- 1 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 8TH DAY OF APRIL, 2025 PRESENT THE HON'BLE MR. JUSTICE S G PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA MISCELLANEOUS FIRST APPEAL NO.101761 OF 2019 (MV-D) C/W MFA CROSS OBJ NO.100024 OF 2021 IN M.F.A. NO.101761 OF 2019 BETWEEN: ROYAL SUNDARAM GENERAL INSURANCE COMPANY, REPRESENTED BY ITS MANAGER, NO.2/319, RAJEEV GANDHI SALAI, KARAPAKKAM NO.2, CHENNAI, NOW REPRESENTED BY ITS AUTHORIZED SIGNATORY. ...APPELLANT (BY SRI S.K. KAYAKAMATH, ADVOCATE) AND 1. SRI. BALKRISHNA S/O. HARI GAVADI, AGE: 61 YEARS, OCC: REGISTRAR, R/O: H.NO.C-237, OLD K.H.B. COLONY, HABBUWADA, TQ: KARWAR, DIST. UTTAR KANNADA-581-301. 2. SMT. VANDANA W/O. BALAKRISHNA GAVADI, AGE: 56 YEARS, OCC: HOUSEWIFE, R/O: H.NO.C-237, OLD K.H.B. COLONY, HABBUWADA, TQ: KARWAR, DIST. UTTAR KANNADA-581-301. 3. KUMARI LEKHA D/O. BALKRISHNA GAVADI, AGE: 27 YEARS, OCC: ASST. ENGINEER, R/O: H.NO.C-237, OLD K.H.B. COLONY, HABBUWADA, TQ: KARWAR, DIST. UTTAR KANNADA-581-301. Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 4. KUMAR CHETAN S/O. BALKRISHNA GAVADI, AGE: 23 YEARS, OCC: STUDENT, R/O: H.NO. C-237, OLD K.H.B. COLONY, HABBUWADA, TQ: KARWAR, DIST. UTTAR KANNADA-581-301. 5. LTI MINDTREE LIMITED, BY ITS GENERAL MANAGER, GLOBAL VILLAGE, RVCE POST, MYSURU ROAD, BENGALURU-560059. …RESPONDENTS (BY SRI. RAMESH ZIRALI, ADVOCATE FOR R1 TO R4; SRI. SHIVARAJ BALLOLI, ADVOCATE FOR R5) THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 173(1) OF MOTOR VEHICLES ACT, 1988, PRAYING TO ALLOW THE APPEAL AS PRAYED FOR BY SETTING ASIDE THE JUDGMENT AND AWARD DATED 07.12.2018 PASSED BY THE COURT OF PRL. SENIOR CIVIL JUDGE AND MACT, KARWAR, IN MVC NO.162/2017, WITH COST IN THE INTEREST OF JUSTICE AND EQUITY. IN M.F.A. CROB. NO.100024 OF 2021: BETWEEN 1. SRI. BALKRISHNA S/O. HARI GAVADI, AGE: 62 YEARS, OCC: REGISTRAR, OFFICE OF THE SUPERINTENDENT ENGINEER, PANCHAYATRAJ ENGINEERING CIRCLE OFFICE, DAVANAGERE, R/O: HOUSE NO.C-237, OLD K.H.B. COLONY, HABBUWADA, TALUK: KARWAR, DIST: UTTAR KANNADA-581306. 2. SMT. VANDANA W/O. BALKRISHNA GAVADI, AGE: 57 YEARS, OCC: HOUSEWIFE, R/O: HOUSE NO. C-237, OLD K.H.B. COLONY, HABBUWADA, TALUK: KARWAR, DIST: UTTARA KANNADA-581301. 3. KUMARI. LEKHA D/O. BALKRISHNA GAVADI, AGE: 28 YEARS, OCC: BE ASST. ENGINEER, BENGALURU WATER SUPPLY - 3 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 AND SEVARAGE BOARD, BENGALURU-560001. 4. KUMAR. CHETAN S/O. BALKRISHNA GAVADI, AGE: 28 YEARS, OCC: BE STUDENT IN CIVIL ENGINEERING, STUDYING IN INSTITUTE OF TECHNOLOGY, NITTE, KARKAL, TQ: UDUPI, DIST: MANGALURU. ...CROSS OBJECTORS (BY SRI. RAMESH ZIRALI, ADVOCATE AND SRI. SANTOSH HATTIKATAGI, ADVOCATE) AND 1. LTI MINDTREE LTD., HAVING ITS OFFICE GLOBAL VILLAGE RVCE POST, MYSURU ROAD, BENGALURU-560059. 2. ROYAL SUNDARAM GENERAL INSURANCE CO. LTD., HAVING ITS OFFICE AT VISHRAANTI MELARAM TOWERS, NO.2/319 RAJIV GANDHI SALAI (OMR), KARAPAKKAM, CHENNAI-600097. …RESPONDENTS (BY SRI. S.K. KAYAKAMATH, ADVOCATE FOR R2; SRI. SHIVARAJ BALLOLI, ADVOCATE FOR R1) THIS MFA. CROB. IN MFA NO.101761/2019 FILED UNDER ORDER 41 RULE 22 OF CPC. PRAYING TO DISMISS MFA NO.101761/2019 FILED BY R2 HEREIN AGAINST THE JUDGMENT AND AWARD DATED 07.12.2018 PASSED BY THE LEARNED PRL. SENIOR CIVIL JUDGE AND M.A.C.T., KARWAR, IN MVC NO.162/2017 AND AWARD THE COMPENSATION AS CLAIMED IN THE CLAIM PETITION BY ALLOWING THIS CROSS OBJECTION, IN THE INTEREST OF JUSTICE AND EQUITY. THIS MISCELLANEOUS FIRST APPEAL AND MFA CROSS OBJECTION HAVING BEEN HEARD AND RESERVED ON 24.03.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, C.M. POONACHA, J., DELIVERED THE FOLLOWING: CORAM: THE HON'BLE MR. JUSTICE S G PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA - 4 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 CAV JUDGMENT (PER: THE HON'BLE MR. JUSTICE C.M. POONACHA) 1. The above appeal and cross objection are filed under Section 173(1) of the Motor Vehicles Act, 1988, calling in question the judgment and award dated 07.12.2018, passed in MVC No.162/2017, by the Court of Principal Senior Civil Judge and MACT, Karwar1. 2. The parties will be referred to as per their ranking before the Tribunal, for the sake of convenience. 