Reimbursement of medical expenses cannot be deducted from claimants’ compensation receivable under the Motor Vehicles Act

The Bombay High Court held that there is a distinction between contractual liability under the contract of insurance (medical) and the statutory liability under the Act and reimbursement under the former cannot be adjusted against statutory compensation.

The above judgment was passed by the Bombay High Court in the matter of Royal Sundaram Alliance Insurance Co. Ltd. Vs. Mr.Ajit Chandrakant Rakvi & Ors., First Appeal No. 1620 of 2012 decided on 19.03.2019

Challenge

After sustaining multiple grievous injuries in a motor accident with a dumper, the applicant approached MACT claiming compensation. The Tribunal, after appraisal of the evidences adduced and documents tendered, came to the conclusion that the accident occurred due to negligence of the driver of the offending Dumper. The tribunal awarded a sum of Rs. 5,02,600/- inclusive of Rs. 1,20,000/- as medical expenses to the applicant. Being aggrieved by and dissatisfied with the aforesaid award, the insurer came in appeal.

It was contended by the appellant that the Tribunal arrived at the said sum of Rs.1,20,000/­ on the basis of the amount reimbursed to the applicant under a mediclaim policy. Thus, the applicant was unjustifiably allowed a double benefit, i.e., statutory, under terms of the policy in question, and contractual, in terms of the policy under which the applicant had insured himself, for one and the same expenses. Therefore, the Court was faced with the question – would the said reimbursement of medical expenses disentitle the applicant to claim compensation under the Act, under the said head?

Held

The Bombay High Court observed that a claim petition for compensation in regard to a motor accident filed by the injured before Tribunal constituted under Section 165 of the Act, is neither a suit nor an adversarial lis in the traditional sense. Though the tribunal adjudicates on a claim and determines the compensation, it does not do so as in an adversarial litigation.

The Court therefore, held that this being the nature of the proceedings before the Tribunal, even in respect of the parties before it, the benefits emanating from an independent and unconnected contract of insurance cannot be considered by the Tribunal, as it besets with variables rooted in contract.

It was further noted by the Bombay High Court that from this stand point, in the context of the distinction between the contractual liability under the contract of insurance (medical) and the statutory liability under the Act, the aforesaid proposition, not to deduct the amount of reimbursement received, under a mediclaim policy, appears to be in consonance with the principle of beneficial interpretation and advances the object of the Act.