Karnataka High Court
The Legal Manager vs Shailaja on 28 July, 2025
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MFA No. 201632 of 2021
HC-KAR
IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 28TH DAY OF JULY, 2025
BEFORE
THE HON'BLE MR. JUSTICE C M JOSHI
MISCL. FIRST APPEAL NO. 201632 OF 2021 (MV-D)
BETWEEN:
THE LEGAL MANAGER,
IFFCO TOKIO G.I.C. LTD.,
G1, G12 AND G13, ASIAN ARCADE,
NEAR ANAND HOTEL,
S.B. TEMPLE ROAD,
KALABURAGI.
(NOW REP. BY AUTHORISED SIGNATORY,
KASTURI NAGAR, BENGALURU).
...APPELLANT
(BY SMT. PREETI PATIL MELKUNDI, ADVOCATE)
Digitally signed AND:
by NANDINI R
Location: 1. SHAILAJA,
HIGH COURT W/O SHARANABASAPPA BIRADAR,
OF
KARNATAKA AGED ABOUT 42 YEARS,
OCC: HOUSEHOLD.
2. BHAGYASHREE,
D/O SHARANBASAPPA BIRADAR,
AGED ABOUT 16 YEARS,
OCC: STUDENT.
3. BHAGESH,
S/O SHARANBASAPPA BIRADAR,
AGED ABOUT 13 YEARS,
OCC. STUDENT.
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NC: 2025:KHC-K:4247
MFA No. 201632 of 2021
HC-KAR
4. POOJA,
D/O SHARANBASAPPA BIRADAR,
AGED ABOUT 11 YEARS,
OCC. STUDENT.
RESP. NO. 2 TO 4 HEREIN ARE MINORS,
U/G OF THEIR MOTHER RESP. NO.1 HEREIN,
ALL ARE R/O. E/9/693/17, NEAR HANUMAN TEMPLE,
FILTERBED, SHAHABAZAR TANDA, KALABURAGI,
NOW AT DHARMWADI, TQ. ALAND,
DIST. KALABURAGI-585 101.
5. SHARANBASAPPA,
S/O GURULINGAPPA BIRADAR,
AGED ABOUT 46 YEARS,
OCC. MASON,
(GOUNDI) WORK,
R/O. E/9/693/17, NEAR HANUMAN TEMPLE,
FILTERBED, SHAHABAZAR TANDA,
KALABURAGI-585 101.
...RESPONDENTS
(BY SRI BABU H METAGUDDA, ADVOCATE FOR R1 TO R4;
R-5 SERVED)
THIS MFA IS FILED UNDER SECTION 173(1) OF THE
MOTOR VEHICLES ACT, PRAYING TO SET-ASIDE THE
IMPUGNED JUDGMENT AND AWARD DATED 31.03.2021 IN MVC
NO. 156/2019 PASSED BY THE SENIOR CIVIL JUDGE AND
MACT AT ALAND.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 28.04.2025 AND COMING ON FOR
'PRONOUNCEMENT OF JUDGMENT', IN THE PRINCIPAL BENCH
AT BENGALURU THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
CORAM: HON'BLE MR. JUSTICE C.M. JOSHI
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NC: 2025:KHC-K:4247
MFA No. 201632 of 2021
HC-KAR
CAV JUDGMENT
(PER: HON'BLE MR. JUSTICE C.M. JOSHI) Being aggrieved by the judgment and award in MVC.No.156/2019 dated 31.03.2021 by learned Senior Civil Judge and MACT, Aland, Kalaburagi District, the Insurance Company (who was respondent No.2 therein) has approached this Court in appeal questioning the liability fastened upon it.
2. The factual matrix of the case is that on 27.08.2015, deceased Gururaj was proceeding towards Muktambika College of Science, Kalaburagi, on his Hero Honda Splendor Plus motorcycle bearing registration No.KA-32-EB-1761, which was owned by his father-
Sharanabasappa i.e., respondent No.1. The deceased-
Gururaj fell down from the said motorcycle due to a skid in front of Pratibha Photo Studio near Lalgeri Cross and he succumbed to the injuries on the way to the hospital. The Gulbarga Additional Traffic Police registered a case in Cr.No.132/2015 and ultimately, filed a report that the -4- NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR deceased was negligent but the case stands abated. The petitioners who are the mother, brother and sisters of the deceased filed a claim petition under Section 163A of the Motor Vehicles Act, 1988 before the Tribunal contending that the deceased was aged 24 years working as a Clerk in Muktambika College of Science, Kalaburagi, earning a salary of Rs.40,000/- per annum. They sought the compensation from the owner and insurer of the vehicle.
3. In pursuance to the notice, respondent No.1 did not appear and as such, he was placed ex-parte.
Respondent No.2-Insurance Company appeared and resisted the petition denying the age, occupation and income of the deceased. It was contended that deceased-
Gururaj himself was driving the motorcycle in a rash and negligent manner and he fell down on the road sustaining injuries and later succumbed to it. The deceased being the tortfeasor, is not covered by the policy of insurance issued by respondent-Insurance Company. Inter-alia, the Insurance Company also denied the claim as it is -5- NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR exorbitant and imaginary and the mandatory conditions of the policy were violated by the rider as he did not possess a valid driving licence.
