IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON
&
THE HONOURABLE MR.JUSTICE K.HARILAL
TUESDAY, THE 8TH DAY OF SEPTEMBER 2015/17TH BHADRA, 1937
MACA.No. 1623 of 2013 ()
-------------------------
AGAINST THE AWARD IN OPMV 37/2010 of M.A.C.T.,ERNAKULAM DATED 27-03-2013
APPELLANT(S)/3RD AND 4TH RESPONDENTS:
------------------------------------------------------------------------
THE NATIONAL INSURANCE COMPANY LTD
DIV.NO.10, FLAT NO.101-106, N.I.BMC HOUSE
CONNAUGHT PLACE, NEW DELHI
REPRESENTED THROUGH THE MANAGER THIRD PARTY CLAIM OFFICE
KOCHI, REGIONAL OFFICE, PADMA JUNCTION
M.G.ROAD, ERNAKULAM-682 035.
BY ADVS.SRI.A.A.ZIYAD RAHMAN
SRI.LAL K.JOSEPH
SRI.V.S.SHIRAZ BAVA
RESPONDENT(S)/PETITIONER AND THE RESPONDENTS 1 & 2:
------------------------------------------------------
1. AKBER BADSHA, AGED 49 YEARS
S/O.MOHAMMED, XIV/1999A, REYYAN HOUSE
CHULLIKKAL, KOCHI-682 002.
** 2. ROCKY.N.T, AGED 57 YEARS
S/O.THOMAS, NADUVILETHARA HOUSE, ERMALLOOR
CHERTHALA, ALAPPUZHA.
(** DELETED FROM THE PARTY ARRAY AS PER ORDER DATED 19.06.2015 IN
MACA 1623 OF 2013)
3. THOMAS JOB
S/O.THOMAS, XVIII/1533A, NADUVILETHARA HOUSE
PYARRY JUNCTION, THOPPUMPADY, KOCHI-602 005.
R3 BY ADV. SRI.C.K.SAJEEV
R1 BY ADV. SRI.BIJU MARTIN
R1 BY ADV. SRI.D.M.NOWFAL
THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON
08-09-2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
(CR)
P.R. RAMACHANDRA MENON
&
K. HARILAL, JJ.
..............................................................................
M.A.C.A.No.1623 OF 2013
.........................................................................
Dated this the 8th September, 2015
J U D G M E N T
P.R. Ramachandra Menon, J.
This appeal is placed before us by virtue of the 'Reference
order' dated 14.07.20105 passed by the learned single judge,
doubting correctness of the decision rendered by another
learned single judge reported in 2011 (2) KLT 20[National Insurance
Company Ltd. vs. .V.S. Bijumon and others, which has been relied on by
the Tribunal to decline the relief sought for by the Insurance
Company for setting off the amount obtained by the claimant
under a separate 'Mediclaim policy' in connection with the same
injuries sustained in a road traffic accident. The point to be
considered is whether reimbursement of the medical expenses
under a 'Mediclaim policy' is liable to be set off from the amount
of compensation worked out under Section 166 of the Motor
M.A.C.A.No.1623 OF 2013
2
Vehicles Act, in relation to the statutory obligation under Section
147(2) of the Act .
2. Gist of the factual position for the purpose of deciding
this issue is that the claimant, while travelling in a car bearing
No.KL.07.AX/4114 sustained injuries on 21.01.2008, when the
said car collided with a Maruti car bearing No.KL.07.AV.7338,
parked on the side of the road, was suddenly taken to the road
without any signal. Serious injuries were caused to the claimant,
which was sought to be compensated by filing claim petition
before the Tribunal. The owner and driver of the Maruti car
bearing No.KL.07.AV.7338, sought to remain ex parte. The claim
was resisted by the insurance company on different grounds .
The Tribunal arrived at a finding that the accident was only
because of the negligence on the part of the driver of the Maruti
car insured by the appellant. The total compensation payable
was worked out as Rs.99500/-, which was directed to be
satisfied by the appellant/insurer of the said car, with interest at
the rate of 8% per annum, which is the subject matter of
M.A.C.A.No.1623 OF 2013
3
challenge in this appeal.
3. The case of the appellant/Insurer is that, in connection
with the injuries sustained to the claimant , a sum of Rs.78500/-
was claimed as medical expenses and that the said amount was
already satisfied by the Insurance Company under a separate
'Mediclaim policy' obtained by the claimant, which was sought to
be set off . The said proposition was objected by the claimant
stating that the said amount satisfied by the insurer was under
a separate policy, by virtue of the premium paid by the claimant
to meet the eventualities and that the same did not have any
connection whatsoever with the statutory liability to be satisfied
by the insurer as envisaged under Section 147(2) of the Act.
The plea of the insurance company was rejected by the Tribunal
relying on the decision rendered by a learned single Judge of
this Court reported in 2011 (2) KLT 20 (cited supra).
