- 1 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 1ST DAY OF APRIL, 2025 BEFORE THE HON'BLE MR. JUSTICE UMESH M ADIGA MFA NO. 23509 OF 2013 (MV) BETWEEN: THE DIVISIONAL MANAGER THE ORIENTAL INSURANCE CO, LTD BY ITS DIVISIONAL OFFICE, CLUB ROAD, BELGAUM, POLICY NO.472505/31/2012/6317, VALIDITY FROM 16/02/2012 TO 15/02/2013, REPRESENTED BY ITS ASSISTANT MANAGER, REGIONAL OFFICE, SUMANGALA COMPLEX, LAMINGTON ROAD, HUBLI-29. … APPELLANT (BY SRI. G.N. RAICHUR, ADVOCATE) AND: 1. KUMAR SANJAY @ SANJU GOVINDGOUDA HALEMANI @ HALEMANI, AGE: 09 YEARS, OCC:STUDENT, M/G. R/BY. HIS NATURAL FATHER SHRI GOVINDGOUDA YALLAPPAGOUDA HALEMANI @ HALLIMANI, AGE: 38 YEARS, OCC: AGRICULTURE R/O : KADARKOPPA, TAL BADAMI. 2. SRI. SURESH LAXMAPPA NINGARADDI AGE: 43 YEARS, OCC: EX-SERVICEMEN, R/O: HULAKUND, TAL: RAMDURGA, DIST: BELGAUM (OWNER OF TRAX CRUISER NO.KA-22-P-3351) … RESPONDENTS (BY SRI. U.J. HAVALDAR, ADVOCATE FOR SRI. SHIVARAJ S BALLOLI, ADVOCATE FOR R1; SRI. N.L. BATAKURKI, ADVOCATE FOR R2) Digitally signed by VISHAL NINGAPPA PATTIHAL Location: High Court of Karnataka, Dharwad Bench - 2 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 THIS MFA IS FILED U/S. 173(1) OF MV ACT, PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED 15-06-2013 PASSED IN MVC NO.331/2012 ON THE FILE OF MOTOR VEHICLE ACCIDENT CLAIMS TRIBUNAL IX, MUDHOL, BY ALLOWING THIS APPEAL WITH COST IN THE ENDS OF JUSTICE AND EQUITY. THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE UMESH M ADIGA) 1. This appeal is filed by the 2nd respondent – Insurer, challenging the judgment and award dated 15th June 2013, passed in MVC No.331/2012, by the MACT-IX, Mudhol (for short “the Tribunal”). 2. For the sake of convenience, the parties are referred to as per their ranking before the Tribunal. 3. It is the case of claimant that, on 18th March 2012 at around 1:30 p.m. the claimant met with an accident due to rash and negligent driving of the Trax Cruiser bearing registration No.KA-22/P-3351 (hereinafter referred to as the “offending vehicle”) by its driver. As a result, the claimant sustained injuries, and therefore, sought compensation. - 3 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 4. Respondent No.1, the owner of the offending vehicle, denied the contents of the claim petition and also denied that that the accident had occurred due to the negligence of the driver of the offending vehicle. He has further contended that the vehicle was insured with respondent No2. If claim petition is allowed, the respondent No.2 be directed to pay the compensation. 5. Respondent No.2 filed written statement denying the contents of claim petition. It is further contended that its liability is restricted to terms and conditions of policy of insurance and holding of valid and effective driving licence by the driver of the offending vehicle at the time of accident. On these grounds, respondent No.2 prayed for the dismissal of the claim petition. 6. Based on the pleadings and evidence, the Tribunal framed necessary issues. 7. The claimant examined three witnesses as PW1 to PW3 and marked 32 documents as per Exs.P1 to P32 and - 4 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 closed his evidence. The respondent examined one witness as RW1 and marked one document as Ex.R1. 8. After hearing both parties and upon appreciating the pleadings and evidence on record, the Tribunal held that the accident occurred due to the rash and negligent driving of the offending vehicle by its driver. The Tribunal then assessed the compensation as follows: Towards loss of future income Rs.18.900/- Towards medical expenses Rs.26,200/- Towards loss of pain and suffering Rs.25,000/- Towards loss of amenities Rs.10,000/- Towards attendant charges Rs.2,000/- Loss of income during bedridden period RS.10,000/- Total Rs.92,100/- Rounded off to Rs.92,000/- 9. The Tribunal also awarded interest at the rate of 9% p.a. on the compensation amount. 10. The Tribunal further held that the driver of the offending vehicle was holding a valid and effective driving licence and that the respondent – insurer failed to prove otherwise. Consequently, the Tribunal fastened the liability on both the owner as well as the insurer. Being aggrieved by these findings, respondent No.2 – the insurer preferred - 5 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 this appeal on two grounds; One is that, as per the charge sheet, the driver of the offending vehicle was not holding a valid and effective driving licence and was therefore, charge sheeted for the offence punishable under Section 3 read with Section 181 of M.V. Act. Despite this, the Tribunal erroneously held that respondent No.2 – the insurer has failed to prove that the driver of the offending vehicle was not holding a valid and effective driving licence and he further relies upon recent judgments of the Coordinate Bench of this Court: (i) Hemalatha @ Hema @ Hemavathi W/o Renukappa and others Vs. Bajaj Allianz General Insurance Company Ltd. and another1; (ii) M/s.TATA AIG Gen. Ins. Co. Ltd. Vs. Sri Manjunatha S/o. late Devaraja and others2; & (iii) M/s Shriram General Insurance Company Ltd Vs. Mrs Sunitha @ Nagaveni and others3, In the cited judgments, it has been held that if the driver of the offending