Divisional Manager vs Mallappa Hanasi - Motor Vehicle Accident Appeal

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• Know your Kanoon - Doc Gen Hub - Counter Argument - Case Predict AI - Talk with IK Doc -... Upgrade to Premium [Cites 5, Cited by 0 ] ### Karnataka High Court

The Divisional Manager, Oriental ... vs Mallappa S/O Allappa Hanasi on 17 March, 2026

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NC: 2026:KHC-D:4262
MFA No. 100182 of 2015

                     HC-KAR

                     IN THE HIGH COURT OF KARNATAKA,AT DHARWAD

                           DATED THIS THE 17TH DAY OF MARCH, 2026

                                          BEFORE

                         THE HON'BLE MR. JUSTICE B. MURALIDHARA PAI

                  MISCELLANEOUS FIRST APPEAL NO. 100182 OF 2015 (MV)

                    BETWEEN:

                    THE DIVISIONAL MANAGER,
                    ORIENTAL INSURANCE CO. LTD.,
                    ENKEY COMPLEX, KESHWAPUR, HUBLI.
                    NOW REPRESENTED BY ITS
                    DEPUTY MANAGER,
                    THE ORIENTAL INSURANCE CO. LTD.,
                    REGIONAL OFFICE,
                    IIND FLOOR, SUMANGALA COMPLEX,
                    LAMINGTON RAOD. HUBLI-580020.
                                                                       ...APPELLANT
                    (BY SRI. M.Y. KATAGI, ADVOCATE)

                    AND:

                    1.    MALLAPPA S/O ALLAPPA HANASI,
                          AGE: 53 YEARS, OCC: AGRICULTURE,
                          R/O: CHARANTIMATH GARDEN, DHARWAD.

Digitally signed by
YASHAVANT
NARAYANKAR
Location: HIGH 2. YALLAPPA S/O MARUTI SHIRSHETTANAVAR
COURT OF
KARNATAKA
DHARWAD BENCH
AGE: MAJOR, OCC: BUSINESS,
Date: 2026.03.23
11:15:40 +0530 R/O: H.NO.320, RAJNAGAR,
MALLAPUR RAOD, GODASE PLOT, DHARWAD.
(OWNER OF BAJAJ DISCOVER MOTOR CYCLE
BEARING REG.NO.KA-25/EH-5377)
...RESPONDENTS
(BY SRI. B.V. SOMAPUR, ADVOCATE FOR R1;
NOTICE SERVED R2)

                          THIS MFA IS FILED UNDER SECTION 173(1) OF MOTOR
                    VEHICLES ACT 1988, PRAYING TO SET ASIDE THE JUDGMENT AND
                    AWARD DATED 17.10.2014 PASSED IN THE COURT OF FAST TRACK
                    AND ADDL. M.A.C.T. DHARWAD, AT DHARWAD IN MVC NO.1006/2012
                    IN THE INTEREST OF JUSTICE AND EQUITY.
                            -2-
                                       NC: 2026:KHC-D:4262
                                  MFA No. 100182 of 2015

HC-KAR

 THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY,

JUDGMENT WAS DELIVERED THEREIN AS UNDER:

                     ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE B. MURALIDHARA PAI)

 This appeal has been preferred by the insurer of the

motorcycle bearing registration No. KA-25-EH-5377, seeking to

set aside the judgment and award dated 17.10.2014 rendered in

MVC No.1006/2012.

1. The claimant namely Sri Mallappa maintained a

petition in MVC No.1006/2012 under Section 166 of the Motor

Vehicles Act, seeking compensation of Rs.10,00,000/- for the

injuries sustained by him in a road traffic accident occurred on

10.08.2012.

1. The case of the claimant is that on 10.08.2012 at

about 12.00 noon, when he was going on his bicycle, near

Ayappa Temple in Manikanth Nagar, Dharwad, he suffered a road

traffic accident attributable to the rash and negligent riding of

the motorcycle bearing No. KA-25-EH-5377, resulting in grievous

injuries. In view of the same, he maintained the petition seeking -3- NC: 2026:KHC-D:4262 MFA No. 100182 of 2015 HC-KAR

compensation from the owner and insurer of the offending

vehicle.

1. On service of notice, Respondent No.2 appeared

before the Tribunal and contested the petition. Thereafter, the

Tribunal decided the claim petition on merits of the case. The

Tribunal attributed negligence to the rider of the motorcycle in

question and allowed the claim petition in part holding that the

claimant is entitled for compensation of Rs.1,29,646/- together

with interest at the rate of 8% per annum from the date of

petition till its deposit.

1. The claimant has accepted the award passed by the

Tribunal.

1. Respondent No.2 has challenged the impugned award

only one the ground that the Tribunal committed grave error in

fastening liability of satisfying the award on them, i.e, the

insurer, in spite of ample evidence to show breach of policy

condition.

1. Sri M.Y.Katagi, learned Counsel for Insurer,

vehemently submitted that rider of the motorcycle in question -4- NC: 2026:KHC-D:4262 MFA No. 100182 of 2015 HC-KAR

was not holding a driving licence as on the date of accident and

thereby the insured committed breach of policy condition. He

further submitted that though the Tribunal held that rider of

offending vehicle was not holding a driving license, yet directed

the insurer to pay the compensation and recover the same from

the insured, ignoring Sections 149(5) and 149(7) of the Motor

Vehicles Act and as such, impugned judgment and award is liable

to be set aside, which has resulted in miscarriage of justice.

