New India Assurance Company Ltd. V. Mrs. Mala M, W/O Late H V Govinda Shetty and Mr. Yashwanth G Shetty, S/O Late H V Govinda Shetty and Mr. Niranjan G Shetty, S/O Late H V Govinda Shetty and Mrs. Rukhminamma, W/O Late Venkatasubba Shetty and Mr. Prabhaker Shetty T, M/S Sowkur Durgaparameshwari Form

MFA/3562/2023

AI Insights

This case involves two appeals: one by the insurer, New India Assurance Company Ltd., challenging the liability and quantum of compensation awarded by the Motor Accident Claims Tribunal, Mysuru, and another by the claimants seeking enhancement of the compensation. The Tribunal had awarded Rs. 46,58,000 as compensation for the death of H.V. Govinda Shetty in a vehicular accident, which the insurer contested on grounds of non-involvement and procedural lapses, while the claimants argued for a higher compensation citing underestimation of future prospects and dependency deductions. The High Court, after re-evaluating the evidence and legal provisions, dismissed the insurer's appeal and partly allowed the claimants' appeal, enhancing the compensation and affirming the insurer's liability under the policy.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 824244 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 16-12-2025
• Assessment Year: misc
• Other Referred Cases: Alok Kumar Ghosh Vs The New India Assurance Company Limited and Another
• Laws Referred To: MV Act 1988
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: SHANTHARAJ
• Assessee Lawyers: GEETHA RAJ
• Keywords: Compensation; Enhancement; Liability; Motor vehicle accident; Quantum
• Section: 173(1)

Judgement Text

" - 1 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 RESERVED ON : 28.10.2025 PRONOUNCED ON : 16.12.2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF DECEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE B M SHYAM PRASAD AND THE HON'BLE MR. JUSTICE T.M.NADAF MISCELLANEOUS FIRST APPEAL NO. 3562 OF 2023 (MV-D) C/W MISCELLANEOUS FIRST APPEAL NO. 6032 OF 2023 (MV-D) IN MFA No. 3562/2023 BETWEEN: M/S. NEW INDIA ASSURANCE COMPANY LTD., THE MANAGER, DIVISIONAL AND BRANCH OFFICE, JLB ROAD, CHAMUNDIPURAM, MYSURU - 570 004. REPRESENTED BY REGIONAL OFFICE, THIRD PARTY CLAIMS HUB, MAHALAKSHMI CHAMBERS, II FLOOR, NO.9, M G ROAD, BANGALROE - 560 001, REPRESENTED BY N L SAI SUDHA, ADMINISTRATIVE OFFICER. …APPELLANT (BY SMT. GEETHA RAJ, ADVOCATE) AND: 1. MRS. MALA. M, W/O LATE H V GOVINDA SHETTY, AGED ABOUT 54 YEARS, Printed from counselvise.com - 2 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 2. MR. YASHWANTH G SHETTY, S/O LATE H V GOVINDA SHETTY, AGED ABOUT 28 YEARS, 3. MR. NIRANJAN G SHETTY, S/O LATE H V GOVINDA SHETTY, AGED ABOUT 26 YEARS, 4. MRS. RUKHMINAMMA, W/O LATE VENKATASUBBA SHETTY, AGED ABOUT 81 YEARS, ALL ARE RESIDING AT, NO. 73/8, 'C' BLOCK, BEHING RING ROAD, ANANDANAGARA, MYSURU - 570 022. 5. MR. PRABHAKER SHETTY T, M/S SOWKUR DURGAPARAMESHWARI FORM, NO.583, HAROHALLI VILLAGE, VARUNA HOBLI, BANNUR ROAD, MYSURU, MYSURU DISTRICT. …RESPONDENTS (BY SRI. SHANTHARAJ K., ADVOCATE FOR R1 TO R3; V/O DATED 30.08.2023 R1 TO R3 ARE LR's OF THE DECEASED R4, R5 - SERVED) THIS MFA IS FILED U/S.173(1) OF MV ACT 1988, AGAINST THE JUDGMENT AND AWARD DATED 27.09.2022 PASSED IN MVC NO.547/2017 ON THE FILE OF MACT, MYSURU (IN THE COURT OF PRINCIPAL SMALL CAUSES AND SENIOR CIVIL JUDGE, MACT, MYSURU), AWARDING COMPENSATION OF RS.46,58,000/- WITH INTEREST AT 6 PERCENT P.A. FROM THE DATE OF PETITION TILL DEPOSIT. Printed from counselvise.com - 3 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 IN MFA NO. 6032/2023 BETWEEN: 1. SMT. MALA M., W/O LATE H.V. GOVINDA SHETTY, AGED ABOUT 54 YEARS, 2. YASHWANTH G. SETTY, S/O LATE H.V. GOVINDA SHETTY, AGED ABOUT 28 YEARS, 3. NIRANJAN G. SETTY, S/O LATE H.V. GOVINDA SHETTY, AGED ABOUT 26 YEARS, ...APPELLANTS (BY SRI. SHANTHARAJ K., ADVOCATE) AND: 1. PRABHAKAR SHETTY T., M/S SOWKUR DURGAPARAMESHWARI FORM, NO 583, HAROHALLI VILLAGE, VARUNA HOBLI, BANNUR ROAD, MYSURU MYSURU DISTRICT - 570 010. 2. THE MANAGER, NEW INDIA ASSURANCE COMPANY LTD, DIVISIONAL AND BRANCH OFFICE, JLB ROAD, CHAMUNDIPURAM, MYSURU - 570 004. ...RESPONDENTS (BY SMT. GEETHA RAJ, ADVOCATE FOR R2 V/O DATED 05.09.2023 NOTICE TO R1 IS DISPENSED WITH) THIS MFA IS FILED U/S 173(1) OF MV ACT 1988, AGAINST THE JUDGMENT AND AWARD DATED 27.09.2022 PASSED IN MVC NO. 547/2017 ON THE FILE OF MOTOR ACCIDENTS CLAIMS TRIBUNAL, MYSURU (IN THE COURT OF PRINCIPAL JUDGE, COURT OF SMALL CAUSES, AS A PRESIDING OFFICER), PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION. Printed from counselvise.com - 4 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 THESE APPEALS ARE, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF CAV JUDGMENT (PER: HON'BLE MR. JUSTICE T.M.NADAF) These two appeals being MFA.No.3562/2023 and MFA.No.6032/2023 are by the Insurer as well as claimant, calling in question the judgment and award dated 27.09.2022 in MVC.No.547/2017 passed by the Motor Accident Claims Tribunal, Mysuru [‘Tribunal’ for short]. The Insurer is on the ground of liability and quantum, and the claimant seeks enhancement. 