vehicle drove the offending vehicle without holding a valid and effective driving licence then there is a fundamental breach of policy conditions. Consequently, the 1 MFA No.6154/2019, DD: 14.12.2023 2 MFA No.7018/2023, DD: 16.01.2025 3 MFA No.3288/2013 C/w. MFA No.3287/2013, DD: 29.01.2024 - 6 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 insurer absolved of its liability to pay the compensation. In view of these decisions, respondent No.2 – the insurer is not liable to pay the compensation and therefore, prays to absolve of such liability. Said ground is that the Tribunal has awarded interest at the rate of 9% p.a. without any basis and it is on much higher side. Therefore, prays for reduction in the interest rate. 11. Learned counsel for the respondents supports the impugned judgment and award. It is further stated that in view of the law laid down by the Full Bench of this Court in the case of New India Assurance co. Ltd. Vs. Yellavva4, respondent No.2 is liable to pay the compensation with the liberty to recover the amount from the owner of the vehicle. He also further contended the Tribunal exercised its discretion in awarding interest at the rate of 9% p.a. and the Tribunal assigned sufficient reason to award interest at that rate, which does not call for any interference. 4 ILR 2020 KAR 2239 - 7 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 12. Based on the contentions of the parties, the following points arise for determination: (i) Whether the Tribunal is justified in fastening the liability on respondent No.2 – the insurer to pay compensation even though the driver of the offending vehicle was not holding a valid and effective driving licence? (ii) Whether the Tribunal is justified in awarding interest at the rate of 9% p.a.? Re: Point No.1: 13. The fact of the accident and the injuries sustained by the claimant as a result of accident are not in dispute. The Tribunal has held that the accident had taken place due to the rash and negligent driving of the offending vehicle by its driver. Hence there is no need for further consideration of this issue. 14. The driver of the offending vehicle had been charge sheeted by Mudhol Police and a copy of the charge sheet is marked as Ex.P6. It shows that the driver of the offending vehicle was not holding valid and effective driving - 8 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 licence to drive such a class of vehicle and that he drove the offending vehicle on a public road without a licence. Respondent No.1 – the owner had appeared before the Tribunal. However, he has not produced the driving licence which leads to inference that driver had no valid licence. Hence Tribunal ought to have held that the driver of the offending vehicle was not holding valid and effective driving licence to drive such a class of vehicle. Under these circumstances, the owner of the offending vehicle has committed the breach of terms of the policy. 15. Learned counsel appearing for the appellant fairly submits that, the decisions referred to supra no distinctions are made regarding the Full Bench judgment in the case of YALLAVVA (supra) since the judgment in the case of Yellavva was rendered by the Full Bench of this Court and has neither been modified nor set aside, it remains binding precedent and must be followed. 16. In view of the law laid down in the aforementioned cases, where the owner has violated the - 9 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 terms of the policy of insurance, the Insurance Company is required to pay compensation to the claimants and is at liberty to recover it from the owner of the offending vehicle in an appropriate proceedings. The same principle is applicable to the facts and circumstances of the present case. Accordingly, point No.1 is answered partly in the affirmative. Re: Point No.2: 17. Much argued by the learned counsel for the appellant that the Tribunal has awarded interest at the rate of 9% p.a. which is highly exorbitant. The Tribunal in the impugned judgment at paragraph Nos.13 and 14 discussed the reasons for awarding interest @ 9% P.A. Awarding of rate of interest is discretion of the Tribunal. Looking to the facts and circumstances of the case & law laid down in the referred cases, the Tribunal has awarded interest at the rate of 9% p.a. The exercise of jurisdiction is judicial and not arbitrary. Under these circumstances, the contention of - 10 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 appellant is not acceptable. Accordingly, point No.2 is answered in the negative. 18. For the aforesaid discussions, this Court pass the following: ORDER (i) The appeal is allowed in part. (ii) The judgment and award dated 15th June 2013, passed in MVC No.331/2012 by the MACT-IX, Mudhol is modified. (iii) Respondent No.2 – the insurer shall pay the amount of compensation with liberty to recover it from the owner of the offending vehicle i.e., respondent No.1 in an appropriate proceedings in accordance with law. (iv) Remaining portion of the judgment and award are not disturbed. - 11 - NC: 2025:KHC-D:5783 MFA No. 23509 of 2013 (v) The amount in deposit, if any, shall be transmitted to the Tribunal for disbursement. Sd/- (UMESH M ADIGA) JUDGE VNP / CT-CMU LIST NO.: 1 SL NO.: 2