- 1 - MFA No.102958 of 2017 IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 23RD DAY OF JANUARY, 2026 BEFORE THE HON'BLE DR. JUSTICE K.MANMADHA RAO MISCELLANEOUS FIRST APPEAL NO.102958 OF 2017 (MV) BETWEEN: NATIONAL INSURANCE COMPANY LTD., REPRESENTED BY ITS DIVISIONAL MANAGER, D.O. RAMADEVI GALLI, BELAGAVI – 590 001. REPRESENTED BY AUTHORISED SIGNATORY- ADMINISTRATIVE OFFICER. …APPELLANT (BY SRI. SURESH S. GUNDI, ADVOCATE) AND: 1. SMT. SHOBHA WD/O. PRAKASH CHIGARE, AGE: 37 YEARS, OCC: HOUSEWIFE, R/O: H.NO.88, IIND CROSS, SHIVAJI NAGAR, BELAGAVI – 590 001. 2. ADITYA S/O. PRAKASH CHIGARE, AGE: 21 YEARS, OCC: STUDENT, R/O: H.NO.88, IIND CROSS, SHIVAJI NAGAR, BELAGAVI - 590 001. 3. AMAN S/O. PRAKASH CHIGARE, AGE: 18 YEARS, OCC: STUDENT, R/O: H.NO.88, IIND CROSS, SHIVAJI NAGAR, BELAGAVI – 590 001. 4. SHRIHARI S/O. PRAKASH CHIGARE, AGE: 16 YEARS, OCC: STUDENT, R/O: H.NO.88, IIND CROSS, SHIVAJI NAGAR, BELAGAVI-590 001. MINOR, REPRESENTED BY HIS NATURAL GUARDIAN MOTHER I.E. APPELLANT NO.1. ® MOHANKUMAR B SHELAR Digitally signed by MOHANKUMAR B SHELAR Location: High Court of Karnataka, Dharwad Bench Date: 2026.01.27 16:48:08 +0530 - 2 - MFA No.102958 of 2017 5. SMT. YALLUBAI WD/O. BABURAO CHIGARE, AGE: 61 YEARS, OCC: NIL, R/O: H.NO.88, IIND CROSS, SHIVAJI NAGAR, BELAGAVI-590 001. 6. SHRI. JAYAKUMAR SURESH PATIL AGE: MAJOR, OCC: BUSINESS, R/O: JYOTI NAGAR KH, TQ & DIST: BELAGAVI-590001. …RESPONDENTS (BY SRI. M.H.PATIL, ADVOCATE FOR R1 TO R5; NOTICE TO R6-SERVED) THIS MFA IS FILED UNDER SECTION 173(1) OF THE MOTOR VEHICLES ACT 1988, PRAYING TO CALL FOR RECORDS IN MVC 1346/2016, ON THE FILE OF THE VIII ADDITIONAL DISTRICT AND SESSIONS JUDGE, BELAGAVI. TO SET ASIDE THE JUDGMENT AND AWARD DATED 08.06.2017 PASSED IN MVC 1346/2016, ON THE FILE OF THE VIII ADDITIONAL DISTRICT AND SESSIONS JUDGE, BELAGAVI AND ETC., THIS MFA HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 06.01.2026 AND COMING ON FOR PRONOUNCEMENT THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: THE HON'BLE DR. JUSTICE K.MANMADHA RAO - 3 - MFA No.102958 of 2017 CAV JUDGMENT This appeal is by the appellant/Insurance Company challenging liability and quantum under Section 173(1) of the Motor Vehicles Act (for short ‘MV Act’) seeking to set aside the judgment and award dated 08.06.2017 passed in MVC No.1346/2016, on the file of the VIII Additional District and Sessions Judge, Belagavi (herein after referred to as ‘the Tribunal’ for short). 2. The appellant herein-Insurance Company is the respondent No.2 before the Tribunal, respondents No.1 to 5 herein are the petitioners/claimants No.1 to 5 before the Tribunal and the respondent No.6 herein-Owner of the vehicle is the respondent No.1 before the Tribunal. 3. For convenience of reference, the parties herein are referred to as per their ranking before the Tribunal. 4. The claim petition was filed under section 163-A of the MV Act claiming compensation for the death of Sri Prakash Baburao Chigare due to the injuries sustained in an accident. - 4 - MFA No.102958 of 2017 5. The brief facts of the case are as under: On 01.08.2014 at about 9.30 p.m., the deceased, Sri Prakash Baburao Chigare, was returning from his work to his residence on his motorcycle bearing No. KA-22/EF-3766. When he reached near Arun Talkies on Congress Road, Tilakwadi, Belagavi, in front of a sugarcane juice centre, an unknown vehicle came from behind at high speed and in a rash and negligent manner and dashed against his motorcycle, resulting in an accident. Due to the impact, the deceased fell down, sustained severe head injuries and injuries to other parts of the body, and he became unconscious at the spot. He was immediately shifted to BIMS Hospital, Belagavi, and thereafter, on reference, shifted to KLE Hospital, Belagavi, where he underwent treatment and ultimately succumbed to the injuries on 04.08.2014. It was further pleaded that the accident occurred due to the rash and negligent driving of the unknown car, and that the deceased was hale and healthy, earning Rs.40,000/- per annum, and was maintaining the entire family. - 5 - MFA No.102958 of 2017 6. After service of notice, respondent No.2, the Insurance Company filed objections denying all the allegations and claims made by the claimants and contended that the accident was not caused due to the involvement of any vehicle and that the deceased died due to his own negligence. It was further contended that there was violation of the policy conditions on the part of respondent No.1-owner of the vehicle and, therefore, respondent No.2 was not liable to indemnify the liability of respondent No.1. Since the death of Sri Prakash Baburao Chigare was due to self-negligence, the claimants were not entitled to any compensation. 