HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 1 - IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF FEBRUARY, 2026 BEFORE THE HON'BLE MS. JUSTICE TARA VITASTA GANJU MISCELLANEOUS FIRST APPEAL NO.8465 OF 2018(MV-I) BETWEEN: SRI E.NAGARAJU S/O. LATE. ERA YELLAIAH, AGED ABOUT 34 YEARS, R/AT NO. 81, LOHITHNAGARA, NELAMANGALA TALUK, BANGALORE RURAL DISTRICT. …APPELLANTS (BY SRI. SHRIPAD.V.SHASTRI., ADVOCATE) AND: 1. SRI. KUMARASWAMY, S/O LATE BASAVARAJU, NO.17, HANUMANTHAPURA, BILLINAKOTE POST, NELAMANGALA POST, NELAMANGALA TALUK, BANGALORE RURAL DISTRICT. PRESENT R/AT BAVIKERE VILLAGE, YENTAGANAHALLI POST, KASABA HOBLI, NELAMANGALA TALUK, BANGALORE RURAL DISTRICT. 2. THE REGIONAL MANAGER, THE NATIONAL INSURANCE CO., LTD., REGIONAL OFFICE, 2ND FLOOR, M.G.ROAD, SUBARAM COMPLEX, BENGALURU. HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 2 - 3. SRI. ESHWARA @ ESHWARAPRASAD, S/O LATE SHIVANNA, AGED 37 YEARS, BAVIKERE VILLAGE, YENTAGANAHALLI POST, KASABA HOBLI, NELAMANGALA TALUK, BANGALORE RURAL DISTRICT. …RESPONDENTS (BY SRI. A.M.VENKATESH., ADVOCATE FOR R2; V/O DTD: 08.01.2025-NOTICE TO R1 IS HELD SUFFICIENT; V/O DTD: 17.02.2025-NOTICE TO R3 IS DISPENSED WITH) THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 06/02/2018, PASSED IN MVC NO.6234/2016, ON THE FILE OF THE VII ADDITIONAL SMALL CAUSES JUDGE & XXXII ACMM., MEMBER, MACT-3, BENGALURU, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION. THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MS. JUSTICE TARA VITASTA GANJU ORAL JUDGMENT 1. The present petition seeks to challenge a Judgment and Award dated 06.02.2018 passed in MVC.No.6234/2016, by the learned VII Additional Judge and XXXII ACCMM, Bengaluru [hereinafter referred to as the “Impugned Award”]. HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 3 - 2. By the Impugned Award, the learned Tribunal has granted compensation in a sum of Rs.2,50,500/- along with interest at the rate of 8% per annum, from the date of petition till the date of deposit. The award has also found the respondent No.1/owner of the vehicle liable to pay compensation and has exonerated the Insurance Company. The challenge in the present appeal has been made by the appellant/claimant. 3. The brief facts are that, an accident occurred on 12.07.2016 at 02.00 p.m., on National Highway-48, when the appellant/claimant was riding a motorcycle bearing No.KA-52-K-0201. At that time, another motorcycle bearing No.KA-52-J-5737 came from the opposite direction and collided with the appellant's motorcycle. On account of which, the appellant sustained grievous injuries. The appellant was hospitalized for a period of 45 days. A claim petition was filed by the appellant stating that he was healthy prior to the accident and was doing electrical work and earning Rs.10,000/- per month. HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 4 - However, as a result of the accident, he was unable to continue his avocation. 4. The respondent No.1/owner and the respondent No.2/Insurance Company entered appearance. The respondent No.3/Driver of the vehicle did not appear before the Tribunal and was proceeded with ex-parte. The Insurance Company contested the matter and filed its written statement. There was no contest by the owner of the vehicle either. 5. On the basis of the pleadings of the parties, the learned Tribunal framed the following issues: “1. Whether the petitioner proves that he has sustained grievous injuries in the accident occurred on 12-07-2016 at about 2-00 p.m., near Pacific factory, NH-48 Service Road, Kunigal-Nelamangala Road due to the rash and negligent riding of the rider of Motor cycle bearing reg. No.KA-52-J-5737 as alleged in the petition? 2. Whether the petitioner is entitled for compensation? If so, from whom and at what quantum? 3. What Order or Award?” HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 5 - 6. The petitioner examined himself as PW.1, marked documents at Exs.P1 to P18, an Official of respondent / Insurance Company was examined as RW.1, who marked documents at Exs.R1 to Ex.R7. As stated above, the learned Tribunal after examining the documents on record, gave its finding awarding Rs.2,50,500/- to the claimant along with interest of 8% per annum. On the aspect of liability, since the rider of the offending vehicle did not possess a driving licence, only the respondent/Owner of the offending vehicle was made liable to pay the compensation by the learned Tribunal. 