3. The factual matrix in a nutshell is that on 02.02.2017 one Swati D/o. Balkrishna Gavadi2 was travelling in Mahindra vehicle bearing registration No.KA-41/P-8821 from Karwar to Gulbarga, when the driver of the said vehicle drove the same in a rash and negligent manner, as a result of which, it hit against a tree, causing the accident in question, wherein, the deceased sustained grievous injuries and succumbed to the same on the way to the hospital. Claiming compensation for the death of the deceased, her 1 Hereinafter referred to as the ‘Tribunal’ 2 Hereinafter referred to as the ‘deceased’ - 5 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 parents, sister and brother filed claim proceedings arraying the owner and insurer of the vehicle as respondents No.1 and 2. 4. The respondents entered appearance and contested the claim proceedings. The claimant No.1 examined himself as PW.1 and the H.R. Manager of the 1st respondent was examined as PW.2. Ex.P1 to Ex.P44 were marked in evidence. One Nandan Anirudh Kulkarni, who was the employee of the 1st respondent, was examined as RW.1, the representative of the 2nd respondent/insurer was examined as RW.2, the Deputy Manager of Motor O.D. Claims, Regional office, Bangalore of the 2nd respondent/insurer was examined as RW.3 and the Program Director of the 1st respondent was examined as RW.4. Ex.R1 to Ex.R15 were marked in evidence. 5. The Tribunal, by its judgment and award dated 07.12.2018, partly allowed the claim petition and awarded a compensation of ₹73,56,901/- together with interest at 9% per annum from the date of petition till realization. The Tribunal held that the respondents are jointly and severally - 6 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 liable to pay the compensation awarded and directed the respondent No.2/insurer to deposit the compensation awarded. 6. Being aggrieved, the insurer has preferred the appeal, questioning the judgment and award of the Tribunal on the aspect of liability and quantum of compensation. The claimants have preferred the cross-objection seeking for enhancement of compensation. 7. Learned counsel Sri S.K.Kayakamath appearing for the insurer contends that the driver and passengers of the insured vehicle were not the employees of the insured. That no additional premium has been paid to cover the risk of occupants of the vehicle and premium to cover the risk as contemplated under Indian Motor Tariff-293, not having been paid, the insurer of the vehicle is not liable to pay the compensation awarded. Alternatively, it is also contended that the vehicle has been used for hire/reward and that the insurer is liable to be exonerated from payment of 3 Hereinafter referred to as the ‘IMT-29’ - 7 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 compensation. It is further contended that the quantum of compensation awarded by the Tribunal is on the higher side, in as much as the assessment of income of the deceased is erroneous, since various allowances that have been paid are taken into consideration. 8. Learned counsel Sri Shivaraj S. Balloli appearing for the owner of the vehicle contends that the deceased was not an employee of the 1st respondent and was a third party insofar as the insured and insurer are concerned and hence the Tribunal was justified in fastening the liability on the insurer. It is further contended that the insured vehicle, although belonging to the 1st respondent company was given to RW.1 due to his employment and that use of the vehicle was in terms of the policy of insurance. Hence, it is contended that the finding of the Tribunal on liability is just and proper. 9. Learned counsel Sri Ramesh Zirali appearing for the respondents No.1 to 4/claimants justifies the finding of the Tribunal on liability and contends that the quantum of - 8 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 compensation awarded under conventional heads is on the lower side and seeks for enhancement of compensation. 10. Learned counsels have relied on various judgments which shall be considered to the extent that the same is necessary for adjudication of the questions that arise for consideration. The submissions of the learned counsels have been considered and the material on record including the records of the Tribunal have been perused. The questions that arise for consideration are: i) Whether the finding of liability by the Tribunal is just and proper? ii) Whether the quantum of compensation awarded by the Tribunal is liable to be enhanced? Regarding Question No.