7. In order to substantiate the case of the petitioner, the petitioner/claimant No.1 got himself examined as PW-1 and got marked documents at Exs.P1 to P35. On the other hand, respondents No.1 to 3 examined themselves as RW-1 to 3 and got marked Exs.R1 to Ex.R3. 8. On the basis of pleadings, oral and documentary evidence, the Tribunal framed issue and partly allowed the - 6 - MFA No.102958 of 2017 claim petition by awarding compensation of Rs.4,24,505/- with interest at the rate of 9% p.a. from the date of petition till the date of realization by fastening the liability on the Insurance Company. 9. The learned counsel for the appellant-Insurance Company would contend that the Tribunal has failed to consider the defence raised by the appellant in its proper perspective in fastening liability on the Insurance Company to pay compensation of Rs.4,24,505/- with interest at the rate of 9% per annum. 10. It is further contended that the Tribunal ought not to have entertained and allowed the claim petition under Section 163-A of the MV Act, as the same was not maintainable under the facts and circumstances of the case. Further, the delay in lodging the police complaint, coupled with the absence of any medico-legal case registration at the hospital where the deceased was initially treated, has not been properly appreciated by the Tribunal. - 7 - MFA No.102958 of 2017 11. It is also contended that the Tribunal has failed to consider the violation of policy conditions, inasmuch as the deceased was not holding a valid and effective driving licence at the time of accident and had borrowed the motorcycle, thereby stepping into the shoes of the owner. Despite applications filed by the appellant and the evidence of the investigating officer confirming non-production of the driving licence, the Tribunal wrongly fastened liability on the insurer, ignoring the statutory defences available under Section 149(2)(a)(ii) of the MV Act. Additionally, the award of interest at the rate of 9% per annum is exorbitant. 12. In support of his contention, learned counsel for the appellant has placed reliance on the judgment of the Apex Court in the case of Ramkhiladi and another v. United India Insurance Company and another reported in (2020) 2 SCC 550. The relevant paras of the said decisions are as under:- 9. Heard the learned counsel appearing on behalf of the respective parties at length. We have also perused and considered the judgment and award passed by the learned Tribunal as well as the impugned judgment and - 8 - MFA No.102958 of 2017 order passed by the High Court and the evidence on record. The short question which is posed for consideration of this Court is whether, in the facts and circumstances of the case and in a case where the driver, owner and the insurance company of another vehicle involved in an accident and whose driver was negligent are not joined as parties to the claim petition, meaning thereby that no claim petition is filed against them and the claim petition is filed only against the owner and the insurance company of another vehicle which was driven by the deceased himself and the deceased being in the shoes of the owner of the vehicle driven by himself, whether the insurance company of the vehicle driven by the deceased himself would be liable to pay the compensation under Section 163-A of the Act? Whether the deceased not being a third party to Vehicle No. RJ 02 SA 7811 being in the shoes of the owner can maintain the claim under Section 163-A of the Act from the owner of the said vehicle? 