Punjab and Haryana High Court rules ESI benefits can’t be deducted from claim awarded by insurance company

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The Hush Post: In a major decision favouring dependants of motor vehicle accident victims, Punjab and Haryana High Court has ruled that the ESI benefits cannot be deducted from the claim awarded by the insurance company. The High Court passed the orders while hearing a plea of a road accident victim’s father.

Devendra had died in a road accident on April 13, 2013 in Gurugram. His father had filed a claim in the Motor Accident’s Claim Tribunal (MACT) which ruled in his favour. However, while determining the quantum of compensation, the Tribunal accepted insurance company’s contention that the benefits provided to the victim under the Employees’ State Insurance Act be adjusted in it.

Challenging the Tribunal’s order, the victims’ father moved the High Court. The insurance company maintained in the High Court that the victims’ family had already availed the benefits under the ESI Act and hence cannot lay claim under any other Act.

Meanwhile, Counsel for the petitioner submitted that the ESI Act applies only to the employer and the employee while the Motor Vehicle Act does not have anything to do with them, hence, both the Acts can’t be correlated.

The High Court in its ruling stated that a person contributes to the ESI every month from his salary and in lieu of it the ESIC has released some benefit to the dependants of the deceased. The court ruled that this cannot be treated as a claim amount and hence cannot be deducted from award of compensation in the motor vehicle accident cases. Subsequently, the High Court directed the insurance company to pay the full claim amount.

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