Personal Accident Coverage cases can only be tried by civil courts, not Motor Accident Claims Tribunals: Madras HC
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Personal Accident Coverage cases can only be tried by civil courts, not Motor Accident Claims Tribunals: Madras HC

The Court held that since disputes concerning Personal Accident Covers are contractual in nature, they can only be dealt with by competent civil courts.

Meera Emmanuel

The Madras High Court recently held that clarified that insurance claims under Personal Accident Coverage policies cannot be adjudicated on by Motor Accident Claims Tribunals which derives its jurisdiction from the Motor Vehicles Act.

Rather, disputes concerning Personal Accident Covers, being contractual in nature, can only be taken to competent civil courts (Cholamandalam MS General Insurance Company Limited v. Ramesh Babu).

The ruling passed by Justice SM Subramaniam states,

"If a particular Personal Accident Policy is contractual in nature, then statutory liability cannot be fixed on the Insurance company. Violations of terms and conditions of contract, the party is affected or aggrieved, then entitled to approach the competent Forum to enforce the contractual obligations. Once, it is a contract and terms and conditions are agreed between the parties, which are reduced in writing and signed by the parties, then it is a contract under the provisions of the Indian Contract Act and the terms and conditions of the Contract Act are enforceable before the competent Court of Law and not before the Motor Accident Claims Tribunal under the Motor Vehicles Act."
"Only the statutory liabilities are amenable to the jurisdiction of the Motor Accident Claims Tribunal and not the contractual liability. All such contractual liabilities are falling within the scope of the Indian Contract Act and the aggrieved persons to the contract can approach the competent Court of Law and not the Motor Accident Claims Tribunal under the Motor vehicles Act."
Madras High Court

It is not as if all claims for compensation can be entertained by Motor Accident Claims Tribunals, the Court said. The jurisdiction of the Tribunal is limited by the provisions of the Motor Vehicles Act, which is aimed to provide just compensation to accident victims, but which does not extend to contractual obligations that are agreed on between two parties.

Justice SM Subramaniam
Justice SM Subramaniam

As further noted in the judgment,

"There may be several policies, which all are contractual in nature. Those contractual policies are between the parties, on certain specific terms and conditions and the said contractual policy cannot be construed as statutory policy. In the absence of any statutory liability on the part of the Insurance company, the provisions of the Motor Vehicles Act cannot be invoked nor an adjudication can be done before the Tribunal. Mere contractual liability are not enforceable before the Motor Accident Claims Tribunal."

Compensation as understood in the Motor Vehicles Act cannot be equated to a benefit in a Personal Accident Cover, the Court added. The benefits under a Personal Accident Cover would have to construed strictly in accordance with the terms and conditions laid down in that policy. A tribunal cannot adjudicate on such contractual agreements to go beyond the policy agreement.

Justice Subramaniam proceeded to emphasise that a Motor Accident Claims Tribunal would be usurping the powers of a civil court if it were to adjudicate on disputes concerning contractual insurance agreements such as Personal Accident Coverage Policies.

"... such claims are to be made before the competent Forum namely before Consumer Forum or before the competent Civil Court of Law. The enforceability of the terms and conditions cannot be adjudicated as such contractual policies are unconnected with the scope of the provisions of the Motor Vehicles Act, more specifically, under Section 147 of the Motor Vehicles Act... If such contractual liabilities are adjudicated before the Motor Accident Claims Tribunal, then the Tribunal are exercising excess jurisdiction, which is not contemplated nor conferred under the provisions of the Motor Vehicles Act."

In view of these findings, the Court proceeded to allow an insurance company's appeal before it in whereby a Motor Accidents Claims Tribunal's ruling in a dispute over personal accident coverage was challenged.

The insurance claimant in this case had crashed his car into a tree by the roadside.

On noting that the personal policy in this case was in the nature of a contract, and in view of its findings on the jurisdiction of the Tribunal in such cases, the High Court proceeded to set aside the challlenged Tribunal ruling.

Read the Judgment:

Cholamandalam MS General Insurance Company Limited v. Ramesh Babu.pdf
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