1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF JANUARY 2026 PRESENT THE HON'BLE MR. JUSTICE S. G. PANDIT AND THE HON'BLE MR. JUSTICE K.V.ARAVIND M.F.A No.1788/2023 (MV-D) BETWEEN: 1 . SMT. BABY M @ BHAGYAMMA W/O LATE DEVARAJU AGED ABOUT 33 YEARS 2 . MASTER RENUKA PRASAD B S/O LATE DEVARAJU AGED ABOUT 4 AND 1/2 YEARS SINCE MINOR REP. BY HIS NEXT FRIEND NATURAL GUARDIAN MOTHER I E APPELLANT NO.1 SMT. BABY M. @ BHAGYAMMA 3 . SMT. JAYAMMA W/O RAMANNA AGED ABOUT 58 YEARS 4 . SRI RAMANNA S/O LATE KENCHAPPA AGED ABOUT 63 YEARS APPELLANTS NO.1 TO 4 ARE R/O KADAVIGERE VILLAGE AT POST SIRA TALUK-572137 TUMAKURU DISTRICT 2 PERMANENT R/O CHIRARYU NILAYA MAHALAKSHMI NAGAR 3RD PHASE, BATAWADI TUMAKURU-572103. ...APPELLANTS (BY SRI. V B SIDDARAMAIAH, ADV.) AND: 1 . THE UNITED INDIA INSURANCE CO. LTD., JAYADEVA COMPLEX B H ROAD TUMAKURU DISTRICT-572101 REP. BY ITS BRANCH MANAGER. 2 . SRI KRISHNAPPA G S/O GOVINDAPPA AGED ABOUT 53 YEARS R/O BHOVI COLONY BANNINAGARA, SIRA TOWN TUMAKURU DISTRICT-572137. …RESPONDENTS (BY SRI. A N KRISHNA SWAMY, ADV. FOR R1 SRI JAGADISH G KUMBAR, ADV. FOR R2) THIS APPEAL IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 31.01.2023 PASSED IN MVC NO. 795/2020 ON THE FILE OF THE III ADDITIONAL DISTRICT AND SESSIONS JUDGE, MACT, TUMAKURU, PRAYING TO FIX THE LIABILITY ON INSURANCE COMPANY. THIS APPEAL HAVING BEEN HEARD AND RESERVED ON 12.01.2026 COMING ON FOR PRONOUNCEMENT THIS DAY, S.G.PANDIT J., DELIVERED THE FOLLOWING: CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE K.V.ARAVIND 3 CAV ORDER (PER: HON'BLE MR JUSTICE S.G.PANDIT) Appellants, claimants before the III Additional District and Sessions Judge, MACT, Tumakuru (for short, ‘the Tribunal’) are in appeal under Section 173(1) of the Motor Vehicles Act, 1988 (for short, ‘1988 Act’) questioning the saddling of liability on the second respondent-owner and also seeking enhancement of compensation, not being satisfied with the quantum of compensation awarded under the judgment and award dated 30.01.2023 in MVC.No.795/2020 passed by the Tribunal. 2. Brief facts of the case are that, claimants – legal heirs of one Devaraju filed claim petition under Section 166 of the 1988 Act claiming compensation for the accidental death of Devaraju that occurred on 02.02.2020 involving TVS bearing registration No.KA- 06-HC-9189 and bus bearing registration No.KA-06-C- 4 7459. It is stated that the deceased was aged 30 years and was earning Rs.30,000/- p.m., as on the date of accident. It is claimed that the claimants were totally depending on the income of the deceased and the accident occurred due to the rash and negligent driving of the driver of the bus. 3. On issuance of notice, respondents appeared and filed their objections. The respondent- owner filed objections denying the entire petition averments and stated that the accident occurred solely due to the negligent act of the deceased. Further, it is stated that the insurance policy was in force and the driver of the respondent No.1 was having valid and effective driving license as on the date of accident. 4. The respondent-insurance company denied the petition averments and admitted the policy issued in respect of the offending vehicle. It also contended 5 that the driver of the insured vehicle had no valid and effective driving license as on the date of accident. 5. In support of their claim, the claimants, first claimant – wife of the deceased examined herself as PW1 apart from marking Ex.P1 to Ex.P19. The respondents examined RW1 and RW2 and marked Ex.R1 to Ex.R10. 6. The Tribunal on appreciation of the material placed before it, awarded total compensation of Rs.33,14,900/- along with interest at the rate of 6% p.a., from the date of filing the petition till the date of deposit of the compensation amount before the Tribunal, on the following heads: Head of Compensation Amount 1. Loss of dependency for petitioners who are the wife and son of the deceased Rs. 31,05,900/- 2. On traditional heads A. Loss of Estate B. Loss of consortium C. Towards funeral expenses Rs. 16,500/- Rs. 1,76,000/- Rs. 16,500/- Total Compensation Rs. 33,14,900/- 6 7. While awarding the above compensation, the Tribunal assessed the income of the deceased at Rs.14,500/- p.m., added 40% of the assessed income towards future prospects. As the age of the deceased was 30 years, deducted 1/3 towards personal living expenses of the deceased. 8. Heard learned counsel Sri.V.B.Siddaramaiah for appellants and learned counsel Sri.A.N.Krishnaswamy for respondent No.1 and learned counsel Sri.Jagadish G. Kumbar for respondent No.2. Perused the entire material on record including the Trial Court Records. 9. Learned counsel for the appellants submits that the Tribunal erred in assessing the income of the deceased at Rs.14,500/- per month when the claimants claim that the deceased was earning a sum of Rs.20,000/- per month by doing painting work and also doing agriculture. It is noticed that the claimants 7 have not placed on record any material to establish the income of the deceased. In the absence of cogent materials to determine the income, it is for the Courts and Tribunals to assess the income of the deceased notionally. While assessing the income notionally, the Courts and Tribunals would take the assistance of the Chart prepared on the basis of Minimum Wages by the Karnataka State Legal Services Authority. In terms of the said Chart, the notional income for the year 2020 would be Rs.14,500/- per month and the Tribunal rightly assessed the income of the deceased at Rs.14,500/- per month. Therefore, the same needs no interference of this Court. 