Supreme Court Denies Insurance Claim: Death Due to Alcohol Not Accidental (22 March 2021)

LEGAL ISSUE: Whether a death caused by asphyxia due to alcohol consumption and regurgitation of food is considered an “accidental death” under an insurance policy.

CASE TYPE: Consumer Law/Insurance Law

Case Name: Narbada Devi and Ors. vs. H.P. State Forest Corporation & Anr.

Judgment Date: 22 March 2021

Date of the Judgment: 22 March 2021

Citation: Not Available

Judges: Mohan M. Shantanagoudar, J. and Vineet Saran, J.

Can an insurance company deny a claim if the insured’s death is linked to alcohol consumption, even if the death is not a natural one? The Supreme Court of India addressed this question in a recent case involving a claim under a personal accident insurance policy. The court examined whether a death caused by asphyxia resulting from alcohol consumption and food regurgitation could be classified as an “accidental death” covered by the insurance policy. This judgment clarifies the interpretation of “accidental death” in insurance policies, particularly when alcohol is involved. The bench comprised of Justice Mohan M. Shantanagoudar and Justice Vineet Saran, who delivered a unanimous judgment.

Case Background

The case revolves around the death of Om Prakash, an employee of the Himachal Pradesh State Forest Corporation (HPSFC), who worked as a daily-wage Chowkidar. On the night of October 7, 1997, Om Prakash was returning from Banal Depot to Thundal with a forest guard, Chandermohan. Due to heavy rain and a storm, he was found in a helpless condition the next morning, October 8, 1997, smelling of alcohol. Despite attempts to revive him, he died around 1:00 PM on the same day.

A post-mortem report revealed no external injuries, and the cause of death was determined to be asphyxia resulting from regurgitation of food into the larynx and trachea after consuming alcohol. The alcohol level was measured at 34.5 mg per 100 ml of urine. Expert medical opinions confirmed that the cause of death was linked to alcohol ingestion.

HPSFC had an insurance policy with The New India Assurance Company Limited, which covered employees for accidental deaths. The legal heirs of Om Prakash filed a claim under this policy, which was rejected by the insurance company.

Timeline

Course of Proceedings

The legal heirs of the deceased filed a consumer complaint before the District Consumer Disputes Redressal Forum, Shimla, which ruled in their favor, stating that the death was accidental and the insurance company was liable. However, the State Consumer Disputes Redressal Commission reversed this decision, holding that the death was not accidental and instead held HPSFC liable. The National Consumer Disputes Redressal Commission then overturned the State Commission’s decision, stating that the death was not accidental and the insurance company was not liable. It also noted that HPSFC could be liable under the Workmen’s Compensation Act, 1923, but this matter was already under consideration by the Commissioner, Workmen’s Compensation.

Legal Framework

The case primarily involves the interpretation of the terms of the Janta Personal Accident Insurance Policy and the application of the Consumer Protection Act, 1986. The insurance policy stated that it covered “bodily injury resulting solely and directly from accident caused by outward, violent and visible means.”

The Consumer Protection Act, 1986, under Section 12, allows consumers to file complaints for deficiency in service. The definition of “service” under the Act excludes services rendered under a contract of employment.

The Workmen’s Compensation Act, 1923, provides for compensation to employees for injuries or death arising out of and in the course of their employment.

The Insurance Policy also had a specific exclusion clause (Proviso 4), which stated that no compensation would be paid if the insured died while under the influence of intoxicating liquor or drugs.

The relevant clause of the insurance policy states:

“bodily injury resulting solely and directly from accident caused by outward, violent and visible means (including sterilization risks )”

The relevant Proviso 4 of the insurance policy reads thus:

“Provided always that the company shall not be liable under this policy to: 4) Payment of compensation in respect of death, injury or disablement of the insured from (a) intentional (illegible) suicide or attempted suicide, (b) whilst under the influence of intoxicating liquor or drug (c) or (illegible) by insanity, (d) arising or resulting from the insured committing any breach of the law with criminal intent.”

