An employer may be held vicariously liable when an employee operates a vehicle without a valid license, negating insurer liability in case of substantive policy breach.

JUDGMENT :

K. MANMADHA RAO, J.

1. The present appeal is filed by the claimant under Section 30 (1) of the Employees Compensation Act, 1923 (hereinafter referred to as "the ECA Act" for short) against the judgment and award dated 22.03.2019 in No.09/2014 passed by the Senior Civil Judge and JMFC at Arkalgud (hereinafter referred to as "the Commissioner") for fastening the liability of respondent No.1 and seeking enhancement of the compensation awarded by the Commissioner.

2. The facts leading to the filing of this appeal are as follows:

The appellant/claimant is the father of deceased Lokesh who met with a fatal accident on 08.04.2010 at about 5:30 am near Chikkodanahalli Gate while working as a driver of a canter vehicle bearing Registration No.KA-09 B-1359 belonging to respondent No.1. The deceased, who was hale and healthy prior to the accident, was employed under respondent No.1 on a monthly salary of Rs.7,500/- with a daily batta of Rs.50/-. The accident occurred during the course and out of employment, resulting in his death. Consequently, the appellant and his wife filed Claim Petition No. ECA .9/2014 seeking compensation of Rs.12,00,000/- with interest at 12% per annum against respondent No.1, the owner, and respondent No.2, the insurer of the said vehicle.

3. Upon issuance of notice and substituted service through paper publication, respondent No.1 failed to appear and was placed ex-parte. The respondent No.2, on appearance, filed a written statement denying liability while admitting insurance coverage at the relevant time, contending that the deceased did not possess a valid driving license to operate a Medium Goods Vehicle (MGV). He was holding only an LMV license, thereby violating policy conditions.

4. It is contended by the learned counsel for the appellant that the Commissioner by its judgment and award dated 22.03.2019, accepted the contention of respondent No.2 and exonerated the insurer and erroneously fastened the liability upon the owner who remained ex-parte, awarding a meager sum of Rs.8,84,800/- with 12% interest per annum, without applying the principle of "pay and recovery", as per the law laid down in the case of National Insurance Co. Ltd. v. Swaran Singh & Ors. (2004) 3 SCC 297 , Pappu and others v. Vinod Kumar Lamba and another , (2018) 3 SCC 208 and Shamanna and another v. Divisional Manager, Oriental Insurance Company Limited and others , (2018) 9 SCC 650.

5. It is further contended that considering the income of Rs.7,500/- and batta of Rs.50/- per day, which comes to nearly Rs.9,000/- per month. Hence, the Commissioner ought to have awarded Rs.9,000/- under the head of income. Further, appellant has also sought for enhancement under the heads of funeral expenses and rate of interest and also sought to award any compensation on the head of transportation.

6. Aggrieved by the said judgment and award, the appellant has preferred the present Appeal challenging the same on grounds of inadequate compensation and erroneous fastening of liability.

7. Heard the learned counsel appearing for the appellant and Respondent No.2. Notice to Respondent No.1 is dispensed with.

8. In support of his case, the learned counsel appearing for the appellant has placed reliance on the following judgments:

• Alok Kumar Ghosh v. The New India Assurance Company Ltd. and another by order dated 09.10.2025 passed in Civil Appeal No. 10482/2017:

15. Now, we shall consider the decisions cited by the learned counsel for the first respondent. In Harshadbhai Amrutbhai Modhiya (supra), the issue was whether