- 1 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF NOVEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE T.M.NADAF MISCELLANEOUS FIRST APPEAL NO. 7015 OF 2019 (MV-D) BETWEEN: 1. SMT. THIMAKKA, W/O LATE CHENNAMARAPPA B.K., AGED ABOUT 51 YEARS, 2. SRI. MUNIRAJU B.C., S/O LATE CHENNAMARAPPA B.K., AGED ABOUT 30 YEARS, 3. SRI. BASAVARAJU B.C., LATE CHENNAMARAPPA B.K., AGED ABOUT 26 YEARS, ALL ARE R/O NO.76, 8TH MAIN ROAD, BABASABARAPALYA, KENGERI, BENGALURU - 560 060. …APPELLANTS (BY SRI. SHIVAYOGESH SHIVAYOGIMATH, ADVOCATE) Digitally Signed by REKHA R Location : High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 AND: 1. SRI. RAJAN S., S/O SUBRAMANIAM, AGED ABOUT 48 YEARS, R/O NO.7 (83/1), PETHANAICHKANUR STREET, SAMANTHUR POST, POLLACHI TALUK, COIMBATORE DISTRICT, TAMILNADU-642 123. (R.C OWNER OF LORRY NO.TN-37-P0-4488) 2. THE NEW INDIA ASSURANCE CO.LTD. NO.9/2, MAHALAKSHMI CHAMBERS, TRINITY CIRCLE, M.G. ROAD, BENGALURU - 560 001. REPRESENTED BY THE MANAGER (INSURER OF LORRY NO.TN-37-P-4488) …RESPONDENTS (BY SRI.THIPPESWAMY B.C., ADVOCATE FOR SRI. R. JAIPRAKASH, ADVOCATE FOR R2; R1 IS SERVED) THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 28.01.2019 PASSED IN MVC NO.1340/2017 ON THE FILE OF THE VII ADDITIONAL SCJ & XXXII ACMM, MEMBER, MACT-3, BENGALURU, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION. THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE T.M.NADAF - 3 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 ORAL JUDGMENT This appeal is by the claimants calling in question the judgment and award dated 28.01.2019 in MVC.No.1340/2017 passed by the VII Additional SCJ and XXXII ACMM, Member, MACT-3, Bengaluru (‘Tribunal’ for short) on the ground of liability as well as quantum. 2. The date of accident, involvement of vehicle, death of Late.Chennamarappa B.K S/o. Late Kempaiah, are not in dispute. The only dispute is with regard to the fastening the liability on the owner of the vehicle on the premise of permit violation and on the quantum of compensation. 3. Heard Sri. Shivayogesh Shivayogimath, learned counsel appearing for Madam Ratna N.Shivayogimath, learned counsel for the appellants and Sri. Thippeswamy B.C, learned counsel for Sri. R.Jaiprakash, learned counsel appearing for - 4 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 respondent No.2/Insurance company. Notice of this appeal on respondent No.1 is served. 4. Sri. Shivayogesh Shivayogimath, taking this Court through the judgment and award with all vehemence submits that the accident had occurred on 16.12.2017. As per the chart prepared by the Karnataka State Legal Services Authority (‘KSLSA’ for short), the income is Rs.11,000/- for the year 2017, but the Tribunal has taken income at Rs.8,000/- p.m. There is no dispute with regard to ‘future prospectus’, added at 10% to the income taken considering the age of the deceased as 54 years as on the date of accident as well as the multiplier at ‘11’. The deceased survived by 3 claimants. The Tribunal has not awarded appropriate compensation under the conventional heads, so also under the head of ‘loss of consortium’. The claimants are entitled for 10% escalation on the conventional heads. Further, argued - 5 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 that the Tribunal has deducted 50% towards ‘personal expenses’, which is erroneous. 5. The learned counsel further submits that the Tribunal has fastened the entire liability on the owner of the vehicle to pay the compensation exonerating the insurer absolutely on the premise that, there is violation of permit conditions. He further submits that the deceased was a third party, riding a TVS XL motorcycle, whereas the offending vehicle which has caused the accident is lorry bearing Reg.No.TN-37-P-4488. In these circumstances, even if there is any violation of permit conditions, in view of settled position of law by the Hon’ble Apex Court, the insurer primarily be directed to pay the compensation, with a right to recover the same from the owner of the offending vehicle. 6. To buttress his arguments, he has relied on the judgment of the Hon’ble Apex Court in the case of Rani and Others Vs. National Insurance Company - 6 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 Limited and Others1 and pressed on paragraph Nos.15 and 17, wherein the Hon’ble Apex Court on a similar set of facts regarding violation of permit provisions directed the insurance company, primarily to satisfy the compensation with liberty to recover the same from the owner of the offending vehicle, with these submissions, the learned counsel sought to allow the appeal and enhance the compensation. 7. Sri. Thippesway.B.C, in support of judgment submitted that the Tribunal in the absence proof of income considered the income at Rs.8,000/- and awarded appropriate compensation. Considering the fact that the wife is alone dependent on the husband, 50% deducted towards the ‘personal expenses’ and awarded appropriate compensation. Both the claimant Nos.2 and 3 are major as such not entitled for any compensation. 1 (2018) 8 SCC 492 - 7 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 The compensation awarded under all other heads does not require any interference. 