HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 1 - IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF FEBRUARY, 2026 BEFORE THE HON'BLE MS. JUSTICE TARA VITASTA GANJU MISCELLANEOUS FIRST APPEAL NO.998 OF 2019 (MV-D) BETWEEN: UNITED INDIA INSURANCE COMPANY LIMITED REGIONAL OFFICE, 5TH LOOR, KRISHI BHAVAN, NRUPATHUNGA ROAD, HUDSON CIRCLE, BENGALURU – 560 001. REP. BY ITS AUTHORIZED SIGNATORY. …APPELLANT (BY SRI. A M VENKATESH., ADVOCATE) AND: 1. SMT. GEETHA D/O LATE KRISHNA REDDY, W/O SRINIVAS REDDY, AGED ABOUT 38 YEARS, R/AT CHIKKABELANDOOR, CARMELRAM PSOT, BENGALURU EAST TALUK, BENGALURU. 2. SRI. SANTHOSH H. K., S/O LATE KRISHNA REDDY, AGED ABOUT 36 YEARS, R/AT HANDENAHALLI VILLAGE & POST, SARJAPURA HOBLI, ANEKAL TALUK, BENGALURU RURAL DISTRICT. HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 2 - 3. SRI. MAZARULLA KHAN SAYED, S/O NOT KNOWN, MAJOR, R/AT NO.5, NARAYANA PILLAI STREET, BENGALURU – 560 001. …RESPONDENTS (BY SRI. N. GOPALKRISHNA., ADVOCATE FOR R1 & R2; VIDE ORDER DATED 30.10.2024, NOTICE TO R3 IS HELD SUFFICIENT; R3 IS SERVED) THIS MFA IS FILED U/S 173(1) OF MV ACT PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED 31/10/2018, PASSED IN MVC NO.48/2014, ON THE FILE OF THE III ADDITIONAL DISTRICT AND SESSIONS JUDGE AND MACT, BENGALURU RURAL DISTRICT, SIT AT ANEKAL BY ALLOWING THE ABOVE APPEAL, IN THE INTEREST OF JUSTICE AND EQUITY. THIS APPEAL COMING ON FOR ADMISSION THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MS. JUSTICE TARA VITASTA GANJU ORAL JUDGMENT 1. The present petition has been filed seeking to challenge the order dated 31.10.2018 passed in MVC No.48/2014 by the learned III Addl. District and Sessions HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 3 - Judge and MACT, Bengaluru Rural District (hereinafter ‘Impugned Award’). By the Impugned Award a sum of Rs.7,38,000/- along with interest at the rate of 9% per annum has been awarded to Respondent Nos.1 and 2/claimants. 2. Learned counsel for the appellant submits that the Impugned Award suffers from several infirmities. In the first instance, the learned Trial Court reached a finding that the petitioner has not proved involvement of the said vehicle in the accident and that the learned Trial Court suspects a collusion in the matter. However, thereafter the learned Trial Court goes on to award compensation. Reliance in this behalf is placed on paragraphs 12 to 15 of the Impugned Award. 3. The second contention raised by learned counsel for the appellant is that the findings on liability are contrary to the settled law. On one hand, the learned Trial Court’s finds Respondent No.3 owner to be liable for compensation while directing Respondent No.2/appellant to pay the HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 4 - compensation. Learned counsel for the appellant submits that since the insurance is a contract between the insurer and the insured, the liability of the insurer arises only when the liability of the insured has been upheld and where the liability of the insured is not clear, the insurer cannot be made liable. Reliance in this behalf is placed on the judgment of Supreme Court in Oriental Insurance Co. Ltd., vs. Sunita Rathi and others1. 4. Learned counsel for the respondent on the other hand fairly submits that the Impugned Order does set out contradictory findings. However, he submits that in view of pendency of this appeal, no amounts has been paid to the respondent/claimants. 5. None appears for Respondent No.3 despite service. The respondent No.3 did not appear before the Trial Court. Given the pendency of the matter and the fact that stay of proceedings before the trial court was granted by this 1 (1998) 1 SCC 365 HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 5 - Court on 16.03.2020, this Court deems it apposite to hear and decide the matter today. 