- 1 - HC-KAR NC: 2026:KHC:32299 MFA No. 9284 of 2013 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JUNE, 2026 BEFORE THE HON'BLE MRS. JUSTICE P SREE SUDHA MISCELLANEOUS FIRST APPEAL NO. 9284 OF 2013(MV-I) BETWEEN: NATIONAL INSURANCE CO LTD REGIONAL OFFICE, NO.144, 2ND FLOOR, SHUBHARAM COMPLEX, M.G.ROAD, BENGALURU-560001 REP. BY TIS ASST. MANAGER SRI.R.LAKSHMANA RAO. APPELLANT (BY SRI. ANUP SEETHA RAMA RAO.,ADVOCATE) AND: 1. SRI K R BALAJI AGED ABOUT 46 YEARS, S/O LATE K.RAMANATHAN, RESIDING AT NO.25, NEHRUNAGAR, SESHADRIPURAM, BANGALORE-20. 2. SRI KRISHNA MURTHY MAJOR, NO.16, I "B" MAIN, S.S.A.ROAD, CHOLANAYAKANAHALLI, R.T.NAGAR POST, BANGALORE-560032. (OWNER OF CAR NO.KA.03/MG-4832). RESPONDENTS (BY SRI. V. LAKSHMAIAH.,ADVOCATE FOR R1; V/O DTD 27.10.2017 SERVICE OF NOTICE TO R2 IS HELD SUFFICIENT) Digitally signed by PADMASHREE SHEKHAR DESAI Location: High Court of Karnataka - 2 - HC-KAR NC: 2026:KHC:32299 MFA No. 9284 of 2013 THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 11.07.2013 PASSED IN MVC NO.3717/2011 ON THE FILE OF THE PRINCIPAL, CHIEF JUDGE, COURT OF SMALL CAUSES, MEMBER MACT, BANGALORE, AWARDING COMPENSATION OF RS.1,65,385/- WITH INTEREST @ 6%P.A FROM THE DATE OF PETITION AND ETC,. THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MRS. JUSTICE P SREE SUDHA ORAL JUDGMENT This appeal is filed by insurance company against the judgment and award dated 11.07.2013 passed in MVC.No.3717/2011 on the file of learned Principal Motor Vehicles Accidents Claims Tribunal and Chief Judge, Court of Small Causes, Bengaluru SCCH-01. The claimant met with an accident on 21.02.2011 and filed claim petition claiming compensation of Rs.10,00,000/-. The Tribunal considering the entire evidence on record granted an amount of Rs.1,65,385/- together with interest at the rate of 6% per annum from the date of petition. Being aggrieved by the said order, the insurance company preferred an appeal and mainly contended that, it is not liable to pay the compensation, as the previous - 3 - HC-KAR NC: 2026:KHC:32299 MFA No. 9284 of 2013 cheque issued by respondent No.2 towards premium was dishonoured and he issued another cheque with material mistakes which was also returned unpaid. Respondent No.2 clearly admitted in his evidence regarding return of the cheques and also withdrawal of the amount from his bank account without leaving sufficient balance. But the Tribunal fastened the liability against the insurance company. The Tribunal observed that policy cancellation endorsement is served on RW.2 on 23.02.2011 i.e., 2 days after the accident. RW.2 in his evidence stated that the owner has withdrawn Rs.4,000/- from his account out of Rs.4,800/- available and he misrepresented to the effect that he received a policy cancellation endorsement on 25.02.2011 and he has not kept sufficient balance for paying the premium, he came to know about the dishonour of the cheque after two days, thus they are liable to pay the compensation. The second cheque was issued only after first cheque issued towards premium was returned unpaid. The Tribunal wrongly observed that there is no intention on the part of RW.2 for issuing cheque with difference in signature and difference in amounts mentioned in words and figures and the - 4 - HC-KAR NC: 2026:KHC:32299 MFA No. 9284 of 2013 said observation is erroneous. Therefore, requested this Court to set aside the judgment and award. 2. Heard the arguments of learned counsel appearing for the appellant and learned counsel appearing for respondent No.1. 3. Learned counsel appearing for the appellant contended that as on the date of accident there is no valid policy as such they are not liable to pay the compensation. It is stated that RW.1 issued cheque dated 10.01.2011 towards premium of the policy. On the same day, policy was issued subject to the realisation of the cheque amount. But it was dishonoured on 19.01.2011 due to the difference in the signature and he gave another cheque. It was also dishonoured as there is no sufficient balance in the account and they intimated the same on 15.02.2011 itself. Accident occurred on 21.02.2011, but respondent No.1 contended that he received the intimation on 23.02.2011. He further stated that, the Tribunal observed that on the date of accident respondent was not aware about the dishonour of the cheque. Admittedly, the petitioner had issued two cheques. The first cheque was - 5 - HC-KAR NC: 2026:KHC:32299 MFA No. 9284 of 2013 dishonoured on the ground that there was variation in the signature and the second cheque was dishonoured on the ground that there was no sufficient balance which was brought in the evidence, out of Rs.4,800/- he has withdrawn Rs.4,000/- as such there was no sufficient balance for payment of the premium. The said intimation was also sent by the insurance company on 15.02.2011 itself and later accident occurred on 21.02.2011. As on the date of the accident there was no policy. It cannot be said that petitioner has no knowledge of dishonour of the cheque, as he himself has withdrawn the amount from the bank account after issuance of the cheque, but the Tribunal failed to appreciate the facts properly and fastened the liability against the insurance company, as there is no valid policy existing on the date of accident, insurance company is exonerated from paying the liability and the owner of the vehicle is alone liable to pay the compensation. In the result, the following: ORDER i) The appeal is allowed; - 6 - HC-KAR NC: 2026:KHC:32299 MFA No. 9284 of 2013 ii) The appellant / insurance company is exonerating from paying the liability; iii) Respondent No.2 / owner of the vehicle is alone liable to pay the compensation. vi) The amount already in deposit is to be transferred to MACT. Sd/- (P SREE SUDHA) JUDGE PNV List No.: 1 Sl No.: 38