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Amount Paid By Insurance Company Under Mediclaim Policy Deductible From Compensation In Motor Accident Claim: Madras High Court

Upasana Sajeev
24 May 2022 11:13 AM GMT
Amount Paid By The Insurance Company Under Medi Claim Policy Shall Be Deducted While Calculating Compensation: Madras HC
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The Madras High Court has held that the compensation for medical expenses is a matter of reimbursement and hence once the insurance company has chosen to compensate the victim of road accident for medical expenses, the same cannot be once again claimed under the Motor Vehicles Act.

The bench of Justice Teeka Raman thus held that the amount paid to the hospital directly by the insurance company under a medical policy coverage shall be deducted by the Motor Accident Tribunal while calculating the compensation to the injured.

The order was made in an appeal made by the Insurance Company, TATA AIG General Insurance Co Ltd, against an order passed by the Motor Accident Claims Tribunal, Karur granting Rs. 9,08,954 as medical expenses.

The appellant argued that the tribunal had committed an error as it did not take into consideration the sum of Rs.4,00,000/- reinvested by the insurance company under the medi-claim policy to the injured. Thus, the petitioner argued that the amount had already been paid to the hospital and the same cannot be awarded as it would amount to double compensation.

The appellant placed reliance on the decision of the Madras High Court in Cholamandalam MS General Insurance Co. Ltd v. A Saravanan 2012 (1) TNMAC 606 where the court observed as follows:

"…So far as LIC policy is concerned, the policyholder is entitled for the payment of entire premium on maturity or the heirs are entitled for the payment in the event of his death. The payment under the life insurance policy does not depend upon the injury sustained in meeting with the accident. On the other hand, as far as the medi-claim policy is concerned, the amount is payable to the claimant when he sustains injuries in an accident. Hence, the compensation for the injuries sustained by him under the head 'medical treatment' cannot be granted."

Per contra, the respondents relied on the decision of the court in National Insurance Co. Lts v. C Ramesh Babu [2013 (2) TNMAC 636] and submitted that medi-claim policy is not deductible and is not retrievable in a claim for compensation under Motor Vehicles Act.

The court agreed with the submissions of the appellants. The court also took note of the judgment of Apex Court in United India Insurance Co. Ltd v. Mrs. Patricia Jean Mahajan where it was held as follows:

"24.... it is clear that the deductions are admissible from the amount of compensation in case the Claimant receives the benefit as a consequence of injuries sustained, which otherwise he would not have been entitled to. It does not cover cases where the payment received is not dependent upon an injury sustained on meeting with an accident."
The court observed that what has not been paid by the original petitioner to the hospital cannot be granted as compensation in a claim under the Motor Vehicles Act. Thus, the court deducted the amount already paid by the insurance company and directed the appellant company to pay the remaining along with compensation for disability, pain and suffering, permanent disability loss of income etc together with an interest of 7.5% per annum and deposit the same within a period of eight weeks. In case the entire amount was already deposited by the company, the court directed the tribunal to refund the excess award amount to the company with proportionate interest.

Case Title: The Manager, TATA AIG General Insurance Co Ltd v. Kathamuthu and another

Case No: CMA (MD) No. 729 of 2017

Citation: 2022 LiveLaw (Mad) 223

Counsel for Appellant: Mr.J.S.MuraliAmount Paid By The Insurance Company Under Medi Claim Policy Shall Be Deducted Whil Calculating Compensation: Madras HC

Counsel for Respondent: Mr.R.Suresh Kumar (R1)

Click here to read/download the judgment

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