Full Judgment
-1-
IN THE HIGH COURT OF KARNATAKA, KALABURAGI BENCH DATED THIS THE 29TH DAY OF NOVEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM MISCL. FIRST APPEAL NO.200569 OF 2019 (MV-D) C/W MISCL. FIRST APPEAL NO.201245 OF 2019 (MV-D) IN MFA NO.200569 OF 2019 BETWEEN: THE BRANCH MANAGER HDFC EERGO GEN. INS. CO. LTED, SHANKAR NARAYAN BUILDING, 1ST FLOOR, M.G. ROAD, BANGALORE-560001 (NOW REPRESENTED BY AUTHORIZED SIGNATORY HUBLI) …APPELLANT (BY SMT. PREETI PATIL MELKUNDI, ADVOCATE)
Digitally signed by RENUKA AND: Location: HIGH COURT OF KARNATAKA 1. HUSANAWWA W/O. BASAWARAJ CHALAWADI, AGE: 44 YRS, OCC: H.H.WORK,
2. REKHA D/O. BASAVARAJ CHALAWADI AGE: 21 YRS,
3. ARUN S/O. BASAVARAJ CHALAWADI AGE: 19 YRS, ALL R/O. HOLE HANGARAGI, TQ. AND DIST. VIJAYAPUR-586101
4. SANTOSH S/O. AMASIDDAGOUDA
TODALABAGI, AGE: 44 YRS, OCC: BUSINESS, -2- R/O. MAKHANAPUR, TQ. AND DIST.VIJAYAPUR-586101. …RESPONDENTS (BY SRI SANGANABASA B. PATIL, ADVOCATE FOR R1 TO R3; SRI SANGANAGOUDA V. BIRADAR, ADVOCATE FOR R4) THIS MFA IS FILED U/S. 173(1) OF MV ACT, PRAYING TO CALL FOR THE RECORDS AND ALLOW THE ABOVE APPEAL BY SETTING ASIDE THE IMPUGNED JUDGMENT AND AWARD DATED 26.12.2018 IN MVC NO.1045/2015 PASSED BY THE III ADDL. SENIOR CIVIL JUDGE AND MOTOR ACCIDENT CLAIMS TRIBUNAL NO.XII, VIJAYAPUR. IN MFA NO.201245 OF 2019 BETWEEN:
1. HUSANAWWA W/O. BASAVARAJ CHALAWADI, AGE: 44 YEARS, OCC: HOUSE HOLD WORK,
2. REKHA D/O. BASAVARAJ CHALAWADI AGE: 21 YEARS, OCC: STUDENT,
3. ARUN S/O. BASAVARAJ CHALAWADI AGE: 19 YEARS, OCC: STUDENT, ALL ARE R/O. HOLE-HANGARAGI, TQ. AND DIST. VIJAYAPUR-586101 …APPELLANTS (BY SRI SANGANABASAVA B. PATIL, ADVOCATE) AND:
1. SANTOSH AMASIDDAGOUDA TODALABAGI, AGE: 44 YEARS, OCC: BUSINESS, R/O. MAKHANAPUR, TQ. AND DIST. VIJAYAPUR-586101
2. THE BRANCH MANAGER
HDFC ERGO GENERAL INSURANCE -3- COMPANY LTD., SHANKAR NARAYAN BUILDING, 1ST FLOOR, M.G. ROAD, BANGALORE-560001 …RESPONDENTS (BY SMT. PREETI PATIL MELKUNDI, ADVOCATE FOR R2; R1 SERVED) THIS MFA IS FILED U/SEC. 173(1) MVC ACT, PRAING TO, CALL FOR THE RECORDS AND MODIFY THE JUDGMENT AND AWARD PASSED BY THE COURT OF THE III ADDL. SENIOR CIVIL JUDGE AND MACT NO. XII, VIJAYAPUR, AT VIJAYAPUR IN MVC NO.1045/2015 DATED 26.12.2018 AND BE PLEASED TO ALLOW THE CLAIM PETIITON BY GRANING THE RELIEF AS PRAYED FAR BY THE APPELLANTS HEREIN. THESE APPEALS COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
ORAL JUDGMENT
(PER: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM) These two appeals are by the insurance company and by the claimants. The insurance company has filed an appeal in MFA No.200569/2019 questioning liability on the ground that policy is a fake policy and therefore, insurance company is not liable to indemnify the owner of the offending vehicle. The insurance company has not seriously disputed quantum determined by the Tribunal. Whereas, claimants have filed an appeal in MFA -4- No.201245/2019 questioning the quantum determined by the Tribunal.
