Karnataka High Court
The Branch Manager vs Mahesh K S @ Mahesh on 22 November, 2023
Author: Rajendra Badamikar
Bench: Rajendra Badamikar
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22nd DAY OF NOVEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR
MISCELLANEOUS FIRST APPEAL NO.10497/2012(MV-I)
C/W
MISCELLANEOUS FIRST APPEAL NO.6004/2016(MV-I)
IN MFA.NO.10497/2012:
BETWEEN:
THE BRANCH MANAGER,
M/S ICICI LOMBARD COMPANY LTD.,
REGIONAL OFFICE,
NO.89, 2ND FLOOR,
SVR COMPLEX, MADIVALA,
HOSUR MAIN ROAD,
BENGALURU-68,
REPRESENTED BY ITS LEGAL MANAGER.
... APPELLANT
(BY SRI. B.C. SHIVANNE GOWDA, ADVOCATE)
AND:
1. MAHESH .K.S @ MAHESH,
S/O K.V. SHIVAPPA,
NOW AGED ABOUT 22 YEARS,
R/O KALAGONDANAHALLI,
KODIHALLI HOBLI,
KANAKAPURA TALUK,
RAMANAGARA DISTRICT-571 511.
2. MERU CAB PVT LTD.,
NO.90/4, 2ND FLOOR,
STAPLES BUILDING,
2
MARATHAHALLI OUTER RING ROAD,
VARTHUR HOBLI,
MARATHAHALLI MAIN ROAD,
BENGALURU-37.
... RESPONDENTS
(BY SRI. P. MAHADEVASWAMY, ADVOCATE FOR R1,
SRI. K. RAVISHANKAR, ADVOCATE FOR R2)
THIS APPEAL IS FILED UNDER SECTION 173(1) OF MV ACT
AGAINST THE JUDGMENT AND AWARD DATED:23.06.2012,
PASSED IN MVC NO.554/2011 ON THE FILE OF THE II
ADDITIONAL JUDGE, MACT, COURT OF SMALL CAUSES,
BENGALURU, AWARDING COMPENSATION OF RS.3,10,000/-
WITH INTEREST @ 6% P.A., FROM THE DATE OF PETITION TILL
DEPOSIT IN THE TRIBUNAL.
IN MFA.NO.6004/2016:
BETWEEN:
MERU CAB CO. PVT. LTD.,
REP. BY ITS MANAGER FACILITATION,
NO.90/4, 2ND FLOOR,
STAPLES BUILDING,
MARATHAHALLI, OUTER RING ROAD,
VARTHUR HOBLI,
MARATHAHALLI MAIN ROAD,
BENGALURU-560 037.
... APPELLANT
(BY SRI. K. RAVISHANKAR, ADVOCATE)
AND:
1. SRI. MAHESH .K.S @ MAHESH,
S/O K.V. SHIVAPPA,
AGED ABOUT 26 YEARS,
R/O KALAGONDANAHALLI,
KODIHALLI HOBLI,
KANAKAPURA TALUK,
RAMANAGARA DISTRICT
BENGALURU-560 040.
3
2. ICICI LOMBARD GEN. INS COMPANY LTD.,
REGIONAL OFFICE,
NO.89, 2ND FLOOR, S.V.R COMPLEX,
HOSUR MAIN ROAD,
MADIWALA,
BENGALURU-560 068
... RESPONDENTS
(V/O DATED 10.8.2017, SRI. B.C. SHIVANNE GOWDA,
ADVOCATE FOR R2, SRI. P. MAHADEVASWAMY,
ADVOCATE FOR R1 )
THIS APPEAL IS FILED UNDER SECTION 173(1) OF MV ACT
AGAINST THE JUDGMENT AND AWARD DATED:23.06.2012,
PASSED IN MVC NO.554/2011 ON THE FILE OF THE II
ADDITIONAL JUDGE, MACT, COURT OF SMALL CAUSES,
BENGALURU, AWARDING COMPENSATION OF RS.3,10,000/-
WITH INTEREST @ 6% P.A., FROM THE DATE OF PETITION TILL
DEPOSIT.
