Supreme Court Directs Insurance Company To Pay 4 Lakh To Insured Who Incurred Medical Expenses For Treatment Of Person Injured In Motor Accident

The Supreme Court held that the insurance company was liable to reimburse the claimant when he had duly placed on record the evidence of him paying the medical bills of a person injured in a motor accident in respect of which there is third-party insurance coverage.

“The District Forum had specifically referred to medical bills and had directed the insurance company to release the amount found admissible to the appellant. The appellant was naturally under the impression that the amounts covered under the medical bills would also be payable. Even, the State Commission had stated to the same effect.” the court observed.

The Supreme Court bench comprising Justices BV Nagarathna and Justice Ujjal Bhuyan was hearing an appeal against the order of NCDRC which had denied the claims of appellant for reimbursement of medical expenses.

The court further observed, “the appellant herein has been not only deprived of the aforesaid amount spent by him towards medical expenses owing to the injuries sustained by the injured Ram Parshad Tharu in the accident in respect of which there is a third-party insurance coverage but was also constrained to approach this court.”

The Court set aside the order of NCDRC and directed the respondent to pay 4 lakh along with interest and imposed a nominal cost of 30,000 payable to the appellant.

BACKGROUND OF THE CASE

The appellant owned a Mahindra pickup vehicle and had purchased an insurance policy from respondents for a period between 2013-2014 covering India and later extended it to Nepal also.

In September 2014, he visited Nepal where he met with an accident that killed a lady, and one person was injured. He paid 10,36,500 compensation for full and final settlement of all claims due to death and injury so caused.

He sought reimbursement/indemnity from the respondent which they refused to pay. Therefore, he filed a complaint before the District Consumer Disputes Redressal Forum, Mansa claiming deficiency in service. The respondents admitted that the appellant was covered by their insurance policy but denied details of payment made by them

The forum directed the respondent to settle the claim as per the policy and awarded 10,000 compensation to the appellant.

An appeal was preferred by the respondent before State Commission which was dismissed. The state commission directed the respondent to release 6 lakhs to appellants which were deposited to them when the appeal was filed.

Now, respondents approached NCDRC which held that amount that was paid to the kin of the deceased has to be given to appellants. However, it held that there was no evidence on record to show that appellants paid money to the one injured in an accident.

Aggrieved by this order, Appellants filed an SLP before the Supreme Court. They sought to bring on record medical bills paid by them towards the treatment of the injured person

CONTENTIONS

The appellants argued that evidence of reimbursement of medical expenses was on record in the form of exhibits already before the forums. He submitted that the district forum had asked the respondent to release the payment as legally payable and indemnify as per the insurance policy. Even the state commission directed them to release the amount admissible.

SUPREME COURT’S VERDICT

The court noted that the respondents had not disputed the medical documents furnished by the appellant showing payment to a medical hospital towards the treatment of an injured person in the accident.

It observed that the respondent's contention before the NCDRC that “there was no evidence on record” to show the payment was made is wrong.

NCDRC proceeded on the basis that the district forum had disallowed the claim of the appellant and he didn’t challenge this as well. Therefore, his claim cannot be allowed.

However, the Supreme Court opined that this was wrong since the district forum had specifically referred to medical bills in exhibits and directed the respondent to release the amount so admissible.

The Court observed that “the appellant was naturally under the impression that medical bills would also be payable. The state commission had also held that claims had to be released to as far as the appellant is entitled to.”

The Supreme Court allowed the appeal and set aside NCDRC Order directing the respondents to pay 4 lakhs along with interest. It also imposed a nominal cost of 30,000 payable to the appellant.

Case title: Hem Raj v New India Assurance Co. Ltd.

Citation: 2023 LiveLaw (SC) 574

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