Kerala High Court
Bindhu Varghese vs The Divisional Manager on 28 July, 2025
2025:KER:55380
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE JOBIN SEBASTIAN
MONDAY, THE 28TH DAY OF JULY 2025 / 6TH SRAVANA, 1947
MACA NO. 346 OF 2022
AGAINST THE AWARD DATED 26.10.2021 IN OPMV NO.511
OF 2017 OF MOTOR ACCIDENT CLAIMS TRIBUNAL,
PATHANAMTHITTA
APPELLANTS/PETITIONERS:
1 BINDHU VARGHESE, AGED 42 YEARS,
W/O.ABRAHAM VARGHESE, MEPPURATHU HOUSE,
ANAPPARA, PATHANAMTHITTA - 683 577.
2 NEETHU VARGHESE, AGED 16 YEARS
D/O.ABRAHAM VARGHESE, MINOR,
MEPPURATHU HOUSE, ANAPPARA,
PATHANAMTHITTA - 683 577.
3 GEETHU VARGHESE, AGED 15 YEARS
D/O.ABRAHAM VARGHESE, MINOR,
MEPPURATHU HOUSE, ANAPPARA,
PATHANAMTHITTA- 683 577.
4 PREETHU VARGHESE, AGED 11 YEARS
D/O.ABRAHAM VARGHESE, MINOR,
MEPPURATHU HOUSE, ANAPPARA,
PATHANAMTHITTA- 683 577.
(APPELLANTS 2 TO 4 MINORS REPRESENTED BY
THEIR MOTHER AND GUARDIAN, BINDHU VARGHESE,
THE 1ST APPELLANT).
BY ADV SHRI.A.N.SANTHOSH
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RESPONDENT/2ND RESPONDENT:
THE DIVISIONAL MANAGER,
NEW INDIA ASSURANCE COMPANY LTD.,
T.P.HUB, KHAISE BUILDING, BEACH ROAD,
OPP. BENZIGAR HOSPITAL, KOLLAM - 691 001.
BY ADV SRI.JOHN JOSEPH VETTIKAD
THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN COME
UP FOR HEARING ON 13.06.2025, THE COURT ON 28.07.2025
DELIVERED THE FOLLOWING:
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"C.R."
JUDGMENT
The claimants in O.P.(MV).No. 511 of 2017 on the file
of the Motor Accidents Claims Tribunal, Pathanamthitta,
have preferred this appeal seeking enhancement of the
compensation awarded by the tribunal on account of the
death of one Abraham Varghese, who died in a motor
accident that occurred on 27.12.2016.
2. The brief facts of the case are as follows:-
On 27.12.2016, while the deceased, Sri. Abraham
Varghese was driving an autorickshaw bearing registration
No.KL-03-AA-2959, through Pathanamthitta - Kozhenchery
public road, and when reached at Elathoor junction, another
autorikshaw bearing registration No.KL-03/S/4523, driven
by the 1st respondent in a rash and negligent manner, and
at an excessive speed, hit the rear side of the autorishaw
driven by Sri. Abraham Varghese. Due to the impact of the
hit, Abraham Varghese sustained grievous head injuries,
and he succumbed to the same on the way to the hospital.
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3. The owner-cum driver of the autorikshaw bearing
registration No.KL-03/S/4523 was arrayed as the 1st
respondent, whereas the insurer was arrayed as the 2nd
respondent. The 2nd respondent, the insurance company,
contested the petition by filing a written statement primarily
disputing the quantum of compensation awarded, despite
admitting insurance coverage for the autorikshaw involved in
the accident. In the written statement, the 2nd respondent
took a specific contention that if the claimants had received
any amount as compensation under the personal accident
coverage from the insurer of the deceased's vehicle, the said
amount shall be deducted from the total compensation
payable in the present claim.
4. During the trial, the 1st petitioner, who is none
other than the wife of the deceased, was examined as PW1
and produced documentary evidence marked as Exts. A1 to
A16. From the side of the respondents, no evidence
whatsoever was produced.
