- 1 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI MISCELLANEOUS FIRST APPEAL NO. 501 OF 2021 (MV-D) C/W MISCELLANEOUS FIRST APPEAL NO. 2222 OF 2021 (MV-D) IN MFA No. 501/2021 BETWEEN: THE MANAGER, THE BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD., NO.324/1, D/SUBBAIAH ROAD, CHAMARAJA MOHALLA, MYSURU NOW REP BY THE MANAGER, THE BAJAJ ALLIANZ GENERAL INSURANCE CO LTD NO.21, 4TH FLOOR, GOLDEN HEIGHTS COMPLEX, 56TH C CROSS, NEAR SUJATHA THEATRE, RAJAJI NAGAR, BANGALORE-560 010. …APPELLANT (BY SRI. A N KRISHNA SWAMY., ADVOCATE) AND: 1. RAMESH M K S/O KRISHNASHETTY AGED ABOUT 52 YEARS, 2. SMT. SUKANYA W/O RAMESHA M.K. AGED ABOUT 43 YEARS, BOTH ARE R/AT NO.314, MADUVINAKODI BOOKANAKERI HOBLI, K.R.PETE TALUK, MANDYA NOW R/AT C/O NAGENDRA, BANDIKERE STREET, S.R.PATNA TOWN, S.R.PATNA. Digitally signed by MEGHA MOHAN Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 3. H.B.MANJEGOWDA M/S. SOMESHWARA ATPS AGED ABOUT 38 YEARS, R/AT NO.396, 13TH CROSS, MAIN BLOCK, R/AT NO.2232, BASAVESHWARA MAIN ROAD, MYSURU. …RESPONDENTS (BY SRI. T VIJAY KUMAR., ADVOCATE FOR R1 & R2; V/O/DT.21.2.2025 SERVICE OF NOTICE TO R3 IS HELD SUFFICIENT) THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 29.08.2019 PASSED IN MVC NO.1681/2017 ON THE FILE OF THE ADDITIONAL SENIOR CIVIL JUDGE, MACT, SRIRANGAPATNA, AWARDING COMPENSATION OF RS.11,68,400/- WITH INTEREST AT 9 PERCENT P.A. FROM THE DATE OF DEPOSIT OF THE COMPENSATION AMOUNT BEFORE THE TRIBUNAL. IN MFA NO. 2222/2021 BETWEEN: 1. RAMESH M.K. S/O KRISHNASHETTY AGED ABOUT 53 YEARS 2. SMT. SUKANYA W/O RAMESHA M K AGED ABOUT 44 YEARS BOTH ARE R/AT NO.314 MADUVINAKODI BOOKANAKERI HOBLI K R PETE TALUK MANDYA -571426 NOW R/AT C/O NAGENDRA BANDIKERI STREET S R PATNA TOWN - 3 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 S R PATNA MANDYA DISTRICT-571438. ...APPELLANTS (BY SRI. VIJAY KUMAR T., ADVOCATE) AND: 1. THE MANAGER, BAJAJ ALLIANZ GIC LTD., NO.324/1, D. SUBBAIAH ROAD, CHAMARAJA MOHALLA, MYSURU-570010. 2. H. B. MANJEGOWDA, M/S. SOMESHWARA ATPS, AGED ABOUT 39 YEARS, R/A NO.396, 13TH CROSS, MAIN BLOCK, R/A NO.2232, BASAVESHWARA MAIN ROAD, MYSURU-570004. ...RESPONDENTS (BY SRI. A N KRISHNA SWAMY., ADVOCATE FOR R1; V/O/DT.21.9.2023 NOTICE TO R2 IS DISPENSED WITH) THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 29.08.2019 PASSED IN MVC NO. 1681/2017 ON THE FILE OF THE ADDITIONAL SENIOR CIVIL JUDGE, MACT, SRIRANGAPATNA, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION. THESE APPEALS, COMING ON FOR DISMISSAL, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI - 4 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 ORAL JUDGMENT Aggrieved by the award passed in MVC.No.1681/2017 dated 29.08.2019 by the Addl. Senior Civil Judge, Srirangapatna, the Insurance Company as well as the claimants are before this Court. The Insurance Company’s appeal is MFA. No.501/2021 and the claimants’ appeal is MFA.No.2222/2021. The claim petition is filed by the parents of the deceased seeking compensation of an amount of Rs.25,50,000/- for the death of the deceased. 2. It is the case of the claimants that on 19.04.2017 at about 12.30 pm., on KRS-Mysuru road, in front of MMK Hotel, K.R. Sagara Village, Srirangapatna, when deceased along with his friends was proceeding on a bike as a pillion rider, the driver of Tipper lorry drove it in high speed in a rash and negligent manner and dashed to the bike and as a result of which the deceased fell down and sustained injuries on his head and other parts of the body. Immediately after the accident he was shifted to K.R. Hospital, Mysuru. But on the same day on 3.00 pm., he succumbed to injuries while taking treatment. Basing on the evidence, the Tribunal had awarded the compensation as per the table given below: - 5 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 Sl. No. Heads Rs. Compensation amount awarded 1. Loss of dependency for claimants Rs. 10,58,400/- 2. Loss of estate Rs. 15,000/- 3. Towards funeral expenses Rs. 15,000/- 4. Loss of Consortium Rs. 80,000/- Total Rs. 11,68,400/- 3. Learned counsel appearing for the Insurance Company submits that the Tribunal had fixed a liability on the Insurance Company. It is the case of the Insurance Company that there is no valid permit, no driving license and also the vehicle was not having the fitness certificate. In support of their case, they have examined the RTO officer and in the evidence, it is elicited that the fitness certificate is not there and the document is also marked before the Tribunal, but the Tribunal had failed to consider all these aspects and fastened the liability on the Insurance Company. It is submitted that the Tribunal had taken the rate of interest at 9%, it should be reduced to 6% per annum. 