2. Heard Ms.Geetha Raj, learned counsel appearing for the appellant, and Sri. Shantharaj. K, learned counsel for respondent Nos.1 to 3. Though Notice to respondent No.5 in MFA No.3562/2023 is served, but unrepresented. The Notice to this Printed from counselvise.com - 5 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 respondent in MFA.No.6032/2023 [the respondent No.1] is dispensed with vide order dated 05.09.2023. 3. Ms. Geetha Raj on four counts has placed her arguments: (i) Complainant was not cited as witness to substantiate the claim of the claimants. (ii) Witness No.2, Prashanth Kumar, is a stock witness with the police. (iii) Though PW-2 has given evidence in the claim petition in favour of the claimant, on the manner of accident alleging the involvement of vehicle and the reason for the accident, but in the criminal case, completely turned hostile deposing that he did not see any accident. In the absence of any materials, except the statement of Prashanth Kumar, the police in collusion filed charge sheet by implicating the vehicle of the insurer, though the owner of the insurer appeared, filed statement of objection and led his evidence as well as Printed from counselvise.com - 6 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 the evidence of the driver of the lorry involved in the accident against the facts narrated by the eye witness. (iv) As per the statement of PW-2 Prashanth Kumar, the accident had occurred at 05.45 p.m. on 26.04.2017. However, as per the records, placed by the insured the vehicle left Sowkur Durgaparameswari Poultry Farm at 06.00 p.m. in the evening and reached Mangaluru. Ms. Geetha further submits that as per the evidence of owner as well as driver of the lorry, the lorry was transporting 11 Tonnes of eggs from Sowkur Durgaparameswari Poultry Farm, owned by the insured and reached the destination i.e, Mangaluru safely without any damages. If the contentions of PW-2, are taken as it is which assumes importance in the matter, the reason being the witness has stated that the Printed from counselvise.com - 7 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 driver of lorry has driven the lorry in a zig- zag manner and not the motorcycle, when trying to overtake it and then dashed against road divider and stopped. If that is to be considered, there must be damages to the goods contained in the lorry owing to the nature of goods i.e., eggs. However, the entire load was safely transported to the Mangaluru destination. In these circumstances, in view of admissions by the witness PW-2 that, he had earlier given complaint in respect of other accidental cases with the police and also given evidence before the Court, pellucidly shows that the witness is a stock witness with the police and his case is a pure case of implantation of vehicle. With this Madam Geetha sought to allow the appeal and exonerate the insurer, holding that the offending lorry is not at all involved in the accident. Printed from counselvise.com - 8 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 4. In contrast to these submissions, Sri.Shantharaj, submits that the evidence in terms of Indian Evidence Act, be read as a whole and not in isolation. The claimants have examined, apart from an eyewitness [PW-2] the Investigating Officer, who has registered the case and conducted initial investigation. This witness is examined as PW-3, and who has handed over further investigation to RW-3. 5. RW-3 who has filed charge sheet, against the driver of the lorry for causing the accident due to his actionable negligent and rash driving, though treated as hostile and cross-examined, nothing is elicited either to dispel the evidence of the said witness or to dislodge the entire case of the claimant. 6. Sri.Shantharaj, relying on the judgment of the Hon'ble Apex Court in Alok Kumar Ghosh Vs The New India Assurance Company Limited and Another1, stressed on paragraph No.19, to contend that the unnecessary appeals by the insurance 1 Civil Appeal No.10482/2017 dated 09.10.2025 Printed from counselvise.com - 9 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 company rising technical pleas more so, when they do not deny their ultimate liability under the contract of insurance has been viewed by the Hon'ble Apex Court seriously imposing cost of Rs.50,000/-. In the case on hand, the Insurer though suffered an order on contest, merely on technicality and reading certain stray statements but not admitted as admissions on hyper-technicality, laid challenge to the award seeking exoneration from liability in the teeth of contract of insurance, when there is no dispute regarding liability of the insurance to pay compensation be dealt with exemplary cost while dismissing the appeal. Accordingly, sought to dismiss the appeal filed by the appellant-insurer. 