Is murder by gangsters an accidental death for insurance claims? Punjab Consumer Commission answers

The Punjab State Consumer Disputes Redressal Commission recently held that a pre-planned murder by gangsters cannot automatically be excluded from accidental death coverage under an insurance policy merely because the killing was intentional.

A bench of Presiding Judicial Member HPS Mahal and Member Kiran Sibal observed that the intention of the assailants to commit murder and whether the resulting death constitutes an accident for insurance purposes are distinct questions.

"Merely because the death was caused by a pre-planned criminal act, it cannot automatically be concluded that the claim is not payable under the policies, especially in the absence of any terms and conditions," the commission said.

The case concerned one Tajinder Singh, who was murdered by unidentified assailants while sitting at his shop in Moga, Punjab, on July 14, 2020.

Singh had obtained four life insurance policies from the Life Insurance Corporation of India (LIC), carrying double accident benefits, with a total basic sum assured of ₹26.6 lakh.

Following his death, LIC released the basic death benefits but refused to pay the additional accidental death benefits.

The insurer maintained that its investigation, based on social media material and a police closure report, indicated that Singh had been murdered in a pre-planned attack by gangster Sukhpreet Singh alias Sukha Gill Lamme to create terror in the area.

LIC argued that since the murder was pre-planned, it could not qualify as an accidental death.

Moga District Consumer Commission accepted this argument and dismissed the family's complaint in November 2022.

However, the State commission said LIC failed to establish that Singh was involved in any activity leading to his murder.

LIC had relied on a purported social media post by the accused gangster claiming that he had a dispute with Singh.

The commission noted that this allegation was not corroborated by the FIR or police investigation report.

It also referred to LIC's 2007 circular which prohibits withholding accidental death benefits in murder cases where police records do not raise suspicion of a self-provoked murder or the claimant's involvement.

The commission opined that LIC had adopted a hyper-technical approach without producing any policy exclusion clause to establish that the death fell outside coverage.

It consequently set aside the district commission's order and directed LIC to pay the additional accident benefits under all four policies, with 6% annual interest from April 30, 2021.

It also awarded ₹50,000 towards compensation and litigation expenses.

Advocate Liza Bansal represented the complainants

Advocate Sandeep Bhardwaj appeared for LIC.

[Read Judgment]