4. The present matter was argued in detail by both the
sides before the learned single Judge, who found it difficult to
agree with the proposition in 2011 (2) KLT 20. Doubting the
M.A.C.A.No.1623 OF 2013
4
correctness of the said decision, it was observed that the decision
sought to be relied on by the learned single Judge in 2011(2)
KLT 20 was more with reference to the amount payable by the
Life Insurance Corporation of India, which stood entirely on a
different footing . It was also observed that the ruling rendered
by the Madhya Pradesh High Court as per the decision in MP State
Road Transport Corporation v. Priyank (2000 ACJ 701] referred to therein
was actually based on the decision rendered by a Full Bench of
the same High Court, which in turn had dealt with the case
under a Life Insurance Policy and as such, the matter required
a re-look. It was further brought to the notice of the Court that
the decision rendered by the Karnataka High Court reported in
ILR 2008 Karnataka 3277 [Shaheed Ahmed v. Sanakaranarayana Bhat]
referred to in the verdict, to the effect that the amount obtained
under 'Mediclaim policy' was not liable to be set off in respect of
a claim under Section 166 of the M..V. Act, was subsequently
doubted by another learned judge of the Karnataka High Court
and it was referred to a Division Bench. Accordingly, the position
M.A.C.A.No.1623 OF 2013
5
of law has been made clear by the Division Bench as per the
decision reported in 2013 (1) Karnataka Law Journal 624
(The New India Assurance Company Limited vs. Manish
Gupta and others), declaring that the amount obtained
under 'Mediclaim policy' was liable to be set off, as there could
not be extension of any double benefit in respect of the same
cause of action.
5. Reference was made to the observations of the Apex
Court in United India Insurance Company Ltd. vs. Patricia
Jean Mahajan (AIR 2002 SC 2607), pointing out that the
amount obtained under the policy, (which was a Life Insurance
Policy) could not have been set off against a claim in respect of
the accident occurred and dealt with under Section 166 of the
M.V. Act. But the said decision was found as not promoting the
case of the claimant in any manner. On the other hand, the said
decision itself was found as an authority to hold it the otherway
round, in the light of the observations in paragraphs 23, 24, 25,
26, 31 and 36. After hearing both the sides, the learned Judge
M.A.C.A.No.1623 OF 2013
6
observed that the view taken by the learned single Judge in
2011 (2) KLT 20 did not appear to be the correct law and that
the same required to be referred to a Division Bench. Hence the
Reference.
6. We heard the matter in detail.
7. The policy issued by the Life Insurance Corporation and
similar bodies providing coverage for life , stands entirely on a
different footing than the policy issued by General Insurance
Companies covering such other risks; whether it be a policy to
cover the statutory insurance under the M.V. Act or the policy of
insurance issued under the Workmen's Compensation Act
(presently the Employees' Compensation Act) or whether it be a
Mediclaim policy. In the case of the former, ( i.e. Life Insurance
Policies) life of the insured is assured and if there is any threat
to the life, it is of course liable to be compensated by the
Insurance Company. But satisfaction of the amount covered by
such policy does not depend upon occurrence of death/accident
and even if nothing happens to the insured, by virtue of the
M.A.C.A.No.1623 OF 2013
7
terms of the policy, the sum assured ( which is inclusive of the
premium paid and the bonus assured and accrued) is liable to be
paid to the insured, once the term of the policy is over. In other
words, if a Life Insurance policy has been taken to an extent of
Rs.One lakh, paying the requisite amount of premium, during the
period of policy, say 10 years, if nothing happens to the life of the
insured, the entire amount covered by the policy, plus bonus
accrued and such amounts, if any, as per the terms of the policy
will be payable to the insured and as such, it is the vested right
of the insured to get the said amount, notwithstanding the fact
that no contingency has occurred. If any death occurs in the
meanwhile, it goes without saying that the beneficiary will be
entitled to get the amount covered by the policy without payment
of any further premium, as per the terms of the policy. It is not
the position in the case of other policies, i.e. latter group referred
to above, issued by General Insurance sector. In the case of
latter group of policies, it also is a contract of insurance, subject
to payment of premium. It is true that, for obtaining Mediclaim
M.A.C.A.No.1623 OF 2013
8
policy as well, various formalities have to be completed by the
insured, as to the production of various documents and
satisfaction of the premium to the requisite extent. But, so as
to make the insured eligible to obtain the amount covered by the
policy, the 'contingency' as mentioned in the policy has
necessarily to occur, i.e., accident or illness, as the case may be
and only subject to suffering the injuries/accident, that the
damages/compensation will become due under the said policy.
In the case of policy issued under the M.V.Act or Workmen's
Compensation Act, occurrence of the accident is a 'sine quo non'
so as to make the beneficiaries entitled and eligible to get the
amount covered under the policy to the specified extent.
8. It is worthwhile to note the observations made by the
Apex Court in Helen C. Rebello and others vs. Maharashtra
State Road Transport Corporation (AIR 1998 SC 3191) .
The main question considered by the Court was in respect of the
amount of Life Insurance, as to whether the same was to be
deducted from the amount of compensation payable under the
M.A.C.A.No.1623 OF 2013
9
Motor Vehicles Act to the claimants or not. Paragraph 34 of the
said judgment reads as follows:
"34. Thus, it would not include that which claimant
receives on account of other form of deaths, which he
would have received even apart from accidental death.
Thus, such pecuniary advantage would have no corelation
to the accidental death for which compensation is
computed. Any amount received or receivable not only on
account of the accidental death but that would have
come to the claimant even otherwise, could not be
construed to be the 'pecuniary advantage' liable for
deduction. However, where the employer insures his
employee, as against injury or death arising out of an
accident , any amount received out of such insurance on
the happening of such incidence may be an amount
liable for deduction. However, our legislature has taken
note of such contingency, through the proviso of Section
95. Under it, the liability of the insurer is excluded in
respect of injury or death, arising out of, in the course of
employment of an employee.
9. The said vital distinction, is further discernible from the
discussion made by the Apex Court in United India Insurance Co.Ltd
vs. Patricia Jean Mahajan (AIR 2002 SC 2607). The relevant portion in
paragraph 26 of the said verdict is extracted below:
M.A.C.A.No.1623 OF 2013
10
" 26. From the above passage 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 entitlted to. It does not cover
cases where the payment received is not dependent upon
an injury sustained on meeting with an accident.
