An unsubstantiated FIR allegation of drunk driving cannot establish policy breach or justify recovery.

On 16 January 2023, a Maruti Swift allegedly driven by the appellant collided with a parked auto-rickshaw at Nalanihola Panchali, resulting in the death of its driver, Krishna Mili.

An FIR was registered under Sections 279, 338, 304A and 427 of the Indian Penal Code, followed by submission of a charge-sheet.

The deceased’s wife and children filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, registered as MAC Case No. 20/2023.

The claim proceeded ex parte against the appellant, while HDFC ERGO General Insurance Company contested the proceedings.

The Motor Accident Claims Tribunal awarded compensation of ₹17,71,073 with 8% interest and directed the insurer to pay the amount, granting it liberty to recover the sum from the appellant on the ground that the vehicle had been driven under the influence of alcohol, thereby breaching the insurance policy.

In appeal under Section 173 of the Motor Vehicles Act, the appellant challenged only the recovery direction.

The Court applied Section 173 of the Motor Vehicles Act, 1988, governing appeals against awards of the Motor Accident Claims Tribunal.

It considered the insurer’s reliance on Section 150(2)(a)(ii) of the Act, which recognises breach of a policy condition relating to driving under the influence of alcohol as a statutory defence to liability.

The Court held that an insurer seeking the benefit of such a policy-condition defence must establish the alleged breach through cogent and reliable evidence.

An FIR is ordinarily an accusation and cannot, by itself, be treated as proof of the facts alleged therein; hearsay statements in an FIR require corroboration through investigation material or other admissible evidence.

The burden could not be shifted to the appellant merely by invoking Section 106 of the Indian Evidence Act, particularly where the insurer had failed first to produce reliable evidence of intoxication.

The Court found that the appellant had appeared before the Tribunal on 19 May 2023, after which the matter was kept in abeyance pending receipt of Form 54.

When the case was later restored on the basis of the claimants’ application, the appellant was not shown to have been notified.

The Tribunal therefore ought to have issued appropriate notice before proceeding ex parte, although the High Court declined to decide the issue conclusively because the appellant had not separately sought setting aside of the ex parte order or award.

On the substantive issue, the only material suggesting intoxication was the FIR, in which the informant stated that he had “come to know” that the driver was under the influence of liquor.

The informant was not examined, the source of his information was not disclosed, and the insurer produced no medical, toxicological or other corroborative evidence.

Although the insurer had attempted to secure production of the toxicological report, its application was rejected by the Tribunal and the rejection was not challenged.

Consequently, the allegation remained hearsay and did not establish a breach of the policy condition.

The Tribunal’s finding of intoxication and the consequential recovery direction therefore lacked a cogent evidentiary basis.

The High Court set aside the Tribunal’s finding that the appellant had breached the insurance policy by driving under the influence of liquor, along with the direction permitting HDFC ERGO General Insurance Company to recover the compensation from him.

The insurer was held liable to bear the entire compensation awarded to the claimants, amounting to ₹17,71,073 with applicable interest.

The records of MAC Case No. 20/2023 were directed to be returned to the Tribunal.