Ramashidhanna S/O Mallikarjun Poleshi vs Prakash S/O Ramachandra Bennur
2025 Latest Caselaw 10825 Kant

Karnataka High Court

Ramashidhanna S/O Mallikarjun Poleshi vs Prakash S/O Ramachandra Bennur on 28 November, 2025

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                                                       MFA No. 101267 of 2014


                     HC-KAR




                   IN THE HIGH COURT OF KARNATAKA, AT DHARWAD

                    DATED THIS THE 28TH DAY OF NOVEMBER, 2025

                                            BEFORE

                    THE HON'BLE MR. JUSTICE B. MURALIDHARA PAI

                              M.F.A. NO.101267 OF 2014 (MV-I)


                     BETWEEN:


                     SHRI RAMASHIDHANNA
                     S/O. MALLIKARJUN POLESHI,
                     AGE: 30 YEARS,
                     OCC: TRANSPORT BUSINESS,
                     R/O. RUMEWADI CROSS,
                     TAL: KHANAPUR,
                     DIST: BELGAUM.


                                                                   ...APPELLANT
Digitally signed     (BY SRI. SANJAY S. KATAGERI, ADVOCATE)
by V N BADIGER
Location: HIGH
COURT OF
KARNATAKA,
DHARWAD              AND:
BENCH



                     1.   SHRI PRAKASH
                          S/O. RAMACHANDRA BENNUR,
                          AGE: MAJOR YEARS, OCC: BUSINESS,
                          R/O. KAKKERI,TQ: KHANAPUR,
                          DIST: BELGAUM.


                     2.   THE MANAGER,
                          RELIANCE GENERAL INSURANCE
                             -2-
                                         NC: 2025:KHC-D:16677
                                      MFA No. 101267 of 2014


HC-KAR




    COMPANY LTD., OFFICE, NO.4,
    8TH BLOCK, ASIAN PLAZA COMPLEX,
    STATION MAIN ROAD,
    NEAR S. V. PATIL CHOWK,
    GULBARGA, TQ & DIST: GULBARGA.


                                                  ...RESPONDENTS
(BY SRI. S. K. KAYAKAMATH, ADV. FOR R2;
   NOTICE TO R1 SERVED)


     THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 173(1) OF MOTOR VEHICLES ACT 1988, PRAYING TO
THE JUDGMENT AND AWARD DATED 25-02-2014 IN MVC
NO.2290/2011 PASSED BY THE LEARNED MEMBER MOTOR
ACCIDENT    CLAIMS   TRIBUNAL     AND   SENIOR     CIVIL   JUDGE,
KHANAPUR, IN DISMISSING THE CLAIM PETITION BE KINDLY
SET ASIDE, BY ALLOWING THIS APPEAL AND AWARDING THE
CLAIM COMPENSATION OF RS.2,50,000/- WITH INTEREST @
12% PER ANNUM FROM THE DATE OF PETITION, TILL THE DATE
OF PAYMENT BY HOLDING RESPONDENTS NO.1 & 2 HEREIN
JOINTLY AND SEVERALLY LIABLE TO PAY THE COMPENSATION,
WITH COST THROUGHOUT, IN THE INTEREST OF JUSTICE AND
EQUITY.


     THIS   MISCELLANEOUS     FIRST     APPEAL,   HAVING    BEEN
HEARD AND RESERVED ON 17.10.2025, COMING ON FOR
'PRONOUNCEMENT OF JUDGMENT', THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
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                                         NC: 2025:KHC-D:16677
                                      MFA No. 101267 of 2014


HC-KAR




                          CAV JUDGMENT

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

1. The claimant in MVC No. 2290/2011, before the Motor

Accidents Claims Tribunal, Khanapur, has filed this appeal, being

aggrieved by the dismissal of his claim petition by the impugned

judgment dated 25.02.2014.

2. The claimant filed MVC No. 2290/2011 under Section 166

of the Motor Vehicles Act, seeking compensation of ₹2,50,000/-

from the owner and insurer of the offending vehicle, Truck No.

KA-17-1666, for the loss sustained due to damage caused to his

Mahindra Bolero pick-up goods vehicle, bearing Registration No.

KA-22-A-8358, in a road traffic accident that occurred on

18.04.2011.

3. After contest, the Tribunal dismissed the claim petition,

though holding that the accident occurred due to actionable

negligence of the driver of the offending truck. The Tribunal

rejected the claim on the ground that the claimant had already

received compensation for the damage from his own insurer and

could not claim again from the respondents. The Tribunal also

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held that the claimant had not produced sufficient evidence to

establish the actual loss suffered.

