- 1 - HC-KAR CNR: KAHC010718722024 NC: 2026:KHC:40131 MFA No. 8002 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR MISCELLANEOUS FIRST APPEAL No. 8002 OF 2024 (MV-I) BETWEEN: SRI SHEKAR S C S/O DODDATHAMMAIAH AGED ABOUT 41 YEARS R/AT SOMPURA VILLAGE, KASABA HOBLI MADDUR TALUK, MANDYA DISTRICT. …APPELLANT (BY SRI NAIK KRISHNA VENKATRAMAN, ADVOCATE) AND: 1. SHIVALINGAIAH S/O LATE. CHANNAMMA MAJOR, R/AT No.12 MUDAGERE POST CHANNAPATNA TALUK RAMANGARA DISTRICT (THE OWNER OF VEHICLE BEG No. KA-42-A-5382) 2. THE BRANCH MANAGER NEW INDIA ASSURANCE COM., LTD., CHANNAPATNA BRANCH No.2241/4, GIRIYAMMA SHAMBHUGOWDA COMPLEX CHANNAPATNA TALUK. Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR CNR: KAHC010718722024 NC: 2026:KHC:40131 MFA No. 8002 of 2024 (POLICY No. 67010431170100006242 VALID FROM 02/08/2017 TO 01/08/2018) …RESPONDENTS (BY SRI A R LAKSHMINARAYANA, ADVOCATE FOR R2 V/O DTD. 25.11.2025, NOTICE TO R1 IS H/S. R1-SHIVALINGAIAH) THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT, AGAINST THE JUDGMENT AND AWARD DATED:22.08.2024 PASSED IN MVC No.494/2019 ON THE FILE OF THE SENIOR CIVIL JUDGE AND MACT, MADDUR, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION. THIS APPEAL, COMING ON FOR ADMISSION THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR ORAL JUDGMENT This appeal is filed by the appellant –claimant challenging the judgment and award dated 22.08.2024 passed in MVC No.494/2019 by Senior Civil Judge and MACT, Maddur. 2. Even though the appeal is listed today for admission, it is taken up for disposal with the consent of learned counsel for the appellant and learned counsel for respondent No.2 –insurer. 3. The appellant made a claim petition praying to award compensation for the injury sustained by him in a road - 3 - HC-KAR CNR: KAHC010718722024 NC: 2026:KHC:40131 MFA No. 8002 of 2024 traffic accident occurred on 19.02.2018, contending that the accident occurred due to the rash and negligent driving of the driver of the auto-rickshaw bearing registration No.KA-42/KA- 5382. The said auto rickshaw was insured with respondent No.2. The Tribunal after recording the evidence of the parties, appreciating the evidence on record has assessed the compensation and awarded total compensation of Rs.6,01,032/- with interest at the rate of 8% per annum from the date of petition till realisation. The Tribunal held that there is a violation of policy conditions as there is deviation of permit since the auto rickshaw has traveled beyond Channapatna limit and held that the owner of the vehicle i.e., respondent No.1 is liable to pay the compensation and exonerated the insurer from payment of compensation awarded. The appellant -claimant has challenged the finding of the Tribunal of exonerating the insurer from liability to pay the compensation amount. 4. Heard learned counsel for appellant –insurer and learned counsel for respondent No.2 –insurer. - 4 - HC-KAR CNR: KAHC010718722024 NC: 2026:KHC:40131 MFA No. 8002 of 2024 5. Learned counsel for appellant –claimant would contend that in cases of violation of policy conditions i.e., deviation of permit, the order will be passed for payment of compensation amount by the insurer with liberty to the insurer to recover it from the owner of the vehicle. On that point he places reliance on the decision of the Hon’ble Apex Court in the case of K. Nagendra Vs. The New India Insurance Company Ltd., and others1. 6. Learned counsel for respondent No.2 submits that the Tribunal has rightly exonerated the insurer from payment of the award amount on the ground that there is violation of policy conditions. With these he prays to dismiss the appeal. 7. Having heard learned counsels, the Court has perused impugned judgment and award. 8. The date of accident is 19.02.2018. The place of the incident is near the Tailuru Lake, Rudrakshipura. The said spot of the accident is beyond the limits of Channapatna town. The permit obtained by respondent No.1 is within the limits of 1 In 2025 INSC 1270. - 5 - HC-KAR CNR: KAHC010718722024 NC: 2026:KHC:40131 MFA No. 8002 of 2024 Channapatna town as the auto rickshaw has traveled beyond Channapatna town limit. There is a violation of policy conditions since there is deviation of permit. On the ground of deviation of permit and violation of policy conditions, the Tribunal has held that the insurer is not liable to pay the award amount and held that the owner of the vehicle is liable to pay the award amount. The Hon'ble Apex Court, considering similar point, in the case of K. Nagendra(Supra), has held as under: “8. Now, let us consider the instant case. The record reveals that the offending vehicle did not have the permit to enter Channapatna City, where the accident took place. This position is not in dispute. Unquestionably, therefore, the terms of the permit have been deviated. 9. The purpose of an insurance policy in the present context is to shield the owner/operator from direct liability when such an unforeseen/unfortunate incident takes place. To deny the victim/dependents of the victim compensation simply because the accident took place outside the bounds of the permit and, therefore, is outside the purview of the insurance - 6 - HC-KAR CNR: KAHC010718722024 NC: 2026:KHC:40131 MFA No. 8002 of 2024 policy, would be offensive to the sense of justice, for the accident itself is for no fault of his. Then, the Insurance Company most certainly ought to pay. 10. At the same time though, when an Insurance Company takes on a policy and accepts payments of premium in pursuance thereto, it agrees to do so within certain bounds. The contract lays down the four corners within which such an insurance policy would operate. If that is the case, to expect the insurer to pay compensation to a third party, which is clearly outside the bounds of the said agreement would be unfair. Balancing the need for payment of compensation to the victim vis-à-vis the interests of the insurer, the order of the High Court applying the pay and recover principle, in our considered view, is entirely justified and requires no interference)” 9. In view of the said decision, the insurer has to pay the award amount and recover the same from respondent No.1 -owner of the auto rickshaw. 10. In view of the above, the following ORDER i) The appeal is allowed in part. - 7 - HC-KAR CNR: KAHC010718722024 NC: 2026:KHC:40131 MFA No. 8002 of 2024 ii) The insurer/respondent no. *2 has to pay the award amount with interest as per Judgment and Award dated 22.08.2024 passed in MVC No.494/2019 by Senior Civil Judge and MACT, Maddur and recover the same from respondent No.1 -owner of the auto rickshaw. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE DSP List No.: 1 Sl No.: 49 *Corrected vide Court order dated 17.8.2026.