10. The other contention urged by learned counsel for the appellants Sri. V B Siddaramaiah that the Tribunal committed an error in saddling the liability on the first respondent – owner of the offending vehicle on finding that the driver of the 8 offending bus had no valid and effective driving license as on the date of accident. The Insurance Company in its objection contended that the driver of the offending bus had no valid and effective driving license as on the date of accident and to prove the said contention, placed on record Ex.R2 – extract of the driving license of the driver of the offending vehicle and also examined RW1-Second Division Assistant from the office of the ARTO, Madhugiri. Based on the evidence, the Tribunal has given a categorical finding that the license of the driver of the offending vehicle had expired as on the date of accident i.e., on 02.02.2020. We have also gone through the evidence of RW1 and Ex.R2-document and we are also of the considered opinion that driving license of the driver of the offending bus had expired as on the date of accident. As the driving license of the offending bus had expired as on the date of accident, it would be a case of no license to drive the 9 vehicle as on the date of accident. Section 15 of the MV Act, 1988 as well as Rule 18 of the Rules 1989 provides for renewal of driving license. Renewal of driving license could be affected subject to the production of Medical Certificate. 11. Learned counsel for the respondent – Insurance Company Sri.A.N.Krishnaswamy contended that when the driver of the offending vehicle had no valid and effective driving license as on the date of accident. It would be a case of no driving license to drive the vehicle and in that circumstances, no liability could be fastened on the insurer. It is submitted that liability could be fixed or fastened on the Insurance Company only in the circumstances where there is no fundamental breach or violation of conditions of policy. Learned Counsel for respondent No.1 Sri.A.N.Krishnaswamy relied upon the following 10 decisions of the Hon’ble Apex Court to buttress his contentions:- Learned Counsel relied upon the decision of the Hon’ble Apex Court in Telangana State Level Police Recruitment Board v. Penjarla Vijay Kumar and Ors. reported in 2025 SCC OnLine SC 2915, wherein, it was held that the driver of a vehicle is barred in law from driving from the date of expiry of licence. It was also held that mere renewal of licence after a gap would not operate from a back date implying the continuance of a valid licence. Learned Counsel for respondent No. 1 places reliance upon the decision of the Hon’ble Apex Court in The Divisional Manager New India Assurance Company Ltd. v. Shaanabasappa and Ors( SLP (C) Nos. 19830-19832/2022), wherein, the Hon’ble Apex Court found fault with the decision of the High Court in saddling the liability upon the Insurance Company 11 where the licence of the driver of the offending vehicle had expired as on the date of the accident. Learned Counsel Sri.A.N.Krishnaswamy also placed reliance upon the decisions of the Hon’ble Apex Court in Ram Babu Tiwari v. United India Assurance Co. Ltd reported in (2008) 8 SCC 165, in New India Assurance Company Ltd. v. Suresh Chandra Aggarwal reported in (2009) 15 SCC 761 and Ishwar Chandra and Ors. v. Oriental Insurance Co. Ltd reported in (2007) 10 SCC 650, wherein, the Hon’ble Apex Court held that the insurer would not be liable to indemnify the insured if the driver of the vehicle was not holding a valid licence upon failure to renew the same within a period of 30 days as prescribed in the statute and a subsequent renewal would not operate from a back date. 12. Learned counsel for the appellants places reliance on the decision of the Hon’ble Apex Court in 12 RAMABAI vs. M/S. AMIT MINERALS THROUGH IN CHARGE OFFICER/COMPETENT OFFICER AND OTHERS, Civil Appeal No. 9669/2024 dated 24.09.2025 to contend that wherever it is a case of no driving license to drive the vehicle, it would be a case of pay and recovery and the insurer shall be directed to satisfy the award with liberty to recover the same from insured-owner of the vehicle. In Ramabai surpa, it was a case of no driving license as on the date of accident and in the said circumstances, after noticing the decisions of the Hon’ble Apex Court IN SHAMANNA AND ANOTHER v. DIVISIONAL MANAGER, ORIENTAL INSURANCE COMPANY LIMITED AND OTHERS, 2018 9 SCC 650, PARMINDER SINGH v. NEW INDIA ASSURANCE COMPANY LIMITED AND OTHERS, (2019) 7 SCC 217 and also NATIONAL INSURANCE CO. LTD., v. SWARAN SINGH AND OTHERS, (2004) 3 SCC 297, has come to the conclusion that wherever it is a case of no driving 13 license to drive the vehicle as on the date of accident, it would be for the insurer, to satisfy the award with liberty to recover the same from insured-owner. While coming to the above