Karnataka High Court
Savitha vs Basheer Ahamed on 11 February, 2026
NC: 2026:KHC:8726
MFA No. 2748 of 2020
HC-KAR
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.2748 OF 2020(MV-D)
BETWEEN:
1. SAVITHA
AGED ABOUT 53 YEARS,
W/O LATE MANJUNATHAPPA,
HOME MAKER,
2. LAVANYA.B.M.
AGED ABOUT 30 YEARS,
D/O LATE MANJUNATHAPPA,
3. MADHUSHREE.B.M.
AGED ABOUT 28 YEARS,
D/O LATE MANJUNATHAPPA,
R/O BIDARE,
SHIVAMOGGA TALUK AND DISTRICT.
4. SMT. SHASHIKALA.B.M.
AGED ABOUT 38 YEARS,
W/O CHANDRASHEKARA,
D/O LATE MANJUNATHAPPA,
R/O NIDDHIGE,
SHIVAMOGGA TALUK AND DISTRICT.
...APPELLANTS
(BY SRI. GURUPRASAD HEGDE., ADVOCATE FOR
SRI. S.V.PRAKASH., ADVOCATE)
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MFA No. 2748 of 2020
HC-KAR
AND:
1. BASHEER AHAMED
AGED ABOUT 66 YEARS,
S/O KHADAR PEER,
DRIVER CUM OWNER OF THE LORRY
BEARING NO.CNG 6546,
R/O T.B.ROAD, N.R.PURA,
CHIKKAMAGALURU DISTRICT.
2. THE ORIENTAL INSURANCE CO.LTD.,
LAKSHMI COMPLEX, 1ST CROSS,
GARDEN AREA, SHIVAMOGGA.
3. SANTHOSH.B.M.
AGED ABOUT 33 YEARS,
S/O LATE MANJUNATHAPPA,
C/O H.B.NARAYANAPPA,
HIRIYUR, BHADRAVATHI TALUK,
SHIVAMOGGA DISTRICT.
...RESPONDENTS
(BY SMT. SUNANDA.S.RATHOD., ADVOCATE FOR R2;
R1 & R3-SERVED)
THIS MFA FILED U/S 173(1) OF MV ACT, 1988, AGAINST
THE JUDGMENT AND AWARD DATED 12.12.2019 PASSED IN
MVC NO.1064/2010 ON THE FILE OF THE I ADDITIONAL SENIOR
CIVIL JUDGE, C.J.M. AND A.M.A.C.T-VII, SHIVAMOGGA, PARTLY
ALLOWING THE CLAIM PETITION FOR COMPENSATION AND
SEEKING ENHANCEMENT OF COMPENSATION.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MS. JUSTICE TARA VITASTA GANJU
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MFA No. 2748 of 2020
HC-KAR
ORAL JUDGMENT
1. The present appeal seeks to challenge the judgment and award dated 12.12.2019 in MVC No.1064/2010 passed by the I Addl. Senior Civil Judge & CJM & Additional MACT- VII, Shivamogga [hereinafter referred to as the "Impugned Award"]. By the Impugned Award, Rs.8,81,560/- has been awarded to the appellants/claimants [wrongly stated in the Impugned Award as Rs.8,51,560/-] along with interest at the rate of 6% per annum. The Impugned Award also directs that the respondent No.1/ owner is liable to pay the entire compensation since there was a breach of the conditions of the insurance policy.
2. The brief facts are that the deceased Manjunathappa was a Forest Guard and on 07.06.2010, when he was working in Umblebylu Forest Range at about 11.00 a.m., certain persons were illegally cutting trees in Survey No.39 of the Umblebylu Forest range. Since at that time, the offenders started to run away, the deceased chased them -3- NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR on a motorbike bearing registration No.KA-14-L-9897 and when the deceased reached at around 12.15 p.m., near Thotadakere on N.R.Pura road, a lorry bearing registration No.CNG 6546 came from the opposite direction in a rash and negligent manner and collided with the bike of the deceased, due to which the deceased sustained grievous injuries and succumbed to the injuries on the spot.
3. A claim petition was filed by the legal representatives of the deceased before the learned Trial Court. The petition was contested by the owner of the lorry as well as the Insurance Company.
