ON MARCH 28, 2025, a larger Bench of the Bombay High Court at Mumbai, consisting of Justice Atul S Chandurkar, Justice Milind N Jadhav and Justice Gauri Godse, while answering a Reference in negative, has held that question as framed ought to be answered in the negative.

 

Thus, any amount received by a claimant under a mediclaim policy or under a medical insurance policy is not liable to be deducted from the amount of compensation payable to a claimant under the head “medical expenses” in proceedings under section 166 of the Motor Vehicles Act. In the First Appeal 1344/2014-The New India Assurance Co. Ltd. v. Mrs Dolly Satish Gandhi and Another, a challenge has been raised to the judgement of the Motor Accident Claim Tribunal, Mumbai, awarding monetary compensation to the claimant. One of the grounds of challenge is that the amount awarded by the Tribunal towards medical expenses could not have been so awarded in view of the fact that the claimant had received these expenses under a Mediclaim Policy from the Insurance Company.

 

When the First Appeal was heard, amongst other decisions, the judgement in FA 657/2013 (New India Assurance v. Dineshchandra Shantilal), decided on September 19, 2013, taking the view that that amount received under a Mediclaim Policy by a claimant was liable to be deducted from amount of compensation that was liable to be awarded towards medical expenses was relied upon by the Insurance Company. On the other hand, the claimant sought to rely upon the decisions in Vrajesh Navnitlal Desai v. K Bagyam and Another-2006 ACJ 65 and Royal Sundaram Alliance Insurance Co. Ltd. Kolkata v. Ajit Chandrakant Rakvi and another -2019(6) Mh. L.J. 386 to contend that the amount received under a Mediclaim Policy was not liable to be set-off or deducted from the amount of compensation payable under section 166 of the Motor Vehicles At, 1988. The Single Judge noticed the divergent views in Vrajesh Navnitlal and Royal Sundaram Alliance decisions on one hand and in Dineshchandra Shantilal Shah and others, on the other. The latter decision did not notice the earlier views on that point. Hence, through the order of June 29, 2020, the First Appeal was directed to be placed before the Chief Justice to constitute a larger Bench to decide the said question. Accordingly, the said question has been referred to Full Bench. It is clear that the amount received on account of insurance is due to the contractual obligations entered into by the insured with others. Having paid premium it was clear that the beneficial amount would accrue to the share of the deceased either on maturity of the policy or on death, whatever be the manner of death.

 

The tort-feasor cannot take advantage of the foresight and wise financial investments made by the deceased. This is the settled position of law. In the decision – Dineshchandra Shantilal Shah and Others, the Single Judge was considering an appeal filed by the New India Assurance Company wherein the award passed by the Tribunal was under challenge. Before the Tribunal, it was noted that an amount of Rs 5,14,286/-towards compensation included the amount of reimbursement, which was granted under a mediclaim policy of the claimant. It was urged by the insurer that the amount received under the mediclaim policy was liable to be deducted from the total amount of compensation as the claimant had already been reimbursed the said amount. After referring to the judgement of the Delhi High Court in the case –National Insurance Co. Ltd. V. R K Jain and others -2012 SCC OnLine Delhi 3303(MSE Appeal No. 346/2010 decided on July 2, 2012) and on the basis of ratio of the decisions of the Supreme Court in the cases –Helen C Rebello and Patricia Jean Mahajan, it was held that the amount received by the Claimant under the mediclaim policy was liable to be deducted from the total amount of compensation.

 

In the HC’s considered opinion, a deduction of the amount received under a mediclaim policy by the claimant could not be directed to be so deducted in the light of the law laid down in the SC decision – Sebastiani Lakra and others, after considering the ratio of the decisions in Helen C Rebello and Patricia Jean Mahajan. As held therein, the amount under a mediclaim policy is received in view of a contract entered into by the claimant with the insurance company and the same is received in view of the terms of the contract. It is thus clear that the ratio of the decision in Dineshchandra Shantilal does not indicate the correct legal position. In the HC’s view, in the light of the SC’s decision in the case – Lakra and others, the deduction of any amount received by a claimant under a mediclaim policy would not be permissible.

 

Therefore, the HC said that it does not agree with the view taken by the Karnataka and Kerala High Courts on this aspect. Several Single Judge Benches have taken the view that any amount received under a mediclaim policy is not liable to be deducted from the amount of compensation awarded under the head, “medical expenses”. Such view as taken in Vrajesh Navnitlal, Ajit Rakvi, Anjana Parmar, Vasvati Ganguly, Suryakant Gaude and Aman Tak is consistent with the view taken by the SC in Sebastiani Lakra’s case, that no such deduction of mediclaim amount from the amount of compensation awarded is permissible. In the HC Full Bench’s view, the legal position has been correctly laid down in all these judgements of the Court.

 

The Full Bench has also referred to a Calcutta HC division Bench decision of the case – New India Assurance v. Bimal Kumar Shah And Another -2019 ACJ 1532 in this regard. Justice Dipankar Datta (as he was then) in his concurring opinion held that what a victim gets from his mediclaim policy is the return for making payment of premium. It is the hard earned money that he puts in towards premium which is thereafter returned to him upon happening of an accident. This in circumstances is consolation money. To consider it as a benefit from other sources would be a narrow minded approach, not intended in best interest of the victim. The HC Full Bench has directed that now this First Appeal be placed before the Single Judge for its consideration on merits.