4. In this appeal, the claimant challenges the findings of the

Tribunal, contending that he is entitled to recover the balance

amount of actual loss since his own insurer reimbursed only

₹45,050/-, whereas he incurred expenses of ₹1,73,465/-

towards vehicle repair. He further contends that he suffered

pecuniary loss due to his vehicle being off the road and that PW-

2's testimony proving loss of ₹73,372/- for 52 days was wrongly

ignored. He also disputes the Tribunal's finding regarding

absence of valid insurance coverage for the offending vehicle.

5. During arguments, learned counsel for the claimant relied

on the following Judgments :

I. Sri Hemanth Raju v. Sri Punitha H.J.

(NC:2023:KHC:46025)

II. United India Insurance Co. Ltd. v. Lakshmama (AIR

2012 SC 2817)

III. Oriental Insurance Co. Ltd. v. Inderjit Kaur ((1998) 1

SCC 371) and he prayed for allowing the appeal.

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6. Per contra, learned counsel for the insurer relied on:

I. Deddappa v. Branch Manager, National Insurance Co.

Ltd. (MANU/SC/4587/2007)

II. National Insurance Co. Ltd. v. Seema Malhotra

(MANU/SC/0112/2001)

and submitted that the policy covering the offending truck was

cancelled owing to dishonor of the cheque issued towards

premium and therefore was void ab initio. He further relied on

the Insurance Regulatory and Development Authority (Manner of

Receipt of Premium) Regulations, 2002, submitting that the

insurer's risk commences only upon receipt of premium.

7. It is undisputed that the vehicles Mahindra Bolero (KA-22-

8358) and Truck (KA-17-1666) were involved in the accident on

18.04.2011 near Mugalihal Village. The Tribunal held that the

accident in question occurred due to actionable negligence on the

part of truck driver. Neither the owner nor insurer of the truck

has challenged the said finding.

8. The claimant seeks compensation of ₹2,50,000/- towards

repair cost and loss of income. He asserts that he spent more

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than ₹1,66,000/- for repairs and suffered income loss of

₹73,372/- due to the vehicle remaining off the road. The

respondents disputed these contentions, requiring the claimant

to establish them with evidence.

9. The claimant examined himself as PW-1, marked

documents, and examined two more witnesses. His primary

reliance is on Ex.P9, his claim application to his own insurer and

attached documents showing that he sought ₹1,73,435/- based

on estimated repair costs. The documents indicate that the claim

was based on estimates and quotations, not on actual

expenditure.

10. Ex.P9 also contains the insurer's final assessment

fixing repair cost at ₹45,050/-. The assessment shows:

1 Parts at nil depreciation 3,486.00 2 Parts at 35% depreciation 12,407.00 3 Parts at 50% depreciation 6,227.00 4 Labor charges 24,932.00 Total: 47,052.00 Less: Excess (Rs.500) and 2,002.00 Salvage (Rs.1502) Net payable 45,050.00

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11. The above referred final assessment shows that the

total cost of the repairs was ₹57,960/- as under:

1 Cost of the parts at nil depreciation 3,486.00 2 Cost of the parts in respect of which 19,088.00 35% depreciation was applied 3 Cost of the parts in respect of which 12,454.00 50% depreciation was applied 4 Labor charges 24,932.00 Total: 59,960.00 Less: Excess (Rs.500) and Salvage 2,002.00 (Rs.1502) Net Amount: 57,958.00 Rounded off to: 57,960.00

Thus, it becomes clear that the claimant has incurred ₹12,910/-

over and above the reimbursement of ₹45,050/-.

12. The claimant has sought an additional sum of

₹73,372/- towards loss of income on the ground that his vehicle

remained off the road for a period of 52 days during the course

of repairs. According to the claimant, he had entered into a

contract with M/s Hutson Agro Product Limited, Belagavi, for

providing a vehicle for transporting milk from various villages of

Khanapur Taluk, and he was using the vehicle involved in the

accident for that purpose. It is his specific case that he was

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receiving ₹42,000/- per month under the said contract and that,

after deducting expenses such as the driver's salary, vehicle

maintenance, and fuel charges, he was earning a net income of

₹25,000/- per month.

13. The evidence adduced through PW-2 indicates that

the claimant continued to receive payments from M/s Hutson

Agro Products Limited, Belagavi for the period from 16.04.2011

to 15.06.2011 under the subsisting contract. The claimant

contends that, in order to honour his contractual obligations and

ensure continuous milk collection from the villages, he had

arranged an alternative vehicle during this period, and therefore

the payments were released to him even when his own vehicle

was not available.