9.1. xxx 9.2. xxx 9.3. xxx 9.4. xxx 9.5. It is true that, in a claim under Section 163-A of the Act, there is no need for the claimants to plead or establish the negligence and/or that the death in respect of which the claim petition is sought to be established was due to wrongful act, neglect or default of the owner of the vehicle concerned. It is also true that the claim petition under Section 163-A of the Act is based on the principle of no-fault liability. However, at the same time, the deceased has to be a third party and cannot maintain a claim under Section 163-A of the Act against the owner/insurer of the vehicle which is borrowed by him as he will be in the shoes of the owner and he cannot maintain a claim under Section 163-A of the Act against the owner and insurer of the vehicle bearing Registration No. RJ 02 SA 7811. In the present case, the parties are governed by the contract of insurance and under the - 9 - MFA No.102958 of 2017 contract of insurance the liability of the insurance company would be qua third party only. In the present case, as observed hereinabove, the deceased cannot be said to be a third party with respect to the insured vehicle bearing Registration No. RJ 02 SA 7811. There cannot be any dispute that the liability of the insurance company would be as per the terms and conditions of the contract of insurance. As held by this Court in Dhanraj [Dhanraj v. New India Assurance Co. Ltd., (2004) 8 SCC 553 : 2005 SCC (Cri) 363] , an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. In the said decision, it is further held by this Court that Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle. 9.6. In view of the above and for the reasons stated above, in the present case, as the claim under Section 163-A of the Act was made only against the owner and insurance company of the vehicle which was being driven by the deceased himself as borrower of the vehicle from the owner of the vehicle and he would be in the shoes of the owner, the High Court has rightly observed and held that such a claim was not maintainable and the claimants ought to have joined and/or ought to have made the claim under Section 163-A of the Act against the driver, owner and/or the insurance company of the offending vehicle i.e. RJ 29 2M 9223 being a third party to the said vehicle. 9.7. xxx 9.8. xxx 9.9. 9.7. xxx 9.8. xxx 9.9. Now, so far as the submission made on behalf of the claimants that in a claim under Section 163-A of the Act mere use of the vehicle is enough and despite the compensation claimed by the heirs of the owner of the motorcycle which was involved in the accident resulting in his death, the claim under Section 163-A of the Act would - 10 - MFA No.102958 of 2017 be maintainable is concerned, in view of the decision of this Court in Rajni Devi [Oriental Insurance Co. Ltd. v. Rajni Devi, (2008) 5 SCC 736 : (2008) 3 SCC (Cri) 67] , the aforesaid cannot be accepted. In Rajni Devi [Oriental Insurance Co. Ltd. v. Rajni Devi, (2008) 5 SCC 736 : (2008) 3 SCC (Cri) 67] , it has been specifically observed and held that the provisions of Section 163-A of the Act cannot be said to have any application with regard to an accident wherein the owner of the motor vehicle himself is involved. After considering the decisions of this Court in Oriental Insurance Co. Ltd. v. Jhuma Saha [Oriental Insurance Co. Ltd. v. Jhuma Saha, (2007) 9 SCC 263 : (2007) 3 SCC (Cri) 443] ; Dhanraj [Dhanraj v. New India Assurance Co. Ltd., (2004) 8 SCC 553 : 2005 SCC (Cri) 363] ; National Insurance Co. Ltd. v. Laxmi Narain Dhut [National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC 700 : (2007) 2 SCC (Cri) 142] and Premkumari v. Prahlad Dev [Premkumari v. Prahlad Dev, (2008) 3 SCC 193 : (2008) 1 SCC (Civ) 822 : (2008) 1 SCC (Cri) 694] , it is ultimately concluded by this Court that the liability under Section 163-A of the Act is on the owner of the vehicle as a person cannot be both, a claimant as also a recipient and, therefore, the heirs of the owner could not have maintained the claim in terms of Section 163-A of the Act. It is further observed that, for the said purpose, only the terms of the contract of insurance could be taken recourse to. In the recent decision of this Court in Ashalata Bhowmik [National Insurance Co. Ltd. v. Ashalata Bhowmik, (2018) 9 SCC 801 : (2018) 4 SCC (Civ) 595 : (2019) 1 SCC (Cri) 399] , it is specifically held by this Court that the parties shall be governed by the terms and conditions of the contract of insurance. Therefore, as per the contract of insurance, the insurance company shall be liable to pay the compensation to a third party and not to the owner, except to the extent of Rs 1 lakh as observed hereinabove. 