1. Per contra, learned Counsel for Claimant supported

the finding recorded by the Tribunal and submitted that even if

the contention of the insurer is accepted, they are liable to pay

the award amount at first instance under 'Pay and Recover'

principle and the insurer has not made out any valid ground to

interfere or modify the impugned judgment and award.

1. Thus, the short point for determination by this Court

is whether the Tribunal erred in directing the insurer to satisfy

the award at first instance under the Pay and Recover Principle

and recover the same from the insured.

1. As noted above, the Tribunal, while deciding the

claim petition, held that the claimant met with a road traffic -5- NC: 2026:KHC-D:4262 MFA No. 100182 of 2015 HC-KAR

accident on 10.8.2012 at about 12.00 noon, near Ayyappa

Temple in Manikanth Nagar, Dharwad, on account of negligence

attributable to rider of motorcycle bearing No. KA-25-EH-5377

and as a result, he sustained injuries. Pursuant to the same, the

Tribunal considered other materials placed on record and

awarded a total compensation of Rs.1,29,446/- to the claimant

together with interest at the rate of 8% per annum.

1. The main contention of the insurer before the

Tribunal was that rider of the offending vehicle was not holding a

valid and effective driving license as on the date of the accident,

thereby the insured violated the terms and conditions of the

policy and as such, they are not liable to indemnify the insured

by paying the award amount. In support of this contention, the

insurer adduced their evidence through RW-1 and produced

relevant documents at Ex.R-1 to Ex.R-4. Thus, based on

materials available on record even the Tribunal held that "...So,

considering the evidence on record I am of the considered

opinion that the respondent No.1 has violated the terms and

conditions of the insurance policy and therefore respondent No.2

is not liable to pay compensation to petitioner. ...". -6-

NC: 2026:KHC-D:4262 MFA No. 100182 of 2015 HC-KAR

1. Afterwards, the Tribunal relying on decision reported

in 2014(4) Kar.L.J. 95 (DB) and such other cases, proceeded to

hold that "... since the petitioner who is claiming compensation in

this case is a third party, I feel it is just and proper that it would

meet ends of justice if respondent No.2 insurer of the offending

vehicle is directed to pay the compensation amount awarded to

petitioner in this case and then recover the same from

respondent No.1 as he has violated the terms and conditions of

the insurance policy. ..." and issued direction to the insurer

accordingly.

1. It is well settled that insurers remain liable to third-

party victims for compensation in motor accident claims, even if

the insured breaches policy conditions. This stems from the

Act's social welfare intent to protect innocent third parties. Section 149(1) mandates insurers to satisfy judgments or

awards against insured persons for third-party risks subject to

defenses in Section 149(2). Defenses are narrowly limited to

specific breaches like unauthorized use for hire/reward, non-

permit plying, or driving by an unlicensed/ disqualified driver

with the owner's knowledge or negligence. Other policy -7- NC: 2026:KHC-D:4262 MFA No. 100182 of 2015 HC-KAR

conditions have no effect per Section 149(4) regarding third

party coverage. Insurers must first pay claimants and then seek

reimbursement from the insured, if defenses succeed.

1. In National Insurance Co. Ltd. Vs Swaran Singh,

reported in AIR 2004 SC 1531, Hon'ble Apex Court ruled that -

"...Even where the insurer is able to prove breach on
the part of the insured concerning the policy
condition regarding holding of a valid license 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 license 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 defenses available to the insured under Section
149(2) of the Act. ...".
15. In Pappu and Others Vs Vinod Kumar Lamba

and another, reported in (2018) 3 SCC 208, the Hon'ble Apex

Court has reiterated the principles laid down in Swaran Singh's

Case (referred supra). Similarly, in [K. Nagendra Vs New

India Assurance Co. Ltd.](https://indiankanoon.org/doc/21300770/), reported in JT 2025 (14) SC 74

Hon'ble Apex Court held that 'Pay and recover' applies even for -8- NC: 2026:KHC-D:4262 MFA No. 100182 of 2015 HC-KAR

route permit violations and technical breaches do not deny third

party claims.

1. In the case on hand, the claimant is a third party.

The principles laid down in the above referred decisions are

squarely applicable to this case. In view of the same, this Court

holds that the Tribunal is justified in directing the insurer to

satisfy the award at the first instance. Accordingly, the point

raised for consideration is answered in the negative.

1. In the result, this Court proceeds to pass the

following:

ORDER

(i) The appeal is dismissed.

(ii) Consequently, the judgment and award dated

17.10.2014 passed in MVC No.1006/2012 by

learned Presiding Officer, Fast Track Court and

Member Additional MACT, Dharwad is confirmed.
-9- NC: 2026:KHC-D:4262 MFA No. 100182 of 2015 HC-KAR

(iii) The amount in deposit, if any, along with trial

         court   record   shall   be   transmitted   to   the

         concerned Tribunal forthwith.

Sd/-

(B. MURALIDHARA PAI)
JUDGE

YAN, CT-CMU
LIST NO.: 1 SL NO.: 14