The Bombay High Court has declared that insurance payouts received under a mediclaim policy cannot be deducted from the compensation awarded for medical expenses under the Motor Vehicles Act. A full bench comprising Justices A.S. Chandurkar, Milind Jadhav, and Gauri Godse delivered this verdict on March 28th, settling a long-standing dispute that had seen conflicting rulings from lower courts.
The court emphasised that mediclaim payouts stem from a contractual agreement between the policyholder and the insurance company, distinct from the compensation awarded for losses caused by a motor vehicle accident. “In our view, the deduction of any amount received by a claimant under a Mediclaim policy would not be permissible,” the bench stated.
Bombay High Court Judgement
The decision was made in response to an appeal filed by the New India Assurance Co. Ltd., which argued that medical expenses covered under a mediclaim policy should be deducted from the compensation awarded by the Motor Accident Claims Tribunal, claiming it would amount to “double compensation.”
However, the High Court, referencing Supreme Court judgments, asserted that the Motor Accident Claims Tribunal is obligated to provide “just compensation” to victims. The court highlighted that insurance payouts are a result of the insured’s foresight and financial planning, having paid premiums. “The tortfeasor (offender) cannot take advantage of the foresight and wise financial investments made by the deceased. This is the settled position of law,” the bench clarified.
Compensation for medical victims
Advocate Gautam Ankhad, appointed as amicus curiae to assist the court, argued that the Motor Vehicles Act is welfare legislation and should be interpreted in favor of the victim. He also pointed out that insurers suffer no loss as they receive premiums, and deducting mediclaim payouts would unjustly enrich them.
The High Court’s ruling provides crucial clarity for accident victims, ensuring they receive full compensation for their medical expenses, regardless of any mediclaim benefits they might have. This decision reinforces the principle that insurance contracts and compensation under the Motor Vehicles Act serve distinct purposes and should not be conflated.
(With PTI Inputs)