6. The brief facts are that the deceased was an agriculturist and stated to be earning about Rs.50,000/- per month. On 02.03.2013 when the deceased was crossing the road in front of Taluk Office, Anekal, during that time, a Bajaj Chethak bearing Registration No.KA- 04/U-2794 stated to be driven in a rash and negligent manner hit the deceased. The deceased fell down and sustained grievous head injuries and died on the spot. 6.1. A claim petition was filed by the son and daughter of the deceased. The owner of the vehicle, although was made a party, did not appear and was proceeded as ex- parte. However, the Insurance Company contested the matter. After examining the pleadings filed by the parties, the learned Trial Court framed the following issues: “1. Whether the Petitioner proves that on 02.03.2013 around 11.00 AM. towards Tilak Circle, Thali Road, due to the rash and negligent driving by the rider of the vehicle Bajaj Chethak bearing bearing No.KA- HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 6 - 04/U-2794 accident took place in the said accident Krishna Reddy who is succumbed to the injuries? 2. Whether the petitioner is entitled for the compensation if so at what rate? 3. What order or Award?” 6.2. Respondent No.2 examined himself as PW-1 while an Officer of the Insurance Company was examined as RW.1 7. The learned Trial Court held that the petitioners have not proved the involvement of the vehicle in accident and gave a finding that it suspects collusion of respondent/claimants with the police authorities. It is apposite to set out the relevant extract the Impugned Award in this behalf: “11. In view of the above-mentioned discussions, and in view of non-production of the police records except Ex.P1 to Ex.P3 and in view of the deemed admission in the above-mentioned evidence of R.W.1 coupled with Ex.R.3/charge sheet, there are some suspicions involved in this case” “12. On a combined reading of all these aspects raises suspicion about the collusion of the petitioners with the Police Authorities, as argued by the learned Advocate for the 2nd Respondent and as deposed by R.W.1. Hence the Petitioners have not proved the involvement of the said vehicle in the said alleged accident as well as the factum of negligence. HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 7 - 13. The P. W. 1 has deposed at Para No. 5 of his Affidavit that the driver of the offending vehicle pleaded guilty before the Court of Magistrate. However, he has not produced any documents in support of his evidence. If that is so just because the driver pleaded guilty, the same cannot be considered as the Petitioner has proved the actionable negligence against the 2nd Respondent as held in (Veerappa and Another vs. Siddappa and Another) I.L.R. -2009 KAR 3562 (D.B.) 14. On the combined reading of above-mentioned all aspects I suspect such a collusion. Hence, the Petitioner has not proved the involvement of the said vehicle in the said alleged accident. Therefore I answer this Issue in Negative”. [Emphasis supplied] 8. The learned Trial Court however thereafter has given a finding that since the driver of the offending vehicle pleaded guilty in the criminal proceedings which were filed based on the accident, compensation be awarded. Paragraph 15 of the Impugned Award is set out: “15. Issue No.2: In view of my negative findings on Issue No.1 above, I need not discuss this issue. However, as per the ratio of the decision I.L.R-2009- KAR-3562 (D.B) (Veerappa and Another vs. Siddappa and Another), since the driver of the offending vehicle himself pleaded guilty, as per the evidence of PW1 and since the owner of the vehicle/ 1st Respondent placed exparte, he is liable to pay compensation to the Petitioner”. [Emphasis supplied] HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 8 - 9. The learned Trial Court after calculating the compensation, has awarded the following amounts along with interest at 9% per annum: Sl.No. Heads Amount (Rs.) 01 Loss of Financial Dependency 3,78,000-00 02 Loss of consortium Nil 03 Funeral expenses 15,000-00 04 Loss of love and affection 20,000-00 05 Loss to Estate 15,000-00 06 Medicines and medical expenses 3,00,000-00 07 Transportation of Dead body 10,000-00 08 Pain and suffering Nil Total 7,38,000-00 10. However, when it came to assessing the liability, it has directed that respondent no.2 was alone and held as under in the Impugned Order: “33. LIABILITY:- In view of my above said discussion at issue No.1 above, the 1st Respondent alone is liable to pay compensation. Therefore, I answer Issue No.2 accordingly. 