Insurer Can Reject the Claim on the Ground of Drunken Driving Even Without Breath Analysis or Blood Test: Supreme Court

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Case Name:  IIFCO Tokio General Insurance Company Ltd. vs. Pearl beverages Ltd. [SLP Civil No. 12489 of 2020]


In a notable judgement on Monday (April 12, 2021), the Supreme Court of India observed that for the purpose of repudiating an accident policy claim to the insurer on the ground of drunken driving, a breath analysis test or a blood test, which is contemplated under Motor Vehicle Act, is not necessary. 

Facts of the case

In the present case, an accident took place on 22.12.2007 at about 2:25 AM involving the car of the Respondent company which was insured by the Appellant and driven by one Shri Aman Bangia. In this case, the car was completely damaged. Following the incident, an FIR was lodged under Section 279/427 of the IPC and Section 185 of the Motor Vehicle Act against the accused. Thereafter the notices were exchanged and a complaint was filed by the Respondent under Section 17 of the Consumer and Protection Act, 1986 in the year 2009. 

The National Consumer Dispute Redressal Commission (NCDRC) ruled that the Appellant was not permitted to rely on clause 2(c) of the Contract of Insurance, which states that the accused is not responsible if the individual driving the car was intoxicated or was under the influence of drugs. The State Commission dismissed the Respondent’s argument, finding evidence that the driver was under the influence of alcohol. The NCDRC, on the other hand, provided no difference that the driver of the vehicle was under the influence of alcoholic beverages within the context of the aforementioned Exclusion Clause. This order of the NCDRC was challenged in the appeal before the Supreme Court.

Pleadings before the Court

It was submitted by the learned counsel on behalf of the Appellant that this was an obvious case in which unimpeachable evidence in the form of official documents established that the car was being driven by someone who was intoxicated or under the influence of drugs. Furthermore, the speed in which the car was driven was very high and the manner in which the accident occurred, resulted in the car becoming a total wreck as well as the fact that the FIR and MLC indicated that the driver smelled of alcohol, was enough to trigger the Exclusion Clause and shield the Appellant. It was further submitted that the substance of the case brought forward by the vehicle’s driver can be appreciated by the Court. The Respondent said that the vehicle was not driven erratically or negligently. However, the driver pled guilty in the criminal case, and the sentence was bequeathed by the Criminal Court. This proved beyond a shadow of a doubt that the Respondent’s claim that the car was not being driven rashly and negligently was false and this showed that the reason was his intoxication.

On the other hand, it was submitted by the learned counsel on behalf of the Respondent that according to the investigator’s report, the investigator arrived at the scene in the early morning after being notified, but no measures were taken to determine the amount of alcohol in the driver’s blood. This effectively dispels the fear that the insurer would be unable to show the amount of alcohol. It was further submitted that the conviction for reckless and careless driving under Section 279 of the IPC is linked to Section 279 of the IPC. The crime in question is one alleged under Section 185 of the MV Act, which had not yet been invoked/ proven against the driver. It was submitted that driving under the influence of alcohol is not the same as driving rashly or negligently.

Court’s Observation

The bench of the Supreme Court comprising Justices UU Lalit, Indira Bannerjee and KM Joseph observed that it does not prevent the insurer from making a case for exclusion in situations where there is no empirical material in the form of test results available, as in the case at hand. It is necessary to understand all of the conditions that exist in a situation. Also, the Insurer cannot be barred from proving his case if the breath analyser or some other test is not done for any purpose.

It was further observed that only when driving while being intoxicated draws the wrath of Section 185 and an offence is committed thereunder does the Exclusion Clause in the Contract of Insurance for Own Injury come into play.

Court’s Judgement

The Supreme Court, in this case, held that the view of the State Consumer Dispute Redressal Commission that the accident was caused due to drunken driving is a more plausible view and the order of the National Commission was set aside as it was an error in reversing the order of State commission in summary proceedings.

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