4. Based on the pleadings between the parties, the learned Trial Court framed the following issues:
"1.Whether the petitioners prove that Manjunathappa who died in a road traffic accident due to rash and negligent driving of lorry bearing No.CNG-6546 by the 1st respondent on 07.06.2010 at about 12.15 p.m. near Thotadha Kere, N.R.Pura Road?
2. Whether the petitioners are entitled to compensation? If yes, at what rate and from whom?
3. What Award of decree?"-4-
NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR
5. The petitioners/claimants examined themselves as P.Ws.1 to 4 and produced the documents as Exs.P1 to P31. The Branch Manager of the respondent No.2/Insurance Company was examined as R.W.1 and respondent No.1/owner-cum-driver of the Lorry was examined as R.W.2 and produced the documents as Ex.R1 to Ex.R3.
6. The learned Trial Court after examining the evidence produced in this behalf held that the claimants were entitled to the following compensation:
Sl.No. Particulars Amount (Rs.)
01. Loss of Dependency 7,36,560-00
02. Loss of Consortium 40,000-00
03. Loss of love and affection 60,000-00
04. Loss of Estate 15,000-00
05. Transportation of dead body, 30,000-00
funeral expenses charges and
miscellaneous expenses
Total 8,81,560-00
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6.1. Concededly a calculation mistake was made in the totalling of the amount awarded and the actual compensation was awarded at Rs.8,81,560/- and not Rs.8,51,560/- as was held in the Impugned Award.
7. The challenge in the present case by the appellant/claimants is on three grounds. Firstly, he submits that the deceased was aged 53 years at the time of accident and thus the multiplier should have been taken at '11' and deduction on future prospects in terms of the judgments of the Supreme Court in Sarla Verma & Ors vs Delhi Transport Corp.& Anr1 and National Insurance Co. Ltd. Vs. Pranay Sethi2 should have been taken at 15%. Secondly, he submits that the loss of consortium was wrongly calculated as there were four claimants should have been taken at Rs.40,000/- for each claimant and the loss of estate and the funeral expenses should have been awarded 1 (2009)6 SCC 121 2 (2017) 16 SCC 680 -6- NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR at Rs.15,000/- each. He thus submits the compensation has to be enhanced. In addition, it is contended that the learned Trial Court wrongly found that the Insurance Company shall not to be liable in view of not having a valid driving licence.
8. Learned counsel for the Insurance Company, on the other hand does not dispute the multiplier as well as the deduction. He submits that since the driver of the offending vehicle did not have a driving licence at all, there was a breach of the insurance policy and the Insurance Company could not be made liable.
9. Having heard the learned counsel for both the parties and on perusal of the record of the learned Tribunal, the following issues would arise for consideration in this appeal:
(i) Whether the learned Tribunal was justified in exonerating the Insurance Company from liability on -7- NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR the ground that the driver of the offending vehicle did not possess a valid driving licence?
(ii) Whether the compensation awarded by the Tribunal is liable to be enhanced?
10. The law on the liability of the Insurance Company in the case of a fake, invalid or non-existent driving licence is no longer res integra. The Supreme Court in the Swaran Singh's case while examining the defence of the insurance company that the offending vehicle was not driven by an authorized person or a person not having a valid driving licence held that it is obligatory on the part of the Respondent/Insurance Company to substantiate the defence and a mere plea would not suffice. The relevant extract is set out below:
"84. We have analysed the relevant provisions of the said Act in terms whereof a motor vehicle must be driven by a person having a driving licence. The owner of a motor vehicle in terms of Section 5 of the Act has a responsibility to see that no vehicle is driven except by a person who does not satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore, where the driver of the vehicle, admittedly, did not hold any licence and the same -8- NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability. The matter, however, may be different where a disputed question of fact arises as to whether the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence. In a given case, the driver of the vehicle may not have any hand in it at all e.g. a case where an accident takes place owing to a mechanical fault or vis major. (See Jitendra Kumar [(2003) 6 SCC 420 : JT (2003) 5 SC 538].
xxx xxx xxx
90. We have construed and determined the scope of sub-clause (ii) of sub-section (2) of Section 149 of the Act. Minor breaches of licence conditions, such as want of medical fitness certificate, requirement about age of the driver and the like not found to have been the direct cause of the accident, would be treated as minor breaches of inconsequential deviation in the matter of use of vehicles. Such minor and inconsequential deviations with regard to licensing conditions would not constitute sufficient ground to deny the benefit of coverage of insurance to the third parties.
