case of K. Nagendra v. New India Insurance Co.
Ltd. [See: 2025 SCC OnLine SC 2297 ], concerning the effect
6
MFA No. 474/2017 & conn. matters, v/o.dt.06.08.2026
7
2025 SCC OnLine SC 2297
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of deviation from the prescribed route/territorial limits
under a transport vehicle’s permit on the liability of the
Insurance Company, has held that where the vehicle is
operated outside the bounds of the permit, the
insurer must satisfy the compensation payable to the
third-party claimant in the first instance, while being
entitled to recover the amount from the owner; thus,
the appropriate course is to apply the “pay and
recover” principle . It was thus held that a breach of the
permit condition by operating the vehicle outside the
permitted area does not defeat the third-party’s right
to recover compensation from the insurer, though
the insurer may recover the amounts from the owner .
The relevant extract is set out below:
“6. The question that comes up for consideration
before this Court in these appeals is whether any
deviation from the prescribed route as per the
permit granted by the state transportation
authority, would impact on the liability of the
Insurance Company for any accident which may
take place while the vehicle is on such a deviated
route. An answer to this question would by itself
justify the correctness or lack thereof, of the order
of the High Court which employs the ‘pay and
recover’ principle.
7. Before going to the exact issue involved in this case,
it would be appropriate to refer to certain judgments
which will set out the instances in which this Court has
approved the application of the above-mentioned
principle. It is on that benchmark that we will proceed to
examine the correctness of the High Court's conclusions.
7.1. In National Insurance Co. Ltd. v. Swaran Singh, a
bench of 3 learned Judges of this Court observed thus:
“83. Sub-section (5) of Section 149 which imposes a
liability on the insurer must also be given its full effect.
The insurance company may not be liable to satisfy
the decree and, therefore, its liability may be zero but
it does not mean that it did not have initial liability at
all. Thus, if the insurance company is made liable to
pay any amount, it can recover the entire amount paid
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to the third party on behalf of the assured. If this
interpretation is not given to the beneficent provisions
of the Act having regard to its purport and object, we
fail to see a situation where beneficent provisions can
be given effect to. Sub-section (7) of Section 149 of
the Act, to which pointed attention of the Court has
been drawn by the learned counsel for the petitioner,
which is in negative language may now be noticed.
The said provision must be read with sub-section (1)
thereof. The right to avoid liability in terms of
sub-section (2) of Section 149 is restricted as
has been discussed hereinbefore. It is one thing
to say that the insurance companies are entitled
to raise a defence but it is another thing to say
that despite the fact that its defence has been
accepted having regard to the facts and
circumstances of the case, the Tribunal has power
to direct them to satisfy the decree at the first instance
and then direct recovery of the same from the owner.
These two matters stand apart and require contextual
reading.” [This judgment was followed in Shamanna
v. Oriental Insurance Co. Ltd.3]
(emphasis supplied)
7.2. K.T Thomas J., in New India Assurance Co. v.
Kamla (See: 2001 (4) SCC 342), stated the position
of law succinctly, thus:
“25.... The insurer and the insured are bound by the
conditions enumerated in the policy and the insurer is
not liable to the insured if there is violation of any
policy condition. But the insurer who is made
statutorily liable to pay compensation to third
parties on account of the certificate of insurance
issued shall be entitled to recover from the
insured the amount paid to the third parties, if
there was any breach of policy conditions on
account of the vehicle being driven without a
valid driving licence. Learned counsel for the
insured contended that it is enough if he establishes
that he made all due enquiries and believed bona fide
that the driver employed by him had a valid driving
licence, in which case there was no breach of the
policy condition. As we have not decided on that
contention it is open to the insured to raise it before
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the Claims Tribunal. In the present case, if the
Insurance Company succeeds in establishing that
there was breach of the policy condition, the Claims
Tribunal shall direct the insured to pay that amount to
the insurer. In default the insurer shall be allowed to
recover that amount (which the insurer is directed to
pay to the claimant third parties) from the insured
person.
7.3. In Parminder Singh v. New India Assurance Co. Ltd.,
this Court approved the application of this principle in
cases where the driver of the offending vehicle does not
possess a valid driving license.