34. ISSUE NO. 3: Therefore, I proceed to pass the following Order. HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 9 - ORDER The Petition filed by the Petitioners under Section 166 of Motor Vehicles Act is allowed in part. The Petition against the 1st Respondent is dismissed. The Petitioners are awarded a sum of Rs. 7,38,000/- (Rupees Seven Lakhs Thirty Eight Thousand only) with interest at the rate of 9% Per Annum from the date of filing of petition until its realization. The Petitioners are entitled the said amount as per the apportionment made in the body of this judgment. The 50% of the amount awarded to the Petitioners is ordered to be deposited in any Nationalized Bank of her choice for a period of 5 years. Remaining 50% of amount along with interest shall be paid to the Petitioners by way of Account Payee Cheque on their proper identification. The 2nd Respondent alone is directed to deposit the said compensation. Advocate's fee is fixed at Rs.1,000/-. Draw accordingly. Award/Decree” [Emphasis supplied] 10.1 Clearly, thus liability was imputed on Respondent No.3 owner and thereafter the appellant/Respondent No.2 was directed to deposit the compensation. HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 10 - 11. The Supreme Court in Oriental Insurance Co. Ltd. v. Sunita Rathi2 has held that the liability of the insurer arises only when the liability of the insured has been upheld as follows: ”3. It follows that the insurer cannot be held liable on the basis of the above policy in the present case and, therefore, the liability has to be of the owner of the vehicle. However, we find that the High Court, without assigning any reason, has simply assumed that the owner of the vehicle was not liable and that the insurer alone was liable in the present case. This conclusion, reached by the High Court, is clearly erroneous. The liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. There is, thus, a basic fallacy in the conclusion reached by the High Court on this point”. [Emphasis supplied] 12. So far as concerns, the quantum of compensation awarded, there is no challenge by the either party. Learned counsel for the appellant further submits that interest at the rate of 9% is too high. The attention of the appellant is drawn to the judgment of Supreme Court in Dharampal v. U.P. SRTC3 and Erudhaya Priya v. State Express Transport Corporation Ltd.,4 where interest of 2 (1998)1 SCC 365 3 (2008) 12 SCC 208 4 2020 SCC OnLine SC 601 HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 11 - 9% in an award has not been interfered with by the Supreme Court. 13. Learned counsel for the parties jointly submit that given the contradictory finding in the Impugned Order, let the matter be remanded to the learned Trial Court to decide the aspect of involvement of the vehicle and the liability. 14. Given the settled law in this behalf, the following directions are passed: ORDER (i) The appeal is Allowed to a limited extent of remand of the matter to the learned Trial Court to decide the aspect of liability of the appellant and Respondent No.3. (ii) The learned Trial Court shall examine the documents already produced and pass order in accordance with law. HC-KAR NC: 2026:KHC:6098 MFA No. 998 of 2019 - 12 - (iii) The parties shall appear before the learned Trial Court on 04.03.2026. (iv) The learned Trial Court is directed to decide the matter as expeditiously as possible and not later than six months from today. (v) It is clarified that the remand is on a limited aspect as stated above. (vi) The amount deposited by the appellant before this Court (if any) shall stand transferred to the MACT including interest accrued thereon and be disbursed in accordance with the orders passed by the learned Trial Court. (vii) The Registry is directed transmit a copy of this judgment to the concerned Tribunal, along with its records. (viii) No order as to costs. Sd/- (TARA VITASTA GANJU) JUDGE SNB/RJ List No.: 1 Sl No.: 16 Digitally signed by TARA VITASTA GANJU Location: HIGH COURT OF KARNTAKA