- 1 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 IN THE HIGH COURT OF KARNATAKA, KALABURAGI BENCH DATED THIS THE 10TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE H.P.SANDESH AND THE HON'BLE MR. JUSTICE T.M.NADAF MISCL. FIRST APPEAL NO.203017 OF 2023 (MV-D) C/W MFA CROSS OBJ NO.200002 OF 2024 (MV-D) IN MFA No.203017/2023: BETWEEN: 1. THE MANAGER, ORIENTAL INSURANCE CO. LTD., KRISHNA COMMERCIAL COMPLEX, NEAR LIC BUILDING, AMRAI ROAD, SANGLI-416 416, MAHARASTRA, THROUGH ITS DIVISIONAL MANAGER. …APPELLANT (BY SRI. MANVENDRA REDDY, ADVOCATE) AND: 1. CHANDAHUSEN S/O TANASAB ASANTAPUR, AGE: 42 YEARS, OCC: COOLIE, R/O. 219, HONNALLI, TQ. VIJAYAPURA, NOW RESIDING NEAR IBRAHIMPUR, Digitally signed by REKHA R Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 VIJAYAPURA-586 101. 2. LALABI W/O CHANDAHUSEN ASANTAPUR, AGE: 42 YEARS, OCC: HOUSEHOLD WORK, R/O. 219, HONALLI, TQ. VIJAYAPURA, NOW RESIDING NEAR IBRAHIMPUR, VIJAYAPURA-586 101. 3. MOHAN S/O KALLAYYA JANGAM, PROP. SHIVASHANKTI CONSTRUCTIONS CO., FLAT NO.1, 7 SHANTIBAN COMPLEX, NEAR NEMINATH NAGAR, 100 FEET ROAD, VISHRAMBAGH, SANGLI-416 416, MAHARASTRA. …RESPONDENTS (BY SRI. SANGANAGOUDA V. BIRADAR, ADV. FOR R1 AND R2; R3-SERVED) THIS MFA IS FILED U/S. 173(1) OF THE MOTOR VEHICLES ACT, PRAYING TO CALL FOR THE RECORDS AND SET ASIDE THE JUDGEMENT AND AWARD DATED 05-04-2023 PASSED BY THE PRINCIPAL SENIOR CIVIL JUDGE AND MACT NO. V, VIJAYAPUR IN MVC NO.1354/2021 BY ALLOWING THE APPEAL AS PRAYED FOR. IN MFA CROB. No.200002/2024: BETWEEN: 1. CHANDAHUSEN S/O TANASAB ASANTAPUR, AGE: 42 YEARS, OCC: COOLIE, 2. LALABI W/O CHANDAHUSEN ASANTAPUR, AGE: 41 YEARS, OCC: HOUSEHOLD WORK, BOTH ARE R/O. 219, HONALLI, TQ. VIJAYAPURA, NOW RESIDING NEAR IBRAHIMPUR, VIJAYAPURA. - 3 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 …CROSS OBJECTORS (BY SRI. SANGANAGOUDA V. BIRADAR, ADVOCATE) AND: 1. MOHAN S/O KALLAYYA JANGAM, PROP. SHIVASHANKTI CONSTRUCTIONS CO., FLAT NO.1, 7 SHANTIBAN COMPLEX, NEAR MEMINATH NAGAR, 100 FEET ROAD, VISRAMBAGH, SANGLI-416 416. 2. THE MANAGER, ORIENTAL INSURANCE CO. LTD., KRISHNA COMMERCIAL COMPLEX, NEAR LIC BUILDING, AMRAI ROAD, SANGLI-416 416. …RESPONDENTS (BY SRI. MANVENDRA REDDY, ADV. FOR R2; R1-SERVED) THIS MFA CROB. IS FILED U/O 41 RULE 22 OF THE CIVIL PROCEDURE CODE, PRAYING TO MODIFY THE JUDGMENT AND AWARD DATED ON 05.04.2023 PASSED BY THE COURT OF PRINCIPAL SENIOR CIVIL JUDGE AND MACT-V AT VIJAYAPURA, IN MVC No.1354/2021 AND ALLWO THIS CROSS OBJECTION AND ENHANCE THE COMPENSATION AS CLAIMED IN THE CLAIM PETITION. THIS APPEAL AND THE CROSS OBJECTIONS, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: - 4 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 CORAM: HON'BLE MR. JUSTICE H.P.SANDESH AND HON'BLE MR. JUSTICE T.M.NADAF ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE T.M.NADAF) These two appeals being MFA No.203017/2023 and MFA.Crob.No.20002/2024 filed by the insurer as well as claimant, calling in question the judgment and award dated 05.04.2023 in MVC No.1354/2021, passed by the Principal Senior Civil Judge and M.A.C.T - V at Vijayapura, on the ground of liability by the insurer and quantum by the claimants/cross objectors. 2. The date of accident, involvement of vehicle, death of Riyaz are not in dispute. The only dispute as per the insurer is that it is not liable to pay the compensation, since the person who is travelling in the goods vehicle is not a person covered under the policy as no premium paid against gratuitous passenger. Hence, the Insurance Company is required to be exonerated from liability. - 5 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 3. So far as the claimants/cross-objectors are concerned, although the person traveling in the jeep was not a cleaner/coolie, but was an employee of the company, hence, being an employee covered under the insurance premium of the said goods vehicle. The fact remains that he was working as a supervisor in the company to which the vehicle belongs. Accordingly, the deceased was also covered under the provisions of the Motor Vehicles Act for the purpose of claiming compensation. The Tribunal having considered the entire material on record, allowed the claim petition in part and fastened the liability on the Insurance Company. However, the quantum of compensation awarded by the Tribunal is on the lower side and the same requires re-consideration. 