Amount paid by insurance company to hospital under medical policy should be deducted while computing final amount of compensation: HC

Madurai: While considering a plea by an Insurance Company, the Madras High Court recently clarified that 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.

Reiterating its order judgment, the HC bench comprising of Justice Teeka Raman thus opined that the amount paid by the insurance company directly to the hospital under a medical policy coverage should be deducted by the Motor Accident Tribunal for computing the final amount of compensation.

"Grant of medical expenses is only against the amount spent by the injured claimant or the victim of road accident and what has not been paid by the petitioner to the hospital cannot be granted as compensation in a claim under the Motor Vehicles Act. 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," held the bench.

The court's observations came while considering an appeal by Tata AIG General Insurance Co. Ltd. challenging the order of Motor Accidents Claims Tribunal/Principal Sub Judge, Karur, which had directed the insurance company to pay Rs.9,08,954 for medical expenses.

However, it was the contention of the appellant that the tribunal had committed an error as it didn't take into consideration a sum of Rs.4,00,000/- being the amount reinvested by the insurance company under the medi-claim policy to the injured.

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Referring to this, the counsel for the insurance company argued that the insurance company has already been paid the amount to the hospital and hence, the same cannot be awarded.

To support their argument, the insurance company relied upon the decision reported in 2012 (1) TNMAC 606 that the amount reimbursed under medi-claim policy is held to be deductable. Per centra, the respondents relied on the decision 2013 (2) TNMAC 636 and submitted that medi-claim policy is not deductable and is not retrievable in a claim for compensation under Motor Vehicles Act.

After taking note of the submissions, the HC bench referred to the Supreme Court judgment in the case of Helen C. Rebello and others v. Maharashtra State Road Transport Corporation and another, in the case of United India Insurance Co. Ltd. vs Mrs. Patricia Jean Mahajan, and the judgment in Saravana's case [2012 (1) TNMAC 606].

"Hence, I am inclined to follow the decision reported in 2012 (1) TNMAC 606 [Cholamandalam MS General Insurance Co., Ltd., v. A.saravanan] since the decision in Ramesh Babu's case is no longer holds, accordingly, the amount reimbursed under medi-claim policy is held to be deductable," held the bench.

Reducing the amount of compensation, the HC bench ruled, "Admittedly, Rs.4,00,000/- has been paid by the insurance company under the medi-claim policy and hence medical expenses as per Ex.P5 though it has been proved by RW1 that a sum of Rs.4,00,000/- has been paid to the hospital directly by the insurance company under a medical policy coverage. Grant of medical expenses is only against the amount spent by the injured claimant or the victim of road accident and what has not been paid by the petitioner to the hospital cannot be granted as compensation in a claim under the Motor Vehicles Act. 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 as held by the Madras High Court reported in 2012 (1) TNMAC 606 and accordingly, the compensation granted under the medical bill a sum of Rs.9,08,954/- is reduced to Rs.5,08,954/- and hence the entire compensation is reduced from Rs.11,86,954/- to Rs.7,51,954/-."

"Ex.P5 though it has been proved by RW1 that a sum of Rs.4,00,000/- has been paid to the hospital directly by the insurance company under a medical policy coverage. Grant of medical expenses is only against the amount spent by the injured claimant or the victim of road accident and what has not been paid by the petitioner to the hospital cannot be granted as compensation in a claim under the Motor Vehicles Act. 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 as held by the Madras High Court reported in 2012 (1) TNMAC 606 and accordingly, the compensation granted under the medical bill a sum of Rs.9,08,954/- is reduced to Rs.5,08,954/- and hence the entire compensation is reduced from Rs.11,86,954/- to Rs.7,51,954/-. withdraw the same, as apportioned by the Tribunal, after following the due process of law. In case, if entire award amount as ordered by the Tribunal is deposited, the Tribunal is directed to refund the excess award amount, if any, to the appellant/Insurance Company with proportionate interest," it added.

To view the order, click on the link below.

https://medicaldialogues.in/pdf_upload/madras-hc-177145.pdf

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