14. There is no serious dispute with regard to the

correctness of the claimant's above contention. However, the

claimant has not produced any material before the Tribunal to

establish the actual amount spent by him for arranging the

alternative vehicle or the net loss suffered during the relevant

period. Even if the claimant's case is accepted, he would still be

required to incur expenditure towards the driver's wages, vehicle

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maintenance, and fuel charges to comply with the contract.

Therefore, the expenditure, if any, incurred by the claimant for

arranging an alternative vehicle would fall within the scope of

incidental expenses. In the absence of evidence to establish

actual financial loss, it is held that the claimant has not made out

a valid ground to seek compensation under the head of loss of

income for the relevant period.

15. Learned Counsel for the Insurer has strenuously

contended that the claimant is not entitled to seek any amount

towards repair costs, as he has already received ₹45,050/- from

his own insurer in full and final settlement without raising any

objection. However, in Sri Hemanth Raju (supra), relying on R.P.

Zuber v. Basavarjappa & Another (2016 ACJ 2307), this Court

has held that when the total loss is not reimbursed by the own

insurer, the claimant is entitled to seek the balance from the

insurer of the offending vehicle. Therefore, this Court finds no

merit in the insurer's contention disputing the claimant's right to

recover the balance repair cost not reimbursed by his own

insurer.

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16. Learned Counsel for the Insurer further contends that

the insurer is not liable to pay any compensation since the policy

covering the offending vehicle had been cancelled prior to the

date of the accident on account of dishonour of the cheque

issued by the owner towards payment of premium. He submits

that the insurer's liability commences only upon actual receipt of

premium.

17. It is true that Regulation 4 of the Insurance

Regulatory and Development Authority (Manner of Receipt of

Premium) Regulations, 2002, which came into force on

16.10.2002, stipulates that the insurer's risk commences only

after receipt of premium. Furthermore, the Hon'ble Supreme

Court in Deddappa and Seema Malhotra (supra) has held that

when a cheque issued towards the first premium is dishonoured,

the insurer is not bound to perform its part of the contract.

18. In the present case, the insurer has led evidence

before the Tribunal to show that the cheque dated 22.12.2010

issued by the owner of the offending vehicle towards premium

was returned unpaid due to insufficient funds. The insurer claims

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that, in consequence, the policy covering the period 23.12.2010

to 22.12.2011 was cancelled.

19. It is well settled that non-payment of premium can

render an insurance policy void ab initio, meaning that no risk is

assumed by the insurer. In Yallamma & Others v. National

Insurance Co. Ltd. (2008) 7 SCC 526, the Hon'ble Supreme

Court reiterated that compliance with Section 64VB of the

Insurance Act is a mandatory condition for fastening liability on

the insurer; however, the insurer's own conduct may, in certain

situations, estop it from denying liability on technical grounds.

Further, in ICICI Lombard General Insurance Co. Ltd. v. Arti Devi

& Others (2025 SCC 558), it was held that where premium-

related conditions are later fulfilled, the insurer may still be liable

despite initial non-receipt.

20. In the present case, though the insurer has

established that the cheque issued towards premium was

dishonoured, it has failed to produce reliable evidence before the

Tribunal proving that the policy was validly cancelled prior to the

filing of the claim petition. The documents at Exs. R-5 and R-6,

purportedly intimating cancellation to the insured and to the

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Transport Authority, have not been proved to have been served

on either. Moreover, these intimations bear the date 23.12.2010,

whereas the cheque was dishonoured only on 29.12.2010. It is

also significant that the insurer has not offered a categorical

statement denying the revival of the policy thereafter, up to the

date of the accident. In the circumstances, this Court holds that

the insurer is liable to pay the compensation determined herein,

subject to its right to recover the same from the insured, if any.

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

following:

ORDER

i) The appeal is allowed in part.

ii) The judgment and award dated 25.02.2014 passed in MVC No.2290/2011 by the learned MACT, Khanapur, is set aside.

iii) The claim petition filed under Section 166 of the Motor Vehicles Act is allowed, and the claimant is held entitled to compensation of ₹12,910/- (Rupees Twelve Thousand Nine Hundred Ten) Only, together with interest at 6% per annum from the date of petition till the date of realization.

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iv) Respondent Nos.1 and 2 are held jointly and severally liable to pay the compensation determined by the Court.

v) Respondent No.2 shall deposit the compensation amount before the Tribunal within two months from today, subject to its right to recover the said amount from the insured, if so advised.

vi) The claimant is entitled to withdraw the entire compensation amount upon such deposit.

vii) Draw the award accordingly.

Sd/-

(B. MURALIDHARA PAI) JUDGE

VB, CKK, CT-AN