Insurance Company Not Exempted Merely Because Driver Consumed Alcohol In Excess of Prescribed Limit Unless Contributory Negligence Shown: Kerala HC

The Kerala High Court recently held that merely because a person has consumed alcohol in excess of the limit prescribed under the penal provisions of the Motor Vehicles Act, 1988, it could not be said that he was 'under the influence of the alcohol', and the insurance company cannot be exempted from granting the claim when the person himself had not contributed to the occurrence of the accident in any manner.

Justice Shaji P. Chaly, while holding so, proceeded to construe the term 'influence of alcohol' and observed that, 

"influence of alcohol on the senses and faculties varies from person to person. Influence of alcohol, in my considered view, would mean that due to the consumption of alcohol, the normal senses and faculties of the person should have been overpowered by the alcohol and thereby lost the average mind temporarily; or that he was not in a position to control himself; or an inebriated condition prevailed upon the person, thus losing the capability, strength, and fitness to control and ride the motorcycle by himself and thereby fully or partially contributing to the accident". 

The brief facts of the case show that the deceased person who was the husband of the 4th respondent herein, died in an accident on 19th May 2009, when the motor cycle driven by him crashed into a tourist bus.

The deceased had been covered under a personal accident Group policy, and the 4th respondent accordingly, raised claim before the Insurance Company (the petitioner herein) for the death benefit under the policy. This was however rejected by the latter, on the ground that the death occurred while the deceased was under the influence of intoxicating liquor or drugs, thereby repudiating the claim of the 4th respondent.

Before the Ombudsman, the 4th respondent averred that the repudiation of the claim was not legal and proper and the deceased was not negligent in riding the motorcycle. It was also pointed out that an FIR and a charge sheet was lodged against the driver of the bus. The petitioner however maintained before the Ombudsman that the presence of alcohol content exempted the claim under clause 5(b) contained in the policy conditions. 

The Ombudsman found that the accident occurred when the tourist bus overtook a car, and in that process, hit the motorcycle of the deceased. It was further found that the deceased had been keeping to the proper side of the road, while it was the tourist bus that had gone over to the wrong side. The Ombudsman further observed that, "the mere consumption of alcohol is entirely different from the stage under the influence of alcohol", and the instant accident had entirely occurred due to the negligence of the bus driver. Accordingly, the Ombudsman directed the Insurance Company to pay an amount of Rs. 7,00,000/- to the 4th respondent.

It is against this order that the instant petition was filed by the Petitioner-Insurance Company. 

Before the High Court, it was contended by Advocate Rajan P. Kaliyath on behalf of the Petitioner that the liability of the Company was contractual and the decision of the Ombudsman was clearly contrary to the terms of the contract. It was contended that the Insurance Contract as well as the Memorandum of Understanding based on which the contract of insurance is issued, govern the rights and liabilities of the parties, which specifically excludes the compensation for death or disability arising out of 'whilst under the influence of intoxicating drugs or alcohol' under the exclusion clause of 5(b) in the Insurance Contract and clause 4 of the MoU. Since the deceased had consumed alcohol exceeding the limit of 30 mg per 100 ml of blood prescribed under Section 185 of the Motor Vehicles Act, 1988, as revealed by the Chemical analysis report, it was contended that the insurance company was excluded from its liability for compensation. 

Advocate Ajaya Kumar G., and Senior Government Pleader Joby Joseph on the other hand, contended that the accident was solely due to the rash and negligent driving of the tourist bus driver, and the deceased had not contributed to the same in any manner. 

In the instant case, the Court found that there was no case of contributory negligence on the part of the deceased in the accident, in spite of the presence of the alcohol. 

"the only case projected by the Insurance Company is on the basis of the chemical analysis report that the alcohol content in blood is exceeding the limit prescribed in Section 185 of the Act 1988, which by itself is not sufficient to have the advantage of the exclusion clause in favour of the insurer", Court observed. 

Resultantly, the Court could not find any case being made out that the award of the Ombudsman suffered from arbitrariness, illegality, unfairness, or any other legal infirmities justifiable to be interfered with in a proceeding under Article 226 of the Constitution, and accordingly, dismissed the writ. 

Case Title: National Insurance Co. Ltd. v. State of Kerala & Ors. 

Citation: 2022 LiveLaw (Ker) 531

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