4. On the basis of the above contentions, the Tribunal framed the following:
Issues "1) Whether petitioners prove that on 27.08.2015 at about 12-00 hours, the deceased Gururaj S/o Sharanabasappa Biradar was proceeding on Hero Honda Splendor Plus motorcycle bearing Regn.No.KA-32-EB-1761, near to Arab Masjid, Opposite to Pratibha Photo Studio on Lalgeri Cross to Goa Hotel Road of Kalaburagi, due to skid of said motorcycle, he fell down on the ground and sustained grievous injuries and he died on the way to hospital?
2) Whether the petitioners prove that, they are the legal heirs of the deceased Gururaj S/o Sharanabasappa Biradar?
3) Whether the respondent No.2 proves that, the rider of the Hero Honda Splendor Plus motorcycle bearing Regn. No. KA-32-EB-1761 was not having valid and effective driving -6- NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR license and he was not authorized to drive the specific class of vehicle as on the date of accident, and violated the terms on the date of accident, and violated the terms and conditions of the policy, as such the respondent No.2 is not liable to pay compensation to the petitioners?
4) Whether petitioners are entitled for compensation as prayed in the petition? If so, what is the compensation amount and from whom?
5) What order or award?"
5. Petitioner No.1, who is mother of the deceased was examined as PW.1 and Exs.P1 to 8 were marked in evidence. The official of respondent No.2-Insurance Company was examined as RW.1 and the policy was marked as Ex.R1.
6. After hearing the arguments, the Tribunal held issue Nos.1, 2 and 4 in the affirmative, issue No.3 in the Negative and fastening the liability on the Insurance -7- NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR Company, awarded a compensation of Rs.6,86,000/-
under following heads:
1 LOSS OF DEPENDENCY Rs. 6,80,000/- 2 TRANSPORTATION CHARGES Rs. 3,000/- AND FUNERAL EXPENSES 3 LOSS OF ESTATE Rs. 3,000/-
TOTAL AWARD AMOUNT Rs. 6,86,000/-
7. While coming to such conclusion, it considered the judgments in the case of UNITED INDIA INSURANCE COMPANY LTD VS. SUNIL KUMAR AND ANOTHER1, NINGAMMA AND ANOTHER VS. UNITED INDIA INSURANCE COMPANY LIMITED2, RAM KHILADI AND ANOTHER VS. UNITED INDIA INSURANCE COMPANY AND ANOTHER3 and held that the policy was in force and therefore, the insurer is liable to pay the compensation.
8. Being aggrieved by fastening the liability on the Insurance Company, the Insurance Company has approached this Court in appeal.
12017 SCC OnLine SC 1504 2 (2009) 13 SCC 710 3 (2020) 2 SCC 550 -8- NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR
9. On appeal being admitted, notice was issued to the respondents. The claimants/petitioners have appeared through their counsel and owner of the vehicle (respondent No.5 herein) did not appear despite service of notice. The Tribunal records have been secured and the arguments by learned counsel appearing for the appellant and respondent Nos.1 to 4 were heard.
10. Learned counsel Smt.Preeti Patil Melkundi, appearing for the appellant-Insurance Company submits that when there is no involvement of a third party vehicle, it being a self made accident by the deceased, who become tortfeasor in himself, is not covered under the policy of Insurance. She submits that the deceased cannot be termed as third party and therefore, the Insurance Company is not bound to compensate the LRs of the deceased as there is no statutory requirement of the same. If the policy covers the rider for personal accident claim, only to that extent, it is liable under the contractual obligations. She submits that the contractual liability with -9- NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR a tortfeasor, who comes under the insured is only to the extent of Rs.1,00,000/- provided an additional premium is paid under the policy. It is stated that the policy at Ex.R1 covers the liability of the owner/driver to the extent of Rs.1,00,000/- under the contract, which if refused by Insurance Company would be determinable before a different forum but certainly not the MACT.
11. In this regard, she relies upon the judgment in the case of SMT.SANGEETA AND OTHERS VS.
SRI.KRISHNA CHARI AND ANOTHER4. She also relies upon the judgment by a Division Bench of this Court in the case of APPAJI (SINCE DECEASED) AND ANOTHER VS.
M.KRISHNA AND ANOTHER5 and THE ORIENTAL INSURANCE CO. LTD. VS. SMT.MAHABUNNI6.
12. Per contra, Sri. Babu H. Metagudda, learned counsel appearing for the petitioners (respondent Nos.1 to 4 herein) submits that the question raised is no more res-
42018 Kant MAC 552 5 2004 ACJ 1289 6 2008 ACJ 1158
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR integra. It is submitted that a Division Bench of this Court in the case of SMT.PRIYA AND OTHERS VS.
