- 1 - HC-KAR NC: 2025:KHC:28448 MFA No. 924 of 2017 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE C.M. POONACHA MISCELLANEOUS FIRST APPEAL NO. 924 OF 2017 (MV-I) BETWEEN: THE BRANCH MANAGER UNITED INDIA INSURANCE CO LTD SHIVAMOGGA NOW REPRESENTED BY REGIONAL MANAGER UNITED INDIA INSURANCE CO LTD REGIONAL OFFICE 5TH & 6TH FLOOR KRISHI BHAVAN, NRUPATHUNGA RAOD BENGALURU-560001. APPELLANT (BY SRI. VIJAYA PHANEENDARA TB., ADVOCATE FOR SRI. AN KRISHNA SWAMY.,ADVOCATE) AND: 1. REVANNA S/O PRABHAKARA D GROUP EMPLOYEE DISTRICT MC GANN HOSPITAL SHIVAMOGGA-577202. 2. B H MAHADEVAPPA S/O HANUMANTHAPPA AGED ABOUT 44 YEARS R/O 1ST CROSS, HOSAMANE SHIVAMOGGA-577425. 3. MANJUNATHA CJ S/O JAYAPRAKASH CR BY GPA HOLDER KRISHNAPPA S/O SANNAPPA AGED ABOUT 49 YEARS R/O HUDCO COLONY BHARATHI H M Digitally signed by BHARATHI H M Location: HIGHCOURT OF KARNATAKA DHARWAD BENCH DHARWAD - 2 - HC-KAR NC: 2025:KHC:28448 MFA No. 924 of 2017 SHIVAMOGGA-577201. RESPONDENTS (R1 IS SERVED NOTICE TO R2 AND R3 ARE HELD SUFFICIENT V/O DATED 04.03.2024) THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 03.10.2016 PASSED IN MVC NO.895/2013 ON THE FILE OF THE II ADDL. SR.CIVIL JUDGE AND AMACT-8, SHIVAMOGGA, AWARDING COMPENSATION OF RS.2,16,400/- ALONG WITH INTEREST AT 9% P.A. FROM THE DATE OF THE PETITION TILL THE DATE OF DEPOSIT AND ETC,. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE C.M. POONACHA ORAL JUDGMENT The present appeal is filed by the insurer under Section 173(1) of the Motor Vehicles Act, 19881 challenging the judgment and award dated 03.10.2016 passed in MVC No.895/2013 by the II Additional Senior Civil Judge and Additional Motor Accident Claim Tribunal-8, Shivamogga2. 2. The primary contentions urged in the present appeal is that there was a violation of the permit condition in as much as the insured auto-rickshaw was permitted to ply within 10 1 Hereinafter referred as to ‘Act’ 2 Hereinafter referred as to ‘Tribunal’ - 3 - HC-KAR NC: 2025:KHC:28448 MFA No. 924 of 2017 kms of Shivamogga city. However, the accident occurred at a spot which was at a distance of 18 kms from Shivamogga city. Hence, there was a violation of permit condition. It is further contended that the rate of interest awarded by the Tribunal at 9% per annum is on the higher side. 3. With regard to the contention regarding permit violation, learned counsel for the insurer relies upon the judgment of the Hon'ble Supreme Court in the case of RANI AND OTHERS V/S NATIONAL INSURANCE COMPANY LIMITED AND OTHERS3. It is noticed that in the case of RANI3, the Hon'ble Supreme Court directed that the compensation be paid by the insurer with liberty to recover the same from the owner of the vehicle. The said case arose in a fact situation, wherein the insured vehicle was authorized to ply in the state of Maharashtra, whereas the accident occurred in the state of Karnataka. 4. It is pertinent to note here that this Court in the case of MR BASAVANTHAPPA AND OTHERS V/S SMT 3 “AIR ONLINE 2018 SC 84” - 4 - HC-KAR NC: 2025:KHC:28448 MFA No. 924 of 2017 MALLAMMA AND OTHERS4, noticing the Division Bench judgment of this Court in the case of SMT REHANA BEGUM V/S NEW INDIAN ASSURANCE COMPANY5 and UNITED INDIA INSURANCE CO. LTD V/S SANDHYA6, as also a learned Single Judge of this Court in the case of DURUGAMMA V/S SG NARESH7, as well as another Co-ordinate Bench of this Court in the case of SANNABALAIAH AND OTHERS V/S SMT. V SUJATHA8 has held that the violation of a route permit would not tantamount to a defence available to the insurer under Section 149(2) of the Act. Hence, it is held that the insurer was liable to pay the compensation. 5. It is also pertinent to note that Section 192(A)(1) of the Act stipulates the consequences for use of the motor vehicle in contravention of any condition of a permit relating to the route or area in which it was to be used, are penal consequences. 4 “2024 ACJ 2825” 5 “MFA No.5960/2015 c/w MFA No.706/2013” 6 “MFA No.102428/2017” 7 “2017 (1) AKR 67” 8 “ MFA No.6604/2016 c/w MFA No.507/2016 dated 29.09.2022 ” - 5 - HC-KAR NC: 2025:KHC:28448 MFA No. 924 of 2017 6. At this juncture, it is pertinent to note that in the case of AMRIT PAUL SINGH AND ANOTHER V/S TATA AIG GENERAL INSURANCE COMPANY LTD. AND OTHERS9, before the Hon’ble Supreme Court the case arose of a fact situation where there was absence of permit. The case of RANI3 pertains to a case where the vehicle was plied in a different state in violation of the permit, whereas in the present case the violation alleged is only a deviation of a few kilometers outside the permit area. 7. A Division Bench of this Court in the case of THE MANAGER, CHOLAMANDALAM V/S SRI SADASHIVA AND OTHERS10, after referring to the judgment of the Full Bench of this Court in the case of NEW INDIA ASSURANCE CO. LTD V/S YALLAVVA11, has noticed that the breach of policy condition has to be demonstrated to be intentional or fundamental. 9 “(2018)7 SCC 558” 10 “MFA No.101497/2022 c/w MFA No.105102/2023 dated 24.01.2025” 11 “AIR online 2020 KAR 986” - 6 - HC-KAR NC: 2025:KHC:28448 MFA No. 924 of 2017 8. Having regard to the aforementioned legal position and the factual matrix of the present case, the contention put forth by the insurer with regard to violation of route permit is not liable to be accepted. 9. The next contention with regard to the excess rate of interest is liable to be accepted to the extent of holding that keeping in mind the interest awarded towards fixed deposits, it is just and proper that the interest of 9% awarded by the Tribunal be re-assessed as 7%. 10. In view of the aforementioned, the following: ORDER i) The appeal is allowed in part; ii) The judgment and award dated 03.10.2016 passed in MVC No.895/2013 by the II Additional Senior Civil Judge and Additional Motor Accident Claim Tribunal-8, Shivamogga, is hereby modified to the extent of holding that the compensation awarded by the Tribunal is liable to be paid by the insurer to the claimant together with the interest at 7% per annum from the date of petition till the date of payment. In all other respects, the judgment and award of the Tribunal remains unaltered; - 7 - HC-KAR NC: 2025:KHC:28448 MFA No. 924 of 2017 iii) The amount deposited by the appellant together with the records be transmitted to the Tribunal; iv) The appellant shall deposit the balance compensation together with accrued interest within a period of six weeks. In the event of any excess amount having been deposited, the said excess amount shall be refunded to the appellant; v) The Registry to draw the modified award accordingly. No costs. Sd/- (C.M. POONACHA) JUDGE PNV List No.: 1 Sl No.: 24