7. So far as enhancement is concerned, Sri. Shantharaj, submits that as per the salary slips produced at Ex.P10 and P11 for the month of March, 2017 and April, 2017 both shows the next increment due is May 2017, but due to the untimely death of the employee on 26.04.2017, the income shown only uptil the date of accident in April 2017 pay slip, but Printed from counselvise.com - 10 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 the Tribunal has rightly taken the income shown at Rs.46,688/- as per gross salary of pay slip of March 2017. The salary certificate of March, 2017 that the gross salary is Rs.46,688/- including entire Basic Pay, Dearness Allowance and House Rent Allowance and other allowances. The Tribunal though considered the income as per the pay slip of March 2017, at Rs.46,688/-, but failed to consider the future prospectus. The deceased was 54 years and having 6 more years of service and the employment being of permanent keeping in mind the increments at least twice in an year, the loss of salary on the date of superannuation may not be less than 50% of the of the existing salary. The Tribunal has missed this aspect of the matter and taken 15% towards future prospectus and deducted income tax at source and 1/3rd towards personal expenses, though there are four claimants the same requires consideration. The claimant Nos.2 and 3, though were major, considering their age, they cannot be said as not dependent on the income of the father. The mere age Printed from counselvise.com - 11 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 of majority is not a ground to keep them out of dependency. 8. Since there are 4 claimants, considering the fact that the deceased was the sole breadwinner of the family, considering the cost of education and other family necessities, the personal deductions towards the deceased must have been taken at 1/4th instead of 1/3rd taken by the Tribunal. He further submits that in view of settled position of law, 10% escalation be awarded towards the conventional heads, for each completed 3 years from 2017. With these, Sri Shantharaj, sought to allow the appeal and enhance the compensation. 9. As rightly contended by Sri.Shantharaj, the evidence be read in its entirety and not in isolation. Even there are certain admissions per learned counsel for the insurer, the entire evidence with respect to involvement of vehicle causing accident cannot be brushed aside. Though the owner and driver of the insured lorry have been examined as witnesses and they have produced the copy alleged Printed from counselvise.com - 12 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 to be the receipt for having delivered the load of eggs, the person- i.e., acknowledgee of said receipt has not been examined to substantiate their claim and the seal appearing in the receipt. No records, except the said invoice has been placed on record to substantiate the contentions of the insured that the vehicle left poultry farm at 06.00 p.m. In the absence of reliable evidential documents, no probative value could be given to the evidence of the insured as well as his driver. Neither the insurer nor the driver have taken any pain to call in question the charge sheet filed, though ultimately the case ended in acquittal. It is trite that an acquittal in a criminal case has no bearing on the claim petition as the acquittal resulted on giving benefit of doubt. 10. In the proceedings as in the case on hand, the proof of evidence is on preponderance of probabilities, the Tribunal, after considering the entire material placed before it, has come to an conclusion that, it is the driver of the offending lorry is responsible for the accident, resulting in untimely Printed from counselvise.com - 13 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 death of Sri.H.V.Govinda Shetty. In these circumstances, the grounds taken by the Insurer cannot be countenanced and requires to be rejected, and is accordingly rejected, confirming the findings of the Tribunal on Issue No.1 against the driver of the offending lorry. 