9.8. However, at the same time, even as per the contract of insurance, in case of personal accident the owner-driver is entitled to a sum of Rs 1 lakh. Therefore, - 11 - MFA No.102958 of 2017 the deceased, as observed hereinabove, who would be in the shoes of the owner shall be entitled to a sum of Rs 1 lakh, even as per the contract of insurance. However, it is the case on behalf of the original claimants that there is an amendment to the 2nd Schedule and a fixed amount of Rs 5 lakh has been specified in case of death and therefore the claimants shall be entitled to Rs 5 lakh. The same cannot be accepted. In the present case, the accident took place in the year 2006 and even the judgment and award was passed by the learned Tribunal in the year 2009, and the impugned judgment and order has been passed by the High Court in 10-5-2018 [United India Insurance Co. v. Ramkhiladi, 2018 SCC OnLine Raj 3264] i.e. much prior to the amendment in the 2nd Schedule. In the facts and circumstance of the present case, the claimants shall not be entitled to the benefit of the amendment to the 2nd Schedule. At the same time, as observed hereinabove, the claimants shall be entitled to Rs 1 lakh as per the terms of the contract of insurance, the driver being in the shoes of the owner of the vehicle. 10. In view of the above and for the reasons stated above, the present appeal is partly allowed to the aforesaid extent and it is observed and held that the original claimants shall be entitled to a sum of Rs 1 lakh only with interest @ 7.5 per cent per annum from the date of the claim petition till realisation. In the facts and circumstance of the present case, there shall be no order as to costs. 13. Learned counsel for the respondents No.1 to 5 herein/claimants would contend that there is no illegality or infirmity in the judgment and award of the Tribunal and the Tribunal has rightly allowed the claim petition in part, fastening liability on the insurer. - 12 - MFA No.102958 of 2017 14. In support of his contention, learned counsel for the respondents has placed reliance on the judgment of the Apex Court in the case of Wakia Afrin (minor) v. M/s National Insurance Company Limited by order dated 01.08.2025 passed in SLP (civil) Nos. 15447-48/2024. 16. Trite is the principle that the liability with respect to an accident is on the tortfeasor and in the case of a motor vehicle accident if the tortfessor is the driver, the owner has the vicarious liability, which liability is indemnified by the insurer, when there is a valid policy. The liability is essentially of the owner but the provision, in addition to the insured/owner makes liable the authorized insurer too. Hence, when there is a valid policy issued in the name of the vehicle involved in the accident, a claim under Section 163A, as per the words employed in the provision, according to us covers every claim and is not restricted to a third party claim; without any requirement of establishing the negligence, if death or permanent disability is caused by reason of the motor accident. This would also take in the liability with respect to the death of an owner or a driver who stepped into the shoes of the owner, if the claim is made under Section 163A dehors the statutory liability under Section 147 or the contractual liability as reduced to writing in an insurance policy. It would override the provisions under Sections 147 & 149 along with the other provisions of the M.V. Act and the law regulating insurance as also theterms of the policy confining the claim with respect to an owner-driver to a fixed sum. This according to us is the intention of incorporating the non-obstante clause under Section 163A providing for no-fault liability claims, the compensation for which is restricted to the structured formula under the IInd Schedule. It is a beneficial piece of legislation brought in, keeping in mind the enhanced chances of an accident, resulting from the prevalence of vehicles in the overcrowded roads of today. It was a social security scheme, brought about considering the need for a more comprehensive scheme of 'no-fault' liability for reason of the ever-increasing instances of motor vehicle accidents and the difficulty in proving rash and negligent driving. - 13 - MFA No.102958 of 2017 15. Heard the learned counsel appearing for the parties and perused entire material on record. 