The Bombay High Court ruled that deducting Mediclaim amounts from medical expenses compensation is not permissible. The court emphasized that insurance payouts and compensation serve different legal purposes. It rejected an insurance company’s argument that medical costs were already covered under the policy. The ruling reinforces the rights of claimants to receive full medical compensation without deductions.
Mumbai: The Bombay High Court recently ruled that any sum received by an individual under a mediclaim policy cannot be deducted from the compensation amount owed to a claimant for medical expenses under the Motor Vehicles Act.
This decision was made by a full bench comprising Justices A S Chandurkar, Milind Jadhav, and Gauri Godse in a judgment delivered on March 28.
The bench stated,
“In our view, the deduction of any amount received by a claimant under a Mediclaim policy would not be permissible,”
The matter was escalated to the full bench after differing opinions were expressed by various single and division benches on the issue.
The full bench, referencing judgments from the Supreme Court, emphasized that the Motor Accident Claims Tribunal is not only empowered but also obligated to ensure fair compensation.
The court clarified that the amount received from insurance is a result of the contractual relationship established between the insured and the insurance company.
Also Read: Mediclaim Amount Cannot Be Deducted from Motor Accident Compensation: Bombay High Court
By paying the premium, it is evident that the benefits would either be paid out at the policy’s maturity or in the event of death, regardless of the circumstances surrounding that death, the court noted.
The court asserted,
“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 full bench was addressing an appeal from New India Assurance Co Ltd, which contested a judgment from the Motor Accident Claims Tribunal that awarded compensation beyond medical expenses.
The insurance company argued that the medical costs were already covered under the mediclaim policy, suggesting this would result in double compensation.
Advocate Gautam Ankhad, appointed as amicus curiae to assist the court, argued that the provisions of the Motor Vehicles Act concerning medical expenses should be interpreted in favor of the claimant or victim, as it is a piece of welfare legislation.
He further stated that allowing deductions from medical expenses would unjustly benefit the insurer, leading to its unwarranted enrichment, as the insurer has already received premiums from the insured.