The Apex Court has made a reference to the judgment in Helen C.
Rebello and others vs. Maharashtra State Road Transport
Corporation (cited supra) and has extracted paragraph 34 (as
extracted already) in paragraph 35 of the said verdict as well
10. The judgment rendered by a Division Bench of the
Madhya Pradesh High Court in MP State Road Transport Corporation
vs. Priyank (2000 ACJ 701) which was relied on by the learned Judge
of this Court in 2011(2) KLT 20 (cited supra) ( which is
doubted and referred to) came to be passed placing reliance on
the verdict passed by a Full Bench of the Madhya Pradesh High
Court in 1983 ACJ 152 ( Kashiram Mathur and others vs.
Sardar Rajendra Singh and another). The Division Bench of
the Madhya Pradesh High Court unfortunately omitted to note the
M.A.C.A.No.1623 OF 2013
11
vital distinction between the nature of policy involved (Mediclaim
policy) and the policy considered by the Full Bench of the said
Court (Life Insurance Policy)and simply held that no deduction of
the amount obtained under the Mediclaim policy was justified .
In fact, in the verdict passed by the Full Bench of the Madhya
Pradesh High Court, it was held that there shall not be any
deductions in respect of the amount, which is received under
the (1) Life Insurance Policy; (2) Provident Fund; (3) Family
pension; and (4) Gratuity. In respect of 'Ex-gratia' payment,,
the Full Bench held that the same was deductible . The amounts
under the above 'four' heads stand on a different footing and it
is not an advantage by reason of death/accident.
11. These aspects were infact considered by a Division
Bench of the Karnataka High Court pursuant to the reference
made , doubting the decision rendered by a Single Bench of the
Karnataka High Court in Shaheed Ahmed vs. Sankaranarayana Bhat
(ILR 2008 Karnataka 3277) . It was accordingly held by the Bench
in the New India Assurance Company Limited vs. Manish Gupta and others
M.A.C.A.No.1623 OF 2013
12
[2013 (1) Karnataka Law Journal 624] explaining the significant
difference in between and observing that the very concept of
insurance is not to extend any unlawful enrichment to
anybody in respect of the very same cause of action. The
purpose of insurance is only to place the party to the same level
from where he suffered the downfall because of the contingency
occurred. The observations made by the Division Bench of the
Karnataka High Court in paragraphs 18, 19,20 and 22 are in the
following terms:
18. The tests to be applied for dertermining
"
the 'pecuniary advantage' which has to be deducted
from the amount of compensation in a case of death
are :
(1) Onus is on the insurer to
establish that some pecuniary benefit or
reasonable expectation of pecuniary
benefit to the claimants, is resulting from
the death of the deceased.
(2) Damages to be awarded to the
claimants are compensatory and not
punitive. Therefore, the test that no
advantage should accrue to the wrong
M.A.C.A.No.1623 OF 2013
13
doer would not be applicable.
(3) Where death has merely
accelerated the receipt of benefits, which
the claimants would have in any case,
received at some future date in such cases
pecuniary benefits come to the claimants
not by reason of the death. The pecuniary
advantage received by the claimants is the
advantage gained by acceleration of their
interest.
(4) Benefits received from the
employer in some cases may be held to
come to the claimants by reason of death.
But, if the benefits are shown to have
been received merely out of consideration
for these claimants, e.g., contributions by
co-workers to relieve the needs of the
claimants, then such benefits cannot be
held to have been received merely by
reason of death of the deceased.
(5) Lastly, if there is any doubt as
to whether the balancing principle extends
to any class of benefit not covered by any
binding authoriity, the doubt has to be
resolved in favour of the claimants
M.A.C.A.No.1623 OF 2013
14
inasmuch as in such a case the defendant
must be held to have failed to discharge
the burden placed on him to justify such
deduction
19. With reference to the deductions under the
Mediclaim, a Division Bench of the Madhya Pradesh
High Court in the case of Madhya Pradesh State
Road Transport Corporation V/s. Priyank reported
in 2000 ACJ 701, placing reliance on the full Bench
decision has observed that the amount received by
the insured under the Mediclaim Policy is not
deductible inasmuch as the claimant has received
these amount under the contract of insurance, for
which had paid premium. We are unable to persuade
ourselves agree to the opinion rendered by the
Division Bench of the Madhya Pradesh High Court,
moreso having regard to the fact that the Full Bench
had ruled and classified as to what are the amounts,
which are deductible and the amounts which are not
deductible.