7. Learned counsel for the appellant/claimant submits that his challenge in the present appeal is on one ground alone, which is that the Insurance Company was wrongly exonerated and the liability that was accorded on the respondent/owner alone. He submits that it is now been settled by the Supreme Court in terms of the judgment in the case of National Insurance Co. Ltd. v. Swaran HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 6 - Singh and others1 and Pappu and others v. Vinod Kumar Lamba and another2, that even not having a driving licence does not by itself exonerate the Insurance Company. 8. Learned counsel for the respondent/Insurance Company on the other hand fairly submits that the law has now been settled by these two judgments on the aspect of exoneration of the Insurance Company. However, he contends that pay and recovery directions should have been passed by the learned Tribunal. 9. The Supreme Court in Swaran Singh's case has dealt with in detail about the liability of the Insurance Company when a driving licence is either not produced; there was no driving licence; the driving licence was fake; the licence was granted but had expired and had not been renewed, the license granted for one class of restriction of vehicle, but the vehicle was a different class and/or the 1 (2004) 3 SCC 297 2 (2018) 3 SCC 208 HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 7 - vehicle was being driven by a person having the learner's license. The law in this behalf has been crystallized by the Supreme Court and a finding has been given that since the liability of the insurer arises both from the contract as well as statute, the Insurance Company cannot escape its liability merely by stating that there was no driving licence. The beneficial legislation must be accorded liberal interpretation and the liability of an Insurance Company is a statutory liability. The Supreme Court in the Swaran Singh’s case also placed reliance on the judgment of the Supreme Court in the case of United India Insurance Co. Ltd. v. Lehru and Others3. The similar view was taken by the Supreme Court in the case of Pappu case. 10. The Supreme Court in the case of Pappu has held that an enquiry is to be held as to whether the owner of the vehicle has breached the policy based on which recovery rights can be granted to the Insurance Company. It was held that based on this enquiry the compensation 3 (2003) 3 SCC 338 HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 8 - should be paid by the insurer with liberty to recover the same from the owner. An order for pay and recovery was passed thereafter. The relevant extract of Pappu and Others’ case is set out below: “9. On the basis of these pleadings, the matter proceeded before the Tribunal. Admittedly, the respondent No.1/owner of the vehicle did not produce any evidence in support of his plea taken in the Written Statement that the offending vehicle was plied by an authorised person having a valid driving permit. All that respondent No.1 did was to produce a driving licence purportedly of one Joginder Singh. The Tribunal adverted to the said driving licence but found that nowhere the owner of the vehicle has asserted that the Truck No.DIL-5955 was in fact driven by said Joginder Singh at the time of the accident. On the basis of the pleadings, the Tribunal framed issue No.3 and answered the same in favour of the Insurance Company as follows: “Issue No.3: Whether the Truck No. DIL- 5955 was not being driven by a person having valid and effective driving licence?” XXX XXX XXX 10. This view taken by the Tribunal was assailed before the High Court by the claimants. No other contention was raised before the High Court except about the liability of the Insurance Company. The High Court, after analysing the record, negatived the said contention in the following words: “5. The only question which has been raised before this Court is, whether Insurance Company has rightly been held not liable by holding that Truck No. DIL 5955 was not being driven by a person having valid licence. This Court has to consider, whether HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 9 - findings recorded in respect of issue no.3 is correct or not. 6. Learned counsel for the appellants could not dispute that neither any pleadings nor evidence have been led before Tribunal to suggest or to tell, as a matter of fact, that aforesaid truck was being driven by Sri Joginder Singh. It is not in dispute that owner of aforesaid vehicle produced driving licence which was in the name of Sri Joginder Singh but at no stage it is pleaded or brought on record before Tribunal that Sri Joginder Singh was the person who was driving aforesaid Truck. XXX XXX XXX 16. The next question is: whether in the fact situation of this case the insurance company can be and ought to be directed to pay the claim amount, with liberty to recover the same from the owner of the vehicle (respondent No.1)? 