5. Upon appreciation of evidence on record, the
tribunal came to the conclusion that the accident occurred
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solely due to the rash and negligent driving of the
autorikshaw bearing registration No.KL-03/S/4523 by the
1st respondent, and being the insurer, the 2nd respondent
was held liable to pay the compensation. The compensation
was quantified at Rs.18,51,300/-, with interest at the rate
of 9% per annum from the date of the petition till
realisation and proportionate costs. However, the tribunal,
while arriving at the said compensation, deducted an
amount of Rs.2,00,000/-, the sum received by the
claimants under the personal accident coverage from the
insurer of the autorickshaw bearing registration
No.KL-03-AA-2959, which was owned and driven by the
deceased at the time of the accident. Aggrieved by the
quantum of compensation awarded, particularly by the
deduction of the said Rs.2,00,000/-, the claimants have
preferred the present appeal seeking enhancement of the
compensation amount.
6. Heard Sri. A.N. Santhosh, the learned counsel
appearing for the appellants and Sri.John Joseph Vettikkad,
the learned counsel appearing for the respondent.
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7. The learned counsel for the appellants submitted
that the tribunal erred in deducting the sum of
Rs.2,00,000/-, which was received by the appellants under
the compulsory personal accident coverage attached to the
insurance policy of the autorikshaw owned and driven by
the deceased at the time of the accident. According to the
counsel, the said amount was paid to the appellants
pursuant to a separate and independent contract between
the deceased and the insurer, and hence the tortfeasor or
his insurer would not be entitled to get benefit of the said
compensation paid. It is further submitted that the
compulsory personal accident coverage was introduced as a
social security measure, and its proceeds are intended to
operate independently of the compensation payable in a
motor accident claim. According to the counsel, the
statutory liability under the Motor Vehicles Act cannot be
watered down on the basis of any contractual agreement
between the deceased and the insurer of his vehicle.
8. Per contra, the learned counsel appearing for the
respondent, the insurance company contended that the
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deduction of Rs.2,00,000/- is perfectly justifiable and is in
consonance with the legal principles laid down by the
Hon'ble Supreme Court in United India Insurance Co.
Ltd. and others v. Patricia Jean Mahajan and others
[2002 (6) Supreme Court Cases 281]. According to the
counsel, the amount received by the claimants on account
of compulsory personal accident coverage from the insurer
of the deceased's vehicle is liable to be deducted from the
compensation awardable to the claimants for the death of
the deceased in the motor vehicle accident. The counsel
further urged that since this amount is directly related to
the death of the deceased, which occurred in a motor
vehicle accident, the same is liable to be deducted from the
compensation awardable to the claimants in a petition filed
under Section 166 of the Motor Vehicles Act.
9. From the rival contentions raised, it is gatherable
that the core issue that arises for determination in this
appeal is whether the amount received by the claimants
under the compulsory personal accident coverage of the
deceased's vehicle is liable to be deducted from the
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compensation awardable in a claim petition filed under
Section 166 of the MV Act. Before delving into a discussion
regarding the said issue, it is to be borne in mind that the
primary object of awarding compensation in a motor
accident claim is to put the injured person in a position that
he or she was or would have been, had the unforeseen
eventuality of an accident not occurred. Likewise, in cases
involving death, while the compensation may serve as a
form of solace or financial support for the bereaved family,
it cannot serve as a complete or perpetual substitute for the
loss of their close relative. Therefore, the tribunal, while
adjudicating such claims, is duty-bound to ensure that the
compensation awarded is reasonable and adequate to
compensate the loss suffered by the claimants.
10. The learned counsel for the respondent, in
support of his contention that the amount paid under
compulsory personal accident coverage is deductible from
the compensation awardable under Section 168 of the
Motor Vehicles Act, placed reliance on the analogy of the
deductions allowed in cases involving mediclaim insurance.