20. Indeed an injured person cannot claim
benefit out of his own misfortune. He cannot claim
medical expenses under the Mediclaim policy and
also calim damages in the nature of amount expended
for medical treatment under the claim petition, which
M.A.C.A.No.1623 OF 2013
15
is filed under the Motor Vehicles Act. In similar, if
not identical circumstances, a Division Bench of this
court in the case of Karnataka State Road Transport
Corporations V/s. Anantharam Singh reported in ILR
1996 KAR 1088 has observed that once a claim is
satisfied with repsect to the damages caused to the
car by the insurer, the question of the owner of the car
claiming damages as against the tort -feasor before
the Claims Tribunal does not arise inasmuch as the
cost of repair having been already recovered through
the insurer, the claimant or the owrner of the case
cannot claim compensation under the claim petition
filed under the Act. It is useful to extract the
observatuiobs made by tbe Division Bench, which
would read as under:
(xx xx xxx--omitted)
22. In the case on hand, the facts are almost
similar. It is not in dispute that in all the claim
petitions, the claimants had taken the Mediclaim
Policies and they have claimed the amount under the
policy. We are of the view that the question of the
claimants claiming compensation in the claim
petition, which is filed under the Act for the amount
expended by them for the treatment, certainly cannot
be granted. The medical expenses as observed, is
M.A.C.A.No.1623 OF 2013
16
classified as a pecuniary loss. Pecuniary loss in its
context means that the actual amount, which is
expended by the claimant for treatment. If the said
amount has been paid by the insurer under the
Mediclaim policy, the question of the claimant
claiming the very same amount for the very same
purpose, which is inclusive of the expenses, which are
incurred by him for the hospitalization and for his
treatment does not arise. Undoubtedly,, if the
amount, which is received by the claimant under the
Mediclaim policy falls short of the actual expenses
expneded by him, it is always open for him to claim
the difference of amount spent from the Tribunal. But
however he cannot claim compensation under both
the Mediclaim policy as well as the claim petition
filed under the Act. The decision of the Apex Court
in Hellen C. Rebello's case was in respect of the Life
Insurance Policy and not in respect of a Mediclaim
Policy and therefore the said decision is
distinguishable. "
12. We are in full agreement with the views expressed by
the Division Bench of the Karnataka High Court, and hold that
the very purpose of insurance is to see that un-anticipated risk
M.A.C.A.No.1623 OF 2013
17
is covered to the extent necessary, lest there should be any loss
to the party concerned because of the unforeseen contingency
which occured during the policy period. As it stands so, if a
party sustains damage in respect of a vehicle or was made to
spend a certain amount for availing treatment in connection
with the injuries and if the said amount is satisfied by the insurer
under a separate policy issued in this regard ( of course based
on premium collected separately for the sum assured) the same
is liable to be reckoned for fixing the quantum of compensation
payable under the M.V. Act and if only a finding is rendered that
loss is still there, could it be compensated to the requisite extent.
To put it more clear, if the party has obtained only a lesser
amount under the 'Mediclaim policy' taken by him (paying
premium separately), the balance amount, if any, could very
well be claimed in the claim petition to be preferred before the
Tribunal with reference to the statutory coverage.
13. Then a question may arise, whether this by itself will be
sufficient to make up the loss. It is important to note that the
M.A.C.A.No.1623 OF 2013
18
'Mediclaim policy' was obtained by the party after paying the
premium. If a portion of the sum assured under the Mediclaim
Policy has already been satisfied, he will be entitled to coverage
only in respect of the balance sum assured during the remaining
period/tenure of the policy. If he meets with any other accident
or suffers from any other disease in the meanwhile, he cannot
aspire anything more. At the same time, the Insurance Company
who has issued policy to cover the statutory risk under the M.V.
Act becomes a gainer .
14. In the instant case, both the policies have been issued
by one and the same Insurance Company. According to the
learned Counsel for the Insurance Company, the mischief was
brought to light only when the claimant was required to produce
the original bills before the Tribunal so as to sustain the claim;
when he had to produce a certificate issued by the Insurer as
Ext.A8, to the effect that a sum of Rs.78418/- ( as claimed in
the claim petition before the MACT) had already been obtained by
him on producing the original bills before the Insurance
M.A.C.A.No.1623 OF 2013
19
Company under the Mediclaim Policy. It was in the said
circumstance that the said amount was sought to be set off.
15. The amount actually spent by the insured and the loss,
if any, sustained because of the accident is the cause of action to
be considered. It is true that a sum of Rs.78418/- had to be
spent by the party towards medical expenses because of the
injuries sustained in the accident, which however stands
compensated by the Insurance Company, though under a
separate policy. This being the position, there is no other
instance, which is liable to be compensated with regard to the
injuries sustained in the accident, but for the expenses incurred
by the party in having satisfied the premium for obtaining the
Mediclaim Policy. Nothing prevented the party from retaining the
Mediclaim Policy intact and to have claimed the entire benefit in
respect of the injuries sustained in the accident under the policy
issued in respect of the offending vehicle, before the Tribunal.
But having chosen to obtain the due amount under the 'Mediclaim
policy'; thus making him to be placed back on the same
M.A.C.A.No.1623 OF 2013
20
pedestal, where he was standing before sustaining the accident,
the insured is not liable to be heard to say that amount is
liable to be paid under other policies as well, in respect of the
same cause of action; which otherwise will only amount to
unlawful enrichment.
16. The remaining aspect is with regard to the 'premium'
already satisfied by the party for obtaining the 'Mediclaim Policy'
as mentioned above. The learned Counsel for the appellant
Insurance Company submits that no contingency, as apprehended
has taken place as there was no case for the claimant at any
point of time during the subsistence of the policy, that any claim
preferred before the Insurance Company was declined or
restricted to a lesser extent, referring to satisfaction of the
amount towards medical bills in respect of the injuries sustained
in the road traffic accident. Still, it is stated by the learned
Counsel for the Insurance Company that the Company is ready
to give credit to the 'premium' satisfied by the claimant for
obtaining the 'Mediclaim policy' during the relevant year which
M.A.C.A.No.1623 OF 2013
21
amount could be treated as an expense and claimed before the
Tribunal.
17. In the said circumstance, this Court declares that the
Insurance Company is entitled to 'set off' the amount in respect
of the medical bills with regard to the same injuries under the
Mediclaim Policy, except to the extent of 'premium' satisfied
under the Mediclaim Policy. Reference stands answered
accordingly. The award passed by the Tribunal is modified and
the liability of the Insurance Company is scaled down to the
above extent. Judgment passed by the learned single Judge ,
as reported in 2011 (2) KLT 20 (cited supra) stands overruled.
Appeal stands allowed. No cost.