4. Heard Sri Manvendra Reddy, learned counsel appearing for the appellant in MFA No.203017/2023, Sri Sanganagouda V. Biradar, learned counsel appearing for the appellant in MFA Crob No.200002/2024. Respondent – owner in both the appeals as well as cross objection though served with notice but unrepresented. - 6 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 4. Sri Manvendra Reddy, learned counsel for the appellant in MFA No.203017/2023 with all vehemence submits that the deceased was traveling in the goods vehicle as a gratuitous passenger and, therefore, not entitled to any compensation on account of violation of the policy conditions. The policy was issued only in respect of the goods vehicle, i.e., the driver, conductor, and cleaner. Admittedly, the person traveling in the goods vehicle was stated to be working as a supervisor in the company to which the vehicle belongs. However, he cannot be considered to be covered under the police being an employee of the company. As such, it cannot be said that he was statutorily covered under the Motor Vehicles Rules. The Tribunal, without considering these aspects of the matter, the Tribunal fastened the entire liability on the insurance company solely on the ground that there was a valid insurance policy covering persons such as the driver, conductor, and cleaner under IMT No.40. Though it is stated that the deceased was working as a supervisor in the company to which the vehicle belongs, none of the persons of the said company were examined even to prove that he was traveling in the said jeep, as such employee of the said company for the - 7 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 purpose and in connection with the employment. In these circumstances, the entire liability fastened on the Insurance Company requires to be set aside and the Insurance Company be exonerated from paying the compensation. 5. To buttress his arguments, he has relied on the judgment of the Hon’ble Apex Court in BALU KRISHNA CHAVAN VS. THE RELIANCE GENERAL INSURANCE COMPANY LTD. AND OTHERS1 reported in the 2022 Live Law SC 932 and stressed on paragraph Nos.7 and 10. In Paragraph No.10, the Hon’ble Apex Court has held that in all cases the order of ‘pay and recovery’ would not arise, when the insurance company is not liable. However, the learned counsel for the appellant has submitted that the Hon’ble Apex Court exercising power under Article 142 of the constitution, directed the Insurance Company primarily to deposit the award and reserved the liberty to recover. In the said case, the High Court set aside the finding of the Tribunal, fastening the liability on the Insurance Company and exonerated the Insurance Company from liability. The Hon’ble Apex Court, exercising its 1 2022 SCC OnLine SC 2331 - 8 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 plenary power under Article 142 of the Constitution to meet the ends of justice, held that although there was no liability on the Insurance Company in view of the fact that the person traveling in the said vehicle was a gratuitous passenger, directed for pay and recovery. He further contended that the Hon'ble Apex Court has clearly stated at paragraph No.9 by relying on the judgment in Civil Appeal No(s).3047/2017, in the case of MANUARA KHATUN AND OTHERS VS. RAJESH KR. SINGH AND OTHERS that, there would be no order to “pay and recover”. Further, in paragraph No.8 of the judgment, the Hon'ble Apex Court has clearly observed as ‘on this aspect, the law is well settled that if the liability of the Insurance Company is decided and they are held not to be liable, ordinarily, there shall be no direction to “pay and recover”’ and accordingly, sought to allow the appeal and exonerate the insurance company from payment of compensation. 6. Refuting the submissions of the learned counsel appearing for the appellant, Sri Sangangouda V. Biradar with all vehemence has submitted that the person traveling in the jeep was working in the company to which the goods vehicle belongs - 9 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 and entitle to travel in the vehicle. In these circumstances, the Insurance Company cannot be exonerated from making good the compensation. The Tribunal after considering this aspect, fastened the liability on the Insurance Company. 