Karnataka High Court
United India Insurance Co. Ltd vs Smt. R Sumathi on 10 July, 2025
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NC: 2025:KHC:25451
MFA No. 4622 of 2015
HC-KAR R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF JULY, 2025
BEFORE
THE HON'BLE MR. JUSTICE UMESH M ADIGA
MISCELLANEOUS FIRST APPEAL NO. 4622 OF 2015 (MV-D)
BETWEEN:
UNITED INDIA INSURANCE CO., LTD.,
REGIONAL OFFICE,
KRISHI BHAVAN BUILDING,
NRUPATHUNGA ROAD,
BANGALROE-560 009.
REP. BY ITS DY. MANAGER
SRI. K.N. SURESH.
...APPELLANT
(BY SRI. ANUP SEETHARAMA RAO, ADVOCATE)
AND:
1. SMT. R SUMATHI
AGED ABOUT 25 YEARS,
W/O LATE K. RANGARAJU,
Digitally signed by KORLAHALLI
BHARATHIDEVIKRISHNACHARYA
2. MASTER R. JEEVAN
Location: HIGH COURT OF
KARNATAKA
S/O LATE K. RANGARAJU,
AGED ABOUT 7 YEARS,
3. MASTER R. CHARANRAJ
S/O LATE K. RANGARAJU
AGED ABOUT 5 YEARS,
4. SMT. RUKMINIYAMMA
W/O LATE R. KRISHNASWAMY,
AGED ABOUT 56 YEARS,
RESPONDENTS NO.2 AND 3 BEING MINORS,
REP. BY THEIR MOTHER
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NC: 2025:KHC:25451
MFA No. 4622 of 2015
HC-KAR
THE FIRST RESPONDENT HEREIN.
ALL ARE RESIDENTS OF
RATHNAPURI COLONY,
HUNSOOR TALUK,
MYSORE DISTRICT - 570 103.
...RESPONDENTS
(BY SRI. A.K. BHAT, ADVOCATE FOR
SRI.S RAJU, ADVOCATE FOR R1 AND R4,
R2 AND R3 MINORS REPRESENTED BY R1)
THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE
JUDGMENT AND AWARD DATED:15.03.2014 PASSED IN MVC
NO.530/2009 ON THE FILE OF THE COURT OF THE
ADDITIONAL SENIOR CIVIL JUDGE, RAMANAGARA, AWARDING
COMPENSATION OF RS. 2,00,000/- WITH INTEREST @ 6% P.A
FROM THE DATE OF PETITION TILL THE DATE OF
REALIZATION.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE UMESH M ADIGA
ORAL JUDGMENT
This appeal is filed by the Insurance Company (respondent) challenging the judgment and award dated 15th March 2014, passed by the Addl.Senior Civil Judge, Ramanagara, (for short `Tribunal), in MVC.No.530/2009.
2. For the sake of convenience, the parties are referred to as per their ranking before the Tribunal. -3-
NC: 2025:KHC:25451 MFA No. 4622 of 2015 HC-KAR
3. The brief facts of the case of both the parties before the Tribunal are as under :
On 25.10.2007, at about 04.00 a.m., the deceased Rangaraju was traveling in a mini lorry bearing registration No.KA-45-636, from Bengaluru towards Mysuru. The said vehicle dashed against some other unknown vehicle and caused the accident. As a result, the said Rangaraju sustained grievous injuries and died at the spot.
Claimants being the wife, minor children and mother of the deceased, filed the claim petition under Section 163A of Motor Vehicles Act, 1988 (for short, `M.V. Act'), praying to award compensation of Rs.15 lakhs.
4. The respondent-Insurance Company filed its written statement denying the contentions of the claim petitioners. It denied its liability to pay the compensation on the ground of violation of terms and conditions of the policy of insurance. With these reasons, prayed to dismiss the claim petition.
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5. From the rival contentions of the parties, the Tribunal framed necessary issues.
6. The claimants to prove their case, examined one witness as PW-1 and marked 7 documents as per Exs.P-1 to P-7. The respondent No.2 examined one witness as RW-1 and marked Ex.R-1.
7. The Tribunal after hearing both parties and appreciating the materials available on record, held that claim petition is maintainable under Section 163A of M.V.Act against the insurer. The Tribunal, while exercising its jurisdiction, awarded compensation of Rs.2 lakhs by the impugned judgment, as the insurer had collected a premium of Rs.100/- from the owner of the vehicle to cover the risk of owner cum driver. The same is challenged by the insurer in this appeal.
8. Heard the arguments of learned counsel for both parties and perused the materials placed before this Court. -5-
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9. The learned counsel for the appellant/Insurance Company contended that Section 163A or Section 166 of M.V.Act pertains to the claim by third party. In this case, claimants are not third parties; They are legal heirs of owner of the vehicle; Under Section 163A of M.V.Act, they cannot enforce the contractual liability between the insured and insurer; The Civil Court had no jurisdiction to award the compensation in such circumstances; The Tribunal has not considered the same and has awarded the compensation, which is illegal. Therefore, prayed to set aside the same.
