Mediclaim can't be deducted from compensation under Motor Vehicle Act: Supreme Court

New Delhi: The Supreme Court has said a sum received as part of mediclaim or medical insurance is not to be deducted from compensation as calculated by the Motor Accident Claims Tribunal under the Motor Vehicles Act.

A bench of Justices Sanjay Karol and Vipul M Pancholi emphasised just because the mediclaim and the compensation under the head of medical expenses appeared same or similar, they cannot be termed as "double benefit" as these two stand on a different footing.

The court pointed out one is statutory while the other is contractual and the latter is only a sequitur of premiums having been paid in the past while the other is an entitlement as a consequence of an accident or death in a motor vehicle accident.

The bench dismissed an appeal filed by New India Assurance Company Limited, in its judgment on May 15.

The issue was whether it is legally permissible for the MACT to account for the amounts received under the claim of medical insurance, and as such deduct the same or not.

Answering the question, the bench said, "We are of the considered opinion that the answer to the question raised in this appeal is not a matter of Sherlockian deduction.''

The bench pointed out that the guiding yardstick in mediclaim vis a vis MVA is different.

In the former, a mediclaim policy is taken up to a certain amount and if the claim of the policy holder once found to be holding merit go beyond it, the holder has no option but to foot the bill out of pocket however in the latter, because of its beneficial nature the only guide is the broad principle of just and fair compensation. Put differently, the compensation that may be awarded thereunder has no strict monetary limits, the court said.

"The amount received under MVA arises from a beneficial legislation and as guided by just compensation which is intended to put the injured or the claimants (legal representatives of the deceased) in a position, as far as possible, at least monetarily, if the accident in question had not taken place," the bench said.

Naturally, the court underscored, this stands on a higher pedestal - not only because it is a statutory entitlement of compensation but also because the nature of the statute is entirely beneficial.

"To equate these two amounts to pulling down the MVA or unnecessarily hyping up the mediclaim policy,'' the bench said.