2. Learned counsel appearing for the insurance
company has vehemently argued by contending that policy on which claimants are placing reliance is a fake policy and therefore, finding on liability by the Tribunal is illegal and warrants interference at the hands of this Court.
3. Per contra, learned counsel appearing for the claimants and learned counsel appearing for the owner contend that the issue regarding the genuineness of policy
is exhaustively dealt with by the Tribunal. Both the counsels would take this Court through the discussion made by the Tribunal at paragraph No.18 of the judgment. Both the counsels have also brought to the notice of this Court that policy was issued through an authorized agent namely, Niraj Pankaj Sha and this fact is admitted by an
official, who is examined as RW.1. Therefore, both the counsels submit that insurance company cannot shy away from its duty in satisfying the award. -5- Finding on liability
4. The insurance company is seriously disputing
the genuineness of the policy on which claimants are placing reliance while seeking compensation against the insurance company. Respondent - insurance company is seriously contesting the genuineness of the policy. Therefore, this Court is inclined to examine the pleadings in the written statement filed before the Tribunal. Except paragraph No.2, there is no specific denial as to how the policy is fake. The relevant portion is extracted, which reads as under:
“02. That this respondent No. 2 HDFC ERGO General Insurance Co. Ltd has not at all issued any policy to respondent No.1 Santhosh amoghasidda Todalabai covering the vehicle i.e. Motor Cycle bearing No. KA-22/EA-4461 as on the date of alleged accident i.e. on 25-05- 2015. Further this respondent submits that the policy No.2320 2005 1357 1200 000 mentioned in the cause title of petition is not found in our company Data as we have not issued any policy -6-
to the said vehicle. Zerox copy of policy produced before the court is not issued by our company and it is fake policy and we have given complaint in Vijayapur Traffic Police station on fake police issue, hence, this respondent is not liable to pay any compensation to the petitioners.”
5. This Court is also deems it fit to refer to the several admissions elicited in the cross-examination of RW.1. The relevant portion is extracted, which reads as under:
“CfðAiÀÄ°èAiÀÄ ಾಲ ನಂಬರ ನಮ ಕ ೇಂದ ೊರುವಲ. £ÀªÀÄä ಕ ೇಂದ ೊಟ ಾಲಯ ನಂಬರ ಇಯವ ೆ!ೆ ೊಟ ಾಲಯ ನಂಬನ ಬುಕ"ನು# $ಾನು %ಾಜರಪ(ಲ ಮತು* +ಾವ ನಂಬರವ ೆ!ೆ ಾಲ ೊರು,ೆ*ೕªÉ" ಅಂ,ಾ $ಾನು .ಾ/0ಯನು# 01ದುೊಂಡು %ೇಳಬ4ೆ. ಾಲ 6ೕ4ೆ ಇರುವ ಸ» +ಾರದು8 ಅಂ,ಾ ನನ!ೆ !ೊ0*ಲ. ಾಲಯ 6ೕರುವ 9ೕ: ಸ/ತ ನಮ zÀÄÝ ಇರುವಲ. ಪ;ೆಯ <ರಜ ಪಂಕಜ =ಾ ಅನು#ವ ಏ?ೆಂಟ ಇ@ಾ8$ೆ ಎಂದ ೆ ಸ. ¸Àzj À ಏ?ೆಂಟ FvÀ£À PÉÆÃq £ÀA: 201921712527 ªÀÄvÀÄÛ DvÀ£À ¥ÉÆãï £ÀA. 91-9322213138 ಎಂದ ೆ ನನ!ೆ .ಾ/0 ಇಲ. ಾಲಯ ಬ!ೆB ಸದ <ರಜ =ಾ FvÀ££ À ÀÄß C ಾರು,ೆ*ೕDೆ. ಆದ ೆ ಆ ಬ!ೆB @ಾಖ4ೆಗಳH ಇರುವಲ.” -7-
6. If these significant details are taken into
consideration, this Court is of the view that the insurance company in the absence of rebuttal evidence cannot be permitted to raise a contention regarding liability on the premises that policy copy furnished by the claimants is a fake policy. The copy of the policy produced by the claimants, who are third parties secured from the Investigating Officer clearly discloses the policy details and its validity period. The policy further discloses the name of agent with his code. RW.1 in unequivocal term admits that Niraj Pankaj Sha is the authorized agent. The policy further discloses the contact details of the authorized agent Niraj Pankaj Sha.