(i): 11. In the claim petition the claimants have averred that the deceased was working as Senior Systems Engineer in Siemens Technology and Services Pvt Ltd., and earning a monthly income of ₹58,522/-. That the deceased was working with the 1st respondent from 2013 to 2016 and - 9 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 hence one Nandan Anirudh Kulkarni (RW.1), who was also working under the 1st respondent, invited the deceased for his marriage to be held in Karwar and accordingly, after attending the marriage, the deceased was returning in the insured vehicle, which was being driven by its driver along with three other occupants. That when they reached near Bagalkot, due to the rash and negligent driving of the driver, the insured vehicle hit against a tree, causing the accident in question. 12. The 1st respondent/owner of the vehicle filed statement of objections admitting the manner of occurrence of the accident as averred in the claim petition. It was further averred that the driver of the vehicle was duly licensed and the vehicle was insured with the respondent No.2/insurer under a valid Private Car Package Policy. 13. The respondent No.2/insurer filed statement of objections denying the various averments made in the claim petition. It is averred that the vehicle was being used for hire or reward. It was further specifically averred in the statement of objections that the owner of vehicle had not - 10 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 paid extra premium to cover the legal liability of the employees of the insurer as covered under the IMT-29. Hence, it is contended that the insurer is not liable to pay the compensation awarded. 14. PW.1 has adduced evidence consistent with the averments made in the claim petition. PW.2 has deposed regarding the income of the deceased. 15. RW.1 has deposed that he has signed the written statement on behalf of the 1st respondent/owner. It is further deposed that the driver of the vehicle had necessary authorisation (Ex.R3) from the 1st respondent/owner to drive the vehicle. It is further deposed that the insured vehicle belonging to 1st respondent was authorised by the 1st respondent to be taken by RW.1. The letter of authorisation is marked as Ex.R2. It is deposed that there is no breach for the terms and conditions of the policy of insurer. RW.1 has been cross-examined in detail and he has deposed that the insured vehicle was permitted to be used by him. - 11 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 16. The representative of the insurer, who was examined as RW.2, has deposed that the risk under the Private Car Package Policy is only when the vehicle is used in connection with the business of the insured and not for any third party’s business. That the vehicle being a private vehicle had no permit to ply for hire or reward. It is further deposed that the owner of the insured vehicle is a Global Information Technology Consulting Company having its office at Bangalore and the use of the vehicle on the date of the accident is unconnected with their business. That the vehicle was given to its employee RW.1 for hire or reward and the same was misused by RW.1 by employing his own driver for carrying passengers unconnected with the business of the insured or unconnected with the family of the said employee. 17. The Program Director of the 1st respondent was examined as RW.4 and has deposed that the own damage claimed in respect of the insured vehicle was fully settled by the 2nd respondent/Insurer. 18. It is forthcoming from the policy of insurance (Ex.R9) that the same is a Private Car Package Policy and - 12 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 that the seating capacity of the insured vehicle is seven. A premium of ₹11,196/- has been collected. The break-up of the collection of the premium has been enumerated in Ex.R9 which includes basic premium including premium for third party property damage (TPPD), personal accident cover to paid driver (IMT-17) and legal liability to paid driver (IMT- 28). 19. Learned counsel for the insurer relying on Section II of the IMT pertaining to extra benefits and the stipulation with regard to the coverage of “legal liability to employees of the insured travelling in and/or driving the employer’s vehicle which pertains to IMT-28 i.e., for paid driver” and “IMT-29 (employees other than driver and/or cleaner)” submits that the employees travelling in the vehicle are required to be covered only if additional premium is paid in terms of IMT-28 and IMT-29. 