TaxTMI 
TaxTMI 
2026 (6) TMI 795
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.... amounts received, and as such deduct the same or not, is the question involved herein. 3. A Bench of three Judges of the High Court of Judicature at Bombay in deciding a conflict between judgments of the said Court, namely The New India Assurance v. Dineshchandra Shantilal Shah and Ors [2(2013) 09 BOM CK 0240 (First Appeal No.657 of 2013)], on the one hand, and Vrajesh Navnitlal Desai v. K. Bagyam and Anr [2005 SCC OnLine Bom 156]., Royal Sundaram Alliance Insurance Co. Ltd., Kolkata v. Ajit Chandrakant Rakvi and Anr [42019 SCC OnLine Bom 496], on the other, in terms of the impugned judgment, held that the amount received by a claimant by way of his own Mediclaim, is not deductible when such a claimant is before the jurisdictional MACT seeking compensation for injuries he has suffered as a result of an accident. New India Assurance Co. Ltd., is aggrieved and questions the correctness of such a finding before us, in this appeal. 3.1 We are, therefore, to decide the question of law as to whether the amount of money received as Mediclaim, in terms of a ediclaim policy, is deductible from an award passed by a Claims Tribunal or not. The factual matrix in which this questio....
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....inst third party risk has been mandatory, and the insurer has been required to indemnify the owner or driver for liability arising from death or bodily injury caused by the use of the vehicle. However, such liability has been premised on the existence of an actual loss. If the medical expenses have already been reimbursed, the question arisen is whether any liability survives in respect of that head. The appellant-insurer has submitted that in the absence of a subsisting loss, there can be no corresponding liability to compensate. 4.1.5 It has further been submitted that the distinction between statutory and contractual liability, as discussed in Helen Rebello (supra) has arisen in the context of death cases where certain pecuniary advantages have accrued to the dependents independently of the accident. In contrast, the present matter has involved an injury claim where the reimbursement of medical expenses has been directly and exclusively connected to the accident. This has created a clear overlap between the loss claimed and the amount already received, making it a case where the principle against double recovery applies with full force. 4.1.6 The appellant-insu....
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....nnot be treated as gains arising from the same cause. 4.3.3. The respondent-insured also submits that the principle recognised in Bradburn v. Great Western Railway Co. [(1874-80) All ER Rep 195] affirms that damages payable by a wrongdoer are not to be reduced on account of insurance benefits received by the injured party. This ensures that the appellant insurer or the tortfeasor does not derive advantage from the prudence of the claimant in securing insurance coverage. 4.3.4. Turning to the statutory framework, the respondent-insured submits that the MVA is a beneficial legislation intended to provide relief to victims of motor accidents. Section 166 confers the right to claim compensation, while Section 168 obligates the Tribunal, to award just compensation based on fairness, reasonableness, and equity. As elucidated in National Insurance Co. Ltd. v. Pranay Sethi [(2017) 16 SCC 680], the determination of just compensation must strike a balance and reflect a realistic assessment of loss. The respondent insured contends that deducting Mediclaim benefits would undermine this objective and result in inadequate compensation. 4.3.5. In response to the content....
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....1 [Del. HC] 1J 6. The other view is that the amount received from a Mediclaim is in fact deductible from the total compensation, which in a tabular form we indicate the cases as under :- S. No. Case Title Bench Strength DELHI HIGH COURT CASES 1. Jaswant Kaur Sethi v. Tamal Das, MAC. APP. No. 352 of 2006 1J 2. National Insurance Co. Ltd. v. R.K. Jain, 2012 SCC OnLine Del 3303 1J 3. National Insurance Co. v. Deepmala Goel, 2012 SCC OnLine Del 1958 1J 4. IFFCO Tokio General Insurance Co. v. Kisanlal Sharma, 2019 SCC OnLine Del 11091 [Claimant surrendered claim under medical expenses] 1J 5. IFFCO Tokio General Insurance Co. Ltd. v. Shambhu Pathak, 2012 SCC OnLine Del 1361 1J 6. National Insurance Co. Ltd. v. Shiela Avinashi, 2012 SCC OnLine Del 532 1J 7. Bajaj Allianze General Insurance Co. Ltd. v. Ganpat Rai Sehgal, 2012 SCC OnLine Del 42 1J 8. UP State Road Transport Corporation v. Rama Chugh, 2019 SCC OnLine Del 11627 1J 9. New India Assurance Co. Ltd. v. Arjun Singh, 2019 SCC OnLine Del 11625 1J 10. Oriental Insurance Co. Ltd. v. Ravi Jain, 2025 SCC OnLine Del 8966 1J KERA....
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....it is independent, or an entitlement, in which case it is not. For instance, where the family of a deceased person receives statutory compensation or ex gratia payment from the State on account of death, such amount may be deducted from the compensation awarded under MACT. The reasoning therefor, is straightforward. Both payments are addressing the same loss. Similarly, where one aspect of compensation directly replaces the same income stream lost due to the accident, and is triggered by that very event, permitting full recovery under both heads would amount to double compensation. 7.2.1. However, the position is different where the benefit is independent in nature. It has repeatedly been clarified by this Court that certain payments cannot be deducted merely because they accrue upon death. Employment benefits such as provident funds, gratuity, and pension are not deductible, as they arise from the contract of employment and represent deferred earnings or accrued rights. They are not compensation for the accident, but entitlements earned over time. 7.3 Let us now look at the primary reason taken by those who have favoured the grant of both MACT compensation and Me....
