Hello,

In traditional networks tunneling is performed/established when two IPv6 nodes in communication encounter an IPv4 network in between, so the IPv6 packet is encapsulated in IPv4 packet to move across IPv4 network, and decapsulated upon reaching IPv6 network.

But incase of MIPv6 etc, we do not use tunneling for this purpose. Do we use it because only HA knows the care of address of MN and to forward the CN's packets HA tunnels it to care of address?
If yes, then why does it need to tunnel when it is already in ipv6 network?

I do not really understand this question, but the meaning of tunneling a bit different:
see here: http://www.enterprisenetworkingplane...-Tunneling.htm

The encapsulation you are talking about is just one use case.