- 1 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF JULY, 2026 BEFORE THE HON'BLE MRS. JUSTICE P SREE SUDHA MISCELLANEOUS FIRST APPEAL NO. 2826 OF 2018 (MV-D) BETWEEN: THE MANAGER ORIENTAL INSURANCE CO LTD., 1ST FLOOR, BADSHA BUILDING, OPP/CLOCK TOWER, MAIN ROAD, VIRAJPET, KODAGU DISTRICT-571 250. …APPELLANT (BY SRI. H C VRUSHABHENDRAIAH., ADVOCATE) AND: 1. SMT. GOWRI W/O. LATE P.K. LAKSHMANA AGED ABOUT 31 YEARS, 2. SMT. P.K. SUBBAMMA W/O. LATE KALA AGED ABOUT 65 YEARS, BOTH ARE RESIDING AT KOKNANAKATTE VILLAGE AND POST, VIA MAYAMUDI, VIRAJPET TALUK, KODAGU DISTRICT-577 250. 3. SRI. B.S. GANESH S/O. SOMAIAH B.D. MAJOR, BEGOOR VILLAGE AND POST, VIRAJPET TALUK KODAGU DISTRICT-577 250. Digitally signed by PADMASHREE SHEKHAR DESAI Location: High Court of Karnataka - 2 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 4. SRI. K.P. BOPAIAH S/O. POOVAIAH, MAJOR, R/O BEGOOR VILLAGE AND POST, VIRAJPET TALUK, KODAGU DISTRICT-577 250. …RESPONDENTS (BY SRI. HARISH GANAPATHY., ADVOCATE FOR R1 AND R2, SRI. GAUTAM. S. BHARADWAJ, ADVOCATE FOR R4, V/O DTD: 01.07.2022 NOTICE TO R3 IS D/W) THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED: 22.02.2018 PASSED IN MVC NO.23/2013 ON THE FILE OF THE SENIOR CIVIL JUDGE, MACT, VIRAJPET, AWARDING COMPENSATION OF RS.6,98,320/- WITH INTEREST AT 9% P.A. FROM THE DATE OF PETITION TILL THE DATE OF REALIZATION. THIS APPEAL HAVING BEEN HEARD AND RESERVED ON 06.07.2026 COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, P SREE SUDHA J., DELIVERED THE FOLLOWING: CORAM: HON'BLE MRS. JUSTICE P SREE SUDHA CAV JUDGMENT The Oriental Insurance company Ltd. has filed this appeal against the judgment and award dated 22.02.2018 passed by the Senior Civil Judge and MACT, Virajpet, in MVC No.23 of 2013. One P.K. Lakshmana met with an accident on - 3 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 07.09.2012 and died. His wife and mother filed claim petition claiming compensation of Rs.14,39,600/- with interest. The Tribunal considering the entire evidence on record granted an amount of Rs.6,98,320/- with interest at the rate of 9% per annum from date of petition till realisation. and stated that respondent Nos.2 and 3 therein are jointly and severally liable. It is directed by the tribunal that respondent No.3 therein shall indemnify respondent No.2 and deposit the amount. 2. Aggrieved by the said order, the appellant-insurance company has preferred this appeal and mainly contended that police filed charge sheet against respondent No.3-driver of the tractor and respondent No.4-owner. The Tribunal should have perused the certificate of insurance and also copy of RC book which is produced by respondent No.4-owner, in which it is mentioned that, no additional risk is covered, except the driver. The policy was in existence as on the date of accident as per Exhibit R2, but appellant is not liable to indemnify the claimants. The deceased is an unauthorised passenger travelling on the mud guard in the tractor and his risk was not covered under the policy as per provisions of Section 147 of the - 4 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 M.V. Act. The Rules and Regulations would clearly indicate that no person would travel sitting on the mudguard of the agricultural tractor and trailer. It is contended that the Tribunal erred in adding 40% towards future prospects and calculating loss of dependency as the occupation of the deceased was not a stable job and interest is also granted at the rate of 9% per annum instead of 6%. Therefore, requested this Court to set aside the order. 3. Heard the arguments of learned counsel for both sides. 4. It is stated that P. K. Lakshmana was a coolie. He loaded the Tractor and Trailer belonging to the 4th respondent herein with coffee and he was proceeding towards coffee huller. At that time, the driver of the said vehicle driven it in a rash and negligent manner. As a result, deceased-Lakshmana fell down and sustained injuries and subsequently died. The claimants are the wife and mother of the deceased-Lakshmana respectively. Charge sheet is filed against the driver of the - 5 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 tractor. The 4th respondent herein is the registered owner. The 3rd respondent therein is the appellant-insurance company. 5. The respondent-driver and owner, in their objections before the Tribunal, contended that the liability is against the insurance company. Driver is having a valid driving licence and owner is having valid RC and the policy is in force. Petitioners are not entitled for interest exceeding 6% per annum. The insurance company, in their objections before the Tribunal, stated that there is no valid driving licence to driver and the liability of the insurance company is subject to terms and conditions of the policy. The respondent-driver violated the conditions of the policy and as such, they are not liable to pay compensation. As per the policy, the seating capacity is only for one person i.e. driver and no coolies are covered. Exhibit R3 shows that the respondent-driver is having a licence to drive tractor with trailer and there is an endorsement ‘Agri.TrTl’. 6. Learned counsel for appellant-insurance company stated that a tractor is different from trailer. When tractor is fixed with trailer and trailer is loaded with coffee, then it will - 6 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 assume the character of non-transport vehicle and special endorsement on the driving licence is required to drive the tractor. The Tribunal relied upon the citation in the case of Mukund Dewangan Vs. Oriental Insurance company Limited reported in AIR 2017 Supreme Court 3668, and also, the Tribunal extracted Section 10 of Act, in which the definitions of light motor vehicle and transport vehicle were extracted and also the effect of amendment dated 14.11.1994 is extracted. 