A motor policy does two different jobs in one document, and a repudiation has to be tested against the right one. The compulsory third party cover exists for the benefit of the person your vehicle injures, and the Act regulates when an insurer may resist it. The own damage cover is your own contract with the insurer, and the exclusion clauses govern it.
The third party side, and the closed list of defences
Section 150(1) provides that where a judgment or award in respect of a liability required to be covered is obtained against a person insured by the policy, the insurer shall pay the person entitled to the benefit of the award the sum payable, notwithstanding that the insurer may be entitled to avoid or cancel, or has avoided or cancelled, the policy. Section 150(2) then provides that no sum is payable unless the insurer had notice of the bringing of the proceedings through the court or the Claims Tribunal before they commenced, and that an insurer to whom such notice is given is entitled to be made a party and to defend the action on the following grounds only:
- Breach of a specified condition of the policy. The listed conditions are a condition excluding use of the vehicle for hire or reward where it is not covered by a permit, for organised racing and speed testing, for a purpose not allowed by the permit, or without a side car on a two wheeled vehicle; a condition excluding driving by a named person, or by a person who is not duly licensed, or by a person disqualified during the period of disqualification, or driving under the influence of alcohol or drugs as laid down in Section 185; and a condition excluding liability for injury caused by war, civil war, riot or civil commotion.
- That the policy is void on the ground that it was obtained by non disclosure of a material fact, or by a representation of a fact which was false in a material particular.
- Non receipt of premium as required under Section 64VB of the Insurance Act, 1938.
Two further sub-sections matter. Section 150(4) provides that where a certificate of insurance has been issued, so much of the policy as purports to restrict the insurance by reference to any condition other than those in sub-section (2) shall be of no effect as respects the liabilities required to be covered. Section 150(5) bars an insurer given notice from avoiding liability otherwise than in the manner provided in sub-section (2). The list is not a menu of examples; it is the boundary.
The listed ground is a condition excluding driving under the influence of alcohol or drugs as laid down in Section 185. That imports the statutory threshold: alcohol in the blood exceeding thirty milligrams per hundred millilitres detected in a test by a breath analyser, or in any other test including a laboratory test, or being under the influence of a drug to such an extent as to be incapable of exercising proper control over the vehicle. Section 203 governs when a breath test may be required, Section 204 the laboratory test, and Section 205 creates a presumption from an unexplained refusal in a prosecution under Section 185. A repudiation resting on a line in a police document, with no test result behind it, is a repudiation with a gap in it.
The own damage side
Damage to your own vehicle is not governed by Section 150 at all. It is governed by the policy and by the exclusions printed in it, which is why the first document to read is the policy wording and schedule rather than the repudiation letter. Check three things: what the exclusion actually says, whether the insurer has pleaded that exclusion or a different one, and what evidence it relies on to bring the facts within it. A repudiation that quotes a clause the policy does not contain, or relies on facts that no test supports, is answerable.
What to do about a repudiation
- Get the repudiation in writing, with reasons. A refusal communicated by telephone or in an application is not a decision you can meet. Ask for the ground and the clause relied on.
- Assemble the record on intoxication. The medical examination, any breath analyser printout, the laboratory report if one was taken, and the time of the test against the time of the accident.
- Reply in writing, clause by clause. Answer the ground the insurer has taken rather than the case generally, and enclose the documents rather than describe them.
- Escalate through the grievance channels. The insurer's grievance redressal officer first, then the Insurance Regulatory and Development Authority of India's grievance route, then the Insurance Ombudsman for a policyholder complaint.
- Consider a consumer complaint. Section 35 of the Consumer Protection Act, 2019 allows a complaint about a service provided or agreed to be provided to be filed with a District Commission by the consumer to whom the service is provided, with a proviso allowing electronic filing. Deficiency in service in handling a claim is the usual frame.
Keep two things separate while you do this. The criminal case under Section 185 and the licence proceedings that follow it run on their own timetable, which our guide on drunk driving penalties and licence suspension sets out. The third party claim before the Claims Tribunal runs on another, described in our guide on motor accident compensation claims. What a reply to a repudiation should carry is in our guide on challenging an insurance claim repudiation.