- 1 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 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. 24249 OF 2012 (MV-D) C/W MISCELLANEOUS FIRST APPEAL NO. 25557 OF 2012 IN MFA NO. 24249 OF 2012: BETWEEN: 1. MALLAMMA W/O. LATE KANTI @ KANTEPPA, AGED ABOUT 36 YEARS, HOUSE WIFE, 2. ERAMMA D/O. LATE KANTI @ KANTEPPA, AGED ABOUT 19 YEARS, 3. MINOR JYOTHI D/O. LATE KANTI @ KANTEPPA, AGED ABOUT 15 YEARS, 4. MINOR SWATHI D/O. LATE KANTI @ KANTEPPA, AGED ABOUT 13 YEARS, 5. MINOR SWETHA D/O. LATE KANTI @ KANTEPPA, AGED ABOUT 09 YEARS, 6. MINOR VINOD KUMAR S/O. LATE KANTI @ KANTEPPA, AGED ABOUT 07 YEARS, SINCE THE APPELLANT NOS. 3 TO 6 ARE THE MINORS R/BY THEIR NATURAL GUARDIAN AND MOTHER 1ST APPELLANT. 7. SMT. PARVATHAMMA W/O. LATE RUDRAPPA, AGED ABOUT 71 YEARS, ALL ARE R/O: KURIHATTI, ONKARAPPA COMPOUND, SIRUGUPPA ROAD, BALLARI. … APPELLANTS (BY SRI. Y. LAKSHMIKANT REDDY, ADVOCATE) R Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 AND: 1. NARAYANASWAMY S/O. VENKATESH, AGED ABOUT 34 YEARS, OCC: DRIVER CUM OWNER OF NEW AUTO BEARING REG. NO. KA-17/TRT-980, R/O: RAJESHWARI NAGAR, BESIDE THIPPAIAH KIRANI SHOP, BEHIND JANARDHANA REDDY, SIRUGUPPA ROAD, DIST: BALLARI. 2. THE BRANCH MANAGER, BHARATI AXL GENERAL INSURANCE COMPANY LIMITED, BALLARI. … RESPONDENTS (BY SRI. S.K. KAYAKMATH, ADVOCATE FOR R2; R1-HELD SUFFICIENT) THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT, PRAYING TO MODIFY THE JUDGMENT AND AWARD DATED: 07-07- 2012 PASSED IN MVC NO.1107/2011 ON THE FILE OF MOTOR ACCIDENT CLAIMS TRIBUNAL-II, BELLARY. IN MFA NO.25557 OF 2012: BETWEEN: BHARATI AXA GENERAL INSURANCE COMPANY LTD., RMZ INFINITY, B. TOWER, 2ND FLOOR, NO.3, OLD MADRAS ROAD, BENGALURU, REPRESENTED BY ITS AUTHORIZED SIGNATORY, BHARATI AXA GENERAL INSURANCE, I FLOOR, FERNS/SY. NO.28, DODDA NEKUNDI, BENGALURU-37. … APPELLANT (BY SRI. S.K. KAYAKAMATH, ADVOCATE) AND: 1. SMT. K. MALLAMMA W/O LATE KANTI @ KANTEPPA, AGE: 36 YEARS, OCC: HOUSE WIFE, 2. ERAMMA D/O LATE KANTI @ KANTEPPA, AGE: 19 YEARS, OCC: NIL, - 3 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 3. MINOR JYOTHI D/O LATE KANTI @ KANTEPPA, AGE: 15 YEARS, OCC: NIL, 4. MINOR SWATHI D/O LATE KANTI @ KANTEPPA, AGE: 13 YEARS, OCC: NIL, 5. MINOR SWETHA D/O LATE KANTI @ KANTEPPA, AGE: 09 YEARS, OCC: NIL, 6. MINOR VINOD S/O LATE KANTI @ KANTEPPA, AGE: 07 YEARS, OCC: NIL, SINCE THE RESPONDENTS NO.3 TO 6 ARE MINORS REPRESENTED BY THEIR NATURAL GUARDIAN MOTHER RESPONDENT NO.1. 7. SMT. PARVATHAMMA W/O LATE RUNDRAPPA, AGE: 70 YEARS, OCC: NIL, (ALL ARE R/O: KURIHATTI, ONKARAPPA COMPOUND, SIRURUPPA ROAD, BALLARI. 8. SRI. NARAYANSWAMY S/O VENKATESH, AGE: 33 YEARS, OCC: DRIVER CUM OWNER OF THE NEW AUTO BEARING REGN. NO.KA-17/TRT-980, R/O: RAJESHWARI NAGAR, BESIDES TIPPAYYA KIRANI STORES, BEHIND JANARDHAN RADDI, SHIRAGUPPA ROAD, BALLARI. … RESPONDENTS (BY SRI. Y. LAKSHMIKANT REDDY, ADVOCATE FOR R1 AND R7; R2-SERVED; R8-HELD SUFFICIENT) THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT, 1988, PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED: 07-07- 2012 PASSED IN MVC NO.1107/2011 ON THE FILE OF THE MOTOR ACCIDENTS CLAIMS TRIBUNAL-II, BELLARY. THESE APPEALS, COMING ON FOR FINAL HEARING THIS DAY, JUDGMENT IS DELIVERED THEREIN AS UNDER: - 4 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR) MFA No.24249/2012 is filed by the claimants seeking enhancement of compensation, whereas, MFA No.25557/2012 is filed by the Insurance Company, questioning the liability fastened on it, on the ground that the Insurance Company has not at all issued insurance policy, being aggrieved by the judgment and award dated 07.07.2012 passed in MVC No.1107/2011 on the file of Motor Accidents Claim Tribunal-II, Bellary (for short, ‘Tribunal’). 2. For the sake of convenience and easy reference, the parties are referred to as per their rankings before the Tribunal. 3. It is the case of claimants that on 02.09.2011 at about 12.00 noon in front of Divisional Work shop, Siruguppa road, Bellary, when husband of 1st petitioner Kanti @ Kanteppa was proceeding in the New Auto bearing registration No.KA-17/TRT-980 as a passenger driven by - 5 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 1st respondent with high speed and in a rash and negligent manner. Due to which, 1st respondent lost his control over the said vehicle and the said vehicle fell down and turned turtle on the road. As a result of it, the Kanti @ Kanteppa sustained grievous injuries all over the body. Thereafter, he succumbed to the injuries sustained in the road traffic accident. Hence, the legal heirs of the deceased filed claim petition seeking compensation. 4. Upon the claim petition filed by legal heirs of the deceased, the Tribunal has awarded compensation of Rs.5,33,000/-with costs along with interest at the rate of 6% per annum by fastening liability on the Insurance Company, on the reason that there was cover note of Insurance Company. 