HC: Motor tribunal can examine personal cover claims
The Karnataka high court has held that a motor accident claims tribunal (MACT) is not stripped of jurisdiction to examine claims relating to personal accident (PA) cover under a motor insurance policy.
Justice K Manmadha Rao made the observation while dismissing an appeal filed by The New India Assurance Company, which had challenged an order of the MACT in Belagavi refusing to reject a claim petition at the preliminary stage.
The case arose from an accident that occurred on April 8, 2023, when Umar Farooque, a tailor and resident of Belagavi, suffered serious injuries after his motorcycle allegedly skidded off the road. He filed a claim petition stating that he had purchased a package motor insurance policy that included an additional premium for a personal accident cover of Rs 15 lakh as the owner-driver.
The insurance company sought a dismissal of the claim under Section 166 of the Motor Vehicles Act, contending that the provision enables adjudication only of third-party claims before the tribunal. According to the insurer, a personal accident claim by the insured is a matter of private contract between the parties and falls outside the jurisdiction of the MACT.
After the tribunal rejected its preliminary application, the insurer approached HC.
Justice Rao referred to the Supreme Court’s ruling in National Insurance Company vs Ashalata Bhowmik. In that case, the apex court had clarified that while a claim under Section 166 may not lie against an insurer for the insured’s own negligence, the contractual benefit of a personal accident cover remains enforceable in accordance with the policy terms.
The high court observed that the tribunal is empowered to mould the relief in line with the insurance contract and determine the extent of liability after a full-fledged trial.
The judge noted that the insurer would have a full opportunity before the tribunal to contest the claim, prove the policy terms and raise all available legal defences. Interfering at this preliminary stage, the court said, would effectively shut out a bona fide claim without adjudication on the merits.
Hit-&-run: Mum couple, insurer to pay Rs. 1 crore
A 44-year-old Nepean Sea Road teacher, her husband, and the insurance company have been ordered to jointly pay nearly Rs 1 crore as total compensation to the family of a 25-year-old dental intern killed in an alleged 2018 hit-and-run. The amount is inclusive of interest.
Dipali Lahamate, a BDS graduate, was undergoing her internship at Nair Hospital Dental College at the time of her death. The legal battle before the Motor Accident Claims Tribunal, which spanned eight years, concluded with member R R Patwari ordering the driver, Shikha Zhaveri, the vehicle owner and her husband Ankur Zhaveri, and insurer Bajaj Allianz General Insurance Co Ltd, to jointly pay a compensation of approximately Rs 98.5 lakh.
Mumbai couple, insurer to pay Rs 1 crore for hit-&-run of dental student in 2018.
The tribunal held that the driver was entirely responsible for the fatality after jumping a red signal, rejecting claims that the victim’s use of a mobile phone contributed to the accident. The tribunal found the driver’s actions to be the sole cause of the death.
Regarding the duty of care, the tribunal observed, “The accused driver was duty-bound to stop the vehicle at the traffic signal until the signal turns green.
Patient can’t pay for hospital lapses, says consumer court
Holding that a patient cannot be penalised for a hospital’s failure to comply with registration norms, a city consumer forum has directed an insurance company to settle a mediclaim along with compensation and legal costs, reports Tushar Tere.
The Vadodara District Consumer Disputes Redressal Commission passed the order on a complaint filed by Indradutt Pandya (63) who had purchased a policy from The New India Assurance Company Ltd in 2003. Pandya underwent cataract surgery in 2022 and filed a claim of Rs 44,700, which was rejected by Paramount Health Services and Insurance TPA Pvt Ltd, engaged by the insurer.
Challenging the rejection, Pandya approached the consumer commission in May 2023, seeking the claim amount with 18% interest, Rs 25,000 for mental harassment and Rs 15,000 towards legal expenses. The insurance company argued that the claimant failed to provide certain details about the hospital and contended that the facility was not registered under Vadodara Municipal Corporation norms.
The insurance company also pointed out that the hospital did not meet the requirement of being a 10-bed facility as per VMC circulars issued in 2016-17 and 2020-21.
After hearing both sides, the commission observed that while hospital registration may be mandatory under civic rules, the contractual obligation lies between the insurer and the policyholder.
It held that the patient cannot be denied reimbursement on grounds related to the hospital’s compliance with municipal regulations.
“The requirement of registration is a matter between the hospital and the VMC. The treatment taken by the complainant does not become illegal,” said advocate Gaurang Bumiya, who represented Pandya.
The forum further noted that the treating doctor was certified and that rejecting the claim on technical grounds, including non-submission of certain hospital documents, was unreasonable. It added that the purpose of an insurance policy is to provide financial support during medical emergencies, and denying claims on conditions not clearly communicated to the policyholder is unjust.
The commission directed the insurer to pay Rs 44,700 to Pandya, along with Rs 2,000 for mental harassment and Rs 1,000 towards legal cost.
NIC CMD be made party in criminal case, orders SC
The Supreme Court directed that the chairman and managing director of National Insurance Company, a state-run entity, be named as an accused in a criminal case on the alleged use of a forged insurance policy in a motor-accident claim.
The court also ordered the formation of a Special Investigation Team (SIT) to investigate the matter.
Taking exception to the insurer’s failure to initiate criminal proceedings despite asserting that the policy in question was fabricated, a Bench comprising Justice Ahsanuddin Amanullah and Justice R Mahadevan described the lapse as a serious abdication of responsibility.
“An insurance company … once it comes to their knowledge and they are convinced that the policy itself is void … they are bound in law to inform the proper authority,” the court observed. The Bench expressed concern that, despite alleging fraud, the insurer had not lodged any criminal complaint. It also observed that once an insurer concluded that a policy was invalid, it was legally obligated to inform the appropriate authorities. The court said stronger steps were necessary to ensure insurers remained vigilant, particularly since claim payouts were from public funds.
The case arises from a compensation claim filed by K Saravanan, who was injured in a bus accident, had multiple surgeries, and eventually had to quit his job. He had approached the Motor Accident Claims Tribunal (MACT), seeking compensation from the vehicle owner and its insurer. The insurer contested the claim, disputing both liability and the validity of the policy relied upon by the claimant.
However, the tribunal rejected these objections and held the insurer liable. The Madras High Court upheld this finding, with some modification to the compensation amount. Calling the case one with wider national ramifications, the Supreme Court directed the SIT (yet to be formed) to register a fresh first information report (FIR) naming the company’s CMD, along with officials across levels, including the branch manager concerned.
The court ordered that the owner of the bus be included as an accused. The probe, the court said, must be expeditiously pursued and focus on the alleged fabrication of the insurance document.
The Tamil Nadu director general of police (DGP) had personally attended the proceedings and had earlier filed an affidavit stating that the police did not verify the authenticity of insurance documents collected during motor-accident investigation.
“The time has come when this Court has to take some drastic measures … to ensure that the insurance companies discharge their onus and also their responsibility of being vigilant … because ultimately they are paying money from the coffers to which the general public contributes,” the court added.