SRI.ARMUGAM AND ANOTHER7 has considered this aspect in detail and has held that when the petition is filed under Section 163A of MV Act, despite the claim was by the tortfeasor, the Insurance Company is liable to pay the compensation. In furtherance of his contention, he relies on the judgment of the Apex Court in case of NATIONAL INSURANCE COMPANY LTD. VS. SINITHA AND OTHERS8, SHIVAJI AND ANOTHER VS. DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD AND ORS.9, THE BRANCH MANAGER VS. SMT.LALITABAI AND OTHERS10, MR.B.MAKBUL PASHA AND OTHERS VS.
S.R.BHAKTHAVATHSALAM AND ANOTHER11, THE ORIENTAL INSURANCE CO. LTD. VS. SMT.BHAGYALAKSHI AND OTHERS12. It is his submission that Section 163A of the Motor Vehicles Act, specifically states that the question 7 MFA 3889/2011 DD 11.06.2019 8 2012 (2) SCJ 227 9 2018 AIAR (Civil) 803 10 MFA No.31626/2009 DD 30.08.2012 11 MFA No.3172/2019 DD 13.04.2023 12 MFA No.10260/2010 DD 19.08.2020
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR of negligence cannot be looked into and the compensation has to be awarded to the claimant as per the structured formula. He submits that going into the question of the negligence and due to whose fault the accident occurred is an anathema for the purport of Section 163A of MV Act and therefore, no indulgence is required in respect of the judgment and award passed by the Tribunal.
13. The question that arises in this appeal is, Whether the LRs of deceased rider of a two wheeler, not being the owner can claim compensation for an accident where no other vehicle is involved, under Section 163A of the MV Act?
14. To understand the provisions of Section 163A of MV Act, in a better manner, the same is reproduced below:
"163A. Special provisions as to payment of compensation on structured formula basis.--
(1) Notwithstanding anything contained in this Act or in any other law for the time being in force or
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR instrument having the force of law, the owner of the motor vehicle of the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be.
Explanation.--For the purposes of this sub-section, "permanent disability" shall have the same meaning and extent as in the Workmen's Compensation Act, 1923 (8 of 1923).
(2) In any claim for compensation under sub- section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person.
(3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule.
15. The law on tort is based on 'fault liability'. The person who commits an 'actionable negligence' is liable to compensate for the injuries caused due to his negligence.
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR If he is indemnified by a contract of insurance in respect of such acts during which the 'actionable negligence' was committed, then the indemnifier or the insurer is liable due to the contractual obligations. It is pertinent to note that a borrower of a vehicle from the registered owner commits such actionable negligence, the borrower would be stepping into the shoes of the owner or the insured. In view of this, if a borrower commits an actionable negligence, the insurer, who issued the Insurance Policy would be held liable due to the contractual liability. The question is 'Whether the statute require the insurer to compensate the insured even if the contract is otherwise?'.
16. The provisions of Section 163A of MV Act, carve out an exception to this principle. It is worth to note that Sections 165 and 166 of Motor Vehicles Act, dilute the principle of 'Strict Liability' by incorporating the word 'use of the vehicle' instead of 'actionable negligence'.
Obviously, it was in the object of providing a solace to the victims of the accidents arising out of the use of the motor
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR vehicle. The use of the motor vehicles is an indispensable requirement of facilities of transportation in any growing economy of the Country. Therefore, in order to augment and to meet the effects of the accidents on any person or his family, it was felt that the requirement of an 'actionable negligence' under Sections 165 and 166 of MV Act, need to diluted further. Therefore, the provisions of Section 163A of MV Act, were introduced. It is pertinent to note that the compensation payable under Sections 165 and 166 of MV Act, would be more comprehensive in nature, but the compensation under Section 163A of MV Act, would be as stated in the Schedule-2 of the Motor Vehicles Act. Keeping these aspects in mind, the case law that has developed concerning Section 163A of MV Act, needs to be considered by this Court.
17. In the case of APPAJI (supra), the Division Bench of this Court in paragraph Nos.22 and 23 has held as below:
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR "22. Two decisions relied upon by the appellants may at this stage be noticed. In Kokla Devi's case (supra), a Division Bench of the High Court of Himachal Pradesh held that Section 163A had brought about a drastic change in the concept of tortuous liability prevaling prior to it. The Court was of the view that the non obstante clause in Section 163A permitted even the tort feasor to claim compensation on the principle of 'no fault liability'. With respect to the Hon'ble Judges who delivered the said decision we find it difficult to subscribe to that view. Section 163A of the Act no doubt bring about a significant change in the legal position as regards the obligation to prove fault is concerned, but the change is not so drastic so as to make even a tort feasor entitled to claim compensation for his own act of rashness, negligence or imprudence. The non obstante clause in Section 163A simply dispenses with proof of fault by the claimants against the driver or the owner of the vehicle involved in the accident. The claimant under Section 163A therefore need not prove that the driver to the owner of the vehicle was at fault in the sense that the accident had occurred on account of any negligence or rashness on his part. That does not however mean that the claimant can maintain a claim on the basis of his own fault or negligence and argue that even when
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR he himself may have caused the accident on account of his own rash and negligent driving, he can nevertheless make the insurance company pay for the same. Inasmuch as Section 163A dispenses with proof of fault, it does so only where the claimant is not solely responsible for the accident. The correct approach appears to us to be to find out whether in the absence of Section 163A, a claim could on the facts pleaded be maintained by the claimant of the answer is 'no' because the claimant was himself the tort feasor, the provisions of Section 163A would not come to his rescue and make such a claim maintainable. If the answer is 'yes' the beneficial provisions of Section 163A would absolve the claimant of the obligation to prove that the accident had taken place on account of the fault of the driver or owner of the vehicle provided he is willing to accept the amount of compensation offered according to the structured formula prescribed in the Schedule. That is the only way in which the anomaly arising out of a contrary interpretation can possibly be avoided.
