Kerala High Court Upholds Insurance Claim Despite Alcohol Presence in Bloodstream

Insurer's liability not negated by mere alcohol presence; actual impairment required to invoke exclusion clause.

In a landmark judgment, the Division Bench of the Kerala High Court upheld the Insurance Ombudsman’s decision, asserting that the mere presence of alcohol in the bloodstream does not suffice to trigger the exclusion clause in an insurance policy. The case involved National Insurance Co. Ltd.'s appeal against an order directing them to pay Rs. 7,00,000 to the widow of a deceased government employee who died in a motor vehicle accident.

The appellant insurer had contested the claim, arguing that the insurance policy excluded liability for accidents occurring under the influence of intoxicating liquor or drugs. They relied on a chemical analysis report showing a high level of alcohol in the deceased's bloodstream at the time of the accident.

However, the High Court, comprising Justice Sushrut Arvind Dharmadhikari and Justice Syam Kumar V.M., emphasized that the burden of proof lies with the insurer to demonstrate actual impairment due to intoxication. The judgment reiterated that a chemical analysis report alone, without corroborating evidence of impaired faculties, cannot conclusively prove intoxication to invoke the exclusion clause.

The court referred to legal precedents, including the Supreme Court’s ruling in Iffco Tokio General Insurance Company Ltd. v. Pearl Beverages Ltd., to underline that the insurer must demonstrate that intoxication was the proximate cause of the accident. The court noted that the exclusion clause applies only when the insured is under the influence of intoxicating substances at the time of the incident, which requires factual analysis and confirmation.

Justice Syam Kumar V.M. stated, "The insurer’s reliance on the chemical analysis report to deny the claim is insufficient. The exclusion clause mandates proof of impairment, which was not satisfactorily established by the insurer."

The judgment dismissed the insurer's appeal, affirming the Ombudsman’s decision to compensate the claimant. The court's decision underscores the necessity for insurers to prove actual impairment and not just the presence of alcohol to negate liability under insurance policies.

Bottom Line:

Insurance Law - Burden of proof on insurer to demonstrate actual impairment due to intoxication under exclusion clause in policy; mere presence of alcohol in the bloodstream is insufficient to invoke exclusion clause. 

Statutory provision(s):  

• - Insurance Law  
• - Evidence Law  
• - Motor Vehicles Act, 1988

National Insurance Co.Ltd. v. State of Kerala, (Kerala)(DB) : Law Finder Doc Id # 2752969