Karnataka HC Raises Compensation To ₹6.04 Lakh For Loader On Trailer, Directs Insurer To Pay First And Recover From Owner

On 8 January 2012, Lokesh was injured when he fell from a tractor-trailer after the driver allegedly applied the brakes suddenly, causing the tractor and trailer to separate.

The Tribunal partly allowed his claim under Section 166 of the Motor Vehicles Act, 1988, awarding ₹2,67,922 with 9% annual interest and holding the insurer liable.

The insurer appealed against liability, contending that the policy did not cover a loader travelling on the tractor-trailer; Lokesh cross-appealed seeking enhanced compensation.

The High Court noted that the prosecution records referred to Lokesh sitting on the tractor’s engine or mudguard, while he testified that he was travelling on the trailer.

Section 166 of the Motor Vehicles Act, 1988 provides the basis for a claim for compensation arising from a motor-vehicle accident, while Section 173(1) provides for an appeal against the Tribunal’s award.

The Court relied on Royal Sundaram Alliance Insurance Co. Ltd. v. Honnamma, 2025 SCC OnLine SC 1027, for the principle that, where a tractor is attached to a trailer, the tractor causes the movement and the insurer must satisfy the award, with liberty to recover from the insured.

It also referred to Shivaraj v. Rajendra, (2018) 10 SCC 432, concerning an insurer’s obligation to pay and recover.

For calculating loss of future earning capacity, the Court applied Erudhaya Priya v. State Express Transport Corporation Ltd., 2020 SCC OnLine SC 601, and added 40% future prospects to the income of a self-employed claimant under 40 years of age.

On liability, the Court considered both the prosecution records and Lokesh’s testimony that he was on the trailer.

Applying Honnamma, it held that the insurer was required to satisfy the award, while preserving its right to recover the amount from the insured; it therefore found it unnecessary to rely on the insurer’s cited authority concerning travel on a tractor’s mudguard.

On quantum, the Court held that the Tribunal had understated the notional monthly income: because Lokesh’s income was unproved, it assessed it at ₹7,000 for 2012 rather than ₹4,000.

Applying Erudhaya Priya, it added 40% future prospects and calculated future loss of income using 15% disability and a multiplier of 18, yielding ₹3,17,520.

It left the medical-expense award unchanged, increased compensation for pain and suffering, future medical expenses, loss of income during treatment, and loss of amenities, and retained the award for nourishment and attendant charges.

The award carries interest at 9% per annum from the date of the claim petition until realization.

The insurer was directed to deposit the compensation and interest within six weeks, with liberty to recover the amount from the insured; on deposit, the full amount was ordered released to Lokesh.