8. He further submits that so far as liability is concerned, the Tribunal while answering the question has held that as per the evidence of RTO the permit was given to ply the vehicle within the State of Tamil Nadu. The accident has occurred in the State of Karnataka, beyond the permit condition and amounts to violation of permit issue, which has resulted in violation of policy conditions contained in the contract of insurance. The Tribunal considering the violation of policy conditions has exonerated the insurer absolutely holding respondent No.1-insurer is liable to pay the compensation, which does not call for any interference of this Court and accordingly, sought to dismiss the appeal. 9. Having heard the learned counsel appearing for the parties, perused the entire materials as well as - 8 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 trial Court record. The points that arises for consideration of this Court is as follows: (i)“Whether the Tribunal is justified in exonerating the insurance company absolutely? (ii) Whether the claimants have made out any case for enhancement of compensation?” 10. My answer for the above points for consideration are partly in affirmative: 11. Point No.1: So far as exoneration of insurer absolutely is concerned, the law is no more res-integra with respect to violation of permit conditions. The insurer is primarily made liable to pay the compensation with liberty to recover the same from the owner of the offending vehicle. Since the violation of permit condition does not amounts to fundamental violation of policy conditions, since the same is not having any proximate cause attributable to the accident. Since the third party claim involved in the present factual background of the - 9 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 case, the insurance Company is primarily liable to pay the compensation with a liberty to recover the same from the owner of the offending vehicle. In view of settled position of law, the point for consideration is answered partly in affirmative, holding that insurance company is liable to pay the compensation primarily with liberty to recover the same from the owner of the vehicle. 12. So far as enhancement of compensation is concerned, admittedly the accident had occurred in the year 2017. As per the chart stated supra, the income fixed for the year 2017, is Rs.11,000/-. There is no dispute with regard to adding of ‘future prospectus’ and multiplier. 13. In view of law laid down by the Hon’ble Apex Court in the case of SARLA VERMA AND OTHERS vs. DELHI TRANSPORT CORPORATION AND ANOTHER2, 2 2009 ACJ 1298 - 10 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 if the deceased is married, 1/3rd be deducted towards the ‘personal expenses’. 14. The Tribunal has committed an error in taking the income as well as the deduction towards ‘personal expenses’. So also the Tribunal has erred in not awarding compensation under the ‘loss of consortium’ towards claimant Nos.2 and 3. 15. In view of settled position of law by the Hon’ble Apex Court in the case of NATIONAL INSURANCE CO. LTD. Vs. PRANAY SETHI3 there shall be 10% escalation for each completed 3 years from 2017 on the compensation awarded under the ‘conventional heads’. Considering these aspects of the matter, the compensation awarded by the Tribunal requires re-consideration and re-assessment. On re-assessment, the claimants are entitled for the following compensation: 3 2017 (16) SCC 680 - 11 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 Sl. No. Heads Amount Rs. 1. Loss of Dependency (Rs.11,000+10%x12x11x2/3) 10,64,800/- 2. Loss of Consortium (Rs.40,000x3) 1,20,000/- 3. Loss of Estate 15,000/- 4. Funeral Expenses 15,000/- 5. 10% escalation for 2 terms of 3 years each (i.e.,10% + 10%) 30,000/- TOTAL 12,44,800/- 16. In all, the appellants-claimants are entitled for the total compensation of Rs.12,44,800/- as against Rs.6,60,500/- awarded by the Tribunal. The re-determined compensation shall carry interest at 8% p.a. awarded by the Tribunal. 17. For the foregoing reasons, this Court proceeds to pass the following: ORDER i) The appeal is Allowed-in-Part; ii) The judgment and award dated 28.01.2019, in MVC.No.1340/2017, passed by the VII - 12 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 Additional SCJ & XXXII ACMM, Member, MACT-3, Bengaluru, is hereby modified and re-determined. iii) The insurer is directed to pay the compensation primarily with a liberty to recover the same from the owner of the vehicle. iv) The amount of the compensation is re- determined at Rs.12,44,800/- which shall carry interest at the rate of 8% p.a., from the date of petition till the date of realisation. v) The respondent No.2/insurance company shall deposit the re-determined compensation stated supra along with the accrued interest within 6 weeks from the date of receipt of copy of this order. vi) Upon deposit appellant Nos.2 and 3 are entitled to a sum of Rs.1,00,000/- each along - 13 - HC-KAR NC: 2025:KHC:49438 MFA No. 7015 of 2019 with accrued interest, which shall be released in their favour on proper identification. vii) The balance compensation along with accrued interest i.e., 75% be deposited in any Nationalised Bank in an interest bearing FDR for a period of 3 years with liberty to withdraw periodical interest, the remaining 25% be released in favour of appellant No.1 on proper identification. Sd/- (T.M.NADAF) JUDGE PK List No.: 2 Sl No.: 39 ct-vn