- 1 - HC-KAR NC: 2025:KHC-D:8155 MFA No. 21914 of 2013 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 27TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR MISCELLANEOUS FIRST APPEAL NO.21914 OF 2013 (MV) BETWEEN: THE DIVISIONAL MANAGER, NATIONAL INSURANCE CO. LTD., SUJATHA COMPLEX, KESHWAPUR, HUBBALLI, HOSPET BRANCH, REPRESENTED BY ITS DEPUTY MANAGER, REGIONAL OFFICE, ARIHANT PLAZA, KESHWAPUR, HUBBALLI-23. … APPELLANT (BY SRI. RAJESH B. RAJANAL, ADVOCATE) AND: 1. SRI. VIJAYA S/O BHEEMAPPA CHAWAN, AGE: 36 YEARS, OCC: AUTO DRIVER AND AGRICULTURE, R/O: GANGAJALA THANDA, TAL: RANEBENNUR, DITST: HAVERI. 2. SRI. KHEEMAPPA S/O SHIVAPPA LAMANI, AGE: MAJOR, OCC: BUSINESS, R/O: GOVINDA BADAVANE, RANEBENNUR, DIST: HAVERI. … RESPONDENTS (BY SRI. ANJANEYA M., ADVOCATE FOR R1; SRI. MADANMOHAN M. KHANNUR, ADVOCATE FOR R2) THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT, 1988, PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED: 04-03- 2013 PASSED IN MVC NO.689/2010 ON THE FILE OF THE ADDL. SENIOR CIVIL JUDGE AND ADDL. MACT, RANEBENNUR. THIS APPEAL, COMING ON FOR FINAL HEARING THIS DAY, JUDGMENT IS DELIVERED THEREIN AS UNDER: Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - HC-KAR NC: 2025:KHC-D:8155 MFA No. 21914 of 2013 ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR) This appeal is filed by the Insurance Company challenging the judgment and award dated 04.03.2013 passed in MVC No.689/2010 on the file of Additional Senior Civil Judge and AMACT, Ranebennur1, questioning 50% liability fastened on it on the ground that the driver of the offending vehicle did not have driving licence to drive the vehicle. 2. In the present case, the occurrence of accident and injuries sustained by the claimant are not disputed. The disputed question is with regard to fastening of liability on the Insurance Company to pay 50% of compensation. 3. Heard the arguments from both sides and perused the materials placed on record. 1 (hereinafter referred to as ‘the Tribunal’ for short) - 3 - HC-KAR NC: 2025:KHC-D:8155 MFA No. 21914 of 2013 4. Learned counsel for the appellant/Insurance Company has taken specific contention that the driver of the offending vehicle did not have driving licence and the same is corroborated by the evidence of charge sheet filed under Section 3 of the Motor Vehicles Act, by the Police for not possessing driving licence to drive the said TT Unit. Therefore, it is proved that the driver of the offending vehicle-TT Unit did not have driving licnece to drive the vehicle as on the date of the accident. When this being the fact, the fundamental breach is proved. Therefore, the insurance Company is liable to be exonerated. 5. In the present case, the Tribunal committed an error in not observing that the driver of the TT Unit had not possessed driving licence at the time of the accident but fastened liability both on owner and insurer of the TT unit-offending vehicle. However, as per Sub-section (2) of Section 149 of the MV Act, when the Insurance Company established the fact that the driver was not holding driving licence, then as per Sub-sections (1), (4), (7) of Section - 4 - HC-KAR NC: 2025:KHC-D:8155 MFA No. 21914 of 2013 149 of the Act, the Insurance Company as if the judgment debtor shall satisfy the claim in respect of third parties and then recover the same from the owner of the offending vehicle. Accordingly, the order of pay and recovery is made as per the principle of law laid down by the Hon’ble Supreme Court in the cases of PAPPU AND OTHERS Vs. VINOD KUMAR LAMBA AND ANOTHER2; NATIONAL INSURANCE COMPANY LIMITED VS. SWARAN SINGH AND OTHERS3 and also as per the full bench decision of this Court in the case of NEW INDIA ASSURANCE COMPANY LIMITED VS. YELLAVVA AND ANOTHER4. Accordingly, an order of pay and recovery is made. To this extent, the judgment and award passed by the Tribunal is modified. 6. Just because an order of pay and recovery made that does not mean that the Insurance Company is 2 (2018) 3 SCC 208 3 (2004) 3 SCC 297 4 2020 ACJ 2560 - 5 - HC-KAR NC: 2025:KHC-D:8155 MFA No. 21914 of 2013 jointly and liable to pay compensation along with the owner of vehicle. As discussed above, the benefit of pay and recovery is to the third party. Since, the claimant/respondent No.1 in this case is a third party to the said TT Unit. Therefore, by exonerating the Insurance Company, it is directed that the Insurance Company to pay compensation at first instance then recover it from the owner of the TT Unit. Therefore, the appeal is liable to be allowed in part. 7. In the result, I proceed to pass the following: ORDER i) The appeal is allowed-in-part. ii) While maintaining the quantum of compensation, the judgment and award dated 04.03.2013 passed in MVC No.689/2019 on the file of Additional Senior Civil Judge and AMACT, Ranebennur, stands modified holding that the Insurance Company shall pay entire compensation with accrued interest to the - 6 - HC-KAR NC: 2025:KHC-D:8155 MFA No. 21914 of 2013 claimant/respondent No.1 at first instance then recover the same from the owner of the TT Unit. iii) Amount in deposit made by the appellant/Insurance Company shall be transmitted to the Tribunal. iv) No order as to costs. v) Draw modified award accordingly. Sd/- (HANCHATE SANJEEVKUMAR) JUDGE SRA CT:BCK LIST NO.: 1 SL NO.: 69