The Bombay High Court bench of Justice N.J.Jamadar was hearing an appeal filed against the award passed by the Motor Accident Claims Tribunal on the grounds that the amount towards medical claim reimbursed should not have been taken into consideration while calculation of compensation under the Motor Vehicles Act as such amounts would result in a double benefit to the claimant. The Appellant asserted that the Tribunal had awarded the compensation under the medical head in the absence of any documentary evidence to prove the same. It further contended that the Tribunal had held the appellant liable without appreciating the nature of the contract between the appellant and the insured truck being a policy titled ‘Contractor’s Plant and Machinery Policy’. The Respondent argued that the challenges by the appellant were inapplicable the Tribunal had correctly concluded that insured vehicle fell within the ambit of the definition of ‘motor vehicles’ under Section 2(28) of the Motor Vehicles Act and that the appellant cannot exonerate its statutory liability even though the accident occurred on a public road.

The Court referred to the judgment of the Supreme Court in the case of Kalim Khan & Ors. Vs. Fimidabee & Ors. (2018) 7 SCC 687 to justify the scope of the Motor Accident Claims Tribunal under Section 165 of the MV Act

“24. It may be reiterated here that the causal relationship should exist between violation and the accident caused. There has to be some act done by the person concerned in causing the accident. The commission or omission must have some nexus with the accident. The word ‘use’ as has been explained by the authorities of this Court need not have an intimate and direct nexus with the accident. The Court has to bear in mind that the phraseology used by the legislature is “accident arising out of use of the motor vehicle”. The scope has been enlarged by such use of the phraseology and this Court taking note of the beneficial provision has placed a wider meaning on the same. There has to be some causal relation or the incident must relate to it. It should not be totally unconnected. Therefore, in each case what is required to be seen is whether there has been some causal relation or the event is related to the act.”

On the issue of reimbursement of medical expenses by the Respondent, reference was made to the judgment of the Supreme Court in Helen C. Rebello Vs. MSRTC AIR 1998 SC 3191 which stated “that the amount received by the claimant on the life insurance of the deceased is not deductible from the compensation computed under the Act, the Tribunal held that the said principle applied even to the personal injury claim and thus did not allow the deduction.” Further reference was made to various other judgments Vrajesh Navnitlal Desai Vs. K. Bagyam & Ors. 2006 ACH 65 (BOM.), Madhya Pradesh State Road Trans. Corporation Vs. Priyank Manu/MP/0436/1999, United India Insurance Co. Ltd. Vs. Anjana W/o. Nileshkumar Parmar & Anr. 2012(3) Mh.L.J. 914 and New India Assurance Company Limited Vs. Bimal Kumar Shah & Anr. 2018 SCC OnLine Cal. 10368. The Bench accordingly dismissed the appeal whilst observing that:

“30. From this stand point, in the context of the distinction between the contractual liability under the contract of insurance (medical) and the statutory liability under the Act, the aforesaid proposition, not to deduct\ the amount of reimbursement received, under a mediclaim policy, appears to be in consonance with the principle of beneficial interpretation and advances the object of the Act. Hence, I am not persuaded to agree with the submission on behalf of the appellant that the said amount of Rs.1,20,000/­ ought to have been deducted.”

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Judgment: Royal Sundaram Aliance Insurance Ltd Versus Ajit Chandrakant Rakvi and Ors