4. Learned counsel appearing to the claimants submits that the accident had taken place in the year 2017, the Tribunal had taken the income at Rs.7,000/- per month and granted the - 6 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 compensation of an amount of Rs.11,68,400/- which is not a just and reasonable compensation and that needs to be enhanced. 5. Having heard the learned counsels on either side, perused the material on record. The first contention of the Insurance Company with regard to the driving licence, permit and the fitness certificate, as far as the first two issues are concerned i.e., the driving licence and the permit, no satisfactory evidence is adduced before the Tribunal. Then the third is with regard to the fitness certificate. There is evidence on record to show that there is no fitness certificate to the vehicle as on the date of the accident. When once there is no fitness certificate, it amounts to fundamental breach of the policy. Learned counsel appearing for the Insurance Company had relied on the judgment of the Kerala High Court Full Bench in the case of Pareed Pillai vs. Oriental Insurance Company Ltd.1 He had relied on paragraph Nos.15, 17 and 21 which reads thus: “15. As mentioned above, fitness of a vehicle, to be used as a transport vehicle, is of paramount 1 (2019) AIR (Kerala) 9 - 7 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 importance. The necessity to have 'Fitness Certificate' is prescribed under Section 56 of the Act. Sub- section (1) of Section 56 clearly stipulates that, a transport vehicle [subject to the provisions of Section 59 (power to fix the age limit of motor vehicle) and Section 60 (registration of the vehicles belonging to the Central Government)] shall not be deemed to be validly registered for the purpose of Section 39, unless it carries a 'Certificate MACA No. 2030 of 2015 and connected cases of Fitness' as prescribed. By virtue of Section 84 (a), as mentioned already, it is a mandatory requirement of every Permit, that the vehicle to which the Permit relates, shall carry valid 'Certificate of Fitness' issued under Section 56 at all time, absence of which will automatically lead to a situation that the vehicle will not be deemed as having a Permit [if it is not having a 'Fitness Certificate' on a given date]. Using a motor vehicle in an unsafe condition in any public place itself is an offence under Section 190 of the Act. Separate penalty is prescribed under Section 192 for driving or using the motor vehicle in contravention of Section 39 of the Act [i.e. without registration]; which at the first instance by fine upto Rs.5000/- [not less than Rs. 2000/-] and for the second or subsequent offences, it may be with imprisonment, which may extend to one year or fine upto Rs.10,000/- [not less than Rs.5000/-] or with both; of course, conferring power upon the Court to impose a lesser punishment, for reasons to be - 8 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 recorded. Similarly, separate punishment is provided for using vehicles without 'Permit' as provided under Section 192A [first offence with fine upto Rs.5000/- which shall not be less than Rs.2000/- and for any subsequent offence with imprisonment upto one year [which shall not be less than 3 months or with fine upto Rs.10.000/- which shall not be less than Rs.5000/-] or with both; here MACA No. 2030 of 2015 and connected cases again conferring power on the Court to impose lesser punishment, for reasons to be recorded. Reference is made to the above provisions only to illustrate the utmost requirement to have a valid 'Registration, Permit and Fitness Certificate'. 17. The stipulations under the above provisions clearly substantiate the importance and necessity to have a valid Fitness Certificate to the transport vehicle at all times. The above prescription converges on the point that Certificate of Registration, existence of valid Permit and availability of Fitness Certificate, all throughout, are closely interlinked in the case of a transport vehicle and one requirement cannot be segregated from the other. The transport vehicle should be completely fit and road worthy, to be plied on the road, which otherwise may cause threat to the lives and limbs of passengers and the general public, apart from damage to property. Only if the transport vehicle is having valid