En­hance ac­ci­dent cover to at least K15L, IRDA told

Cost of med­i­cal treat­ment sky­rock­eted in last 15 years, say judges

Sunday Express - - CHENNAI - @ Chen­nai

THE Madras High Court has di­rected the In­sur­ance Reg­u­la­tory De­vel­op­ment Author­ity of In­dia ( IRDA) to en­hance the com­pen­sa­tion un­der the Com­pul­sory Per­sonal Ac­ci­dent Cover (CPAC) from the ex­ist­ing `1 lakh to at least `15 lakh.

A di­vi­sion bench of Jus­tices R Sub bi a hand Jus­tice AD Ja­gadish Chandira gave the di­rec­tion while al­low­ing an ap­peal from the United In­dia In­sur­ance Com­pany Lim­ited at Neyveli, on Oc­to­ber 26.

The bench pointed out that the pol­icy to com­pen­sate the owner of the ve­hi­cle by virtue of CPAC had been fixed at `one lakh in 2002. The sum might be suf­fi­cient to meet the med­i­cal ex­penses to cer­tain ex­tent, then. How­ever, now 15 years had lapsed and the cost of med­i­cal treat­ment had sky-rock­eted, the judges pointed out

Due to neg­li­gence of the owner of the ve­hi­cle, if a third party suf­fers bod­ily in­jury or even death in a road ac­ci­dent, he or his fam­ily mem­bers will get ad­e­quate com­pen­sa­tion from the in­sur­ance com­pany be­fit­ting the pe­cu­niary loss sus­tained by the in­jured or on ac­count of the death of the de­ceased. On the con­trary, if the owner of the ve­hi­cle him­self sus­tains bod­ily in­jury or dies in an ac­ci­dent not in­volv­ing an­other mo­tor ve­hi­cle, due to his or her own neg­li­gence, the owner of the ve­hi­cle or his or her fam­ily mem­bers will not get com­pen­sa­tion be­fit­ting the ac­tual pe­cu­niary loss of the de­ceased or in­jured, but only a lump sum com­pen­sa­tion of `1 lakh. “It is un­for­tu­nate that the owner of the ve­hi­cle, who pays pre­mium amount for the risks that may be con­fronted by the third party or due to any other fac­tor, is not get­ting ad­e­quate com­pen­sa­tion in the event of his or her death or bod­ily in­jury. There­fore, hav­ing re­gard to the above fac­tual ma­trix, tak­ing note of the es­ca­la­tion in the cost of liv­ing, par­tic­u­larly the cost of med­i­cal treat­ment, we di­rect the IRDA to en­hance the Com­pul­sory Per­sonal Ac­ci­dent Cover from the ex­ist­ing `one lakh to at least `15 lakh, so that the amount will add some suc­cour or so­lace to the vic­tims of road ac­ci­dents, the bench said.

The mat­ter re­lates to an ap­peal filed by the in­sur­ance com­pany chal­leng­ing the award of a to­tal com­pen­sa­tion of `51.37lakh awarded by Mo­tor Ac­ci­dent Claims Tri­n­unal in Neyveli on April 28, 2015 to the fam­ily mem­bers of one Ra­jini, who died in a road ac­ci­dent on June 6, 2011. Ra­jini was trav­el­ling as a pil­lion on a two-wheeler owned by him and driven by his friend on the Neyveli-Viru­dacha­lam Road, near Roma­puri liquor shop.

The fam­ily mem­bers filed a claim pe­ti­tion be­fore the tri­bunal. The tri­bunal passed an award of a to­tal com­pen­sa­tion of `51.37 lakh, against which the in­sur­ance firm filed the present ap­peal.

It sub­mit­ted that un­der Sec.147 of MVA, the risk of the de­ceased, who is the owner of the ve­hi­cle, is not re­quired to be cov­ered by the in­sur­ance com­pany and if at all, the claimants/re­spon­dents are en­ti­tled, it can only be to a max­i­mum amount of `one lakh un­der CPAC as per the in­sur­ance pol­icy and noth­ing more.

As the court felt the as­sis­tance of IRDA was nec­es­sary for dis­posal of the ap­peal, it im­pleaded its of­fi­cials as a party in the case.

The bench, af­ter re­fer­ring to var­i­ous judg­ments of Supreme Court, held that the in­sur­ance com­pany can­not be fas­tened with any li­a­bil­ity un­der the pro­vi­sions of MVA for the death of the de­ceased who him­self was the owner of the ve­hi­cle and when no other mo­tor ve­hi­cle was in­volved in this case. There­fore, the ques­tion of the in­surer be­ing li­able to in­dem­nify the de­ceased/ owner of the ve­hi­cle does not arise. Since the de­ceased him­self was the owner of the two-wheeler and not a third party, the claim pe­ti­tion filed by the claimants will not come within the purview of Sec. 146 or 147 of MVA for the pur­pose of pay­ment of com­pen­sa­tion. “There­fore, we hold that the im­pugned judg­ment and de­cree of the tri­bunal can­not be sus­tained. The ap­peal filed by the in­sur­ance com­pany de­serves to be al­lowed, the bench said.

The judges, be­fore part­ing with the case, ob­served that they were pained to note that as per the In­dian Mo­tor Tar­iff, the com­pen­sa­tion payable to the le­gal heirs in case of death or bod­ily in­jury suf­fered by the owner of the ve­hi­cle is re­stricted to `one lakh only in case of two-wheeler and `two lakh in case of four wheeler, by virtue of CPAC. It is out­dated, the bench said and di­rected IRDA to en­hance it to `15 lakh af­ter con­sul­ta­tion with all stake­hold­ers within six months.

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