7. So far as the enhancement of compensation is concerned, Sri Sanganagouda V. Biradar with all vehemence submits that the deceased was 19 years at the time of death. Though, the claimants have contended that the deceased was working as a supervisor in the company and earning Rs.25,000/- per month, however, in the absence of any evidence to that effect, the amount fixed under the chart prepared by the Legal Service Authority at the rate of Rs.14,250/- be considered adding 40% towards future prospectus since deceased was under 40 years. After deducting 50% towards personal expenses, the loss of dependency would comes to Rs.21,54,600/- and loss of consortium would comes to Rs.80,000/-, since there are two dependants i.e., parents of the deceased. So far as loss of estate, funeral and transport expenses is concerned, the parents are entitled to Rs.15,000/- each under the said heads. The claimants are also entitled for - 10 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 10% escalation on the conventional heads at the rate of Rs.11,000/- in terms of the law laid down by the Hon'ble Apex Court in NATIONAL INSURANCE CO. LTD. VS. PRANAY SETHI2. In all, the cross objectors are entitled for Rs.22,75,600/- as against Rs.16,09,000/-, awarded by the Tribunal. In these circumstances, he sought to enhance the compensation to the extent supra, by dismissing the appeal by the Insurance Company. 7. Having heard Sri Manvendra Reddy, learned counsel appearing for the Appellant - Insurance Company in MFA No.203017/2023 and Sri Sangagouda V. Biradar, learned counsel appearing for cross objector bearing MFA Crob. No.200002/2024, perused entire appeal papers in both the appeals, the points that would arise for our consideration are as under: i) Whether the appellant – insurer has made out a case to exonerate from liability? 2 (2017) 16 SCC 680 - 11 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 ii) Whether the claimants/respondents have made out a case for enhancement of compensation? 8. Our answer to the above points for consideration are: Point No.1 - in affirmative Point No.2 is partly in affirmative. Both the points are taken for consideration in order to avoid repetition of facts. REASONS 10. It is not in dispute that the person was travelling in the goods vehicle met with an accident and succumbed to the injuries. It is not dispute that the vehicle in which the deceased was traveling is a goods vehicle, a contention has been taken by the claimant that the deceased was working as a supervisor in the company to which the goods vehicle belongs. However, there is no evidences placed on record even to hold that the person is working in the said company to which the vehicle belongs, so also his proof of income. The policy issued - 12 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 is only in respect of a goods vehicle, wherein premium paid covering the driver, conductor and the cleaner under IMT 40. As per the Registration Certificate, the seating capacity is 1+4. Though the contention has been taken by the learned counsel appearing for the cross objectors that the deceased being a supervisor in the company to which the vehicle belongs, covered under the statutory coverage as per the Motor Vehicles Rules. However, a perusal of IMT 40 clearly shows that only those persons who are employed in the capacities permitted under the said Rules can be considered as employed persons. That part, even to consider the person as a supervisor in the company to which the vehicle belongs, none of the persons from the company were examined in order to substantiate the contention that the deceased was travelling in the said vehicle belonging to the company in terms of the directions of the employer and hence, so as to hold the Insurance Company liable to pay the compensation. As per the judgment relied on by the appellant–Insurance Company in Balu Krishna Chavan (supra), the Hon’ble Apex Court in paragraph No.7 has clearly observed that, although the Tribunal held the person traveling in the said goods vehicle to be a gratuitous passenger and - 13 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 nonetheless awarded compensation by directing the Insurance Company to pay, the High Court considered the matter and exonerated the Insurance Company. In the appeal, the Hon’ble Apex Court, at paragraph No.8, clearly stated that, in all cases where it is proved that