Fitness Certificate, would the necessary Permit be issued in terms of Section 66 of the Act - 9 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 and by virtue of the mandate under Section 56 of the Act, no transport vehicle without Fitness Certificate will be deemed as a validly registered vehicle for the purpose of Section 39 of the Act, which stipulates that nobody shall drive or cause the motor vehicle to be driven without valid registration in public place or such other place, as the case may be. These requirements are quite 'fundamental' in MACA No. 2030 of 2015 and connected cases nature; unlike a case where a transport vehicle carrying more passengers than the permitted capacity or a goods carriage carrying excess quantity of goods than the permitted extent or a case where a transport vehicle was plying through a deviated route than the one shown in the route permit which instances could rather be branded as 'technical violations'. In other words, when a transport vehicle is not having a Fitness Certificate, it will be deemed as having no Certificate of Registration and when such vehicle is not having Permit or Fitness Certificate, nobody can drive such vehicle and no owner can permit the use of any such vehicle compromising with the lives, limbs, properties of the passengers/general public. Obviously, since the safety of passengers and general public was of serious concern and consideration for the law makers, appropriate and adequate measures were taken by incorporating relevant provisions in the Statute, also pointing out the circumstances which would constitute offence; - 10 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 providing adequate penalty. This being the position, such lapse, if any, can only be regarded as a fundamental breach and not a technical breach and any interpretation to the contrary, will only negate the intention of the law makers. 21. The question whether absence of valid Permit to a transport vehicle at the time of accident is a 'fundamental breach' or a 'technical breach' had come up for consideration again before the Apex Court MACA No. 2030 of 2015 and connected cases recently in Amrit paul Singh and Another Vs. TATA AIG General Insurance Co. Ltd and Others [2018 (3) KHC 197]. The factual matrix in the said case is that, the rider of the motor cycle was knocked down to death by the offending truck on 19.02.2013, which led to the claim petition preferred by the legal heirs. The claim was resisted by the insurer, mainly contending that there was violation of policy conditions in so far as the offending truck was not having a valid Permit and the driver was not having a valid driving licence. Based on the materials on record and placing reliance on the verdict passed by the Apex Court in Challa Upendra Rao's case [cited supra], the Tribunal, after fixing the quantum of compensation, directed the insurer to satisfy the same, with liberty to have it recovered from the insured. The said finding and reasoning came to be affirmed by the High Court, in turn leading to the proceedings before the Apex Court. After exhaustive discussion on the relevant provisions of law - 11 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 including Section 2 (28), 2 (31), 2 (47), 66, 149 and 166 of the M.V. Act 1988 and the various judgments rendered by the Apex Court at different points of time, including in National Insurance Co. Ltd. Vs. Swaran Singh and others [(2004) 3 SCC 297] and Challa Upendra Rao's case [cited supra], the Apex Court held that the offending truck was not having a valid Permit on the date MACA No. 2030 of 2015 and connected cases of accident; which was not a technical breach to attract the dictum in Swaran Singhs' case [cited supra] [where also right of recovery was held as conferred on the insurer, once the breach was established by the insurer]. It was also observed that, it was not a case where any of the exceptions under sub-section (3) of Section 66 was attracted and further that, existence of a Permit of any nature was matter of documentary evidence. The Bench held that the exceptions carved out under Section 66 (3) of the Act are to be pleaded and proved by the insured/owner and this burden cannot be shifted to the shoulders of the insurer. It has accordingly been declared that, the use of a transport vehicle in a public place without Permit is a fundamental/statutory infraction and the principles laid down in Swaran Singh's case [cited supra] and Lakshmi Chand Vs. Reliance General Insurance [(2016) 3 SCC 100] cannot