P.R. RAMACHANDRA MENON,
JUDGE
K. HARILAL,
JUDGE
lk
PRESENT:
THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON
&
THE HONOURABLE MR.JUSTICE K.HARILAL
TUESDAY, THE 8TH DAY OF SEPTEMBER 2015/17TH BHADRA, 1937
MACA.No. 1623 of 2013 ()
-------------------------
AGAINST THE AWARD IN OPMV 37/2010 of M.A.C.T.,ERNAKULAM DATED 27-03-2013
APPELLANT(S)/3RD AND 4TH RESPONDENTS:
------------------------------------------------------------------------
THE NATIONAL INSURANCE COMPANY LTD
DIV.NO.10, FLAT NO.101-106, N.I.BMC HOUSE
CONNAUGHT PLACE, NEW DELHI
REPRESENTED THROUGH THE MANAGER THIRD PARTY CLAIM OFFICE
KOCHI, REGIONAL OFFICE, PADMA JUNCTION
M.G.ROAD, ERNAKULAM-682 035.
BY ADVS.SRI.A.A.ZIYAD RAHMAN
SRI.LAL K.JOSEPH
SRI.V.S.SHIRAZ BAVA
RESPONDENT(S)/PETITIONER AND THE RESPONDENTS 1 & 2:
------------------------------------------------------
1. AKBER BADSHA, AGED 49 YEARS
S/O.MOHAMMED, XIV/1999A, REYYAN HOUSE
CHULLIKKAL, KOCHI-682 002.
** 2. ROCKY.N.T, AGED 57 YEARS
S/O.THOMAS, NADUVILETHARA HOUSE, ERMALLOOR
CHERTHALA, ALAPPUZHA.
(** DELETED FROM THE PARTY ARRAY AS PER ORDER DATED 19.06.2015 IN
MACA 1623 OF 2013)
3. THOMAS JOB
S/O.THOMAS, XVIII/1533A, NADUVILETHARA HOUSE
PYARRY JUNCTION, THOPPUMPADY, KOCHI-602 005.
R3 BY ADV. SRI.C.K.SAJEEV
R1 BY ADV. SRI.BIJU MARTIN
R1 BY ADV. SRI.D.M.NOWFAL
THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON
08-09-2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
(CR)
P.R. RAMACHANDRA MENON
&
K. HARILAL, JJ.
..............................................................................
M.A.C.A.No.1623 OF 2013
.........................................................................
Dated this the 8th September, 2015
J U D G M E N T
P.R. Ramachandra Menon, J.
This appeal is placed before us by virtue of the 'Reference
order' dated 14.07.20105 passed by the learned single judge,
doubting correctness of the decision rendered by another
learned single judge reported in 2011 (2) KLT 20[National Insurance
Company Ltd. vs. .V.S. Bijumon and others, which has been relied on by
the Tribunal to decline the relief sought for by the Insurance
Company for setting off the amount obtained by the claimant
under a separate 'Mediclaim policy' in connection with the same
injuries sustained in a road traffic accident. The point to be
considered is whether reimbursement of the medical expenses
under a 'Mediclaim policy' is liable to be set off from the amount
of compensation worked out under Section 166 of the Motor
M.A.C.A.No.1623 OF 2013
2
Vehicles Act, in relation to the statutory obligation under Section
147(2) of the Act .
2. Gist of the factual position for the purpose of deciding
this issue is that the claimant, while travelling in a car bearing
No.KL.07.AX/4114 sustained injuries on 21.01.2008, when the
said car collided with a Maruti car bearing No.KL.07.AV.7338,
parked on the side of the road, was suddenly taken to the road
without any signal. Serious injuries were caused to the claimant,
which was sought to be compensated by filing claim petition
before the Tribunal. The owner and driver of the Maruti car
bearing No.KL.07.AV.7338, sought to remain ex parte. The claim
was resisted by the insurance company on different grounds .
The Tribunal arrived at a finding that the accident was only
because of the negligence on the part of the driver of the Maruti
car insured by the appellant. The total compensation payable
was worked out as Rs.99500/-, which was directed to be
satisfied by the appellant/insurer of the said car, with interest at
the rate of 8% per annum, which is the subject matter of
M.A.C.A.No.1623 OF 2013
3
challenge in this appeal.
3. The case of the appellant/Insurer is that, in connection
with the injuries sustained to the claimant , a sum of Rs.78500/-
was claimed as medical expenses and that the said amount was
already satisfied by the Insurance Company under a separate
'Mediclaim policy' obtained by the claimant, which was sought to
be set off . The said proposition was objected by the claimant
stating that the said amount satisfied by the insurer was under
a separate policy, by virtue of the premium paid by the claimant
to meet the eventualities and that the same did not have any
connection whatsoever with the statutory liability to be satisfied
by the insurer as envisaged under Section 147(2) of the Act.
The plea of the insurance company was rejected by the Tribunal
relying on the decision rendered by a learned single Judge of
this Court reported in 2011 (2) KLT 20 (cited supra).