23. In New India Assurance Co. Ltd.'s case (supra), a Division Bench of Gujarat High Court also took the view that the non obstante clause appearing in Section 163A permitted even the tort feasor to claim compensation and that the
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR insurance company can contest the claim only on the ground of total absence of a contract of insurance and not otherwise. For the reasons that we have set out above, we regret our inability to follow that line of reasoning. As held by the Supreme Court in Oriental Insurance Co. Ltd.'s case (supra) the non obstante clause simply excludes determination of compensation on the principle of fault liability. The said provision does not permit a person to place a premium upon his own fault and make the insurance company pay for the same."
(underlining supplied)
18. In the case of SMT.MAHABUNNI (supra), learned Single Judge of this Court in paragraph Nos.12 to 16 has held as below:
"12. In the light of these rival contentions the questions that arise for consideration in the present appeals are:
a. Whether an insurer is liable to satisfy the claim for compensation on the death of the rider of the vehicle insured, when a claim is made under Section 163-A of the Act.
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR b. Whether the insurer can claim that a policy of insurance issued in terms of Section 147 of the Act, would not require it to cover the risk to the life of the rider of a two-
wheeler.
c. Whether a claim for compensation be made by the insured himself or his legal representatives on injury or death, as the case may be, by the use of his own vehicle which is involved in an accident, against the insurer.
13. In answering these questions the limits of liability of the insurer in respect of a policy of insurance issued in terms of Chapter XI of the Act, need to be kept in view. Section 147 sets out the requirements and limits of liability under a policy to be issued in compliance with Chapter XI of the Act. The said section provides that the policy must insure a owner against any liability to a third party caused by or arising out of the use of the vehicle in a public place and against death or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. The policy shall not be required to cover an employee of the insured in respect of bodily injury or death arising out of and in the course of his employment. An exception is that the
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR policy must cover a liability arising under the Workmen's Compensation Act, 1923, in respect of the death or bodily injury to an employee who is engaged in driving the vehicle or who serves as a conductor in a public service vehicle or an employee who travels in the vehicle of the employer carrying goods, if it is a goods carriage. It is clear that the object is to ensure compulsory coverage of the liability relating to the person or properties of third parties and in respect of employees of the insured employer. Hence whether the claim is under Section 140, 163-A or under 166 of the Act, the limit of liability of the insurer in respect of a policy issued as required under the Act, would not cover the risk to the owner, or any other who is permitted the use of the vehicle, other than an employee.
14. It is not possible to envisage that Section 163-A is a departure from the concept of tortious liability. The non obstante clause incorporated in the section does not alter the legal basis on which a liability arises under Section 147 of the Act nor does it provide a different basis for the same. It would not permit even the tort-feasor to claim compensation on the principle of no fault liability. As held by the Apex Court in Oriental Insurance co. Ltd v. Hansrajbhai V. Kodala 2001 ACJ 827, the
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR non obstante clause simply excludes determination of compensation on the principle of fault liability. The provision does not permit a person to place a premium upon his own fault and make the insurance company pay for the same.
15. The first question is answered in the negative. In the instant case the Insurer cannot be made liable even if the claim petition is under Section 163-A of the Act.
16. The second question is answered in the affirmative. In the absence of any special contract, the Insurer can question any liability sought to be fastened beyond the requirement of the terms of Section 147 of the Act. The terms of any special contract are enforceable elsewhere and not before the Motor Accident Claims Tribunal."
(underlining supplied)
19. This Court in the case of NAVEEN VS.
BASANNA13 relied on the judgment in the case of APPAJI (Supra) and held in paragraph No.8 as below:
"8. In catena of decisions, this Court has held that, the statutory liability contemplated under the 13 MFA No.201440/2019 DD 24.03.2025
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR provisions of the M.V.Act, emanate from the fact that the driver or the rider is the tortfeasor and as such, he is liable to pay the compensation for the tort committed by him. The owner of the vehicle being vicariously liable, is to compensate the victim out of vicarious liability. The liability of the Insurance Company would arise from the contractual relationship with the owner of the vehicle. In other words, the claimant has to be a third party to maintain a claim petition under the provisions of 163A or 166 of the M.V.Act."