the Insurance Company is not liable to pay, even a pay-and-recovery order cannot be directed. At this stage, the learned counsel appearing for the cross objectors tried to substantiate his contention that, even in the case referred by the learned counsel appearing for the appellant - insurance company, the Hon'ble Apex Court in order to meet the ends of justice, directed the insurance company to pay and recover. We are _____to countenance the submission. The reason being in the said case, though there is a direction to pay and recover, it is in order to meet ends of justice invoking the plenary power under Article 142 of Constitution of India envisage with the Hon'ble Apex Court. That power cannot be exercised by the High Court. It is clear as crystal that a person traveling in the goods vehicle as a gratuitous passenger is not covered under the Insurance Company in the absence of any special premium covering such person. In these circumstances, once it is proved that the Insurance Company is - 14 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 not liable to pay the compensation, neither there can be any liability to pay the compensation nor there can be a direction to pay and recover. The Tribunal has failed to consider this aspect of the matter. In these circumstances, findings of the Tribunal holding that the insurer is liable to pay the compensation, required to be set aside and accordingly, we set aside the said findings and exonerate the Insurance Company from payment of compensation. Accordingly, we answer point No.1 in affirmative in favour of the appellant - Insurance Company and against the claimants/cross objectors. 12. So far as the quantum is concerned, as rightly contended by the learned counsel appearing for the cross objectors, the Tribunal has taken the income at Rs.14,250/-. However, not added future prospectus. In these circumstances, in view of the law laid down by the Hon’ble Apex Court in Pranay Sethi supra and for the discussion as per the contentions of the learned counsel appearing for the cross objectors, the compensation awarded by the Tribunal requires re-consideration, which we have already stated supra on the arguments of the learned counsel appearing for the cross - 15 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 objectors. In view of the same, the compensation awarded by Tribunal requires re-consideration and re-determination. 13. On re-determination and re-consideration, the enhanced compensation would comes to: Loss Dependency (14,250 + 40% x 12 x 18 x 50/100) : Rs. 21,54,600/- Loss of Consortium (40,000 x 2) : Rs. 80,000/- Loss of Estate : Rs. 15,000/- Transport and Funeral Expenses : Rs. 15,000/- 10% escalation for one completed term (1,10,000 x 10%) : Rs. 11,000/- TOTAL : Rs. 22,75,600/- On re-determination, the claimants are entitled for a sum of Rs.22,75,600/- as against Rs.16,09,000/- awarded by the Tribunal. The re-determined compensation shall carry 6% p.a. from the date of petition till realization. Accordingly, we answer point No.2 partly in affirmative and proceed to pass the following: - 16 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 ORDER i) Both the appeal as well as cross-objection filed by the appellant – Insurance Company and the claimants are allowed in part. ii) The liability fastened on the Insurance Company is set aside and the Insurance Company is exonerated from liability to pay compensation by modifying the judgment and award dated 05.04.2023 in MVC No.1354/2021, passed by the Principal Senior Civil Judge and M.A.C.T - V at Vijayapura. iii) The amount in deposit in MFA.No.203017/2023 shall be released in favour of the appellant - Insurance Company, on proper identification. iv) The claimants are entitled for Rs.22,75,600/, which shall carry interest at the rate of 6% per annum from the date of petition till realization. v) The respondent No.1 - owner of the vehicle shall deposit the entire amount within 6 weeks from the date of receipt of copy of this order before the concerned Tribunal along with the interest stated supra. - 17 - HC-KAR NC: 2025:KHC-K:5688-DB MFA No. 203017 of 2023 C/W MFA.CROB No. 200002 of 2024 vi) On deposit, the disbursement and apportionment is as per the order passed by the tribunal. vii) No order as to cost. Sd/- (H.P.SANDESH) JUDGE Sd/- (T.M.NADAF) JUDGE THM List No.: 1 Sl No.: 40 CT: AK