4. The present matter was argued in detail by both the
sides before the learned single Judge, who found it difficult to
agree with the proposition in 2011 (2) KLT 20. Doubting the
M.A.C.A.No.1623 OF 2013
4
correctness of the said decision, it was observed that the decision
sought to be relied on by the learned single Judge in 2011(2)
KLT 20 was more with reference to the amount payable by the
Life Insurance Corporation of India, which stood entirely on a
different footing . It was also observed that the ruling rendered
by the Madhya Pradesh High Court as per the decision in MP State
Road Transport Corporation v. Priyank (2000 ACJ 701] referred to therein
was actually based on the decision rendered by a Full Bench of
the same High Court, which in turn had dealt with the case
under a Life Insurance Policy and as such, the matter required
a re-look. It was further brought to the notice of the Court that
the decision rendered by the Karnataka High Court reported in
ILR 2008 Karnataka 3277 [Shaheed Ahmed v. Sanakaranarayana Bhat]
referred to in the verdict, to the effect that the amount obtained
under 'Mediclaim policy' was not liable to be set off in respect of
a claim under Section 166 of the M..V. Act, was subsequently
doubted by another learned judge of the Karnataka High Court
and it was referred to a Division Bench. Accordingly, the position
M.A.C.A.No.1623 OF 2013
5
of law has been made clear by the Division Bench as per the
decision reported in 2013 (1) Karnataka Law Journal 624
(The New India Assurance Company Limited vs. Manish
Gupta and others), declaring that the amount obtained
under 'Mediclaim policy' was liable to be set off, as there could
not be extension of any double benefit in respect of the same
cause of action.
5. Reference was made to the observations of the Apex
Court in United India Insurance Company Ltd. vs. Patricia
Jean Mahajan (AIR 2002 SC 2607), pointing out that the
amount obtained under the policy, (which was a Life Insurance
Policy) could not have been set off against a claim in respect of
the accident occurred and dealt with under Section 166 of the
M.V. Act. But the said decision was found as not promoting the
case of the claimant in any manner. On the other hand, the said
decision itself was found as an authority to hold it the otherway
round, in the light of the observations in paragraphs 23, 24, 25,
26, 31 and 36. After hearing both the sides, the learned Judge
M.A.C.A.No.1623 OF 2013
6
observed that the view taken by the learned single Judge in
2011 (2) KLT 20 did not appear to be the correct law and that
the same required to be referred to a Division Bench. Hence the
Reference.
6. We heard the matter in detail.
7. The policy issued by the Life Insurance Corporation and
similar bodies providing coverage for life , stands entirely on a
different footing than the policy issued by General Insurance
Companies covering such other risks; whether it be a policy to
cover the statutory insurance under the M.V. Act or the policy of
insurance issued under the Workmen's Compensation Act
(presently the Employees' Compensation Act) or whether it be a
Mediclaim policy. In the case of the former, ( i.e. Life Insurance
Policies) life of the insured is assured and if there is any threat
to the life, it is of course liable to be compensated by the
Insurance Company. But satisfaction of the amount covered by
such policy does not depend upon occurrence of death/accident
and even if nothing happens to the insured, by virtue of the
M.A.C.A.No.1623 OF 2013
7
terms of the policy, the sum assured ( which is inclusive of the
premium paid and the bonus assured and accrued) is liable to be
paid to the insured, once the term of the policy is over. In other
words, if a Life Insurance policy has been taken to an extent of
Rs.One lakh, paying the requisite amount of premium, during the
period of policy, say 10 years, if nothing happens to the life of the
insured, the entire amount covered by the policy, plus bonus
accrued and such amounts, if any, as per the terms of the policy
will be payable to the insured and as such, it is the vested right
of the insured to get the said amount, notwithstanding the fact
that no contingency has occurred. If any death occurs in the
meanwhile, it goes without saying that the beneficiary will be
entitled to get the amount covered by the policy without payment
of any further premium, as per the terms of the policy. It is not
the position in the case of other policies, i.e. latter group referred
to above, issued by General Insurance sector. In the case of
latter group of policies, it also is a contract of insurance, subject
to payment of premium. It is true that, for obtaining Mediclaim
M.A.C.A.No.1623 OF 2013
8
policy as well, various formalities have to be completed by the
insured, as to the production of various documents and
satisfaction of the premium to the requisite extent. But, so as
to make the insured eligible to obtain the amount covered by the
policy, the 'contingency' as mentioned in the policy has
necessarily to occur, i.e., accident or illness, as the case may be
and only subject to suffering the injuries/accident, that the
damages/compensation will become due under the said policy.
In the case of policy issued under the M.V.Act or Workmen's
Compensation Act, occurrence of the accident is a 'sine quo non'
so as to make the beneficiaries entitled and eligible to get the
amount covered under the policy to the specified extent.
8. It is worthwhile to note the observations made by the
Apex Court in Helen C. Rebello and others vs. Maharashtra
State Road Transport Corporation (AIR 1998 SC 3191) .
The main question considered by the Court was in respect of the
amount of Life Insurance, as to whether the same was to be
deducted from the amount of compensation payable under the
M.A.C.A.No.1623 OF 2013
9
Motor Vehicles Act to the claimants or not. Paragraph 34 of the
said judgment reads as follows:
"34. Thus, it would not include that which claimant
receives on account of other form of deaths, which he
would have received even apart from accidental death.
Thus, such pecuniary advantage would have no corelation
to the accidental death for which compensation is
computed. Any amount received or receivable not only on
account of the accidental death but that would have
come to the claimant even otherwise, could not be
construed to be the 'pecuniary advantage' liable for
deduction. However, where the employer insures his
employee, as against injury or death arising out of an
accident , any amount received out of such insurance on
the happening of such incidence may be an amount
liable for deduction. However, our legislature has taken
note of such contingency, through the proviso of Section
95. Under it, the liability of the insurer is excluded in
respect of injury or death, arising out of, in the course of
employment of an employee.
9. The said vital distinction, is further discernible from the
discussion made by the Apex Court in United India Insurance Co.Ltd
vs. Patricia Jean Mahajan (AIR 2002 SC 2607). The relevant portion in
paragraph 26 of the said verdict is extracted below:
M.A.C.A.No.1623 OF 2013
10
" 26. From the above passage 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 entitlted to. It does not cover
cases where the payment received is not dependent upon
an injury sustained on meeting with an accident.