17. This issue has been answered in the case of National Insurance Company Ltd. (supra). In that case, it was contended by the insurance company that once the defence taken by the insurer is accepted by the Tribunal, it is bound to discharge the insurer and fix the liability only on the owner and/or the driver of the vehicle. However, this Court held that even if the insurer succeeds in establishing its defence, the Tribunal or the Court can direct the insurance company to pay the award amount to the claimant(s) and, in turn, recover the same from the owner of the vehicle. The three-Judge Bench, after analysing the earlier decisions on the point, held that there was no reason to deviate from the said well-settled principle. In paragraph 107, the Court then observed thus: “107. We may, however, hasten to add that the Tribunal and the court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued, despite arriving at a finding of fact to the effect that the insurer has been able to HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 10 - establish that the insured has committed a breach of contract of insurance as envisaged under sub-clause (ii) of clause (a) of sub-section (2) of Section BHH149 of the Act, the insurance company shall be entitled to realize the awarded amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act. However, in the event, having regard to the limited scope of inquiry in the proceedings before the Tribunal it has not been able to do so, the insurance company may initiate a separate action therefor against the owner or the driver of the vehicle or both, as the case may be. Those exceptional cases may arise when the evidence becomes available to or comes to the notice of the insurer at a subsequent stage or for one reason or the other, the insurer was not..." 18. Further, in para 110, the Court National Insurance Co.Ltd. (National Insurance Co.Ltd. V. Swaran Singh, (2004)3 SCC 297 has observed thus: "110. Summary of Findings: XXX XXX XXX (iii) The breach of policy condition, e.g. disqualification of driver or invalid driving licence of the driver, as contained in Sub- section (2)(a)(ii) of Section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 11 - was not disqualified to drive at the relevant time, (iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish 'breach' on the part of the owner of the vehicle; the burden of proof where for would be on them. (v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance of each case. (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defences available to the insurer under Section 149(2) of the Act.” [Emphasis Supplied] 11. In the present case, the learned Tribunal has found that the driver of the vehicle did not have a driving license at all. In addition, the driver of the vehicle did not appear while the owner did not file anything controverting the HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 12 - same. In addition, it was held that the police investigation/charge sheet [Ex.P6] had affirmed this finding. 12. Given the settled law in this behalf, the learned Tribunal ought to have fastened the liability on the respondent/Insurance Company to make payment of the awarded compensation to the appellant/claimant and directed recovery from the owner of the offending vehicle. 13. In view of the aforegoing discussion, this Court deems apposite to pass the following: ORDER (i) The appeal is allowed. (ii) The Impugned Judgment and Award dated 06.02.2018 passed in MVC.No.6234/2016, by the learned VII Additional Judge and XXXII ACCMM, Bengaluru is modified. (iii) The Insurance company is directed to pay the compensation amount inclusive of interest HC-KAR NC: 2026:KHC:8417 MFA No. 8465 of 2018 - 13 - amended to the claimants in the first instance and within eight weeks from today, and shall be entitled to the said amount from the insured owner of the vehicle, in accordance with law. (iv) The remaining portion of the Impugned Award of the Tribunal remains undisturbed. (v) The amount(s) in deposit before this Court, if any, shall be transmitted to the Tribunal within a week. (vi) The Registry is directed to draw the modified Award accordingly. (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. (TARA VITASTA GANJU) JUDGE NR/KS List No.: 1 Sl No.: 21 Digitally signed by TARA VITASTA GANJU Location: HIGH COURT OF KARNTAKA