91. On all pleas of breach of licensing conditions taken by the insurer, it would be open to the Tribunal to adjudicate the claim and decide inter se liability of insurer and insured; although where such adjudication is likely to entail undue delay in decision of the claim of the victim, the Tribunal in its discretion may relegate the insurer to seek its remedy of reimbursement from the insured in the civil court.-9-
NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR
92. It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the question herein, as noticed hereinbefore, is whether the insurer must prove that the owner was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance. In Lehru case [(2003) 3 SCC 338 : 2003 SCC (Cri) 614] the matter has been considered in some detail. We are in general agreement with the approach of the Bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of the law in terms whereof the insurer is to establish wilful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence or for the owners to be absolved from any liability whatsoever. We would be dealing in some detail with this aspect of the matter a little later.
[Emphasis Supplied] 10.1. The Swaran Singh case clarified that merely stating that the driver of a vehicle did not have a licence or had a invalid or fake licence by itself is not enough to avoid liability by an Insurance Company. They must also establish breach on the part of the owner of the vehicle. Unless the breach is so fundamental that it has contributed to the cause of the accident, the Insurance Company cannot avoid its liability.
The relevant extract is set out below:
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NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR "110. The summary of our findings to the various issues as raised in these petitions are as follows:
(1) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.
(ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act.
(iii) The breach of policy condition, eg 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 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.
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(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 the 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 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 insured under Section 149(2) of the Act.
(vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case......"
[Emphasis Supplied]
11. The Supreme Court in the case of Pappu and Others while relying on a judgment of a Co-ordinate Bench in National Insurance Company Ltd. Vs. Swaran Singh3 has held that in order for an insurance company to avoid its liability towards the insured, it has to prove that the insured 3 [1] (2004) 3 SCC 297
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NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR was guilty of negligence or failed to exercise reasonable care in a matter of fulfilling the condition of policy regarding use of vehicles by a licensed driver. It has further been held that the mere absence, fake or invalid driving licence or disqualification of the driver at the relevant times is not in themselves defences available to the insured against either the insured or the third party.
12. In the present case, the record reflects that the driver did hold a driving licence, however the licence had expired on 02.11.2009. The learned Tribunal had thus come to the conclusion that since there was a breach in the Insurance Policy, the Insurance Company ought to be exonerated. Given the settled law in this behalf as reproduced above, this finding requires to be interfered with. 12.1. In Shamanna and another Vs. The Divisional Manager, Oriental Insurance Co.Ltd. and others4, the 4 (2018) 9 SCC 650
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NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR Supreme Court has held that in cases involving third-party risks, even where there is a breach of policy conditions relating to driving licence, the appropriate course is to direct the insurer to 'pay and recover'. The relevant extract is set out below.
"6. As per the decision in Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297:
2004 SCC (Cri) 733], onus is always upon the insurance company to prove that the driver had no valid driving licence and that there was breach of policy conditions. Where the driver did not possess the valid driving licence and there are breach of policy conditions, "pay and recover" can be ordered in case of third-party risks. The Tribunal is required to consider "as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver ... does not fulfil the requirements of law or not will have to be determined in each case".
7. The Supreme Court considered the decision of Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] in subsequent decision in 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] , wherein this Court held that: (SCC p. 705, para 5) "5. The decision in Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297: 2004 SCC (Cri) 733] has no application to cases other than third-party risks and in case of third-party risks the insurer has to indemnify the amount and if so advised, to recover the same from the insured."
XXX XXX XXX [
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11. In the present case, to deny the benefit of "pay and recover", what seems to have substantially weighed with the High Court is the reference to larger Bench made by the two-Judge Bench in National Insurance Co.
Ltd. v. Parvathneni [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 : (2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943] which doubted the correctness of the decisions which in exercise of jurisdiction under Article 142 of the Constitution of India directing insurance company to pay the compensation amount even though insurance company has no liability to pay. In Parvathneni case [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785: (2009) 3 SCC (Civ) 568: (2009) 3 SCC (Cri) 943], the Supreme Court pointed out that Article 142 of the Constitution of India does not cover such type of cases and that: (SCC p. 786, para 5) "5. If the insurance company has no liability to pay at all, then, it cannot be compelled by order of the court in exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle."
