Alcohol on breath doesn’t imply being drunk: Consumer panel

Subject: The smell of alcohol does not establish intoxication.

Backdrop: A casual noting in a hospital record uncorroborated by medical tests, cannot be used to reject an insurance claim.

Case Study: Suresh owned a Skoda which was insured with Oriental Insurance Co. The car was totally damaged following a highway accident in 2008. An FIR was lodged over the incident. The car was later repaired by an authorized Skoda dealer at a cost of Rs 10,46,961.

Despite filing an insurance claim with all supporting documents, Suresh’s claim was rejected on grounds that the driver and other passengers in the vehicle were under the influence of alcohol at the time of the incident. Suresh immediately wrote back pointing out that this was incorrect. Since the insurance company did not respond, Suresh filed a complaint before the Additional Consumer Forum for Bangalore.

The insurance firm contested the case saying that the claim lodged was for an amount that exceeded the declared value of Rs 7,55,556 under the policy. The liability of the insurance company cannot be more than the insured amount. Also, the estimate for repairs had been submitted but the actual bills had not been furnished. The investigator appointed had reported that Suresh and the vehicle’s other occupants were under the influence of alcohol when the accident occurred. Another investigator reported that there was a noting in the hospital’s accident register that Suresh’s son and two other occupants of the vehicle were found to be disoriented, their breath smelt of alcohol, and their speech was slurred. The insurance company contended that the claim had been rejected in accordance with policy terms and conditions.

The District Forum observed that sections 185 and 202 of the Motor Vehicles Act provide that a driver would be considered intoxicated only if he is tested and found to have more than 30 mg of alcohol in his blood, per 100 ml. In the present case, except for a casual noting in the hospital register, no test had been done to ascertain whether alcohol had exceeded the legally stipulated limit. The mere smell of alcohol cannot lead to an inference that a person is incapable of taking care of himself. The Forum ruled that the a claim could not be rejected on the basis of an unscientific method.

It also observed that the claim would be restricted to the sum insured, subject to a deduction for the salvage value and adjustment as per excess clause requiring the insured to bear a part of the loss. It held that Suresh would be entitled to Rs 6 lakh along with 9% interest from the date of claim, awarding an additional Rs 3,000 as costs.

The insurance company appealed to the Karnataka State Commission which concurred with the view taken by the District Forum and dismissed the appeal. But the insurance company challenged the orders by filing a revision petition before the National Commission. According to the insurance company, there was a delay of 76 days in filing the revision, whereas the actual delay was of 131 days for which no satisfactory explanation was given. The Commission said that this revealed a casual attitude. It castigated the insurance company for over burdening the courts despite two concurrent adverse findings against it through well reasoned orders of the lower consumer fora. It dismissed the petition with a direction to pay Rs 5,000 as costs to the Consumer Welfare Fund. (Judgement dated 7.5.2013 in the case of Oriental Insurance Co. Ltd. v/s M. Suresh in Revision Petition No. 881 of 2013)

Impact:This judgement lays down that a person cannot be said to be intoxicated unless alcohol level exceeds the prescribed limit which can only be confirmed through a medical test. Also, well reasoned orders should not be challenged to drag litigation.