20. Learned counsel for the 1st respondent/owner referring to Section II of the Policy (Ex.R9) i.e., liability to third parties specifically contends that the same covers the risk of any third party who is occupant of the insured car. - 13 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 21. Section II Clause-1 of the said policy of insurance reads as under: 1. “Subject to the limits of liability as laid down in the Schedule hereto the Company will indemnify the insured in the event of an accident caused by or arising out of the use of the Private Car against all sums which the Insured shall become legally liable to pay in respect of:- (i) death of or bodily injury to any person including occupants carried in the Private Car (provided such occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of the Motor Vehicles Act, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the Insured.” (Emphasis Supplied.) 22. It is forthcoming from the aforementioned that the deceased was not an employee of 1st respondent. The vehicle belonging to 1st respondent was authorized to be used by its employee RW.1. The driver of the vehicle was also authorized to drive the vehicle in question by the - 14 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 1st respondent owner. Hence, it is clear that the deceased was a third party vis-à-vis the insured. 23. The Hon’ble Supreme Court of India in the case of National Insurance Company Ltd., Vs. Shanti Bopanna4, relied upon by the learned counsel for the owner, while considering a similar contention by the insurer that it was not liable to pay the compensation awarded, considering a similar clause in a package policy of insurance, has held as follows: “6. The clause of the policy reproduced above clearly covers the insured against all sums which the insurer may become liable to pay in respect of: “(i) death of or bodily injury to any person including occupants carried in the vehicle (provided such occupants are not carried for hire or reward)…” 7. We thus find that the claim of the widow and the adopted son is fully covered by the clause in the insurance contract i.e. the policy and there is no scope for acceding to the submission made on behalf of the appellant Company that the claim is excepted by virtue of the provisions of Section 147(1) of the Act in this case. We, therefore, reject the contention made on behalf of the appellant that the deceased was not a third party because he was an employee sitting in the car. It is obvious 4 (2018) 12 SCC 540 - 15 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 from the circumstances that the deceased was indeed a third party being neither the insurer not the insured.” (Emphasis Supplied.) 24. The reliance placed by the learned counsel for the insurer on the judgment of the Hon’ble Supreme Court in the case of Oriental Insurance Company Vs. Meena Variyal and Others5, will not aid the case of the insurer, since in the said case, the Hon’ble Supreme Court, was considering a case of death of an employee of the owner of the vehicle. 25. It is also relevant to note that the Hon’ble Supreme Court in the case of National Insurance Company Ltd., Vs. Balakrishnan and Another6, has also considered its earlier judgment in the case of Meena Variyal5 and has held that a “comprehensive/package policy” would cover the liability of the insurer for payment of compensation for the occupant in a car. 26. The Tribunal while considering the contention put forth by the owner has held that the insurer is liable to pay the compensation awarded. 5 (2007) 5 SCC 428 6 (2013) 1 SCC 731 - 16 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 27. In view of the settled legal position as noticed above, as held in the cases of Shanti Bopanna4 and Balakrishnan6, the insurer has failed in demonstrating that the finding of the Tribunal on liability is erroneous and required to be interfered with. 28. Hence, the question No.(i) framed for consideration is answered in the affirmative. Regarding Question No.(ii): 29. The claimant has averred in the claim petition that the deceased was working as Senior Systems Engineer in Siemens Wind Power Private Limited at their office at Bengaluru and earning a monthly income of Rs.58,521/- per month. PW.2 is the representative of the employer of the deceased. The claimants have also produced Ex.P.39 which is confirmation letter issued from the employer of the deceased that the deceased was appointed as Senior Systems Engineer on 04.07.2016 and that she has successfully completed her probation and confirmed in the company w.e.f. 04.01.2017. The salary certificate for - 17 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 January 2017 (Ex.P.29) discloses that the deceased had a total earning of Rs.58,521/-. Ex.P.29 also discloses that deduction of Rs.200/- is made towards professional tax and Rs.1,664/- towards income tax. Hence a sum of Rs.1,864/- is required to be deducted from the income of the deceased. Hence, the income for assessing loss of dependency is re-assessed as Rs.56,657/- p.m. (Rs.58,521/- less Rs.1,864/-). 