THESE APPEALS HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 09.11.2023, COMING ON FOR
'PRONOUNCEMENT OF JUDGMENT' THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
JUDGMENT
Both these appeals are filed by the Insurance
Company as well as respondent No.1-owner challenging the
judgment and award passed in MVC No.554/2011.
2. For the sake of convenience, the parties herein
are referred as per the ranks occupied by them before the
Tribunal.
3. The brief factual Matrix leading to the case are
that on 18.10.2010, at 10.30 a.m., the petitioner was
proceeding on two-wheeler bearing registration No.KA 05 EF
9991 as a pillion rider on Kodihalli-Hunasanahalli Road, near
Tavarekere of Kanakapura Taluka. It is alleged that at that
time, the car bearing registration No.KA 03 D 5755 came in
a high speed as well as driven in a rash and negligent
manner endangering the human life and dashed against
two-wheeler, due to which the petitioner sustained grievous
injuries on his right leg and other parts of the body. He was
immediately taken to Kanakapura Govenment Hospital and
thereafter, took to KIMS Hospital for treatment, where he
was treated an inpatient. He has spent more than
Rs.1,80,000/- towards treatment, conveyance, nourishment
charges etc., He was working as Junior Marketing Officer in
M/s. Agri Gold Private Limited and was earning a salary of
Rs.8,000/- per month. But due to the accidental injuries, he
a suffered permanent disability and unable to do any work.
The accident is solely because of actionable negligence on
the part of the driver of the car and respondent No.1 is the
owner and respondent No.2 is the insurer. They are liable to
pay the compensation.
4. Respondent No.1-owner did not appear before
the Court so as to contest the matter and is placed ex-
parte. Respondent No.2 contested the matter admitting
issuance of insurance policy in favour of respondent No.1
pertaining to the offending vehicle and it was in force.
However, it is asserted that the liability, if any, depends on
the terms and conditions of the policy and validity of driving
license as well as permit. It is specifically asserted that
permit was issued to the vehicle to ply within 25 kms of
radius within the limits of Bangalore City Corporation area.
But the accident has occurred beyond the permit limit and
hence, there is a breach of policy condition and it is not
liable to pay the compensation by indemnifying respondent
No.1. Respondent No.2 has raised other defences and other
claims regarding injury, income etc., and sought for
dismissal of the petition.
5. After appreciating the oral and documentary
evidence, the Tribunal has allowed the petition in part and
awarded a total compensation of Rs.3,10,000/- with interest
at the rate of 6% per annum from the date of petition.
Further, the liability was fastened on respondent Nos.1 & 2
jointly and severally with a direction to deposit the
compensation by respondent No.2-insurer with a liberty to
recover the said compensation from respondent No.1 in
view of breach of policy conditions.
6. Being aggrieved by this judgment and award, the
Insurance Company has filed appeal in MFA No.10497/2012
challenging the liability pertaining to pay and recovery as
well as quantum, while the owner has filed MFA
No.6004/2016 challenging the order regarding pay and
recovery passed against him.
7. Heard the arguments advanced by the learned
counsels for appellants in both the appeals and perused the
records.
8. The learned counsel for owner i.e., appellant in
MFA No.6004/2016 would contend that under Section
149(2)(a)(i)(c), the defence of breach of permit is not
incorporated and it simply asserts that the breach for
purpose is not allowed by the permit under which vehicle is
used where the vehicle is transport vehicle is incorporated
and plying beyond the limit does not fall under the breach
of policy conditions and the said defence is not available to
the Insurance Company. Hence, it is his specific contention
that when Insurance Company does not have any defence
regarding breach of permit conditions regarding plying
beyond permit limits, the question of passing an order pay
and recovery does not arise at all as admittedly the Policy
was in force pertaining to the offending vehicle. Hence, to
this extent he would seek for indulgence of this Court.
9. Per contra, the learned counsel for
appellant/respondent i.e., Insurance Company would
contend that Section 66 deals with grant of permit and
plying the vehicle beyond the permit jurisdiction amounts to
violation of permit conditions and in this context, he has
invited the attention of this Court to para 12 of the
decision of the Apex Court in (2004) 8 SCC 517, NATIONAL
INSURANCE CO. LTD. VS CHALLA BHARATHAMMA AND
OTHERS case.
