Can Charity-Paid Medical Expenses Be Included in Motor Accident Compensation Claims?

Motor accident compensation claims under Section 166 of the Motor Vehicles Act, 1988 (MV Act) aim to compensate victims for the losses suffered due to road accidents. These claims often cover a variety of heads, including medical expenses, loss of earnings, pain and suffering, and loss of consortium. However, the inclusion of medical expenses paid by a charitable trust presents a complex legal issue, as demonstrated in the case of LH of Deceased Nileshbhai Mahendrabhai Vasant v. Jigar Babubhai Shah & Anr. (2026), where the Gujarat High Court was tasked with deciding whether medical bills paid by a charitable trust on behalf of the deceased could be included in the compensation awarded under the MV Act.

Background of the Case

In this case, the deceased, Nileshbhai Mahendrabhai Vasant, died following a motor accident on 1st April 2011. The accident was caused when the driver of the car, in which the deceased was travelling, lost control while attempting to avoid a bus. The deceased sustained serious injuries, resulting in his prolonged hospitalisation until his eventual death in February 2012.

The claimants, the legal heirs of the deceased, filed a compensation claim under Section 166 of the Motor Vehicles Act, seeking damages for medical expenses, loss of consortium, and other heads. The initial award by the Motor Accident Claims Tribunal (MACT) granted compensation of Rs. 41,05,240/-.

However, the claimants appealed, seeking enhancement of compensation, specifically requesting the inclusion of medical expenses that had been paid by the Shantaben Atmaramdas Patel Charitable Trust on behalf of the deceased. The appellants argued that the medical expenses paid by the Trust, amounting to Rs. 10,86,415/-, should be reimbursed under the compensation.

Gujarat High Court Modifies Compensation Award, Rejects Claim for Trust Payment

The Tribunal had initially considered medical expenses and reimbursements, resulting in the claimants receiving Rs. 4,41,450/- out of the total amount. However, the Gujarat High Court noted that some medical bills, totalling Rs. 2,52,899/-, were not considered by the Tribunal. These bills are now included in the reassessed compensation. Regarding attendant and transportation charges, while the Tribunal awarded Rs. 1,94,100/- for pain, shock, and suffering, the Court found some of the supporting documents to be duplicates. Therefore, a lump sum of Rs. 50,000/- is awarded for attendant and transportation charges.

For loss of consortium, the Tribunal had awarded Rs. 44,000/- for the four dependents, but the Court increased this amount to Rs. 1,93,600/- following the guidelines set by the Supreme Court in Pranay Shethi. The claim for Rs. 10,86,415/- paid by Shantaben Atmaramdas Patel Charitable Trust is dismissed, as the claimants owe this amount to the Trust and are not entitled to it.

The total compensation is reassessed to Rs. 45,57,739/-, an increase from the original award of Rs. 41,05,240/-. The insurance company is instructed to deposit the revised compensation, and the Tribunal will disburse the amount after proper verification and deduction of any

"So far as claim of claimants to award Rs.10,86,415/- which was paid by Shantaben Atmaramdas Patel Charitable Trust on behalf of the deceased is concerned, the said amount is to be paid to the said Trust however, there is no evidence in this regard and even otherwise the claimants owe the said amount to the said Trust and therefore, the claimants are not entitled to receive the said amount of Rs.10,86,415/ more particularly in view of the fact that compensation under the MV Act is not a bonanza or a jackpot and once expenses are incurred, original claimants are not entitled to receive the said amount."

Conclusion

The First Appeal has been partly allowed, and the compensation awarded by the Motor Accident Claims Tribunal has been revised and increased to Rs. 45,57,739/-. The respondents (insurance company) are directed to deposit this revised amount, along with the accrued interest at the rate of 7.5% per annum, within four weeks of receiving the judgment.

Upon deposit, the Tribunal is instructed to disburse the full amount to the original claimants via account payee cheque, NEFT, or RTGS, after conducting proper verification and following the required procedures. Any outstanding court fees, if not paid, will be deducted from the compensation before disbursement. The remaining parts of the impugned judgment and award are upheld.

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