30. Ex.P.16 i.e., the certificate issued by the Karnataka Secondary Education Examination Board mentions the date of birth of the deceased as 30.10.1990. Hence, as on the date of accident she was aged 26 years and the tribunal has rightly applied the multiplier of 17. 50% of the income of the deceased is required to be added towards future prospects in terms of the judgment of the Hon’ble Supreme Court in the case of National Insurance Company Limited vs. Pranay Sethi and others7. Since the deceased was unmarried, 50% is required to be deducted towards personal expenses. Hence the income for 7 (2017) 16 Supreme Court Cases 680 - 18 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 the purpose of assessment of loss of dependency is re- assessed as Rs.42,493/- (Rs.56,657/- + 50% less 50%). The, loss of dependency is re-assessed as Rs.86,68,572/- [(Rs.42,493/- (income) x 12 (months) x 17 (multiplier)], as against Rs.72,76,901/- assessed by the tribunal. 31. The claimants No.1 and 2 are parents and claimants No.3 and 4 are the siblings of the deceased. Hence they are entitled to loss of consortium at Rs.40,000/- each together with 10% increment in terms of the judgment of the Hon’ble Supreme Court in Magma General Insurance Co. Ltd., vs. Nanu Ram and others8. Hence, the loss of consortium is assessed as Rs.1,76,000/- (Rs.40,000/- + 10% x 4). 32. The claimants are also entitled to loss of estate and funeral expenses in a sum of Rs.16,500/- each. 33. In view of the same, the compensation is re-assessed as follows: 8 (2018) 18 Supreme Court Cases 130 - 19 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 Sl. No. Heads Amount awarded by the Tribunal (₹) Amount awarded by this Court (₹) 1. Loss of dependency. 72,76,901 86,68,572 2. Loss of consortium. - 1,76,000 3. Loss of estate. 25,000 16,500 4. Funeral expenses. 25,000 16,500 5. Love and affection. 30,000 Total: 73,56,901 88,77,572 34. Hence, the claimants are entitled to a total compensation of Rs.88,77,572/- as against Rs.73,56,901/- awarded by the tribunal. 35. Judicial notice is required to be taken of the interest payable on fixed deposits and accordingly interest @ 7% p.a. is awarded as against interest @ 9% p.a. awarded by the Tribunal. 36. In view of the aforementioned, question No.(ii) raised for consideration is answered in the affirmative. Hence, the following: ORDER i) The appeal and the cross objection are partly allowed. - 20 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 ii) The judgment and award dated 07.12.2018, passed in MVC No.162/2017, by the Court of Principal Senior Civil Judge and MACT, Karwar, is modified as under: a) The claimants are entitled to a total compensation of Rs.88,77,572/- together with interest @ 7% p.a. from the date of petition till the date of payment; b) The insurer who is the 2nd respondent before the tribunal is liable to pay the compensation awarded; c) The amount deposited by the appellant in MFA No.101761/2019 shall be transmitted to the tribunal; d) The insurer shall deposit the balance amount together with accrued interest within six weeks from today; e) Out of the compensation awarded, claimant No.1 is entitled to 30% and claimant No.2 is - 21 - NC: 2025:KHC-D:6190-DB MFA No. 101761 of 2019 C/W MFA.CROB No. 100024 of 2021 entitled to 70%. Out of the compensation apportioned to the claimants, 50% shall be kept in fixed deposit in the name of respective claimants in any nationalized bank of their choice for a period of three years and 50% shall be released in favour of respective claimants as ordered above. The deposit amount together with accrued interest shall be paid upon maturity directly to the claimants without any orders from the Court. iii) The judgment and award of the Tribunal in all other respects is remains unlatered. iv) Modified award to be drawn accordingly. Sd/- (S G PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE PMP-para 1 to 28 MRK-para 29 to end. CT: UMD/List No.: 1 Sl No.: 2