conclusion, Hon’ble Apex Court has also noticed that the Apex Court in NATIONAL INSURANCE COMPANY LTD., VS. PARVATHNENI AND ANOTHER, 2009 8 SCC 788, doubted the applicability of principles of pay and recovery when the insurance company is found not liable in law to pay the compensation, and hence, the legal propriety of principle of pay and recover was referred to a larger bench. However, the Hon’ble Apex Court in Ramabai (supra), also noted that, in Shamanna surpa, the reference with regard to doubt expressed with regard to pay and recovery was not answered and the case was disposed of on 17.09.2013, keeping question of law open to be decided in an appropriate case. The relevant paragraphs in Ramabai supra read as under: 14 “3.4 In other words, on the date of the accident a valid licence was not held by respondent No. 2 - driver. Therefore, it was not legally permissible for him to drive the vehicle on the date of accident. The factum that there was no driving licence on 03.10.2011 was proved from the Insurance Document (Ex. D- 1C) and the Driving Licence (Ex. D-2C). Thus, the driver of the offending vehicle was found not to have a valid license on the date of accident. 3.5 While endorsing to the view of the Tribunal that there was no valid license of the driver on the date of accident which would render the insurance company not liable to pay the compensation, the High Court referred to the relevant provisions of the Motor Vehicles Act, including Section 15 which prescribes for “Renewal of Driving Licences”. The High Court proceeded to rely on the decision of this Court in Ram Babu Tiwari v. United India Insurance Company Limited3 and other decisions. Xxxxx 5. The submission on part of the appellant that the High Court ought to have applied the “pay 15 and recover” principle rests on the decision of this Court in Shamanna1 (supra) and Parminder Singh2 (supra). In Shamanna1 (supra) this Court dealt with the claim of compensation by third party victim of the motor accident. In para 5 of the judgment, this Court referred to its own earlier decision in National Insurance Co. Ltd. v. Swaran Singh4 to reiterate that the insurer has to pay the compensation amount payable to the third party and the insurance company may recover the same thereafter from the insured. 5.1 In Shamanna1 in which the doctrine of “pay and recover” was considered, the driver had no valid licence and the insurance policy was violated. Similar principle, as applied in Parminder Singh2 in which the driver of the offending vehicle was found driving the vehicle in breach of the policy conditions, the insurance company was absolved and the principle of ‘pay and recover’ was applied. 5.2 It was pointed out on behalf of respondent No. 3 - Insurance Company that in subsequent decision in National Insurance Company Limited v. Parvathneni5, this Court doubted the 16 justification of applying the principle of pay and recover on the ground that if the Insurance Company was found not liable in law to pay the compensation, the direction regarding pay and recover can be said to be beyond the legal propriety. 5.2.1 In the earlier decisions in National Insurance Co. Ltd. v. Yellamma6, Samundra Devi v. Narendra Kaur7, Oriental Insurance Co. Ltd. v. Brij Mohan8 and New India Insurance Co. v. Darshana Devi9 this Court had applied the very principle, about the correctness of which, reservations were expressed in Parvathneni5. 6. In the present case as stated above, on the date of accident, the driver had no valid license and the licence was not renewed. The insurance company was entitled to take a valid defence in that regard under Section 149 (2)(a)(ii) as the driver of the offending vehicle was not duly licensed, to avoid its liability to pay the compensation. The conditions in law are satisfied to absolve the insurance company from the payment of compensation. 17 6.1 The High Court in the impugned judgment relied upon the decision in Ram Babu Tiwari3 to find that as per the specific provisions of the Motor Vehicles Act, if the driver does not possess a valid and effective driving licence, it results in a breach of conditions of the insurance policy, exonerating the insurer from its liability. But while affirming the order of the High Court, absolving the liability for breach of conditions in the policy, this Court refused to interfere with orders of ‘pay and recover’ as directed by the High Court. 7. In the above circumstances, going by the series of decisions of this Court, it is only proper that the insurer be directed to satisfy the award, which however can be recovered by the insurer from the insured-owner of the vehicle. The appeal stands allowed. 13. By following the latest decision of the Hon’ble Supreme Court in Ramabai, we partly allow the appeal and modify the judgment and award dated 31.01.2023 in MVC No.795/2020 on the file of III Additional District and Sessions Judge, MACT, 18 Tumakuru, and direct the Insurance Company to satisfy the award at the first instance with liberty to the Insurance Company to recover the said amount from the Insured-owner of the offending bus. In all other respect, the judgment and award of the Tribunal remains intact. Sd/- (S.G.PANDIT) JUDGE Sd/- (K.V.ARAVIND) JUDGE NC/BSV CT: bms