7.4. In S. Iyyapan v. United India Insurance Co. Ltd., it
was held that if at the time of accident, there is a
discrepancy in the vehicle being driven by the driver and
the endorsement on the driver's license (i.e., the kind of
vehicle said driver is permitted to operate) then, in such
a case, pay and recover shall be permitted.
7.5. In Chatha Service Station v. Lalmati Devi it was held
that when a vehicle involved in an accident is found to
be carrying certain goods which it was not authorized to
as per law (in the instant case hazardous goods within
the meaning of Rule 9 of Central Motor Vehicles Rules,
1989) the insurance company while would be
required to compensate the victim of the accident,
it shall be entitled to recover the amount so paid
from the holder of the insurance policy.
8. Now, let us consider the instant case. The record
reveals that the offending vehicle did not have the permit
to enter Channapatna City, where the accident took
place. This position is not in dispute.
Unquestionably, therefore, the terms of the permit
have been deviated.
9. The purpose of an insurance policy in the
present context is to shield the owner/operator
from direct liability when such an
unforeseen/unfortunate incident takes place. To
deny the victim/dependents of the victim compensation
simply because the accident took place outside the
bounds of the permit and, therefore, is outside the
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purview of the insurance policy, would be offensive to
the sense of justice, for the accident itself is for no fault
of his. Then, the Insurance Company most certainly
ought to pay.
10. At the same time though, when an Insurance
Company takes on a policy and accepts payments
of premium in pursuance thereto, it agrees to do
so within certain bounds. The contract lays down
the four corners within which such an insurance
policy would operate. If that is the case, to expect
the insurer to pay compensation to a third party,
which is clearly outside the bounds of the said
agreement would be unfair. Balancing the need for
payment of compensation to the victim vis-à-
vis the interests of the insurer, the order of the
High Court applying the pay and recover principle,
in our considered view, is entirely justified and
requires no interference.”
[Emphasis Supplied]
28. In view thereof, the Impugned Award is modified to
the extent that the Insurance Company is directed to make
payment of the compensation in the first instance and
liberty is given to recover the same from the insured, in
accordance with law.
29. Accordingly, the Court proceeds to pass the following:
ORDER
(i) All the appeals are allowed in part ;
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(ii) The Impugned Judgment and Award dated
05.04.2019, passed in M.V.C. Nos.1744/2018 and
1745/2018 by the learned XXIV Additional Small
Causes Judge & XXII A.C.M.M. (SCCH-26) at
Bengaluru, is modified, to the extent that the
petitioner No.1, i.e. appellant in MFA No.5030/2019
[MVC No.1744/2018] is entitled to total
compensation of Rs.2,79,560/- and the petitioner
No.2, i.e. appellant in MFA No.6200/2019 [MVC
No.1745/2018] is entitled to total compensation of
Rs.5,65,640/- . The interest in both awards
remains as is at the rate of 6% per annum;
(iii) The remaining portion of the Impugned Award
of the learned Tribunal remains undisturbed;
(iv) Amounts in deposit before this Court in MFA
No.6654/2019 and MFA No.6656/2019, shall be
transmitted to the concerned Tribunal for
disbursement;
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(v) The Insurance Company shall deposit the
enhanced compensation along with interest
applicable thereon, within a period of eight weeks
from the date of receipt of a copy of this judgment.
However, liberty is reserved to the Insurance
Company to recover the compensation from owner/
insured, in accordance with the law;
(vi) On such deposit of the compensation, the same
shall be released in favour of the petitioner No.1 and
petitioner No.2, on filing of an appropriate
application by them for withdrawal of the enhanced
amount;
(vii) All pending application(s) stand closed;
(viii) No order as to costs.
(ix) The Registry is directed to draw the modified
Award accordingly;
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(x) The Registry is directed to transmit a copy of this
judgment to the concerned Tribunal, forthwith.
Digitally signed by
TARA VITASTA GANJU
Location: HIGH COURT
OF KARNATAKA
Sd/-
(TARA VITASTA GANJU)
JUDGE
BMV*List No.: 1 Sl No.: 26
34