Murder without Deliberate Act of Insured to be treated as Accident for Insurance Claims

The latest ruling of NCDRC (National Consumer Redressal Commission) states that Murder without deliberate act of insured to be treated as accident For Insurance Claims.
In other words an Insurance company cannot deny claim in case of murder of a person insured for accidental death unless such crimes are expected in the policy.
This ruling by NCDRC came in connection with a 2009 murder case in which it directed the Maharashtra state consumer disputes redressal commission to direct the insurance company named Royal Sundaram-to pay the insured amount of Rs 20 lakh to Pawan Mulchandani, whose father was murdered. The apex consumer body directed the insurance company to pay Rs 2 lakh compensation, over and above the claim, to the victim’s kin.

THE CASE

In the instant case, Balram Mulchandani, a resident of Thane, Maharashtra, had taken personal accident shield insurance policy from M/s Royal Sundaram Alliance Insurance Co. Ltd. for the period 05-11-2008 to 04-11-2009 for an assured sum of Rs. 20 lakhs. He was getting the policy renewed from time to time. On January 21, 2009, Balram had gone to his office but did not return home. The family lodged a missing person complaint and the police made arrests of some people who had murdered Balram following some property dispute. Balram’s son Pawan Mulchandani filed a death claim with the insurance company but it was repudiated on the ground that the death was not due to ‘accident’, but was a case of ‘murder simplicitor’. Aggrieved by the repudiation, the complainant approached the Maharashtra State Consumer Disputes Redressal Commission which directed the insurer to pay Rs. 20 lakh along with interest of nine percent and cost of Rs. 25,000.
“It is reasonable and logical to conclude that a person takes personal accident shield insurance policy to insure oneself against accidental injury resulting in death caused by an unexpected and unintentional incident. In this case, there was no immediate deliberate wilful act by the insured that led to his murder. Putting himself to risk of injury by immediate wilful deliberate act or carelessness or instigation or aggression etc. is not evident.
Death was due to unexpected and unintentional incident i.e. an accident. ‘Murder’ per se was not specifically accepted in the policy’’. Hence, in the facts of this case, the death was clearly accidental and was squarely covered by the policy,” said a bench of presiding member SM Kantikar and member Dinesh Singh.
The insurer approached the NCDRC in challenge and relied upon the judgment of the apex court in Rita Devi Vs New India Assurance Co. Ltd., wherein it was held that: “It is not as if every case of murder would be an accident. The murder too could be accidental, but would depend on the facts and circumstances of each case” and that if the dominant intention of the act of felony is to kill any particular person, then such killing is not an accidental murder, but is a murder.
The complainant, on the other hand, argued that the company had wrongly rejected their claim and relied upon the judgment of NCDRC in case titled Maya Devi vs. LIC of India wherein the insured person was shot dead following an altercation with a shopkeeper.
Quoting from the Halsbury’s Law of England, which, while defining what is ‘accident’ said that “even wilful murder may be accidental as far as the victim is concerned”, the commission had held in Maya Devi’s case that the death of the insured was accidental, because the immediate cause of injury was not the result of any deliberate or wilful act of the insured and the untoward event that had occurred.
The commission had further quoted from Halsbury’s Law of England to say in that if the immediate cause of the injury is the deliberate and wilful act of the insured himself, there would seem to be no accident, and no claim will lie under the policy at any rate if the insured is not mentally disordered at the time of his act”.

After hearing both sides, the commission referred to the case titled Nisbet vs. Rayne and Burn in which it was held that murder was an accident from the stand point of the person, who suffered from it.
The commission also noted that murder was not excluded in the exception clause of the policy and upheld the order of the State Commission. It further directed the insurer to pay Rs. 4 lakh compensation to the family within four weeks.

Exclusion clause and anomalies

While deciding the appeal, the commission stated that “Contra Proferentem Rule” applicable to insurance policies says that in case of ambiguities in the insurance policy the interpretation has to be done in favour of the insured.

“In the case Maya Devi vs. LIC of India, this Commission also referred to the exclusion clause referred to under the policy. We have also gone through the terms and conditions of the insurance policy in question, under the heading ‘Exceptions’. Nowhere under the said clause has it been stated that the insurance company was not liable to pay the claim in case of murder. It has been stated that if there was an intentional self-injury, suicide or attempted suicide the claim was not payable. It has also been stated that in the case of any war, rebellion, revolution, insurrection, mutiny, military or usurped power, etc. the claim was not payable.
The facts and circumstances of the present case reveal, however, that none of these clauses is applicable in the present case and hence the repudiation of the claim by the insurance company was not justified,” it said.
It also relied on the order passed by the commission in Taj Devi vs. National Insurance Company Ltd. & Ors., wherein it held that murder of the life assured was not excluded under the terms of the insurance company. This order was challenged before the Supreme Court but upheld. While deciding the case at hand, the commission took a strict view of the gaps and ambiguities in the insurance policies which, it said, resulted in consumer complaints.

The commission then ordered, “The insurance company is directed to discontinue its unfair trade practice apropos ‘murder’ with immediate effect. If murder is excepted, it shall be included explicitly and categorically in the exceptions. If murder is an accident or is not an accident has to be inquired into and determined in every / select case, the same shall be stated explicitly and categorically in the policy.

The insurance co. shall ensure that its terms and conditions and position in respect of ‘murder’ are explicitly and categorically conveyed to the ordinary consumer ab initio, at the time of purchase of the policy. A report-in-compliance shall be filed by the chief executive of the insurance company with this Commission within three months.”

By-
Sagarika Mishra
Student Reporter (INBA)