20. Another Bench of this Court in the case of SMT.SANGEETA (Supra) after referring as many as 11 judgments including APPAJI (Supra) has summarized its opinion in paragraph No.35 as below:
"35. To sum up, in the opinion of this Court, a claim petition seeking payment of compensation in a road accident, by the owner of the vehicle or by any other person driving the vehicle and not being an employee, is not maintainable under Section 163A or Section 166 of the M.V.Act, before MACT. This position holds good even where the vehicle is insured for own damages and premium is paid to cover the risk of "owner-cum-driver" under
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR comprehensive policy or contract policy. The basis for maintaining a petition, both under Sections 163A and 166 of the M.V.Act is provided under Section 147 of the M.V.Act. The difference between Sections 163A and 166 is, the need to prove negligence under Section 166 and non- requirement of proving negligence under Section 163A. The other difference is unlimited liability on the Insurer under Section 166 and payment of compensation on structured formula basis as indicated in the Second schedule of M.V.Act in case of a claim made under Section 163A. The only exception in Section 163A is that a claim petition could be maintained by an employee (or his legal heirs) being a driver/rider having to plead and prove that the motor vehicle accident was caused during the course of employment. As stated earlier, in the context of chapter XI of the MV Act, wherever the word "employee" is used, it is impliedly referable to the meaning it receives under the Workmen's Compensation Act, 1923."
21. As against the above judgments, there are set of judgments which have a deferent view, which are relied by the counsel for the petitioners. In the case of
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR SMT.PRIYA (Supra), a Division Bench of this Court observes in paragraph Nos.26 to 30 as below:
"26. The rapid growth of fast moving transportation and high technology is leading towards risks of numerous injuries to person and property caused by collisions. To meet these consequences, there should be a sensible and equitable system of compensation and sound paraphernalia of prevention of these hazards.
27. The person who uses the vehicles on the road should be held liable to make compensation to anyone who is killed or injured as a consequence of its use. The provisions relating to no-fault liability as contained in the Motor Vehicle Act 1988 evolved to serve the purpose of the social security of the victim. On perusal of the above judgments' it can be inferred that the concept of strict liability recognised under Sections 140 and 163A of the Motor Vehicles Act, 1988.
28. The rule of strict liability which is based on causation rather than fault, has become increasingly prominent in the laws of continental European countries. French Civil Code makes a person liable for damage caused by things of
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR which he is in charge. 'Strict liability is imposed in Germany, the Netherlands and Switzerland. The departure from tort liability began in Germany in nineteenth century in the form of scheme of industrial accident insurance. Since then it has spread all over the world.
29. In the Federal units of the United States of America exist a variety of provision regarding imposition of no-fault liability. Some States have introduced 'add-on- plans' schemes, giving no- fault compensation for road injuries without any restriction on tort liability other than an offset of no-fault compensation paid or payable.
30. In the circumstances, it is held that the principle of strict liability has been incorporated under Section 163A of the Act. Therefore, even in a case where there is no tortfeasor and no negligence caused by any tort feasor, but on account of the use of the motor vehicle in a public place, an injury or death is caused, in such a situation under Section 163A of the Act read with Second Schedule, on structured formula basis, the claim petition would have to be considered dehors the aspect of negligence. But, in the instant case, the claim petition has been dismissed. In the circumstances, we set aside the
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR judgment and award of the Tribunal. Matter is remanded to the concerned Tribunal to re- consider the case afresh in light of the law laid down by the Hon'ble Supreme Court and followed by this Court and in accordance with law."
(underlining supplied)
22. The judgment relied by the learned counsel for the petitioners in the case of SINITHA (Supra) appear to be not in their favour. The Apex Court discussed the law on this aspect and the interpretation of Sections 163A, 140 and 166 of MV Act in detail as below:
"1. Shijo, aged 27 years, was riding a motorcycle bearing Registration No. KL 8J 6528, on 3-3-1999 on Wadakkanchery-Kunnamkulam Road. George K., also aged 27 years, was pillion riding with Shijo. While giving way to a bus coming from the opposite side at Kumaranelly, the motorcycle hit a big laterite stone lying on the tar road. On impact, the motorcycle overturned. Resultantly, the rider as also the pillion rider suffered injuries. They were taken to Divine Medical Centre, Wadakkanchery, for treatment. Thereafter, the rider Shijo was taken to West Fort Hospital, Thrissur. The pillion rider George K. was
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR taken to Medical College Hospital, Thrissur. Shijo succumbed to his injuries on the following day. George K. survived. The motorcycle was insured with the petitioner herein i.e. the National Insurance Company Ltd. A valid Act-only policy, at the time of the occurrence, is admitted.
xxxxxx
3. The Tribunal by its order dated 19-4-2005 allowed the claim petition filed by the wife, minor children and parents of Shijo. They were awarded compensation of Rs 4,26,650. The instant compensation included Rs 2000 towards funeral expenses, Rs 5000 for loss of consortium to the widow, Rs 2500 as loss of estate, Rs 4150 towards medical expenses and Rs 5000 as compensation for pain and suffering. Additionally, interest at the rate of 6% per annum was awarded with effect from 18-8-2000 (i.e. the date of filing the claim petition), till realisation. The claimants were also awarded costs quantified at Rs 8000.
xxxxxxx
19. We are, therefore, satisfied that it would be incorrect to hold that the controversy raised in the instant case can be deemed to have been settled by this Court in Hansrajbhai case [(2001) 5 SCC 175] . We have delineated the inferences drawn by us from the observations recorded in Hansrajbhai case in extenso hereinabove. We have also
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR reproduced hereinabove para 22 of the judgment in Hansrajbhai case so as to determine with some sense of exactitude the conclusions drawn in the aforesaid judgment. It cannot be stated that the issue arising in the present controversy has been dealt with or adjudicated upon in Hansrajbhai case. Additionally, the contentions advanced at the hands of the learned counsel for the appellant, more particularly reliance placed by him on sub- section (4) of Section 140 has certainly not been dealt with in Hansrajbhai case .