5. The learned counsel for the appellant/Insurance Company submitted that, in the present case, the Insurance Company has not at all issued insurance policy and mainly cover notes do not constitute insurance policy, as the cover notes are proposal to make for purchasing - 6 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 insurance policy. In the present case, the owner has not at all produced insurance policy. Hence, there is no proof that the owner was having insurance policy towards offending vehicle. Therefore, Insurance Company is not liable to pay compensation to the claimants. 6. On the other hand, learned counsel for the appellants/claimants submitted that the Insurance Company has not at all issued notice for cancellation of cover notes. Therefore, the insurance policy is deemed to be continued. Hence, the Insurance Company cannot take such contention that there is no insurance policy. Therefore, justified the liability fixed on the Insurance Company to pay compensation to the claimants and also prays for enhancement of compensation. 7. In the present case, the Insurance Company has seriously contested the case on hand that the Insurance Company has not at all issued any insurance policy. When this being the disputed fact, upon considering Ex.R5 and Ex.R5(a) to Ex.R5(c), which are four cover - 7 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 notices, i.e., Customer Copy, Office Copy, Intermediary Copy and Audit Copy, all these are under the possession and custody of Insurance Company. Ex.R1 to Ex.R4 are cancelled cover notes of all the Customer Copy, Office Copy, Intermediary Copy and Audit Copy. 8. Upon considering these Ex.R1 to Ex.R5 – regarding cancellation of cover notes, which are Motor Vehicle Insurance Proposal and Cover note, at the most, these cover notes are to be construed as proposal only. Therefore, on the basis of it, the learned counsel for the Insurance Company submitted that the Company has not at all issued any insurance policy, as the owner of offending vehicle has not at all paid any premium through cheque or cash. Therefore, as per Ex.R1 to Ex.R4, cover notes were cancelled. Hence, there is no question of issuance of notice to the owner of offending vehicle for cancellation. When the Insurance Company contending that cover notes are only proposal and those cover notes were cancelled, then it is burden either on the claimants or - 8 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 on the owner of offending vehicle to prove that the Insurance Company has issued insurance policy. The Insurance Company is not supposed to lead negative evidence. It is not a burden on the Insurance Company to give evidence that, it has not issued insurance policy. Placing burden on the Insurance Company to lead negative evidence that the Company has not issued insurance policy, amounts to absurd situation, as negative evidence could not be lead. But when the claimants asserted that the Company has issued insurance policy, then it is burden either on the claimants or on the owner of offending vehicle to prove that the company has issued insurance policy. But neither the claimants nor owner have produced any insurance policy. 9. Sub-rule 2 of Rule 142 of the Central Motor Vehicles Rules, 1989 (for short, ‘the Rules’ ) reads as under: “(2) A cover note referred to in sub-rule (1) shall be valid for a period of sixty days from - 9 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 the date of its issue and the insurer shall issue a policy of insurance before the date of expiry of the cover note.” 10. Therefore, when cover notes are issued, the validity period is only sixty days from the date of issuance of cover notes. The cover notes are only proposal to enter into a contract of insurance. Once, the owner of offending vehicle pays premium either through cash or cheque or by any other mode, then the contract would be completed. When the Insurance Company asserts that premium has not been paid, then burden shifts on the owner of offending vehicle to lead evidence, proving premium is paid. But the owner of offending vehicle has not discharged his burden to prove regarding payment of premium for purchasing insurance policy. Therefore, cover notes remained as cover notes only, as they remained as proposal. As stated above, the validity of cover notes is only sixty days from the date of issuance of cover notes. But the owner of offending vehicle has not produced any evidence to prove that premium is paid and also the - 10 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 Insurance Company has issued insurance policy. Therefore, the owner is not entitled to its benefit only on the basis of cover notes. 