The Apex Court has made a reference to the judgment in Helen C.
Rebello and others vs. Maharashtra State Road Transport
Corporation (cited supra) and has extracted paragraph 34 (as
extracted already) in paragraph 35 of the said verdict as well
10. The judgment rendered by a Division Bench of the
Madhya Pradesh High Court in MP State Road Transport Corporation
vs. Priyank (2000 ACJ 701) which was relied on by the learned Judge
of this Court in 2011(2) KLT 20 (cited supra) ( which is
doubted and referred to) came to be passed placing reliance on
the verdict passed by a Full Bench of the Madhya Pradesh High
Court in 1983 ACJ 152 ( Kashiram Mathur and others vs.
Sardar Rajendra Singh and another). The Division Bench of
the Madhya Pradesh High Court unfortunately omitted to note the
M.A.C.A.No.1623 OF 2013
11
vital distinction between the nature of policy involved (Mediclaim
policy) and the policy considered by the Full Bench of the said
Court (Life Insurance Policy)and simply held that no deduction of
the amount obtained under the Mediclaim policy was justified .
In fact, in the verdict passed by the Full Bench of the Madhya
Pradesh High Court, it was held that there shall not be any
deductions in respect of the amount, which is received under
the (1) Life Insurance Policy; (2) Provident Fund; (3) Family
pension; and (4) Gratuity. In respect of 'Ex-gratia' payment,,
the Full Bench held that the same was deductible . The amounts
under the above 'four' heads stand on a different footing and it
is not an advantage by reason of death/accident.
11. These aspects were infact considered by a Division
Bench of the Karnataka High Court pursuant to the reference
made , doubting the decision rendered by a Single Bench of the
Karnataka High Court in Shaheed Ahmed vs. Sankaranarayana Bhat
(ILR 2008 Karnataka 3277) . It was accordingly held by the Bench
in the New India Assurance Company Limited vs. Manish Gupta and others
M.A.C.A.No.1623 OF 2013
12
[2013 (1) Karnataka Law Journal 624] explaining the significant
difference in between and observing that the very concept of
insurance is not to extend any unlawful enrichment to
anybody in respect of the very same cause of action. The
purpose of insurance is only to place the party to the same level
from where he suffered the downfall because of the contingency
occurred. The observations made by the Division Bench of the
Karnataka High Court in paragraphs 18, 19,20 and 22 are in the
following terms:
18. The tests to be applied for dertermining
"
the 'pecuniary advantage' which has to be deducted
from the amount of compensation in a case of death
are :
(1) Onus is on the insurer to
establish that some pecuniary benefit or
reasonable expectation of pecuniary
benefit to the claimants, is resulting from
the death of the deceased.
(2) Damages to be awarded to the
claimants are compensatory and not
punitive. Therefore, the test that no
advantage should accrue to the wrong
M.A.C.A.No.1623 OF 2013
13
doer would not be applicable.
(3) Where death has merely
accelerated the receipt of benefits, which
the claimants would have in any case,
received at some future date in such cases
pecuniary benefits come to the claimants
not by reason of the death. The pecuniary
advantage received by the claimants is the
advantage gained by acceleration of their
interest.
(4) Benefits received from the
employer in some cases may be held to
come to the claimants by reason of death.
But, if the benefits are shown to have
been received merely out of consideration
for these claimants, e.g., contributions by
co-workers to relieve the needs of the
claimants, then such benefits cannot be
held to have been received merely by
reason of death of the deceased.
(5) Lastly, if there is any doubt as
to whether the balancing principle extends
to any class of benefit not covered by any
binding authoriity, the doubt has to be
resolved in favour of the claimants
M.A.C.A.No.1623 OF 2013
14
inasmuch as in such a case the defendant
must be held to have failed to discharge
the burden placed on him to justify such
deduction
19. With reference to the deductions under the
Mediclaim, a Division Bench of the Madhya Pradesh
High Court in the case of Madhya Pradesh State
Road Transport Corporation V/s. Priyank reported
in 2000 ACJ 701, placing reliance on the full Bench
decision has observed that the amount received by
the insured under the Mediclaim Policy is not
deductible inasmuch as the claimant has received
these amount under the contract of insurance, for
which had paid premium. We are unable to persuade
ourselves agree to the opinion rendered by the
Division Bench of the Madhya Pradesh High Court,
moreso having regard to the fact that the Full Bench
had ruled and classified as to what are the amounts,
which are deductible and the amounts which are not
deductible.