20. Thus viewed, it is not possible for us to conclude that the issue arising in this case can be stated to have been settled. The assertion made by the learned counsel for the respondents that the issue raised in the instant case, by the learned counsel of the petitioner, is no longer res integra, can therefore not be accepted.
xxxxxxx
29. The heading of Section 163-A also needs a special mention. It reads, "Special provisions as to payment of compensation on structured formula basis". It is abundantly clear that Section 163-A introduced a different scheme for expeditious determination of accident claims. Expeditious determination would have reference to a provision wherein litigation was hitherto before (before the insertion of Section 163-A of the Act) being long
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR drawn. The only such situation (before the insertion of Section 163-A of the Act) wherein the litigation was long drawn was under Chapter XII of the Act. Since the provisions under Chapter XII are structured under the "fault" liability principle, its alternative would also inferentially be founded under the same principle. Section 163-A of the Act catered to shortening the length of litigation by introducing a scheme regulated by a pre- structured formula to evaluate compensation. It provided for some short cuts, as for instance, only proof of age and income need to be established by the claimant to determine the compensation in case of death. There is also not much discretion in the determination of other damages, the limits whereof are also provided for.
30. All in all, one cannot lose sight of the fact that claims made under Section 163-A can result in substantial compensation. When taken together the liability may be huge. It is difficult to accept that the legislature would fasten such a prodigious liability under the "no-fault" liability principle without reference to the "fault" grounds. When compensation is high, it is legitimate that the insurance company is not fastened with liability when the offending vehicle suffered a "fault"
("wrongful act", "neglect", or "defect") under a valid Act-only policy. Even the instant process of reasoning leads to the inference that Section 163-
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR A of the Act is founded under the "fault" liability principle.
32. Additionally, we have concluded hereinabove that on the conjoint reading of Sections 140 and 163-A, the legislative intent is clear, namely, that a claim for compensation raised under Section 163-A of the Act need not be based on pleadings or proof at the hands of the claimants showing absence of "wrongful act", being "neglect" or "default". But that is not sufficient to determine that the provision falls under the "fault" liability principle. To decide whether a provision is governed by the "fault" liability principle the converse has also to be established i.e. whether a claim raised thereunder can be defeated by the party concerned (the owner or the insurance company) by pleading and proving "wrongful act", "neglect" or "default".
33. From the preceding paras (commencing from para 22), we have no hesitation in concluding that it is open to the owner or the insurance company, as the case may be, to defeat a claim under Section 163-A of the Act by pleading and establishing through cogent evidence a "fault" ground ("wrongful act" or "neglect" or "default"). It is, therefore, doubtless that Section 163-A of the Act is founded under the "fault" liability principle. To this effect we accept the contention advanced
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR at the hands of the learned counsel for the petitioner.
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40. In the present case, only one witness was produced before the Tribunal. The aforesaid witness appeared for the claimants. The witness asserted that while giving way to a bus coming from the opposite side, the motorcycle being ridden by Shijo hit a large laterite stone lying on the tar road, whereupon the motorcycle overturned and the rider and the pillion rider suffered injuries. The petitioner Insurance Company herein did not produce any witness before the Tribunal. In the absence of evidence to contradict the aforesaid factual position, it is not possible for us to conclude that Shijo was "negligent" at the time when the accident occurred. Since no pleading or evidence has been brought to our notice (at the hands of the learned counsel for the petitioner), it is not possible for us to conclude that the inverse onus which has been placed on the shoulders of the petitioner under Section 163-A of the Act to establish negligence, has been discharged by it. We, therefore, find no merit in the first contention advanced at the hands of the learned counsel for the appellant.
41. The second contention advanced at the hands of the learned counsel for the petitioner was
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR that Shijo being the rider of the motorcycle, cannot be treated as a third party. It was pointed out that the claim under Section 163-A can only be raised at the behest of a third party. It seems that the instant determination raised at the hands of the learned counsel for the petitioner is based on the determination rendered by this Court in Oriental Insurance Co. Ltd. v. Jhuma Saha [(2007) 9 SCC 263] wherein this Court held as under: (SCC p. 265, para 10) "10. The deceased was the owner of the vehicle. For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident. The accident did not involve motor vehicle other than the one which he was driving. The question which arises for consideration is that the deceased himself being negligent, the claim petition under Section 166 of the Motor Vehicles Act, 1988 would be maintainable."
