Claims under personal accident cover, even if the latter is part of a package policy offered by a motor accident insurance company, can be adjudicated only by civil courts and not by the Motor Accidents Claims Tribunals, the Madras High Court has ruled.

Justice S.M. Subramaniam held that the personal accident cover was in the nature of a contract, and, hence, it could only be decided by civil courts. The tribunals were empowered only to adjudicate payment of statutory compensation to third parties, he said.

The judge also pointed out that money paid to third parties, for injuries or death caused to them, alone would fall under the definition of “compensation” and that a claim made under personal accident cover was actually a benefit and not a compensation.

He allowed an appeal preferred by a private insurance company and set aside an award passed by a Motor Accidents Claims Tribunal in Kallakurichi, directing the appellant to pay ₹2 lakh to the owner-cum-driver of a taxi, since he had suffered rib injuries after dashing against a tree.

The company claimed that the tribunal had erred in passing such an award, when it had no jurisdiction to adjudicate the dispute. It also contended that personal accident insurance covered only death, loss of limbs, eyesight and so on, and not just injuries to the ribs.