11. In a very similar facts and circumstances, the High Court of Kerala at Ernakulam in the case of HDFC ERGO General Insurance Company LTD and Another Vs. Zeenath W/o. Deceased Mohameed Aneefa and Others1, has held at paragraph No.12 as follows: “12. On the other hand, the learned Senior Counsel would argue that the original of Ex.B1 including all four copies (customer copy-1, customer copy-2, insurer’s copy and copy for office use) is still in the possession of the company, which means that though it was prepared, it was not handed over to the insured, as the premium was not paid. According to him, since the premium was not paid, either by cash or cheque, it was cancelled then and there. The learned Senior Counsel would argue that, since Exxt.B1 was cancelled then and there, the owner of the vehicle was aware of the cancellation also, then and there and as such there was no necessity to issue any 1 Dated 28.05.2025/7th Jyaishta, 1947 in MACA No.285/2017 - 11 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 further notice to the insured. Therefore, according to him, in this case no policy was executed or issued to the owner of the offending vehicle.” 12. In the present case also, Ex.R5 and Ex.R5(a) to Ex.R5(c) are cancelled cover notes. Whether those were cancelled, then and there itself, but the fact remains that the cover notes Ex.R5 and Ex.R5(a) to Ex.R5(c) were cancelled as per Ex.R1 to Ex.R4. Therefore, it is presumed that as per Section 114 of the Indian Evidence Act, 1872 (for short, ‘the Act of 1872’) since the owner failed to pay premium, hence, they were cancelled. In order to rebut this presumption, the owner has not at all produced any evidence, to prove that, he has paid premium and cancelled cover notes is illegal. Moreover, the owner has not at all produced any insurance policy. When there is an assertion of existence of fact, then the burden lies on the person, who asserts the existence of said fact as per Section 3 of the Indian Evidence Act. Therefore, the Insurance Company could not lead negative evidence. - 12 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 Hence, it is burden on the owner of offending vehicle to prove existence of insurance policy, but not to discharge his burden. 13. In this regard, I also place reliance on the judgment of this Court, in the case of The Oriental Insurance Company Limited V/s Chikkegowda and Ors2 has held at paragraph No.5 as under: “5. Under the Motor Vehicles Act of 1939 as well as 1988 the registering authority or the Police Officer is required to furnish the particulars of the vehicle involved in the accident and as such it is not as if the insurance particulars cannot be secured at all. When once the insurance company disputes its liability to indemnify the liability of the owner of the vehicle on the ground that the insurance particulars are not given, it is for the claimants or the owner of the vehicle to place material on record to indicate that the vehicle was insured on the relevant date. This Court in NEW INDIA ASSURANCE COMPANY LIMITED V. NARAYAN BALAJI KULKARNI AND OTHERS MFA 282/83 has held that it is not for the insurance company to 2 ILR 1997 KARNATAKA 1980 - 13 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 prove that the vehicle is not insured with them and that it is either for the claimants or the owner of the vehicle to prove that the vehicle was actually insured with the company when the fact of insurance was disputed.” 14. Therefore, when the claimant is asserting that there is existence of insurance policy and insurance company has issued insurance policy to the owner in respect of the offending vehicle, then, it is burden on the owner or on the claimant to prove the existence of the said insurance policy. As per Section 3 of the Indian Evidence Act, negative evidence could not be led. The party who asserts the existence of facts, then it is burden on him to prove existence of the said fact. But in this case, neither the owner nor the claimant has discharged their burden to prove existence of insurance policy. 15. In the present case, the accident is occurred on 02.09.2011. As per cover note, it was issued on 29.04.2011. Therefore, there is sufficient time gap between the date of issuance of cover note and the date of - 14 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 accident. The validity period of cover note expires on 60 days i.e., on 29.06.2011 as per Sub-rule 2 of Rule 142 of the Central Motor Vehicles Rules, 1989. In this interregnum period, there is no evidence by the owner that what attempt he has made insisting on the insurance company to issue insurance policy when it is his allegation that, the insurance company has not issued insurance policy. Even after expiry of 60 days from the date of issuance of cover note, there is no evidence that question made by the owner of the offending vehicle to the insurance company for not issuing insurance policy. 