16. On a careful consideration of the pleadings, evidence on record and the rival submissions, it is not in dispute that the claim petition was filed under Section 163-A of the MV Act in respect of the death of the deceased, who was himself riding the motorcycle at the time of the accident. The Tribunal, while partly allowing the claim petition, fastened liability on the insurer and awarded compensation of Rs.4,24,505/- with interest at the rate of 9% per annum. The appellant–Insurance Company has specifically contended that the deceased was not a third party, and he had borrowed the motorcycle, thereby he stepped into the shoes of the owner. Therefore, the claim petition filed under Section 163-A against the insurer of the said vehicle was not maintainable. 17. The issue raised in this appeal squarely covered by the decision rendered by the Apex Court in - 14 - MFA No.102958 of 2017 Ramkhiladi’s case (supra), wherein it has been categorically held that though Section 163-A is based on the principle of no-fault liability, the deceased must necessarily be a third party vis-à-vis the insured vehicle. It has further held that where the deceased was driving the vehicle as a borrower, he would be in the shoes of the owner and, therefore, his legal heirs cannot maintain a claim under Section 163-A against the owner and insurer of the very vehicle. It is also clarified that the liability of the insurer in such cases flows only from the terms of the contract of insurance and not beyond it, and that Section 147 of the MV Act does not mandate coverage for death or bodily injury to the owner of the vehicle. 18. However, the Apex Court further held that even as per the contractual terms of insurance, the owner/driver is entitled to personal accident coverage to the extent stipulated in the policy, which, in the absence of any enhanced coverage, is Rs.1,00,000/-. Applying the said binding precedent to the facts of the present case, the claim - 15 - MFA No.102958 of 2017 under Section 163-A, insofar as it seeks compensation beyond the contractual personal accident cover, is not maintainable. Consequently, the award passed by the Tribunal fastening liability on the insurer cannot be sustained. The claimants would be entitled only to a sum of Rs.1,00,000/- as personal accident compensation, with interest at 7.5% p.a. from the date of petition till realization, and the impugned judgment and award is liable to be modified to the said extent. 19. The reliance placed by the claimants on the decision of the Apex Court in Wakia Afrin’s case (supra) wherein the Apex Court interpreted Section 163-A of the MV Act in the context of its beneficial and social-security object and held that the provision could override the limitations under Sections 147 and 149 and the contractual terms of the policy; however, the said decision did not consider or dilute the specific principle laid down in Ramkhiladi’s case (supra). - 16 - MFA No.102958 of 2017 20. Since the facts of the present case squarely fall within the ratio laid down in Ramkhiladi’s case, the broader interpretation of Section 163-A as sought to be applied on the basis of Wakia Afrin is not applicable to the present case and the liability of the insurer is confined only to the extent of Rs.1,00,000/- with interest at 7.5% p.a. from the date of petition till realization. 21. In view of the foregoing discussions, this court proceeds to pass the following:- ORDER (i) The appeal is allowed in part. (ii) The judgment and award dated 08.06.2017 passed by the VIII Additional District & Sessions Judge, Belagavi, in MVC No.1346/2016 is modified. (iii) The claimants shall be entitled only to a sum of ₹1,00,000/- as personal accident compensation, with interest at 7.5% p.a. from the date of petition till realization. (iv) The Insurance Company is directed to satisfy the modified award within a period of eight - 17 - MFA No.102958 of 2017 weeks from the date of receipt of a certified copy of this order. (v) Any amount deposited by the Insurance Company in excess of the modified award shall be refunded to it, in accordance with law. (vi) There shall be no order as to costs. Sd/- (DR. K.MANMADHA RAO) JUDGE MBS CT:VP