Arguments

Appellants’ Arguments:

• The terms and conditions of the insurance policy were not communicated to the insured, nor was a copy of the policy provided.
• The deceased was not informed that the insurance policy was applicable only in cases of accidental death.
• The insurance scheme was in addition to the compensation under the Workmen’s Compensation Act, 1923.
• Even if the insurance policy is not applicable, HPSFC should be held liable based on the decision in The New India Assurance Co. Ltd. v. Smt. Jamuna Devi & Ors. [(2002) 3 CPJ 64 (NC)].
• HPSFC acted as a mediator between the insured and the insurance company, creating a tripartite agreement that allows the appellants to file a case against HPSFC.

Respondent No. 1 (HPSFC)’s Arguments:

• Under the insurance policy, the insurance company is liable only in cases of accidental death.
• HPSFC has no liability under the insurance policy.
• The death was not accidental, so neither the insurance company nor HPSFC is liable.
• The deceased was an employee, not a consumer, so the complaint was not maintainable under the Consumer Protection Act, 1986.
• HPSFC can only be held liable under the Workmen’s Compensation Act, 1923.

Respondent No. 2 (Insurance Company)’s Arguments:

• The deceased died a natural death, not covered by the insurance policy.
• The policy covers only bodily injury resulting from an accident caused by outward, violent, and visible means.
• The post-mortem report showed no bodily injury.
• Proviso 4 of the insurance policy excludes claims if the insured dies under the influence of alcohol.
• The deceased was heavily drunk and died due to complications from alcohol consumption.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issues addressed were:

1. Whether the death of the deceased was accidental within the meaning of the insurance policy.
2. Whether the insurance company was liable to pay the insurance amount.
3. Whether HPSFC was liable to pay compensation in place of the insurance company.
4. Whether the exclusion clause in the insurance policy regarding death under the influence of alcohol was applicable.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Cases:

• The New India Assurance Co. Ltd. v. Smt. Jamuna Devi & Ors. [(2002) 3 CPJ 64 (NC)] – National Consumer Disputes Redressal Commission. The National Commission held the employer liable to pay compensation as the employee was given to believe that the policy covered natural death as well.

Legal Provisions:

• Section 12 of the Consumer Protection Act, 1986 – This section allows consumers to file complaints for deficiency in service.
• The Janta Personal Accident Insurance Policy – The specific terms and conditions of the insurance policy were examined to determine the scope of coverage.
• The Workmen’s Compensation Act, 1923 – This Act provides for compensation to employees for injuries or death arising out of and in the course of their employment.

Judgment

How each authority was viewed by the Court?

• The New India Assurance Co. Ltd. v. Smt. Jamuna Devi & Ors. [(2002) 3 CPJ 64 (NC)]: The Court distinguished this case, stating that it was specific to its facts where the employee was given to believe that the policy covered natural death as well, which was not the case here.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the explicit terms of the insurance policy, which covered only accidental deaths and excluded deaths caused by alcohol consumption. The court emphasized the lack of evidence of any accidental injury and relied on medical reports confirming that the death was due to asphyxia resulting from alcohol consumption and regurgitation of food. The court also considered the exclusion clause in the insurance policy, which specifically stated that no compensation would be paid if the insured died under the influence of intoxicating liquor. The court distinguished the facts of the present case from the case of Jamuna Devi, as there was no evidence that the deceased was given to believe that the policy covered natural death.

Logical Reasoning:

The court considered alternative interpretations, such as the argument that the death could be considered accidental due to the storm, but rejected it due to lack of evidence and the explicit terms of the insurance policy. The court also considered the argument that HPSFC should be liable based on the Jamuna Devi case, but distinguished it based on the facts of the case. The final decision was reached by adhering to the explicit terms of the insurance policy and the medical evidence presented.

The Supreme Court held that the death of Om Prakash was not accidental within the meaning of the insurance policy. The court reasoned that the post-mortem report and expert medical opinions confirmed that the cause of death was asphyxia resulting from alcohol consumption and regurgitation of food. The insurance policy only covered deaths resulting from accidents caused by outward, violent, and visible means, and the court found no evidence to support the claim that the death was accidental. Additionally, the court noted that the insurance policy had an exclusion clause that specifically denied compensation for deaths occurring while the insured was under the influence of alcohol.