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....hich he would have received even apart from accidental death. Thus, such pecuniary advantage would have no correlation to the accidental death for which compensation is computed. Any amount received or receivable not only on account of the accidental death but that which would have come to the claimant even otherwise, could not be construed to be the "pecuniary advantage", liable for deduction." Observations made further ahead are also apposite for the present case: "How thus an amount earned out of one's labour or contribution towards one's wealth, savings, etc. either for himself or for his family which such person knows under the law has to go to his heirs after his death either by succession or under a Will could be said to be the "pecuniary gain" only on account of one's accidental death. This, of course, is a pecuniary gain but how this is equitable or could be balanced out of the amount to be received as compensation under the Motor Vehicles Act. There is no corelation between the two amounts. Not even remotely. How can an amount of loss and gain of one contract be made applicable to the loss and gain of another contract. Similarly, how an amount receiva....
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.... that contribution comes from different sources for constituting the fund out of which payment on account of social security system 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 irrespective of accidental death of Dr Mahajan. If the proposition "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 accidental death. Such gains, maybe on account of savings or other investment 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. (emphasis supplied) 8.3 Shashi Sharma In this matter, the question that concerned the....
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....nce on compassionate grounds under Rule 5(1). The Claims Tribunal has to adjudicate the claim and determine the amount of compensation which appears to it to be just. The amount receivable by the dependants/claimants towards the head of "pay and allowances" in the form of ex gratia financial assistance, therefore, cannot be paid for the second time to the claimants. True it is, that the 2006 Rules would come into play if the government employee dies in harness even due to natural death. At the same time, the 2006 Rules do not expressly enable the dependants of the deceased government employee to claim similar amount from the tortfeasor or insurance company because of the accidental death of the deceased government employee. The harmonious approach for determining a just compensation payable under the 1988 Act, therefore, is to exclude the amount received or receivable by the dependants of the deceased government employee under the 2006 Rules towards the head financial assistance equivalent to "pay and other allowances" that was last drawn by the deceased government employee in the normal course. This is not to say that the amount or payment receivable by the dependants of the decea....
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....pecific fact of the employer having reimbursing medical expenses. Neither reimbursement by the employer a general condition prevalent across cases, nor is it clear from the order of this Court whether the respondent in the said case had a Mediclaim policy to his name. 9. Having considered judgments of this Court as above, we are of the considered opinion that the answer to the question raised in this appeal is not a matter of Sherlockian deduction. A Mediclaim policy is a policy that is purchased by a person, accounting for the uncertainties of life and preparing a financial base for an unfortunate possible eventuality. The human body is a coming together of intricate systems where there is always a possibility that something may go wrong or may need mending. In today's time when medical expenses are skyrocketing for a variety of reasons, the ability to meet such expenses, suddenly as and when they may arise, is not something that rests with all. It is, as such, a necessary facet of preparation that people undertake. It doesn't specifically deal with accidental coverage only. 10. The contractual benefit of reimbursement of medical expenses as a result of this policy i....
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....ifferent footing. 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. Naturally, 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. A SECONDARY, BUT IMPORTANT ISSUE 12. There is one other issue that we must address. The chart that is given in paras 4 and 5 of this judgment reveals something unsettling. There are contrary positions of law being taken by the same High Court, whether it be by the benches of the same strength or by the benches of lesser strength in ignorance of pronouncements made by the benches of higher strength. Some illustrations from the tables above are: DELHI HIGH COURT CASES Sl. No. Mediclaim Not Granted Bench Strength Mediclaim Granted Bench Strength 1. ....
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.... Kashinath Gaude v. Suryakant Uttam Gaude. F.A. No. 64 of 2009 1J Royal Sundaram Alliance Insurance Co. Ltd. v. Ajit Chandrakant Rakvi, 2019 SCC OnLine Bom 496 1J 18. State of Goa v. Michael Joaquim F.D. Souza, 2022 SCC OnLine Bom 1672 1J 19. United India Insurance Co. Ltd. v. Anjana, 2012 SCC OnLine Bom 129 1J 20. Reliance General Insurance Co. Ltd. v. Aman Sanjay Tak, 2023 SCC OnLine Bom 883 1J MADHYA PRADESH HIGH COURT CASES 21. Jitendra vs. Rahul, MANU/MP/0366/2008 1J Madhya Pradesh State Road Trans. Corpn. v. Priyank, 1999 SCC OnLine MP 18 2J 13. When such inconsistencies are left unaddressed, it leads to various problems, primary among them being that it leads to judicial inconsistency and uncertainty. This creates difficulties for counsel and the Court for, opposing judgments may give clients hope for differing outcomes or even for a Court in the future to have to examine multiple cases with differing opinions on the same point. Till such times the opposing views exist, judicial uncertaint....