10. Learned counsel for the respondents/claimants contended that the Tribunal has not awarded the compensation under Section 163A of M.V.Act; The Tribunal in the impugned judgment, following the judgment of this Court in the case of Smt.Junjamma @ Thayamma and others -vs- The Oriental Insurance Co. Ltd., and another,1 and also, considering the fact 1 2012 KAR 3600 -6- NC: 2025:KHC:25451 MFA No. 4622 of 2015 HC-KAR that the owner of the vehicle had paid an additional premium, and in order to avoid further litigation for the recovery of compensation from the owner, the insurance company was directed to pay a fixed sum of Rs. 2 lakhs ; The insurer is liable to pay the compensation in case of death of owner of the vehicle in the accident and there is no illegality in the said findings.
11. It is further contended that a helpless widow, her children, and mother, who lost the breadwinner of the family, prayed before the Tribunal for awarding of the compensation. However, as per the provisions of law, they were not entitled to such compensation, and they came to know about this only after the judgment was passed. To avoid further litigation, the Tribunal granted the relief after a lapse of nearly four years from the date of filing the claim petition. The insurer ought to have paid the said amount, but unnecessarily it dragged the claimants before this Court and has now prayed to set aside the said -7- NC: 2025:KHC:25451 MFA No. 4622 of 2015 HC-KAR judgment. Therefore, the appeal is devoid of merits and prayed to dismiss the appeal.
12. The fact of the accident is not in dispute. It is also not in dispute that the deceased was the owner of the vehicle, who died in the said accident. It is also not in serious dispute that in Ex.R-1, the insurance company had collected an additional premium of Rs.100/- to cover the risk of owner-cum-driver of the vehicle. In Ex.R-1, the liability of the insurer is also fixed at Rs.2 lakhs in case of death of owner-cum-driver of the vehicle.
13. The main grievance of learned counsel for the appellant/insurance company is that, it is not a statutory liability, but it is a contractual liability and contractual liability cannot be enforced under the provisions of Motor Vehicles Act either under Section 165 or under Section 163A of M.V.Act; The Tribunal has not considered these points; Had the claimants approached the insurance company, it could have considered the said application and passed suitable orders; If the claimants are unsatisfied by -8- NC: 2025:KHC:25451 MFA No. 4622 of 2015 HC-KAR the action taken by the insurer, then they could have contested the said matter before the concerned authority and not before the MACT; The award passed by the Tribunal is against the provisions of law and without jurisdiction.
14. Learned counsel for the appellant further contended that the insurer has filed a Revision Petition before the very same Court in R.P.No.1/2014, praying to rectify the mistakes committed by the Tribunal. The Tribunal by the order dated 24.04.2015, rejected the said review petition on the ground that the said review petition is not maintainable. Since the said order is an illegal order, it is prayed to set aside the impugned judgment and award.
15. Considering the contentions of the appellant, it appears the appellant-insurer intends to adopt a harsh stance against the claimants, who include a helpless widow, minor children and aged mother of the deceased. Unfortunately, the breadearner of the family was lost by -9- NC: 2025:KHC:25451 MFA No. 4622 of 2015 HC-KAR the claimants. It appears that, due to incorrect legal advice or possibly be due to the law laid down by the higher Court prevailing at that point of time, the claimants filed a petition before the Tribunal seeking compensation under Section 163A of the Motor Vehicles Act, even though the case was one of hit and run. Consequently, they were unsuccessful in obtaining compensation under Section 163A of the Act. In view of catena of judgments of the Hon'ble Apex Court, including the recent judgment in the case of Ramkhiladi and another -vs- United India Insurance Company and another,2 wherein it is held that a person cannot be a claimant and an recipient at the same time. Therefore, the claim petition is not maintainable. However, it has further held that, as per the terms of the policy, insurer shall pay Rs.1 lakh since it has collected the premium covering the liability of owner of the vehicle.
2 AIR 2020 SC 527
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16. In the case of Oriental Insurance Company Limited -vs- Rajni Devi and others,3 the Hon'ble Apex Court though held that the claim petition filed under Section 163A of M.V.Act by the owner or family members of the deceased owner is not maintainable since the claimant and recipient cannot be the same person, however, directed the insurance company to pay compensation of Rs.1 lakh as per the liability under the insurance policy.
17. In the present case, the claimants have not filed a claim petition for enforcement of contractual liability between the owner and insurer under Ex.R-1. They have filed a claim petition as a third party and as legal heirs of deceased owner of the vehicle. The Tribunal considering the judgment of this Court, as well as Apex Court and also interpreting Section 163A of M.V.Act, rightly dismissed the claim petition. However, the Tribunal found that the insurer was liable to pay the compensation as per the 3 (2008) 5 SCC 736
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NC: 2025:KHC:25451 MFA No. 4622 of 2015 HC-KAR terms of the policy of insurance in case of death of owner of the vehicle. Therefore, by exercising its powers under Section 151 of the Code of Civil Procedure (CPC), the Tribunal moulded the relief. Instead of directing the claimants to approach the office of the insurance company and plead for compensation under the terms of the policy, the Tribunal directed the insurer to pay a sum of Rs. 2 lakhs. This order was passed to meet the ends of justice and in the proper exercise of the Tribunal's jurisdiction under Section 151 of the CPC. Hence, it cannot be considered illegal. Accordingly, the appeal is devoid of merit.