10. Both the counsels did not stretch much on the
quantum. Both the counsels have disputed the liability.
Hence, both of them have sought for allowing their
respective appeals.
11. It is an undisputed fact that on 18.10.2010, at
10:30 a.m., the petitioner was proceeding on two-wheeler
and he was hit by the car bearing registration No.KA 03 D
5755. There is no serious dispute of the fact that the driver
of the offending car was prosecuted. It is also not under
serious dispute that the accident in question is because of
actionable negligence on the part of the driver of the
offending car.
12. It is also an admitted fact that the vehicle was
duly insured with respondent No.2-Insurance Company,
who is appellant in MFA No.10497/2012. It is also admitted
that the insurance was in force during the relevant period.
However, the other undisputed fact is that the permit was
issued to the insured vehicle to ply within 25 kms radius of
Bangalore City Corporation area. Admittedly, the accident
has occurred beyond the permit area and hence, it is the
contention of Insurance Company that there is a breach of
policy conditions and the contention of the owner is that the
said defence is not available to Insurance Company.
13. The learned counsel for appellant has placed
reliance on unreported decision of the Division Bench of this
court in MFA No.102428/2017 [UNITED INDIA INSURANCE
CO. LTD., Vs. SMT. SANDYA W/O TUKARAM PATIL AND
OTHERS], wherein the offending vehicle had no permit to
ply in the state of Maharashtra and it was having permit to
ply in the State of Karnataka only. But accident has
occurred in Maharashtra. The Division Bench has held the
liability of Insurance Company can be awarded only on
grounds that are enumerated in 149(2)(a)(i)(c) of the MV
Act. It is further observed that since there is a valid permit
to ply in the State of Karnataka and though the accident has
occurred beyond territorial jurisdiction and considering the
permit conditions under Section 86, it is held that for that
there is a penal provision and the said defence is not
available and hence, the liability was fastened on the
Insurance Company. The Division Bench has placed reliance
on the decision of Challa Bharathamma's case as referred
above.
14. He has further placed reliance on unreported
decision of this Court in MFA No.633/2021 clubbed with MFA
No.3627/2019 [MANJAPPA N AND OTHERS vs.
GURUMURTHY B.K. AND OTHERS], dated 16.08.2022,
which is again based on principles of pay and recovery on
the ground that the defence of violation of route in the
permit under Section 149(2)(a)(i)(c) is not available. It is
observed that it is violation of route permit being pertaining
to territorial jurisdiction.
15. He has also placed reliance on a decision
reported in MFA No.11803/2012 [S.N.KENCHANNA vs. SMT.
ANITHA AND OTHERS] on the same point and MFA
No.1201/2011 [DURGAMMA vs. S.G.NARESH, S.O
GOVINDAPPA & OTHERS] of this Court. Hence, the
contention of the owner is that the defence of violation of
permit route is not a defence available to the Insurance
Company and it is only a penal provision.
16. In all these matters, the decision of Challa
Bharathamma's case was considered and it was analysed.
In the Challa Bharathamma's case, the Hon'ble Apex Court
had an occasion to consider the defence available under
Section 149(2)(a)(i)(c). In para No.12 it has observed as
under:
"The High Court was of the view that since
there was no permit, the question of violation of
any condition thereof does not arise. The view is
clearly fallacious. A person without permit to ply a
vehicle cannot be placed at a better pedestal vis-a-
vis one who has a permit, but has violated any
condition thereof. Plying of a vehicle without a
permit is an infraction. Therefore, in terms of
Section 149(2) defence is available to the insurer
on that aspect. The acceptability of the stand is a
matter of adjudication. The question of policy being
operative had no relevance for the issue regarding
liability of insurer. High Court was, therefore, not
justified in holding the insurer liable."
(Underlined by me)
17. In the said decision, the Hon'ble Apex Court has
clearly observed that a person without a permit to ply a
vehicle cannot be placed on a better pedestal vis-à-vis one
who has a permit, but has violated any condition thereof. It
is further observed that plying of vehicle without permit is
an infraction and therefore, in terms of Section 149(2)
defence is available to the Insurer on that aspect. In all
these above referred citations relied by counsel for owner,
this proposition of law was not at all considered, which was
the law was laid down by the Apex Court. In view of this
decision, of Apex Court, decisions relied by the learned
counsel for the owner does not have any relevancy.