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According to the learned counsel, when a claimant receives
a reimbursement for medical expenses under a mediclaim
policy, the same is usually deducted from the total
compensation awarded in a motor accident claim under the
head of medical expenses. He argued that since the insurer
is entitled to seek a set off for the amount paid towards
medical bills under a mediclaim policy in respect of the
same injury, a similar principle should apply to the amounts
paid under personal accident coverage.
11. However, this Court is of the considered view that
the analogy sought to be drawn by the learned counsel for
the respondent is misplaced. Mediclaim reimbursements
are generally made for specific expenses, such as hospital
bills, which can be quantified and directly linked to a
corresponding claim under the same head in the
compensation awarded in the motor accident claim petition.
In such cases, to prevent duplication of compensation for
the same pecuniary loss, deduction of the amount received
towards medical expenses pursuant to a mediclaim policy is
deductible, and the same is justifiable. In contrast,
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personal accident coverage, like life insurance, provides a
fixed amount upon death or specified injuries, independent
of the actual expenses or losses incurred.
12. In Mariamma James and others v. Alphons
Antony and others [2017 (1) KHC 344], the Division
Bench of this Court made it abundently clear that to justify
the deduction of an amount from the compensation payable
under Section 168 of MV Act, there must be a clear
correlation between the amount received and the loss or
expenses being compensated. In the said case, the court
considered a scenario where the deceased had sustained
injuries in an accident and subsequently succumbed to
those injuries while undergoing treatment. The court made
it clear that in a case where an amount was incurred
towards medical expenses for the injuries sustained in an
accident to which he succumbed later, there is a correlation
between the amount received and the accidental death.
Correlation has occurred as the amount received and the
amount claimed under the head "medical expenses" pertain
to the expenses incurred for treatment of the very same
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injuries sustained in the very same accident in which he lost
his life, and hence the tribunal was justified in effecting a
deduction of the amount while granting compensation
towards medical expenses. In a series of subsequent
judgments, this Court has consistently followed the same
principle, reaffirming that the amount reimbursed under
mediclaim policy is liable to be deducted from the medical
expenses awardable.
13. The crucial question that now arises is whether
the amount received under a mediclaim policy and the
amount received under a personal accident coverage can be
placed on the same footing in all respects. Undisputedly,
the answer to the said question is in the negative. A
mediclaim policy is a reimbursement-based insurance
scheme that indemnifies the insured for expenses incurred
towards medical treatment. If the claimants have already
been reimbursed under such a policy for the treatment
expenses relating to the injuries sustained in a specific
accident, they cannot be permitted to seek compensation
for the same medical expenses once again in a claim
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petition filed under the MV Act. However, the nature and
purpose of personal accident coverage are fundamentally
different.
14. The compulsory personal accident cover was
introduced by the Insurance Regulatory and Development
Authority of India (IRDAI) as a statutory and social security
measure, made mandatory for every vehicle owner at the
time of obtaining or renewing an insurance policy. Virtually,
the owner of the vehicle had no option but to take a policy
that includes personal accident cover, and for which he had
to pay a separate premium also. More significantly, unlike
mediclaim, which indemnifies specific costs, the compulsory
personal accident cover provides a fixed sum upon the
death or sustainment of specified injuries due to an
accident. Therefore, any attempt to treat the amount
received under compulsory personal accident coverage on
par with mediclaim reimbursement for the purpose of
effecting a deduction from the compensation awarded would
be unjustifiable.
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15. At this juncture, it is worthwhile to refer to the
decision of the Hon'ble Supreme Court in Helen C. Rebello
and others v. Maharashtra State Road Transport
Corporation and another [1999 (1) Supreme Court Cases
90] where the Apex Court considered the question as to
whether the life insurance money received on account of a
demise of the insured was liable to be deducted from the
amount of compensation that the claimants-family
members were entitled to receive under the Act of 1939.