be applicable in this regard. The Apex Court held, in such circumstances, that the verdict passed by the High Court affirming the stand of the Tribunal - 12 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 directing the insurer to satisfy the liability and to have it recovered from the owner/insured was in consonance with the principles stated in Swaran Singh's case [cited supra] and other cases pertaining to 'pay and recover principle'. From the above, it is quite evident that the law stands settled by the Apex Court as per the MACA No. 2030 of 2015 and connected cases decision Challa Upendra Rao' case [cited supra] and the latest ruling in Amrit paul's case [cited supra]. This being the position, the dictum laid down by the Full Bench of this Court in Augustine V.M. Vs. Ayyappankutty @ Mani and others [cited supra] holding that the absence of valid Permit or Fitness Certificate is not a fundamental breach, but a technical breach and that no right of recovery can be given to the insurer is not at all correct. It accordingly stands overruled. Consequently, the dictum in Thara's case [cited supra] is restored and the contrary view expressed in Sethunath's case [cited supra] stands declared as incorrect.” 6. He had also relied on the judgment of the Hon’ble Apex Court in the case of United India Insurance Company Ltd. Vs. Sushil Kumar Godara2. He had relied on paragraph No.14 which reads thus: 2 (2021) 14 Supreme Court Cases 519 - 13 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 “14. In the present case, the temporary registration of the respondent’s vehicle had expired on 28-07- 2011. Not only was the vehicle driven, but also taken to another city, where it was stationed overnight in a place other than the respondent’s premises. There is nothing on record to suggest that the respondent had applied for registration or that he was awaiting registration. In these circumstances, the ratio of Narinder Singh (supra) applies, in the opinion of this court. That Narinder Singh (supra) was in the context of an accident, is immaterial. Despite this, the respondent plied his vehicle and took it to Jodhpur, where the theft took place. It is of no consequence, that the car was not plying on the road, when it was stolen; the material fact is that concededly, it was driven to the place from where it was stolen, after the expiry of temporary registration. But for its theft, the respondent would have driven back the vehicle. What is important is this Court’s opinion of the law, that when an insurable incident that potentially results in liability occurs, there should be no fundamental breach of the conditions contained in the contract of insurance. Therefore, on the date of theft, the vehicle had been driven/used without a valid registration, amounting to a clear violation of Sections 39 and 192 of the Motor Vehicles Act, 19886. This results in a fundamental breach of the terms and conditions of the policy, as held by this - 14 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 Court in Narinder Singh (supra), entitling the insurer to repudiate the policy.” 7. He had also relied on the judgment in the case of Narender Singh vs. New India Assurance Company Ltd. and others3. He had relied on paragraph Nos.11 and 12 which reads thus: 11. A bare perusal of Section 39 shows that no person shall drive the motor vehicle in any public place without any valid registration granted by the registering authority in accordance with the provisions of the Act. However, according to Section 43, the owner of the vehicle may apply to the registering authority for temporary registration and a temporary registration mark. If such temporary registration is granted by the authority, the same shall be valid only for a period not exceeding one month. The proviso to Section 43 clarified that the period of one month may be extended for such a further period by the registering authority only in a case where a temporary registration is granted in respect of chassis to which body has not been attached and the same is detained in a workshop beyond the said period of one month for being fitted with a body or unforeseen circumstances beyond the control of the owner. 