Insurance company appealed a tribunal award of Rs.1,65,385 for an accident on the ground that both premium cheques were dishonoured before the accident, so no valid policy existed. The High Court allowed the appeal, exonerated the insurer and fixed liability on the vehicle owner.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
NC: 2026:KHC:32299 MFA No. 9284 of 2013
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JUNE, 2026
BEFORE
THE HON'BLE MRS. JUSTICE P SREE SUDHA MISCELLANEOUS FIRST APPEAL NO. 9284 OF 2013(MV-I)
BETWEEN:
NATIONAL INSURANCE CO LTD REGIONAL OFFICE, NO.144, 2ND FLOOR, SHUBHARAM COMPLEX, M.G.ROAD, BENGALURU-560001 REP. BY TIS ASST. MANAGER SRI.R.LAKSHMANA RAO.
APPELLANT
(BY SRI. ANUP SEETHA RAMA RAO.,ADVOCATE) AND:
Digitally signed by PADMASHREE SHEKHAR DESAI Location: High Court of Karnataka
RESPONDENTS
(BY SRI. V. LAKSHMAIAH.,ADVOCATE FOR R1; V/O DTD 27.10.2017 SERVICE OF NOTICE TO R2 IS HELD SUFFICIENT)
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THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 11.07.2013 PASSED IN MVC NO.3717/2011 ON THE FILE OF THE PRINCIPAL, CHIEF JUDGE, COURT OF SMALL CAUSES, MEMBER MACT, BANGALORE, AWARDING COMPENSATION OF RS.1,65,385/- WITH INTEREST @ 6%P.A FROM THE DATE OF PETITION AND ETC,.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MRS. JUSTICE P SREE SUDHA
ORAL JUDGMENT
This appeal is filed by insurance company against the judgment and award dated 11.07.2013 passed in MVC.No.3717/2011 on the file of learned Principal Motor Vehicles Accidents Claims Tribunal and Chief Judge, Court of Small Causes, Bengaluru SCCH-01. The claimant met with an accident on 21.02.2011 and filed claim petition claiming compensation of Rs.10,00,000/-. The Tribunal considering the entire evidence on record granted an amount of Rs.1,65,385/together with interest at the rate of 6% per annum from the date of petition. Being aggrieved by the said order, the insurance company preferred an appeal and mainly contended that, it is not liable to pay the compensation, as the previous
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cheque issued by respondent No.2 towards premium was dishonoured and he issued another cheque with material mistakes which was also returned unpaid. Respondent No.2 clearly admitted in his evidence regarding return of the cheques and also withdrawal of the amount from his bank account without leaving sufficient balance. But the Tribunal fastened the liability against the insurance company. The Tribunal observed that policy cancellation endorsement is served on RW.2 on 23.02.2011 i.e., 2 days after the accident. RW.2 in his evidence stated that the owner has withdrawn Rs.4,000/- from his account out of Rs.4,800/- available and he misrepresented to the effect that he received a policy cancellation endorsement on 25.02.2011 and he has not kept sufficient balance for paying the premium, he came to know about the dishonour of the cheque after two days, thus they are liable to pay the compensation. The second cheque was issued only after first cheque issued towards premium was returned unpaid. The Tribunal wrongly observed that there is no intention on the part of RW.2 for issuing cheque with difference in signature and difference in amounts mentioned in words and figures and the
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said observation is erroneous. Therefore, requested this Court
to set aside the judgment and award.
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dishonoured on the ground that there was variation in the signature and the second cheque was dishonoured on the ground that there was no sufficient balance which was brought in the evidence, out of Rs.4,800/- he has withdrawn Rs.4,000/as such there was no sufficient balance for payment of the premium. The said intimation was also sent by the insurance company on 15.02.2011 itself and later accident occurred on 21.02.2011. As on the date of the accident there was no policy. It cannot be said that petitioner has no knowledge of dishonour of the cheque, as he himself has withdrawn the amount from the bank account after issuance of the cheque, but the Tribunal failed to appreciate the facts properly and fastened the liability against the insurance company, as there is no valid policy existing on the date of accident, insurance company is exonerated from paying the liability and the owner of the vehicle is alone liable to pay the compensation. In the result, the following:
ORDER
i) The appeal is allowed ;
NC: 2026:KHC:32299 MFA No. 9284 of 2013
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ii) The appellant / insurance company is exonerating
Sd/(P SREE SUDHA) JUDGE
PNV
List No.: 1 Sl No.: 38
1 issue framed by the court
Whether the insurance company was liable to pay compensation when the premium cheques were dishonoured and no valid policy existed on the date of the accident.
1 provisions across 1 enactments
National Insurance Co Ltd
Sri K R Balaji
Sri Krishna Murthy
P Sree Sudha
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