After referring to various decisions including the decision in
Bradburn v. Great Western Rail Company [(1874-80)
All England Reports 195], it was held that the amount of
insurance is payable only on the contingency referred to in
the contract and if the contingency of injury or death does
not happen, the insured is the gainer as it receives more
under premium than to pay on maturity of the policy. In
case the contingency occurs, the claimant is the gainer as
he receives the amount even before paying the full
premium, and the gain is to the proportion of the balance
unpaid premium, whether on account of injury or death. In
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paragraph 35 of the said decision, it has been observed as
under;
"35........Similarly, life insurance policy is received either by
the insured or the heirs of the insured on account of the
contract with the insurer, for which the insured contributes
in the form of premium. It is receivable even by the
insured if he lives till maturity after paying all the
premiums. In the case of death, the insurer indemnifies to
pay the sum to the heirs, again in terms of the contract for
the premium paid. Again, this amount is receivable by the
claimant not on account of any accidental death but
otherwise on the insured's death. Death is only a step or
contingency in terms of the contract to receive the
amount. Similarly, any cash, bank balance, shares, fixed
deposits, etc. though, are all a pecuniary advantage
receivable by the heirs on account of one's death, but all
these have no correlation with the amount receivable
under a statute occasioned only on account of accidental
death. How could such an amount come within the
periphery of the Motor Vehicles Act to be termed as
"pecuniary advantage" liable for deduction. When we seek
the principle of loss and gain, it has to be on a similar and
same plane having nexus, inter se, between them and not
to which there is no semblance of any correlation. The
insured (deceased) contributes his own money for which
he receives the amount, which has no correlation to the
compensation computed as against the tortfeasor for his
negligence on account of the accident. As aforesaid, the
amount receivable as compensation under the Act is on
account of the injury or death without making any
contribution towards it, then how can the fruits of an
amount received through contributions of the insured be
deducted out of the amount receivable under the Motor
Vehicles Act. The amount under this Act he receives
without any contribution. As we have said, the
compensation payable under the Motor Vehicles Act is
statutory while the amount receivable under the life
insurance policy is contractual."
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16. Now the remaining question that requires
consideration is whether in the light of the decision in
United India Insurance Company Ltd. and others v.
Patricia Jean Mahajan and others [(2002 (6) Supreme
Court cases 281], the amount received by the claimants on
account of the personal accident coverage from the insurer
of the deceased's vehicle is liable to be deducted from the
compensation awarded in a petition filed under Section 166
of MV Act. In the said case, one of the core issues that
arose for consideration was whether the amount received
by the claimants on account of the life insurance policy of
the deceased and the allowances received by his wife and
children under the social security system were deductible
from the amount of compensation payable for the death of
the deceased. While dealing with that issue, the Hon'ble
Supreme Court in paragraph 33 of the said judgment
observed as follows;
"We are in full agreement with the observations
made in the case of Helen Rebello that principle of
balancing between losses and gains by reason of
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death, to arrive at the amount of compensation is a
general rule, but what is more important is that
such receipts by the claimants must have some
correlation with the accidental death by reason of
which alone the claimants have received the
amounts. We do not think it would be necessary to
for us to go into the question of distinction made
between the provisions of the Fatal Accidents Act
and Motor Vehicles Act. According to the decisions
referred to in Helen Rebello's case, it is clear that
the amount on account of social security as may
have been received must have a nexus or relation
with the accidental injury of death so far as to be
deductible from the amount of compensation.
There must be some correlation between the
amount received and the accidental death or it may
be in the same sphere. In the absence, the
amount received shall not be deducted from the
amount of compensation. Thus, the amount
received on account of the insurance policy of the
deceased cannot be deducted from the amount of
compensation, though no doubt the receipt of the
insurance amount is accelerated due to premature
death of the insured. So far as other items in
respect of which learned counsel for the insurance
company has vehemently urged, for example some
allowance paid to the children and Mrs. Patricia
Maharaj under the social security system, no
correlation of those receipts with the accidental
death has been shown much less established.