7. It was stated by the appellant-insurance company that additional premium is not paid and thus, the insurance company is not liable to indemnify. As per Exhibit R2, additional premium of Rs.930/- is paid towards trailer and additional premium of Rs.100/- is paid towards P.A. for owner driver and additional premium of Rs.50/- was paid under the heading LL-paid driver, conductor, cleaner, IMT 28. It was also stated that tractor and trailer are insured with appellant herein and deceased was loader and he was travelling in a trailer filled with coffee. The tribunal held that appellant-insurance company - 7 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 is liable to indemnify the respondent-owner on the above grounds, which is not proper. 8. Learned counsel for the appellant-insurance company has relied upon the judgment of this Court in the case of Sri Mailappa and another Vs. Sri Shamraya and others decided in MFA No.200717 of 2020 on 11.06.2026, in which it was stated that an order of pay and recovery is not sustainable. 9. The Learned counsel also relied upon the citation of this Court in the case of Dadapeera Vs. Mallesh and others decided in MFA No.102485 of 2014 decided on 15.01.2025, in which it was stated that though third party is entitled for statutory benefit of pay and recovery, claimant was allowed to travel on the road which is prohibited under Regulation 28 of the Karnataka Motor Vehicles Regulations, 1989 and as such, pay and recovery cannot be permitted. 10. The Learned counsel also relied upon the judgment of this Court in the case of Gadhilingappa @ Gadhilinga and - 8 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 another Vs. K. Guleppa and others reported in ILR 2021 KAR 3377, in which it was held as under: “A tractor fitted with a trailer may or may not answer the definition of goods carriage contained in Section 2(14) of the Motor Vehicles Act.” 11. Learned counsel for the respondent has relied upon the judgment of this Court in the case of Iffco-Tokio General insurance company Ltd. Vs. K. Prabhakar Reddy and another reported in 2013 SCC Online Kar 10773, in which it was held as follows: “10. XXX this evidence is not sufficient to discharge the burden which was cast on the insurance company. It did not summon the driver of the vehicle. No record from the Road Transport Authority has also been produced. In these circumstances, insurance company has not discharged the burden cast upon it under section 96(2)(b)(ii) of the Motor Vehicles Act, 1939.” 12. The learned counsel has also relied upon the judgment of this Court in Ramakrishna Reddy Vs. the Manager, Purchase, HMT Limited, Bangalore and another - 9 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 reported in ILR 2002 KAR 1905, in which it was held as follows: “20. XXX. If the insurer wanted to avoid liability, it ought to have raised a specific plea and ensured that an appropriate issue was framed so that the attention of the claimant and insured was focussed on the ground on which the insurer sought to avoid liability, so that they could let in evidence to show that the insurer is liable.” 13. Perusal of translated copies of FIR and charge sheet filed by the learned counsel for the appellant-insurance company before this Court shows that on 07.09.2012, the P. K. Lakshmana loaded the Tractor and Trailer belonging to the 4th respondent herein with coffee and he was proceeding towards coffee huller. The 3rd respondent herein, driver of the tractor, was transporting a load of coffee bags belonging to 4th respondent herein, and Lakshmana seated on the tractor. When they reached near the residential house of one Mr.Neravanda Pemmaiah at Kunda village, Virajpet Taluk, Kodagu District, the accident occurred. Accordingly, Lakshmana, who was sitting on the tractor, fell down and the right side wheel of the trailer ran over his head and died on the spot. - 10 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 14. In the charge sheet, it was mentioned that Lakshmana, who was sitting on the tractor, lost his balance and fell on to the road and died on the spot. In Exhibit R2- insurance policy, it was stated that it should be used only for agricultural and forestry purposes. The policy does not cover use for the carriage of passengers for hire or reward. A copy of the certificate of registration is also filed in which it was mentioned that seating capacity including driver is only one. The learned counsel also relied upon the Rules of Road Regulation, 1989, wherein Rule 27 reads as follows: “27. Driving of Tractors and Good Vehicles: A driver when driving a tractor shall not carry or allow any person to be carried on a tractor. A drive of goods carriage shall not carry in the drivers cabin more numbers of persons that is mentioned in the registration certificate and shall not carry passengers for hire or reward.” 15. In view of the afore-cited judgments and facts of the case, it is clear that K. Lakshmana was travelling in the tractor and trailer not as a loader, but as an unauthorised passenger. The seating capacity of the tractor was only one including - 11 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 driver, but he was sitting on the tractor. Due to negligence of the driver of the tractor, Lakshmana lost control and fell down and no additional payment was paid to him. Even in the policy, it was specifically stated that vehicle should not be used for carrying the passengers. As such, the appellant-insurance company is not liable to pay compensation. Respondent No.3 and 4 herein, being the driver and owner of the vehicle, are liable to pay the compensation. 16. In the result, the following order is passed: (i) Appeal is allowed. (ii) The appellant-insurance company is not liable to pay compensation and the appellant is exonerated from paying the compensation. (iii) Respondent No.3 and 4 herein, being the driver and owner of the vehicle, are directed to pay the compensation of Rs.6,98,320/- with interest at the rate of 9% per annum within one month from the date of the order. - 12 - HC-KAR CNR: KAHC010378072018 NC: 2026:KHC:37166 MFA No. 2826 of 2018 (iv) On such deposit, the claimants are permitted to withdraw the amount as per their share allotted by the Tribunal. (v) If the appellant-insurance company has deposited any amount, it should be transferred to the Tribunal and they are entitled for refund of the same. Sd/- (P SREE SUDHA) JUDGE CS CT:NR List No.: 3 Sl No.: 1