Mere Deviation In Rules Not Amounting To Fundamental Breach Will Not Exonerate Insurance Company: Karnataka High Court

The Karnataka High Court observed that mere deviation of rules which does not amount to fundamental breach cannot exonerate the Insurance Company to pay compensation to the owner.

 An appeal was filed before the Karnataka High Court under Section 173(1) of the Motor Vehicles Act praying to enhance the compensation granted by the Motor Accident Claims Tribunal.

The Bench of Justice Hanchate Sanjeevkumar observed, “Therefore, mere deviation of rules in the circumstances as above discussed is not amounting to fundamental breach so as to exonerate the Insurance Company to pay compensation to the owner. Hence, the judgment and award insofar as fastening liability on the owner of bus is liable to be set aside and it is set-aside holding that the insurance company shall indemnify the owner of the bus by paying compensation to the claimants.”

Advocate B.M Patil represented the Appellant, while Advocates Sanjay S. Katageri and S.S Koliwada represented the Respondents.

Case Brief

There were four appeals against the common judgement of the Tribunal, which were taken up together by the Karnataka High Court, with the prayer to enhance the compensation awarded in a motor vehicle accident.

The Appellants were riding a motorcycle when they were hit by a private bus and sustained severe injuries. The bus did not have the permit to travel on that route, however, the owner used it as a relief vehicle for carrying passengers. The Tribunal awarded compensation, however, fastened the liability on the owner of the bus as the bus was not traveling on the permitted route, thereby violating the permit conditions.

Court's Reasoning

The Karnataka High Court modified the award of the Tribunal and noted that considering the factual scenario of the case, the Tribunal did not appreciate the compelling circumstances to use the bus on the unpermitted route. 

“While considering the factual scenario involved in the case, what was the compelling circumstances to use the bus bearing registration No.KA-14/A-1313, is not appreciated by the Tribunal. The said bus was used as a relief vehicle, since the another bus bearing registration No.KA-14/A-7144 had got struck and repaired on enroute to Haveri, which was having permit. It is true that the relief vehicle bus bearing registration No.KA-14/A-1313, did not have permit to travel up to Haveri, but the owner has used this bus as a spare vehicle/relief vehicle for carrying passengers. This inevitable circumstance is not appreciated by the Tribunal. Admittedly, both the buses have permit conditions and enroutes are permitted”, the Court observed.

The Court was of the opinion that the facts of the case is not that the bus did not have the permit at all, it was only deviation of route under compelling circumstances. The Karnataka High Court referred to Section 66 of the Motor Vehicles Act along with Rule 57 of the Karnataka Motor Vehicles Rules as it stipulates exemption from Section 66.

The Karnataka High Court held, “Therefore, when the facts and circumstances are considered in this case, the offending vehicle in this case bearing registration No.KA-14/A-1313, though having permit only from Shivamogga to Hangal, but has travelled beyond Hangal up to Haveri and while returning from Haveri, the accident was taken place. But this vehicle was used as a relief vehicle, since another bus bearing registration No.KA-14/A-7144 was breakdown, when it was moving on its permit enroutes. Therefore, the offending vehicle bearing registration No.KA-14/A-1313 was used as a relief vehicle for the circumstances above discussed. Therefore, there is no fundamental breach proved so as to exonerate the Insurance Company. The Tribunal, in this regard, has committed erroг.”

In the light of the above, the Court held that the Insurance Company shall indemnify the owner of the bus by paying compensation to the claimants.

Furthermore, with regard to the quantum of compensation, the Court opined that the compensation awarded by the Tribunal is on a lesser side, thus, the compensation was enhanced by modifying the award.

Accordingly, the Appeals were disposed of by the Court.

Cause Title: Basavaraj V. K.M Altaf Hussain (Neutral Citation: 2025:KHC-D:7397)

Appearance

Appellant: Advocate B.M Patil for Appellant.

Respondents: Advocate Sanjay S Katageri For Respondent 1.

Advocate S S Koliwad for Respondent 2.

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