7. When an insurance company disputes the
issuance of a policy in relation to third-party claims arising from road traffic accidents, it carries a statutory duty to substantiate its stance with clear and convincing evidence. In the present case, the insurance company alleged that the policy in question, referenced by the claimants, was a -8-
fake policy. However, it failed to produce the necessary primary evidence, such as the original register or record maintained by the company, to support its contention. This omission was admitted by RW.1 during proceedings. The company did not demonstrate due diligence by examining the named policyholder, Niraj Pankaj Sha, or by presenting corroborative material to prove that the policy was never issued.
8. The legal framework governing third-party
claims in road traffic accidents imposes a statutory liability on insurance companies to indemnify victims promptly and fairly. This liability is grounded in public policy to ensure that individuals harmed by road traffic accidents are
adequately compensated without unnecessary delays. Delaying or denying compensation on frivolous grounds, as seen in this case, defeats the core purpose of mandatory insurance provisions under the Motor Vehicles Act. By failing to substantiate its claim that the policy was fraudulent, the insurance company has not only prolonged
-9- the litigation unnecessarily but also caused significant hardship to the claimants.
9. It is a well-settled principle of law that once a
claimant produces prima facie evidence of an insurance policy, the burden shifts to the insurer to disprove its validity with cogent evidence. In the absence of such evidence, the court cannot accept bare assertions as sufficient grounds to deny compensation. The protracted delay since 2019 in settling claims arising from an accident that occurred in 2015 reflects a miscarriage of justice and undermines the trust vested in insurance mechanisms.
10. The statutory obligation of an insurer extends
beyond the contract of insurance to encompass the protection of third-party rights. These rights are sacrosanct and cannot be compromised by unsubstantiated allegations of fraud. The courts have consistently emphasized that the denial of just compensation on flimsy grounds not only violates statutory obligations but also erodes public confidence in - 10 - the legal system. Therefore, the contention of the insurance company that the policy is fake, being unsubstantiated, is unsustainable in law and equity. The claimants are entitled to compensation without further delay to uphold the principles of justice and statutory compliance. Regarding quantum
11. The claimants in the claim petition have specially pleaded that deceased was working as a contractor and earning Rs.15,000/- per month. The Tribunal in the absence of income proof assessed the income at Rs.6,000/- per month and awarded Rs.6,24,000/- under the head of loss of dependency. The Tribunal in all awarded Rs.6,84,000/-.
12. Though this Court is of the view that Tribunal was justified in assessing the income notionally for want of documentary evidence, however, the income assessed at Rs.6,000/- appears to be on the lower side. In the - 11 - absence of income proof, this Court is inclined to place reliance on the income chart prepared by the Karnataka State Legal Services Authority. Accident is of the year
2015. Accordingly, income is assessed at Rs.8,000/- per month. Having regard to the age of the deceased, future
prospects is added at the rate of 25%. Income after adding 25% is assessed at Rs.10,000/- and after deducting 1/3rd and applying multiplier of ‘13’, compensation payable under the head of loss of
dependency works out Rs.10,39,896/- (Rs.6,666x12x13).
13. On conventional heads, appellants/claimants
are entitled to Rs.1,50,000/- including funeral expenses and loss of estate. By extending the benefit of escalation at the rate of 10% for every three years in the light of principles laid down by the Apex Court in the case of National Insurance Company Ltd. vs. Pranay Sethi1, an additional sum of Rs.30,000/- is paid on the conventional head at Rs.1,50,000/-. Accordingly,
(2017) 16 SCC 680 - 12 - claimants are entitled for enhanced compensation of Rs.12,19,896/- rounded off Rs.12,20,000/- as against Rs.6,84,000/- awarded by the Tribunal. The interest portion awarded by the Tribunal at the rate of 9% per annum is modified to 6% per annum.
14. In the light of the discussion made supra, following order is passed:
ORDER
a. Appeal filed by the claimants in MFA No.201245/2019 is allowed in part. b. Appellants/claimants are entitled for enhanced compensation of Rs.5,36,000/- with interest at the rate of 6% per annum from the date of claim petition till its realization. c. The appeal filed by the insurance company in MFA No.200569/2019 is allowed in part. d. The apportionment shall be made as per the order of the Tribunal. - 13 -
e. The amount in deposit shall be transmitted to the Tribunal to enable the claimants to withdraw the same. f. Registry to transmit the Trial Court records. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE SRT List No.: 1 Sl No.: 4, CT-SW