16. Therefore, considering all these facts and circumstances based on the evidence, it is proved that the offending vehicle as on the date of accident, did not have insurance policy. Therefore, the insurance company is not liable to indemnify the owner and pay compensation. Hence, the liability fastened on the insurance company is liable to be set-aside. Accordingly, it is set-side. Therefore, the appeal filed by the insurance company is liable to be - 15 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 allowed. Hence, the owner of the offending vehicle alone shall pay compensation to the claimants. The insurance company is exonerated from the liability to pay compensation to the claimants. Regarding Quantum: 17. The Tribunal has allowed the petition in part and granted compensation of Rs.5,33,000/- along with interest at the rate of 6% per annum from the date of petition till its realization on the following heads: Sl. No. Heads. Amount in (Rs.) 1. Towards loss of dependency. 4,80,000/- 2. Towards loss of estate. 15,000/- 3. Loss of love and affection 15,000/- 4. Towards loss of consortium 15,000/- 5. Towards funeral expenses. 5,000/- 6. Transportation 3,000/- Total: 5,33,000/- 18. In the present case, the deceased was aged 38 years as on the date of accident. The accident is occurred on 2011. The deceased was working as Electrician. The Tribunal has assessed monthly income of the deceased at - 16 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 Rs.4,000/- per month which is incorrect. Hence, notional income of the deceased at Rs.6,000/- per month is taken into consideration, which is recognized by the Karnataka State Legal Service Authority. 19. In view of the decision of the Hon’ble Apex Court in case of National Insurance Company Limited vs. Pranay Sethi and others, reported in (2017) 16 Supreme Court Cases 680, 40% of the income is to be added towards loss of future prospects in life. There are seven legal heirs. Therefore, 1/5th of the income is to be deducted towards personal and living expenses. Considering the age of the deceased, the appropriate applicable multiplier is ‘15’. Therefore, loss of dependency is re-assessed and quantified as under: Rs.6,000 + 2400 x 4/5 x 15 x 12 = Rs.12,09,600/- 20. In view of the decision of the Hon’ble Supreme Court in the case of Magma General Insurance Co. Limited v. Nanu Ram & Others, reported in 2018 ACJ - 17 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 2782 and in the case of Pranay Sethi supra, the claimants are entitled to Rs.40,000/- under the head ‘loss of consortium’, along with 10% escalation. Accordingly, Rs.3,08,000/- (Rs.40,000 x 7 +10%) is awarded under the head ‘loss of consortium’. 21. Further, a compensation of Rs.15,000/- each is awarded under the head ‘loss of estate’ and ‘funeral and transportation’ respectively, along with 10% escalation. Therefore, under these heads Rs.33,000/- (Rs.15,000 x 2 + 10%) is awarded. 22. Thus, the claimants are entitled for compensation under various heads as under: Sl. No. Heads. Amount in (Rs.) 1. Towards loss of dependency 12,09,600/- 2. Towards loss of consortium (40,000 x 7 +10%) 3,08,000/- 3. Towards loss of estate and transportation of dead body & funeral expenses. (15,000 x 2 + 10%) 33,000/- Total: 15,50,600/- - 18 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 23. Hence, I proceed to pass the following: ORDER i. MFA No.24249/2012 filed by the claimants is allowed in part. ii. MFA No.25557/2012 filed by the Insurance Company is allowed. iii. The impugned judgment and award dated 07.07.2012 passed in MVC No.1107/2011 on the file of Motor Accidents Claim Tribunal-II, Bellary, is modified holding that the claimants are entitled for total compensation of Rs.15,50,600/- along with interest at the rate of 6% p.a. from the date of petition till its realization as against Rs.5,33,000/- awarded by the Tribunal. iv. Respondent No.1/owner of the offending vehicle shall pay the entire compensation amount with accrued interest to the claimants and is directed to deposit the said amount within a period of eight weeks from the date of receipt of a copy of this judgment. - 19 - HC-KAR NC: 2025:KHC-D:8139 MFA No. 24249 of 2012 C/W MFA No. 25557 of 2012 v. Labiality to pay compensation fastened on Insurance Company is set aside. vi. The order with regard to apportionment, deposit and release of amount shall be in terms of the tribunal order. vii. The amount in deposit, if any, by the appellant/insurance company shall be refunded to it. viii. Send a copy of this judgment to the trial Court along with TCR. ix. No order as to costs. x. Draw award accordingly. Sd/- (HANCHATE SANJEEVKUMAR) JUDGE PMP para-1 to 12 RKM para-13 to end CT:BCK LIST NO.: 1 SL NO.: 62