According to the learned counsel for the petitioner, since the rider of the vehicle involved in the accident was Shijo himself, he would stand in the shoes of the owner, and as such, no claim for compensation can be raised in an accident caused by him, under Section 163-A of the Act.
42. To substantiate his second contention, it would be essential for the petitioner to establish
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR that Shijo having occupied the shoes of the owner, cannot be treated as the third party. Only factual details brought on record through reliable evidence can discharge the aforesaid onus. During the course of hearing, despite our queries, the learned counsel for the petitioner could not point out the relationship between Shijo and the owner of the motorcycle involved in the accident. Shijo is not shown to be an employee of the owner. He was not even shown as the representative of the owner. In order to establish the relationship between Shijo and the owner, the petitioner Insurance Company could have easily produced either the owner himself as a witness, or even the claimants themselves as witnesses. These or other witnesses who could have brought out the relationship between the owner and Shijo were not produced by the petitioner herein, before the Tribunal. The petitioner has, therefore, not discharged the onus which rested on its shoulders.
43. Since the relationship between Shijo and the owner has not been established, nor the capacity in which he was riding the vehicle has been brought out, it is not possible for us to conclude that Shijo while riding the motorcycle on the fateful day was an agent, employee or representative of the owner. It was open to the petitioner to defeat the claim for compensation raised by the respondents by establishing that the
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR rider Shijo represented the owner, and as such, was not a third party, in terms of the judgment rendered by this Court in Oriental Insurance Co. Ltd. case [(2007) 9 SCC 263 : (2007) 3 SCC (Cri) 443] . The petitioner failed to discharge the said onus. In view of the above, it is not possible for us to accede to the second contention advanced at the hands of the learned counsel for the petitioner."
(underlining supplied) Thus, it is clear that even in a case where the claim petition is filed under Section 163A of MV Act, the fault liability persists.
23. In the case of SHIVAJI (Supra), where the accident was involving two vehicles and the owner and insurer of both vehicles were party to the proceedings, a Three Judge Bench of Supreme Court has held in paragraph Nos.4 and 5 as below:
"2. The appellants are parents of Shaji Shivaji Dudhade, who was the driver of a car bearing Registration No. MH-06/W-604, which met with an accident on 15-6-2010. The accident occurred when the car dashed into a truck, bearing Registration No. KA-25/B-5363, resulting in his
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR death; the death of two other persons and injuries to two more persons, all of whom were travelling in the car.
xxxxxxx
4. The insurer preferred an appeal before the High Court of Karnataka. The appellants also filed an appeal before the High Court seeking enhancement of compensation awarded by the Tribunal. The High Court, by its impugned judgment, allowed the insurer's appeal and set aside the order of the Tribunal. The High Court opined that the idea behind enacting Section 163A is to ensure that even in the absence of any mistake on the part of the driver of the offending vehicle, the injured person or the legal heirs of the deceased person are compensated by the owner and the insurer. As a result, under this provision, since the victim has been contemplated to be an innocent third party, protection is extended only to the injured person or to the legal heirs of the deceased victim, and not to the driver who is responsible for causing the said accident. Since the deceased driver in this case was the tortfeasor and responsible for causing the accident, the High Court held that compensation could not have been awarded to the appellants.
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR
5. The issue which arises before us is no longer res integra and is covered by a recent judgment of three judges of this Court in United India Insurance Co. Ltd. v. Sunil Kumar & Anr.,1 wherein it was held that to permit a defence of negligence of the claimant by the insurer and/or to understand Section 163A of the Act as contemplating such a situation, would be inconsistent with the legislative object behind introduction of this provision, which is "final compensation within a limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time". The Court observed that if an insurer was permitted to raise a defence of negligence under Section 163A of the Act, it would "bring a proceeding under Section 163A of the Act at par with the proceeding under Section 166 of the Act which would not only be self- contradictory but also defeat the very legislative intention".
Consequently, it was held that in a proceeding under Section 163A of the Act, the insurer cannot raise any defence of negligence on the part of the victim to counter a claim for compensation."
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR It is pertinent to note that it was not an accident which was solely on the negligence of the deceased.
Therefore, on facts it can be distinguished easily.
24. In the case of SUNIL KUMAR (Supra) after referring to SINITHA (Supra), DEEPAL GIRISHBHAI SONI AND OTHERS VS. UNITED INDIA INSURANCE CO. LTD., BARODA14 and ORIENTAL INSURANCE CO. LTD. VS.
15HANSRAJBHAI V. KODALA holds in paragraph No.8 as below:
"8. From the above discussion, it is clear that grant of compensation under Section 163-A of the Act on the basis of the structured formula is in the nature of a final award and the adjudication thereunder is required to be made without any requirement of any proof of negligence of the driver/owner of the vehicle(s) involved in the accident. This is made explicit by Section 163A(2). Though the aforesaid section of the Act does not specifically exclude a possible defence of the Insurer based on the negligence of the claimant as contemplated by Section 140(4), to permit such defence to be 14 (2004) 5 SCC 385 15 (2001) 5 SCC 175
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR introduced by the Insurer and/or to understand the provisions of Section 163A of the Act to be contemplating any such situation would go contrary to the very legislative object behind introduction of Section 163A of the Act, namely, final compensation within a limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time. In fact, to understand Section 163A of the Act to permit the Insurer to raise the defence of negligence would be to bring a proceeding under Section 163A of the Act at par with the proceeding under Section 166 of the Act which would not only be self-contradictory but also defeat the very legislative intention."
