The Punjab State Consumer Disputes Redressal Commission has directed the Life Insurance Corporation of India (LIC) to pay the double accident insurance benefit under four policies held by a Moga businessman who was murdered in 2020. The Commission ruled that an insurer cannot deny such a claim solely because the murder was pre-planned, particularly when there is no evidence that the policyholder provoked the attack or was involved in the circumstances leading to his death.
A Bench comprising Judicial Member H P S Mahal and Member Kiran Sibal overturned the District Consumer Commission, Moga’s November 29, 2022 order dismissing the family’s complaint. In its October 13 decision, the State Commission found LIC deficient in service and directed it to release the additional insurance benefit with 6 per cent annual interest from April 30, 2021, until payment.
The Commission also awarded ₹50,000 towards compensation and litigation expenses.
Murder of Businessman Led to Insurance Dispute
Tajinder Singh Kambo was killed by unidentified attackers at his shop in Moga on July 14, 2020.
He had purchased four LIC policies carrying assured amounts of ₹5 lakh, ₹10 lakh, ₹1.60 lakh and ₹10 lakh. His wife, Ripendeep Kaur Kambo, was the nominee under each policy.
Following his death, LIC settled the basic death benefits but declined to pay the additional double accident benefit.
In its repudiation letter dated April 30, 2021, LIC maintained that the killing was a planned criminal act. The insurer relied on social media material and a police closure report to claim that gangster Sukhpreet Singh, alias Sukha Gill Lamme, had orchestrated the murder to create fear in the locality.
The businessman’s wife, minor son and mother challenged the refusal before the District Consumer Commission, Moga. After their complaint was dismissed, they approached the State Commission in appeal.
No Evidence of Provocation or Previous Threats
The complainants maintained that Tajinder Singh had no established connection with the alleged gangsters and that nothing on record suggested he had provoked the attack.
They also relied on LIC’s circular dated October 15, 2007, governing double accident benefit claims involving murder.
During the proceedings, LIC referred to a social media post attributed to the alleged attacker, which purportedly indicated a dispute with the deceased.
The State Commission, however, found that the supposed dispute was not supported by either the first information report or the report submitted by the DSP, City Moga.
It also noted the absence of evidence establishing previous threats or communications between the businessman and the accused.
Planned Killing Does Not Automatically Exclude Insurance Coverage
The Commission distinguished between the intention of a person committing murder and the nature of the victim’s death for insurance purposes.
It observed that whether the assailants intended to kill the victim was a separate question from whether the death qualified as accidental under the insurance contract.
The Commission further examined LIC’s October 15, 2007 circular, which provided that accident benefit claims should not be withheld in murder cases where police records did not indicate that the killing was self-provoked or that the claimant had participated in it.
Applying this principle, the Commission concluded that the insurer had failed to establish sufficient grounds for refusing the additional benefit.
Importantly, LIC had neither demonstrated that Tajinder Singh’s death was outside the scope of the insurance coverage nor produced any exclusion clause permitting rejection of the claim in the circumstances presented.
The Commission consequently held that the mere existence of a pre-planned murder did not justify repudiation of the double accident benefit.
LIC Directed to Pay Claim With Interest
Allowing the family’s appeal, the State Commission set aside the District Consumer Commission’s decision and directed LIC to pay the double accident benefit under all four policies.
The additional benefit involved approximately ₹26.50 lakh, while the family had claimed ₹26.60 lakh. The Commission did not separately quantify the final amount payable in its operative directions.
LIC must pay interest at 6 per cent per annum from April 30, 2021, until realisation, along with ₹50,000 as composite compensation and litigation expenses.
The Commission directed that the amounts be distributed equally among the businessman’s wife, minor son and mother.
LIC has been given 60 days from receipt of the certified copy of the order to comply with the directions.
