Reimbursement Received Under A Medical Claim Policy Cannot Be Deducted From Compensation Under Motor Vehicles Act: Bombay HC [Read Judgment]

The Bombay High Court recently held that the reimbursement received under a medical claim policy cannot be deducted from compensation payable under Motor Vehicles Act.

The court was hearing a first appeal filed by Royal Sundaram, challenging an order passed by the Motor Accident Claims Tribunal (MACT). The case pertained to an accident wherein the claimant, a manual worker was hit by a truck insured by the appellant and the claimant suffered injuries in the nature of fracture of right ulna and consequent amputation resulting in 70% disability.

The appellant inter-alia assailed the Award passed by the MACT on the ground that the amount reimbursed under a medical claim policy cannot be claimed under the head medical expenses while computing compensation under the Act, as the same would result in unjustifiable double benefit to the claimant.

The appellant also asserted that the Tribunal manifestly erred in awarding compensation under medical head in the absence of any documentary evidence to substantiate it. It further contended that the Tribunal erringly fastened liability on the appellant without appreciating the nature of contract that subsisted between the appellant and the insured truck. Besides, it submitted that the compensation of Rs. 1 lakh awarded under the head "pain and suffering" was exorbitant.

Justice N.J. Jamadar, however, opined that the amount received by the claimant on the life insurance of the deceased is not deductable from the compensation payable under the act. The bench added that the reimbursement received under a medical claim policy is in consonance with beneficial interpretation and object of the Act.

The bench remarked that the claimant had paid premium for purchasing the medical insurance policy. Thus, the benefits emanating from it cannot be adjusted against the compensation payable under the Act. Since the insurer accepted premium of Rs.250 and thereby explicitly undertook the liability to indemnify the owner for compensation payable to third party in fatal and non-fatal cases, the insurer could not avoid the liability, the court asserted.

Further, it held that since the fact remains that the respondent had suffered a fracture in ulna and was required to undergo medical treatment leading to amputation, the Tribunal was well within its rights in assessing the compensation on the strength of vouched medical expenses.

As for the compensation of Rs. 1 lakh, the court observed, "The applicant was earning his livelihood as a manual worker. The amputation of right forearm unquestionably affected the applicant's prowess and capacity. The mental trauma and anxiety about future must have contributed to the physical suffering. The pain, mental agony and inconvenience caused to the applicant on account of the said disability was thus rightly appreciated by the Tribunal and compensation of Rs.1 lakh was awarded under the head of 'Pain and Suffering'. In the totality of the circumstances, I am not inclined to hold that the said amount is on a higher side." 

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