18. On the same point, the learned counsel for
appellant/Insurance Company has placed reliance on a
decision of the Apex Court reported in (2018) 8 SCC 492
[RANI & OTHERS vs. NATIONAL INSURANCE COMPANY
LTD., & OTHERS]. This case is arising out of the order
passed by this Court. The accident was caused by the lorry
bearing registration No.MH-43-U-3365 in Karnataka i.e.,
between Bangalore and Tumkur. There the lorry had a
permit for plying in Maharashtra and it did not have any
permit to operate in the State of Karnataka, but accident
has occurred in the State of Karnataka. The Apex Court in
the said decision has clearly held that the liability of the
Insurance Company is required to be upheld, but the liberty
was given to pay and recovery.
19. The learned counsel for Insurance Company has
further placed reliance on a Division Bench decision of this
Court in MFA No.2947/2017 clubbed with MFA
No.1024/2018 [THE NEW INDIA INSURANCE CO. LTD., vs.
SMT. HARINI & OTHERS], dated 25.09.2019. The Division
Bench has observed that the defence under Section 149 is
available to the Insurance Company, but it will not
exoberate insurer from satisfying the judgment and award
in terms of Section 149 but in view of the violation of the
permit, is required to satisfy the award and then recover
the same from respondent No.1-owner of the offending bus.
This decision was after relying the decision of the Apex
Court in a AMRIT PAUL SINGH and ANOTHER Vs. TATA AIG
GENERAL INSURANCE COMPANY LIMITED AND OTHERS,
reported in (2018) 7 SSC 558 and Rani and others case
referred above.
20. This view is again taken long back in 2012 by the
Division Bench of this Court in the decision reported in 2012
(4) AIR KAR R 305 [ORIENTAL INSURANCE COMPANY
LTD., VS K.C.SUBRAMANYA AND ANOTHER]. In the said
decision, the Division Bench has clearly observed that the
insurer gets right to defend the action in view of the
grounds mentioned under Section 149(2) regarding breach
of permit conditions. The said principles are directly
applicable to the facts and circumstances of the case. This
decision of the Division Bench was not considered by
subsequent decisions of the Division Bench of this court and
the decision in Challa Bharathamma's case was not properly
appreciated and the decision in Rani's case was directly on
the point.
21. In view of consistent view taken by the Apex
Court, the defence pertaining to breach of permit conditions
is a defence available to the Insurance Company under
Section 149(2)(c) of the MV Act. But at the same time, the
Insurance Company in view of the decision in Amrit Paul
Singh's case referred above is liable to pay the
compensation and recover the same. The liability of
insurance company in view of existence of the policy is to
pay the amount and then recover the same from the owner.
Since this appeal is filed by the owner and since considering
the fact that there is an admitted breach of permit condition
as the vehicle was not supposed to ply outside 25 kms from
Bangalore city and admittedly, the accident has taken
outside the jurisdiction of Bangalore city, there is a clear
breach of permit condition. Hence, the appeal filed by the
owner in MFA No.6004/2016, is not at all maintainable.
22. At the same time the Tribunal has passed an
award of pay and recovery which was challenged by the
Insurance Company. But now, in view of Amrit Paul Singh's
case referred above, the Insurance Company is to indemnify
the claimant, who is a third party and recover the awarded
amount from the insured. As such, the Tribunal has rightly
passed an award of pay and recovery against respondent
No.2 with a direction to satisfy the award passed. In view of
these facts and circumstances, the appeal filed by the
Insurance Company is also not maintainable and needs to
be dismissed. There is no serious dispute regarding
quantum and claimant has not filed any appeal seeking
enhancement. Considering these facts and circumstances,
the appeals being devoid of any merits, does not survive for
consideration and accordingly, I proceed to pass the
following:
ORDER
(i) The appeals stand dismissed.
Sd/-
JUDGE
DS