20. Indeed an injured person cannot claim
benefit out of his own misfortune. He cannot claim
medical expenses under the Mediclaim policy and
also calim damages in the nature of amount expended
for medical treatment under the claim petition, which
M.A.C.A.No.1623 OF 2013
15
is filed under the Motor Vehicles Act. In similar, if
not identical circumstances, a Division Bench of this
court in the case of Karnataka State Road Transport
Corporations V/s. Anantharam Singh reported in ILR
1996 KAR 1088 has observed that once a claim is
satisfied with repsect to the damages caused to the
car by the insurer, the question of the owner of the car
claiming damages as against the tort -feasor before
the Claims Tribunal does not arise inasmuch as the
cost of repair having been already recovered through
the insurer, the claimant or the owrner of the case
cannot claim compensation under the claim petition
filed under the Act. It is useful to extract the
observatuiobs made by tbe Division Bench, which
would read as under:
(xx xx xxx--omitted)
22. In the case on hand, the facts are almost
similar. It is not in dispute that in all the claim
petitions, the claimants had taken the Mediclaim
Policies and they have claimed the amount under the
policy. We are of the view that the question of the
claimants claiming compensation in the claim
petition, which is filed under the Act for the amount
expended by them for the treatment, certainly cannot
be granted. The medical expenses as observed, is
M.A.C.A.No.1623 OF 2013
16
classified as a pecuniary loss. Pecuniary loss in its
context means that the actual amount, which is
expended by the claimant for treatment. If the said
amount has been paid by the insurer under the
Mediclaim policy, the question of the claimant
claiming the very same amount for the very same
purpose, which is inclusive of the expenses, which are
incurred by him for the hospitalization and for his
treatment does not arise. Undoubtedly,, if the
amount, which is received by the claimant under the
Mediclaim policy falls short of the actual expenses
expneded by him, it is always open for him to claim
the difference of amount spent from the Tribunal. But
however he cannot claim compensation under both
the Mediclaim policy as well as the claim petition
filed under the Act. The decision of the Apex Court
in Hellen C. Rebello's case was in respect of the Life
Insurance Policy and not in respect of a Mediclaim
Policy and therefore the said decision is
distinguishable. "
12. We are in full agreement with the views expressed by
the Division Bench of the Karnataka High Court, and hold that
the very purpose of insurance is to see that un-anticipated risk
M.A.C.A.No.1623 OF 2013
17
is covered to the extent necessary, lest there should be any loss
to the party concerned because of the unforeseen contingency
which occured during the policy period. As it stands so, if a
party sustains damage in respect of a vehicle or was made to
spend a certain amount for availing treatment in connection
with the injuries and if the said amount is satisfied by the insurer
under a separate policy issued in this regard ( of course based
on premium collected separately for the sum assured) the same
is liable to be reckoned for fixing the quantum of compensation
payable under the M.V. Act and if only a finding is rendered that
loss is still there, could it be compensated to the requisite extent.
To put it more clear, if the party has obtained only a lesser
amount under the 'Mediclaim policy' taken by him (paying
premium separately), the balance amount, if any, could very
well be claimed in the claim petition to be preferred before the
Tribunal with reference to the statutory coverage.
13. Then a question may arise, whether this by itself will be
sufficient to make up the loss. It is important to note that the
M.A.C.A.No.1623 OF 2013
18
'Mediclaim policy' was obtained by the party after paying the
premium. If a portion of the sum assured under the Mediclaim
Policy has already been satisfied, he will be entitled to coverage
only in respect of the balance sum assured during the remaining
period/tenure of the policy. If he meets with any other accident
or suffers from any other disease in the meanwhile, he cannot
aspire anything more. At the same time, the Insurance Company
who has issued policy to cover the statutory risk under the M.V.
Act becomes a gainer .
14. In the instant case, both the policies have been issued
by one and the same Insurance Company. According to the
learned Counsel for the Insurance Company, the mischief was
brought to light only when the claimant was required to produce
the original bills before the Tribunal so as to sustain the claim;
when he had to produce a certificate issued by the Insurer as
Ext.A8, to the effect that a sum of Rs.78418/- ( as claimed in
the claim petition before the MACT) had already been obtained by
him on producing the original bills before the Insurance
M.A.C.A.No.1623 OF 2013
19
Company under the Mediclaim Policy. It was in the said
circumstance that the said amount was sought to be set off.
15. The amount actually spent by the insured and the loss,
if any, sustained because of the accident is the cause of action to
be considered. It is true that a sum of Rs.78418/- had to be
spent by the party towards medical expenses because of the
injuries sustained in the accident, which however stands
compensated by the Insurance Company, though under a
separate policy. This being the position, there is no other
instance, which is liable to be compensated with regard to the
injuries sustained in the accident, but for the expenses incurred
by the party in having satisfied the premium for obtaining the
Mediclaim Policy. Nothing prevented the party from retaining the
Mediclaim Policy intact and to have claimed the entire benefit in
respect of the injuries sustained in the accident under the policy
issued in respect of the offending vehicle, before the Tribunal.
But having chosen to obtain the due amount under the 'Mediclaim
policy'; thus making him to be placed back on the same
M.A.C.A.No.1623 OF 2013
20
pedestal, where he was standing before sustaining the accident,
the insured is not liable to be heard to say that amount is
liable to be paid under other policies as well, in respect of the
same cause of action; which otherwise will only amount to
unlawful enrichment.
16. The remaining aspect is with regard to the 'premium'
already satisfied by the party for obtaining the 'Mediclaim Policy'
as mentioned above. The learned Counsel for the appellant
Insurance Company submits that no contingency, as apprehended
has taken place as there was no case for the claimant at any
point of time during the subsistence of the policy, that any claim
preferred before the Insurance Company was declined or
restricted to a lesser extent, referring to satisfaction of the
amount towards medical bills in respect of the injuries sustained
in the road traffic accident. Still, it is stated by the learned
Counsel for the Insurance Company that the Company is ready
to give credit to the 'premium' satisfied by the claimant for
obtaining the 'Mediclaim policy' during the relevant year which
M.A.C.A.No.1623 OF 2013
21
amount could be treated as an expense and claimed before the
Tribunal.
17. In the said circumstance, this Court declares that the
Insurance Company is entitled to 'set off' the amount in respect
of the medical bills with regard to the same injuries under the
Mediclaim Policy, except to the extent of 'premium' satisfied
under the Mediclaim Policy. Reference stands answered
accordingly. The award passed by the Tribunal is modified and
the liability of the Insurance Company is scaled down to the
above extent. Judgment passed by the learned single Judge ,
as reported in 2011 (2) KLT 20 (cited supra) stands overruled.
Appeal stands allowed. No cost.
P.R. RAMACHANDRA MENON,
JUDGE
K. HARILAL,
JUDGE
lk