Apart from the fact that contribution comes from
different sources for constituting the fund, out of
which payment on account of social security
systems is made, one of the constituents of the
fund is tax, which is deducted from income for the
purpose. We feel that the High Court has rightly
disallowed any deduction on account of receipts
under the insurance policy and other receipts under
the social security system which the claimant would
have also otherwise been entitled to receive
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irrespective of accidental death of Dr.Mahajan. If
the preposition "receipts from whatever source" is
interpreted so widely that it may cover all the
receipts, which may come into the hands of the
claimants, in view of the mere death of the victim,
it would only defeat the purpose of the Act
providing for just compensation on account of the
accidental death. Such gains, may be on account of
savings or other investments etc. made by the
deceased, would not go to the benefit of the
wrongdoer and the claimant should not be left
worse off, if he had never taken an insurance policy
or had not made investments for future returns.
37. We therefore do not allow any deduction
as pressed by the Insurance Company on account
of receipt of insurance policy and social security
benefits received by the claimants."
17. What the Hon'ble Supreme Court clarified in
Patricia's case (cited supra) is that the family pension,
provident fund, gratuity etc. if obtained by the claimant
dependents pursuant to the death of the victim who was an
employee, could not be deducted from the compensation to
which they are entitled in a claim made under the
provisions of MV Act. Obviously, such benefits payable by
way of social security benefits would be payable to the
widow or to the statutory eligible person even in a case of
the natural death of the employee concerned, subject to the
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service conditions. However, a close and careful reading of
the decision in Patricia's case reveals that if there is a
correlation between the amount received and the accidental
death, or if they are in the same sphere, the amount
received from other sources could be deducted from the
amount of compensation.
18. I am not oblivious that there is a difference
between life insurance policies and personal accident
coverage policies. A life insurance policy entitles the insured
or their nominee to receive the assured sum either on the
maturity of the policy or on the death of the insured,
irrespective of the cause of death. However, the amount
under the personal accident coverage becomes payable only
upon the occurrence of certain defined events, such as
accidental death or sustainment of specified injuries
resulting from a motor accident. Life insurance benefits are
payable irrespective of the cause of death, whether natural
or accidental. Moreover, if the insured survives the term of
the policy, he is entitled to get the maturity amount.
Anyhow, unlike in the case of a mediclaim policy, personal
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accident cover provides a predetermined lump sum upon
the occurrence of death, regardless of actual expenses.
Instead, the payout under personal accident coverage
functions almost akin to life insurance policies.
19. It is equally important to appreciate that
compulsory personal accident coverage was introduced
pursuant to the direction of the Insurance Regulatory and
Development Authority of India (IRDAI) and is intended to
function as a social security measure. Unlike mediclaim
insurance, which is optional and voluntary, it is mandatory
for every owner of a motor vehicle to secure an insurance
policy that includes personal accident coverage. It is not
open to the vehicle owner to waive or opt out of this
component. For this purpose, the insurer is required to
collect a separate premium, which signifies that the
coverage is contractual in nature. It is apparent that there
is a public welfare objective behind it and therefore,
amounts received by the dependents under a separate
contract and under the social security system have no much
correlation with the accidental death.
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20. Consequently, in line with the principles laid down
by the Hon'ble Supreme Court in Patricia's case, the amount
received under the statutorily mandated social security
scheme, including personal accident coverage, cannot be
deducted from the compensation awardable under Section
168 of the MV Act. The amount payable under personal
accident coverage is not meant to enure to the benefit of
the tortfeasor. Therefore, in the case at hand, the tribunal's
direction to deduct Rs.2,00,000/- received under personal
accident cover from the compensation awarded to the
claimants is legally unsustainable and warrants
interference.
In the light of the aforesaid observations and findings,
the appeal is allowed by enhancing the compensation by a
further amount of Rs.2,00,000/- (Rupees Two Lakhs only)
with interest at the rate of 7.5% per annum on the
enhanced compensation from the date of the claim petition
till the date of deposit. The respondent insurance company
is ordered to deposit the enhanced compensation with
interest and proportionate costs before the tribunal within a
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period of three months from the date of this judgment. The
said additional compensation shall be apportioned equally
among the appellants/claimants.
Sd/-
JOBIN SEBASTIAN
JUDGE
ncd/ANS