18. Insurance is a contract based on trust. When the insurance company was aware that the insured was not entitled to claim compensation either under Section 165 or Section 163A of the Motor Vehicles Act, it ought to have fairly deposited the sum of Rs. 2 lakhs, or at the very least, submitted before the Tribunal that although the claimants were not entitled to compensation under the
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NC: 2025:KHC:25451 MFA No. 4622 of 2015 HC-KAR provisions of the Motor Vehicles Act, they were entitled to Rs. 2 lakhs as per the terms and conditions of the policy. However, the insurer failed to comply with this requirement.
19. It was repeatedly contended by the learned counsel for the appellant that, despite filing the petition, the claimants ought to have approached the insurer for disbursement of the compensation amount. However, once the insurance company became aware that the insured, who had paid an additional premium of Rs. 100 to cover his risk in the event of an accident, was entitled to compensation, it should have, in all fairness, deposited the amount before the Court. Doing so would have provided much-needed relief to the claimants. Instead, the concerned officers of the insurance company, without complying with the award passed by the Tribunal, chose to challenge it before this Court. As a result, the already helpless claimants were unable to receive even the
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NC: 2025:KHC:25451 MFA No. 4622 of 2015 HC-KAR meagre amount of compensation awarded by the Tribunal under the terms of the insurance policy.
20. Relevant provisions of Motor Vehicles Act are benevolent legislation. To provide immediate and just compensation to the victims of the accident or legal heirs of the deceased, who died in an accident, Tribunals are formed. It is a summary trial proceedings. A provision is also made in the Act compelling the owners of the vehicle to insure their respective vehicles to cover risk of at least of third parties. The said provision is not passed just to have commercial benefit to the insurance companies, but with an intention that due to lack of funds, if owner is unable to pay the amount, then at least, from the insurance company wherein it was insured, shall pay it. The provisions are made regarding rights and duties of insurer in this regard in the Act. Section 163A of M.V.Act, no where fixes as to who is liable to pay compensation. it is based on "no fault liability". It is suffice, if vehicle is involved in the accident. The said provision was
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NC: 2025:KHC:25451 MFA No. 4622 of 2015 HC-KAR interpreted by the Hon'ble Apex Court in the case of Ramkhiladi (supra), and other cases and held that, 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 authorized 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.
21. Further, the Division Bench of this Court in the case of New India Assurance Co. Ltd., -vs- Smt.Jyothi and others, MFA.No.2306/2023, dated 18th March 2025, referring to the judgments cited above and the judgement of Hon'ble Apex Court in the case of Ningamma and another -vs- United India Insurance Company Limited, 4 has taken a same view.
22. In the present case, the insurer is denying its liability only on the basis of prevailing law laid down by the 4 (2009) 13 SCC 710
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NC: 2025:KHC:25451 MFA No. 4622 of 2015 HC-KAR judicial precedents. Unfortunately, it is turning its blind eyes to a portion of judgment wherein it is also held that in such cases, insurer shall pay the compensation as per the terms of the policy. It was argued that the said portion of order is beyond the jurisdiction, since contractual liability cannot be enforced by the Tribunal. Such arguments could be accepted if petition is filed praying for such a relief. If a petition is filed to claim compensation under statutory liability and Tribunal finds that as per the law laid down by the higher Courts, relief cannot be given under Section 163A of the Act, to meet the ends of justice, it directs the insurance company to pay compensation as per the terms of the policy. There is no illegality in the said findings.
23. Therefore, it is a fit case for imposing heavy cost on the insurer for having made the claimants to suffer unnecessary litigation expenses and other harassments.
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24. Accordingly, I proceed to pass the following:
ORDER
i) The Appeal is dismissed, with cost of Rs.50,000/- payable by the appellant to the claimants.
ii) The judgment and award dated 15th March 2014, passed in MVC.No.530/2009, by the Addl.Senior Civil Judge, Ramanagara, and the order dated 24.04.2015, passed in the Review Petition No.1/2014, stand confirmed.
iii) The appellant - Insurance Company shall deposit the amount awarded by the Tribunal with interest at the rate of 6% p.a., from the date of petition till its realization. The appellant-insurer shall also deposit the cost of Rs.50,000/- awarded above, within a period of four weeks from the date of award, before the Tribunal.
iv) The apportionment, deposit and release of the amount is as ordered by the Tribunal.
v) Whatever amount deposited by the appellant-insurer before this Court shall be transmitted to the concerned Tribunal for disbursement.
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vi) Draw award accordingly.
Registry is directed to send back the records along with a copy of this judgment to the concerned Tribunal.
Sd/-
(UMESH M ADIGA) JUDGE bk List No.: 1 Sl No.: 39