3 (2014) 9 Supreme Court Cases 324 - 15 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 12. Indisputably, a temporary registration was granted in respect of the vehicle in question, which had expired on 11.1.2006 and the alleged accident took place on 2.2.2006 when the vehicle was without any registration. Nothing has been brought on record by the appellant to show that before or after 11.1.2006, when the period of temporary registration expired, the appellant, owner of the vehicle either applied for permanent registration as contemplated under Section 39 of the Act or made any application for extension of period as temporary registration on the ground of some special reasons. In our view, therefore, using a vehicle on the public road without any registration is not only an offence punishable under Section 192 of the Motor Vehicles Act but also a fundamental breach of the terms and conditions of policy contract. 8. Relying on these judgments, learned counsel for the Insurance Company submits that not having a fitness certificate goes to the root of the matter and the Insurance Company is not liable to pay the compensation. This Court had perused the judgments and also the evidence available on record. As far as the fitness certificate is concerned, there is no fitness certificate to the vehicle in the light of the evidence adduced by the Insurance Company, considering the judgments of the Hon'ble Apex Court as well as the Full Bench of the Kerala High Court, - 16 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 this Court is of the view that not having the fitness certificate is a fundamental breach of the conditions of the policy. Hence, the principle of pay and recover will apply and the Insurance Company is liable to pay the compensation and recover the same from the owner of the vehicle. 9. Then coming to the compensation, The Tribunal had awarded the compensation of an amount of Rs.11,68,400/-. This accident had taken place in the year 2017, as per the table, the income has to be taken at Rs.11,000/-, future prospects at 40% comes to an amount of Rs.4,400/- i.e., Rs.15,400/-. As the deceased is a bachelor, 50% has to be deducted towards his personal expenses, then his contribution to the family would be Rs.7,725/-. Hence, towards loss of dependency, this Court is granting an amount of (7,725X12X18)=Rs.16,68,600/-. As there are two dependants, towards the loss of consortium this Court is granting an amount of (44,000X2)=Rs.88,000/-, towards funeral expenses this Court is granting an amount of Rs.36,000/-. - 17 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 10. In the light of the law laid down by the Hon'ble Supreme Court in the case of V.Mekala vs. M. Malathi and Another4, the claimant is entitled for an amount of Rs.10,000/- towards legal expenses. 11. The claimants are therefore, entitled to the compensation under the following heads: Sl. No. Heads Rs. Compensation amount awarded by the Tribunal Compensation amount awarded by this Court 1. Loss of dependency for claimants Rs. 10,58,400/- 16,68,600/- 2. Loss of estate Rs. 15,000/- - 3. Towards funeral expenses Rs. 15,000/- 36,000/- 4. Loss of Consortium Rs. 80,000/- 88,000/- 5. Legal expenses Rs. - 10,000/- Total Rs. 11,68,400/- 18,02,600/- Enhanced amount Rs. 6,34,200/- 12. Altogether, the claimants are entitled for compensation of an amount of Rs.18,02,600/-. 13. Accordingly, MFA.No.501/2021 filed by the Insurance Company is partly allowed by reducing the rate of 4 (2014) 11 SCC 178 - 18 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 interest from 9% to 6% per annum and by applying the principle of pay and recover. 14. Accordingly, MFA.No.2222/2021 filed by the claimants is partly allowed by enhancing the compensation from an amount of Rs.11,68,400/- to Rs.18,02,600/- and the Insurance Company shall pay the compensation amount and recover the same from the owner of the vehicle. i) The entire amount shall carry interest at 6% per annum from the date of petition till the date of realization. ii) The apportionment of the amount shall be as per the order passed by the Tribunal. iii) The amount in deposit shall be forthwith transferred to the Tribunal. iv) The Insurance Company shall pay the compensation amount and recover the same from the owner of the vehicle. v) Insurance Company shall deposit the amount within a period of eight weeks from the date of receipt of copy of the judgment. On such deposit, the claimant is entitled to withdraw the entire amount. - 19 - HC-KAR NC: 2025:KHC:35725 MFA No. 501 of 2021 C/W MFA No. 2222 of 2021 vi) Registry is directed to return the Trial Court Records to the Tribunal, along with certified copy of the order passed by this Court forthwith without any delay. vii) No costs. viii) Pending miscellaneous petitions, if any, shall stand closed. SD/- (LALITHA KANNEGANTI) JUDGE BN List No.: 2 Sl No.: 2