(underlining supplied)
25. In fact, this issue was settled in the case of SINITHA (Supra). It appears that the final outcome of the judgment in the case of SINITHA (Supra) is relied, but not the reasoning concerning the requirement of fault liability.
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR
26. In the case of RAM KHILADI (Supra) after relying on the case of NINGAMMA (Supra), it was observed as below:
"9. xxxxxx 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?
9.4. An identical question came to be considered by this Court in Ningamma [Ningamma v. United India Insurance Co. Ltd., (2009) 13 SCC 710] . In
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR that case, the deceased was driving a motorcycle which was borrowed from its real owner and met with an accident by dashing against a bullock cart i.e. without involving any other vehicle. The claim petition was filed under Section 163-A of the Act by the legal representatives of the deceased against the real owner of the motorcycle which was being driven by the deceased. To that, this Court has observed and held that since the deceased has stepped into the shoes of the owner of the vehicle, Section 163-A of the Act cannot apply wherein the owner of the vehicle himself is involved. Consequently, it was held that the legal representatives of the deceased could not have claimed the compensation under Section 163-A of the Act. Therefore, as such, in the present case, the claimants could have even claimed the compensation and/or filed the claim petition under Section 163-A of the Act against the driver, owner and insurance company of the offending vehicle i.e. motorcycle bearing Registration No. RJ 29 2M 9223, being a third party with respect to the offending vehicle. However, no claim under Section 163-A was filed against the driver, owner and/or insurance company of the motorcycle bearing Registration No. RJ 29 2M 9223. It is an admitted position that the claim under Section 163-A of the Act was only against the owner and the insurance company of the motorcycle bearing Registration No. RJ 02 SA 7811 which was borrowed by the
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR deceased from the opponent-owner Bhagwan Sahay. Therefore, applying the law laid down by this Court in Ningamma [Ningamma v. United India Insurance Co. Ltd., (2009) 13 SCC 710] , and as the deceased has stepped into the shoes of the owner of the vehicle bearing Registration No. RJ 02 SA 7811, as rightly held by the High Court, the claim petition under Section 163-A of the Act against the owner and insurance company of the vehicle bearing Registration No. RJ 02 SA 7811 shall not be maintainable.
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
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR under the 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] , 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
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR 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.
9.9. 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 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] , the aforesaid cannot be accepted. In Rajni Devi , 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] ; Dhanraj [Dhanraj v. New India Assurance Co. Ltd., (2004) 8 SCC 553] ; National Insurance Co. Ltd. v. Laxmi Narain Dhut [(2007) 3 SCC 700] and Premkumari v. Prahlad Dev [(2008) 3 SCC
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR 193] , 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] , 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."
(underlining supplied)
27. Thus, it is consistently held by the Apex Court that even in the event of a claim petition filed under Section 163A of the MV Act, it cannot be said that it is on a principle of 'No Fault Liability'. The 'Fault Liability Principle' applies when the driver/rider claims against his own insurer. More so, when there is no other vehicle which
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR is involved, in as much as he steps into the shoes of the owner. The judgment in the case of SUNIL KUMAR (Supra) does not address the reasoning in the case of SINITHA (Supra) and as such, the same can be distinguished.
28. In the case on hand, except the motorcycle, which was driven by the deceased, no other vehicle was involved. He was riding a vehicle owned by his father.
There is no pleading by respondent No.1/owner that the vehicle was being used by the deceased without his knowledge, so as to bring the exceptions under Section 147 of the Act in play, to restrict the defences of the insurer. Therefore, the facts involved in the case of SINITHA (Supra) and SMT.MAHABUNNI (supra) are applicable to the facts of the case on hand on all fours.
29. Moreover, as observed in paragraph No.9.9 in the case of RAM KHILADI (Supra), the deceased having stepped into the shoes of owner, the LRs of the deceased cannot maintain the petition. If the contractual obligations
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR provide, the relief is elsewhere. The perusal of the policy at Ex.R1 shows that there was no personal accident cover.
No premium was paid covering the risk of the rider/owner.
30. The Tribunal, though mention the ratio laid down in the case of RAM KHILADI (Supra) and NINGAMMA (Supra), without giving any reason allows the petition. Obviously, it has not applied its mind to the ratio laid in the aforementioned cases. In the result, the point raised is answered in favour of the appellant-Insurer.
31. For aforesaid reasons, the appeal deserves to be allowed. Hence the following:
ORDER The appeal is allowed.
The impugned judgment and award is set aside. The petition in MVC.No.156/2019 stands dismissed.
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NC: 2025:KHC-K:4247 MFA No. 201632 of 2021 HC-KAR The amount in deposit be refunded to the appellant-Insurance Company.
Sd/-
(C M JOSHI) JUDGE NR/-List No.: 19 Sl No.: 1