The court also held that HPSFC was not liable to pay compensation in place of the insurance company. The court found that HPSFC was only acting as a mediator for depositing the premium of its employees with the insurance company, and had no liability under the insurance policy. The court noted that HPSFC’s liability, if any, would be under the Workmen’s Compensation Act, 1923, and that the proceedings under this Act had already been settled by the Commissioner.

The Supreme Court did not have a dissenting opinion.

The court’s reasoning was based on a strict interpretation of the insurance policy, the medical evidence, and the specific exclusion clause related to alcohol consumption. The court emphasized that the burden of proof was on the appellants to show that the death was accidental, which they failed to do.

The judgment has implications for future cases involving insurance claims where alcohol consumption is a factor. It reinforces the importance of adhering to the specific terms and conditions of insurance policies and the significance of exclusion clauses.

The court did not introduce any new doctrines or legal principles but rather applied existing principles of insurance law to the specific facts of the case.

“From a bare perusal of the Insurance Policy, as quoted supra, it is clear that only if the insured sustains any bodily injury resulting solely and directly from accident caused by outward, violent and visible means, the Insurance Company would be liable to indemnify the insured.”

“As for the liability of the Respondent No.1­HPSFC, we are of the opinion that the Respondent No.1­HPSFC was only acting as a mediator for depositing the premium of employees with the Insurance Company and had no liability as such under the Insurance Policy.”

“The aforesaid Proviso 4 makes it amply clear that the injured is not entitled to compensation since on facts it is proved that he was intoxicated and that was due to intoxication.”

Key Takeaways

• Insurance policies covering accidental death will generally not cover deaths caused by alcohol consumption.
• The burden of proof lies with the claimant to prove that a death was accidental.
• Employers acting as intermediaries for insurance policies are generally not liable for claims if the insurance company denies them based on policy terms.
• Exclusion clauses in insurance policies, especially those related to alcohol or drug use, are strictly enforced.

Directions

No specific directions were given by the Supreme Court.

Development of Law

The ratio decidendi of the case is that a death caused by asphyxia due to alcohol consumption and regurgitation of food is not considered an “accidental death” under an insurance policy that requires an outward, violent, and visible cause, and that has an exclusion clause for deaths under the influence of alcohol. This case reinforces the strict interpretation of insurance policy terms and exclusion clauses. There is no change in the previous position of law.

Conclusion

The Supreme Court dismissed the appeal, upholding the decision of the National Commission. The court ruled that the death of Om Prakash was not accidental within the meaning of the insurance policy, and therefore, the insurance company was not liable to pay the claim. The court also held that HPSFC was not liable to pay compensation in place of the insurance company. The judgment emphasizes the importance of adhering to the specific terms of insurance policies, particularly exclusion clauses related to alcohol consumption.

Category

Parent Category: Consumer Law

Child Category: Insurance Law

Child Category: Accidental Death

Child Category: Exclusion Clause

Child Category: Consumer Protection Act, 1986

Parent Category: Insurance Law

Child Category: Janta Personal Accident Insurance Policy

Parent Category: Workmen’s Compensation Act, 1923

Child Category: Compensation for Death

FAQ

Q: What is considered an accidental death under an insurance policy?

A: An accidental death typically refers to a death caused by an external, violent, and visible event that is unforeseen and unintentional. It usually does not include deaths resulting from pre-existing conditions or internal causes.

Q: Can an insurance company deny a claim if the insured was under the influence of alcohol?

A: Yes, if the insurance policy has an exclusion clause that specifically denies coverage for deaths or injuries occurring while the insured is under the influence of alcohol or drugs, the insurance company can deny the claim.

Q: What is the significance of an exclusion clause in an insurance policy?

A: An exclusion clause specifies the circumstances under which the insurance policy will not provide coverage. These clauses are legally binding and must be clearly stated in the policy document.

Q: What is the role of an employer in an insurance policy taken for its employees?

A: An employer may act as a mediator by facilitating the purchase of insurance policies for its employees. However, the employer is generally not liable for claims if the insurance company denies them based on the policy terms.

Q: What is the Workmen’s Compensation Act, 1923?

A: The Workmen’s Compensation Act, 1923, is a law that provides for compensation to employees for injuries or death arising out of and in the course of their employment.