11. So far as quantum is concerned, in the absence of any proof having been placed by the claimants regarding the actual raisein the salary by means of increments as contented by Sri.Shantharaj, in the case on hand we have to fall back on the dicta laid down by the Hon'ble Apex Court, considering addition at the rate of 15% to the last pay drawn. The Tribunal has rightly considered the income at Rs.46,688/- as per the pay slip for the month of March, 2017. Since the death has occurred subsequent to closing of the earlier financial year, the Assessment Year 2018-2019, be taken for applicable tax deduction. In this the Tribunal has rightly taken the Assessment year 2018 and 2019. Out of the gross salary taken by the Tribunal, a sum of Rs.200/- Printed from counselvise.com - 14 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 towards professional tax required to be deducted, the annual income of the deceased, after deduction of Rs.200/- per month and Rs.2,400/- per year towards professional tax, comes to Rs.5,57,856/-. 12. As per the income slab for the Assessment year 2018-2019, upto Rs.2,50,000/- no tax could be levied (There is no tax). As such any amount above Rs.2,50,000/- and within Rs.5,00,000/-the tax applicable is at 5%. The concept of standard deductions for the first time was introduced by amendment to Section 16(i)(a) of the Income Tax Act, allowing the deductions of Rs.40,000/- or the amount of salary whichever is less with effect from 01.04.2019, and by way of further amendment is increased from Rs.40,000/- to Rs.50,000/- with effect from 01.04.2020. As such no standard deductions were available for the Assessment year 2018-19. The tax payable at 5% on the sum of Rs.3,07,856/- (5,57,856-2,50,000), comes to Rs.15,392.08, a Cess at 3% if added, as prevailing for the Assessment year, the tax on the net income Printed from counselvise.com - 15 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 comes to Rs.15,841/-. The said tax is liable to be deducted from Rs.5,57,856/-, then the total income available is Rs.5,42,015/-. If 15% is added towards future prospectus, the same would comes to Rs.6,23,317/-. 13. As rightly contented by Sri.Shantaraju, the deduction ought to have been 1/4th instead of 1/3rd, considering the age of claimant Nos.2 and 3, who were only 22 and 20 years, at the time of death of the deceased, therefore, the deduction towards personal expenses must be taken as 1/4th and if deducted, the loss of dependency annually would be to Rs.4,67,488/-. As the deceased was 54 years on the date of accident, the appropriate multiplier applicable is ‘11’. Accordingly, applying the said multiplier, the loss of dependency comes to Rs.51,42,368/-. Though the conventional heads awarded by the Tribunal are just and proper, but in view of settled position of law, the claimants are entitled for enhancement at the rate of 10% on the Printed from counselvise.com - 16 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 conventional heads from 2017 for each completed 3 years. In the case on hand, they are entitled for 20%, till the date of this judgment on the conventional heads, which would come to Rs.38,000/-. For the forgoing reasons, the compensation awarded by the Tribunal requires re-determination and re- consideration, which is as follows: Sl. No. Heads Amount Rs. 1. Loss of dependency 51,42,368-00 2. Loss of consortium (40,000 x 4 = Rs.1,60,000) 1,60,000-00 3. Loss of estate 15,000-00 4. Funeral expenses 15,000-00 5. 10% escalation for 2 terms of 3 years each 38,000-00 TOTAL 53,70,368-00 Rounded off to 53,70,500-00 14. On re-determination, the claimants are entitled for a sum of Rs.53,70,500/- as against Rs.46,58,000/- awarded by the Tribunal. This Court has re-appreciated the evidence to examine the merits of the Insurer's grounds and this Court is not persuaded to opine that the Insurer's appeal is frivolous, as such no cost is imposed. Printed from counselvise.com - 17 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 15. The re-determined compensation shall carry interest at the rate of 6% per annum from the date of petition till realization. 16. For the aforesaid reasons, we proceed to pass the following: ORDER (i) The appeal by the appellant/insurer is dismissed. (ii) The amount in deposit shall be transmitted to the concerned Tribunal for disbursement. (iii) The appeal by the claimants are allowed-in-part, modifying the judgment and award impugned herein by re-determining the compensation at Rs.53,70,500/- as against Rs.46,58,000/. (iv) The re-determined compensation shall carry interest at the rate of 6% per Printed from counselvise.com - 18 - MFA No. 3562 of 2023 C/W MFA No. 6032 of 2023 annum from the date of petition till realization. (v) The respondent No.2/insurer shall deposit the balance re-determined compensation (since the amount in deposit before this Court in the appeal by insurer is ordered to be transmitted to the Tribunal), along with accrued interest stated supra before the concerned tribunal within 6 weeks from the date receipt of copy of this order. (vi) The apportionment and disbursement is unaltered. Sd/- (B M SHYAM PRASAD) JUDGE Sd/- (T.M.NADAF) JUDGE RR ct-vn Printed from counselvise.com "