Any payout received from an accident insurance policy will have

MUMBAI: Any payout received from an accident insurance policy will have to be deducted from the motor accident compensation awarded to heirs of a victim, the Bombay high court has ruled.

Fifteen years after a Mumbai resident died when the autorickshaw he was travelling in with his family was rammed by a truck in Karwar, a division bench of Justices Abhay Oka and Revati Dere ordered that Rs 14 lakh would have to be deducted from the compensation of Rs 44.35 lakh awarded to his family, which included his wife, an airhostess, their minor children, and mother and sister. “If the employee is insured by his employer against injury or death arising out of an accident, any amount received under such policy on accidental death would be liable for deduction from compensation,” said the judges.

The court clarified that this deduction was applicable only if the payout was from an accident insurance policy. No deductions would be made if the compensation was from a life insurance or other policy. “In the case of an ordinary life insurance, if on account of death of a person in a motor accident, the legal representatives receive the amount under the policy, the same cannot be excluded as such benefit has no correlation to the accidental death. The said amount would have come to the legal representatives even in the case of natural death,” added the judges referring to a Supreme Court judgment on the issue.

The case dates back to August 1998 when Pramod Borkar, an employee of Shipping Corporation of India, and his family were travelling in an auto in Karwar when a truck rammed into the vehicle. Borkar died while his family sustained injuries.

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The accidents tribunal awarded a compensation of Rs 28.70 lakh to Borkar’s family on account of his death, in addition to compensation given individually to the family members for their injuries. The high court took into account Borkar’s salary and increased the compensation amount to Rs 44.35 lakh.

However, on the insurance company’s objections the court pointed out the statement of an SCI employee over the Rs 14 lakh that was paid to the family from a group accident insurance policy. “The statement is that the amount was received purely on account of death of the deceased in an accident which may suggest that the policy was an accident policy,” said the judges and added that since nothing contrary had been proved by the family the contention that Rs 14 lakh “was the pecuniary advantage received by the legal representatives of the deceased on account of accident will have to be accepted”.’ The court directed the insurer to pay the family Rs 30.35 lakh along with 7% interest.

Originally posted by TOI