12. The above reference in Parvathneni case [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 : (2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943] has been disposed of on 17-9-2013 [National Insurance Co. Ltd. v. Parvathneni, (2018) 9 SCC 657] by the three-Judge Bench keeping the questions of law open to be decided in an appropriate case.
13. Since the reference to the larger Bench in Parvathneni case [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 : (2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943] has been disposed of by keeping the questions of law open to be decided in an appropriate case, presently the decision in Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] followed in Laxmi Narain Dhut [National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC
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NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR 700 : (2007) 2 SCC (Cri) 142] and other cases hold the field. The award passed by the Tribunal directing the insurance company to pay the compensation amount awarded to the claimants and thereafter, recover the same from the owner of the vehicle in question, is in accordance with the judgment passed by this Court in Swaran Singh [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] and Laxmi Narain Dhut [National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC 700 : (2007) 2 SCC (Cri) 142] cases. While so, in our view, the High Court ought not to have interfered with the award passed by the Tribunal directing the first respondent to pay and recover from the owner of the vehicle. The impugned judgment [Shamanna v. Laxman, 2016 SCC OnLine Kar 6928] of the High Court exonerating the insurance company from its liability and directing the claimants to recover the compensation from the owner of the vehicle is set aside and the award passed by the Tribunal is restored."
[Emphasis Supplied] 12.2. Thus, it was held that where there was a breach established by the Insurance Company, it would be appropriate that the Insurance Company pay the compensation and recover the same from the Insured / owner of the vehicle. Accordingly, the learned Tribunal erred in exonerating the Insurance Company from its liability to pay the compensation.
13. On the second issue, this Court finds merit in the contention of the appellants regarding the quantum of
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NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR compensation. The deceased was aged 53 years at the time of death; therefore, the appropriate multiplier applicable in terms of the principles laid down in Sarla Verma v. DTC and affirmed in National Insurance Co. Ltd. v. Pranay Sethi is 11, and not 10 as applied by the Tribunal. The Tribunal assessed the monthly income of the deceased at ₹8,370/-. Since the deceased was a salaried government employee, an addition of 15% towards future prospects is warranted, which comes to ₹1,256/-. Accordingly, the monthly income is recalculated at ₹9,626/-. After deduction of one-third towards personal expenses, the contribution to the family comes to ₹6,417/- per month, i.e., ₹77,004/- per annum. Applying the multiplier of 11, the loss of dependency is recomputed at ₹8,47,044/- (₹6,417 × 12 × 11).
14. Further, in view of the law laid down in Pranay Sethi and subsequent decisions, loss of consortium is payable at ₹40,000/- to four claimants, amounting to
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NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR ₹1,60,000/-. The claimants are also entitled to compensation under the conventional heads. Accordingly, loss of estate and funeral expenses are awarded at ₹15,000/- each. To this extent, the award of the Tribunal requires enhancement.
Sl.No. Particulars Amount (Rs.)
01. Loss of Dependency 8,47,044-00
02. Loss of Consortium 1,60,000-00
(Rs.40,000x4)
04. Loss of Estate 15,000-00
05. Transportation of dead body, 15,000-00
funeral expenses charges and
miscellaneous expenses
Total 10,37,044-00
Less:awarded by the Tribunal 8,81,560-00
Enhanced compensation 1,55,484-00
15. Hence, the appellants/claimants are entitled to a total compensation of ₹10,37,044/- with interest at the rate of 6% per annum from the date of petition till realization.
16. Accordingly, this Court proceeds to pass the following:
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NC: 2026:KHC:8726 MFA No. 2748 of 2020 HC-KAR ORDER
(i) The appeal is allowed;
(ii) The Impugned Judgment and Award dated 12.12.2019 passed in M.V.C.No.1064/2010, by the I Addl. Senior Civil Judge & CJM and Addl. MACT-VII, Shivamogga, is modified, enhancing the compensation by ₹1,55,484/- along with interest applicable thereon as awarded by the learned Trial Court.
(iii) The Insurance company is directed to pay the compensation amount of Rs.10,37,044/- inclusive of interest awarded to the claimants within eight weeks from today, and shall be entitled to recover 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.
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(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. Digitally signed by TARA VITASTA GANJU Location: HIGH COURT OF KARNTAKASd/- (TARA VITASTA GANJU) JUDGE YN / KS List No.: 1 Sl No.: 29 - 20 -