The Oriental Insurance Company Limited v. Ramesh P.K.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE A. BADHARUDEEN THURSDAY, THE 25[TH] DAY OF NOVEMBER 2021 / 4TH AGRAHAYANA,** **1943** **MACA NO. 2465 OF 2012** **AGAINST THE AWARD IN OP(MV) 2220/2008 OF MOTOR ACCIDENTS** ## **CLAIMS TRIBUNAL, ERNAKULAM** **APPELLANT : 3RD RESPONDENT** **THE ORIENTAL INSURANCE COMPANY LIMITED, COCHIN NOW REPRESENTED BY ITS ASSISTANT MANAGER, REGIONAL OFFICE, METRO PALACE, KOCHI-18.** **BY ADVS. SRI.MATHEWS JACOB, SR.STANDING COUNSEL SRI.P.JACOB MATHEW, STANDING COUNSEL** ## **RESPONDENT : PETITIONER** **RAMESH P.K., S/O.KRISHNAN, PAZHAYAPURACKAL, SP PURAM COLONY, PALLURUTHY.P.O., PIN-682006.** **BY ADVS. SRI.K.JANARDHANAN SMT.P.C.JEEVA SRI.K.J.MANU RAJ** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 25.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** M.A.C.A.No.2465 of 2012 ..2.. **“C.R.”** ## **M.A.C.A.No.2465 of 2012** ## **----------------------------------------------------** ## **J U D G M E N T** Third respondent in O.P.(MV)No.2220 of 2008 on the file of the Motor Accidents Claims Tribunal, Ernakulam is the appellant herein. The petitioner is arrayed as the respondent herein. 2. The pivotal question that requires answer in this appeal is; whether an insured can claim the amount paid by one insurer to the insured under a contract of indemnity from another insurer to whom also liability to indemnify the same insured subsists under another contract of indemnity? 3. The dispute in this appeal confines to grant of Rs.56,475/- under the head 'medical expenses' by the Tribunal after holding that the said amount was reimbursed by the petitioner under a mediclaim policy. The Tribunal M.A.C.A.No.2465 of 2012 ..3.. relied on decision reported in [2011 (2) KLT 20], **National Insurance Co.Ltd v. Bijumon** rendered by this Court to grant the said sum as compensation since the said decision settled such a ratio. However, in a subsequent ruling reported in [2015(5) KHC 327 : 2015(4) KLT 442], **National Insurance Company Ltd. v. Akber Badsha and others** , a Division Bench of this Court overruled the said decision and categorically held that _the very purpose of insurance is to see that un-anticipated risk is covered to the extent necessary, lest there should be any loss to the party concerned because of the unforeseen contingency which occurred during the policy period. As it stands so, if a party sustains damage in respect of a vehicle or was made to spend a certain amount for availing treatment in connection with the injuries and if the said amount is satisfied by the insurer under a separate policy issued in this regard (ofcourse based on premium collected separately for the sum assured) the same is liable to be reckoned for fixing the_ M.A.C.A.No.2465 of 2012 ..4.. _quantum of compensation payable under the M.V.Act and if only a finding is rendered that loss is still there, could it be compensated to the requisite extent. To put it more clear, if the party has obtained only a lesser amount under the 'Mediclaim policy' taken by him (paying premium separately), the balance amount, if any, could very well be claimed in the claim petition to be preferred before the Tribunal with reference to the statutory coverage._ 4. It is, in this context, the principle of subrogation required to be discussed. Subrogation literally means ' _the act of substituting of one creditor for another'._ 5. Black's Law Dictionary defines subrogation as under; _The substitution of one party for another whose debt the party pays, entitling the paying party to rights, remedies, or securities that would otherwise belong to the debtor. For example, a surety who has paid a debt is, by subrogation, entitled to any security for the debt held by the creditor and the benefit of any judgment the creditor has against the debtor, and may proceed against the debtor as the creditor would._ M.A.C.A.No.2465 of 2012 ..5.. _Subrogation most commonly arises in relation to insurance policies. 2. The equitable remedy by which such a substitution takes place. 3. The principle under which an insurer that has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to the insured against a third party with respect to any loss covered by the policy._ ## 6. P. Ramanatha Aiyar's Major Law Lexicon, ## defines subrogation as; _Substitution of another person in the place of a creditor, so the person in whose favour it is exercised succeeds to the rights of the creditor in relation to the debt. The doctrine is one of equity and benevolence, and like contribution and other similar equitable rights was adopted from the civil law, and its basis is doing complete, essential, and perfect justice between all the parties without regard to form, and its object is the prevention of injustice. The right does not rest on contract or privity, but upon principles of natural equity, and does not depend upon the act of the creditor, but may be independent of him and also of the debtor._ 7. In fact, the principle of subrogation is incorporated under Section 69 of the Indian Contract Act, M.A.C.A.No.2465 of 2012 ..6.. 1972 and it provides that any person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other person. Section 92 of the Transfer of Property Act also recognises the principle of subrogation. In the constitution Bench decision reported in [(2010) 4 SCC 114], **Economic Transport Organisation v. Charan Spinning Mills (P) Ltd. and another,** the Apex Court held that law of insurance recognises an equitable corollary of the principle of indemnity that when the insurer had indemnified the assured/insured, the rights and remedies of the assured/insured against the wrong doer stand transferred to and vested in the insurer. Here, medical bills to the tune of Rs.56,475/- was given by the insurer, under a mediclaim policy, to the insured and thereafter, in this proceedings, another insurer also was directed to pay the said sum so as to get unlawful enrichment to the petitioner herein. To put it otherwise, when the insurer under a mediclaim policy M.A.C.A.No.2465 of 2012 ..7.. discharged liability in terms of the contract of indemnity, the insurer who issued mediclaim policy is subrogated in the place of the insured and therefore, the insured cannot claim the said amount again from another insurer. By applying the principle of subrogation, the law emerges is that when the petitioner was given amount covered by medical bills under a mediclaim policy by one insurer, the said insurer got subrogated in the place of the petitioner. Therefore, the petitioner cannot claim the amount again from another insurer to embark upon the legal right of the earlier insurer to get the same reimbursed. In view of the settled law as discussed, grant of Rs.56,475/- as per award dated 29.02.2012 by the learned Tribunal is patently illegal and therefore, the said award to that extent is liable to be set aside. In the result, this appeal is allowed and grant of Rs.56,475/- impugned herein is set aside. Consequently, it is held that the petitioner is entitled to get Rs.75,722/- M.A.C.A.No.2465 of 2012 ..8.. (Rs.1,32,197-56,475=75,722/-)(Rupees Seventy Five Thousand Seven Hundred and Twenty Two only) as compensation along with the same rate of interest granted by the Tribunal. Sd/- **A.BADHARUDEEN, JUDGE** rkj