Claim of Insurance Policy – in case of “Murder”
In India, there are many insurance companies which are selling various kinds of Insurance policies to cover the unexpected loss of life and property of the insured. Any person can buy the insurance as per his requirements, however the real heat is faced by him or his survivors at the time of claiming such policies as only that time the exceptions are brought to the knowledge of the insured or the coverage of the policies altered by the insurance companies by manipulating the words used in the policies. Recently in the case of Royal Sundaram Alliance ...vs Pawan Balram Mulchandani the National Consumer Dispute Redressal Commission (for short ‘Commission’) held that an insurance company cannot deny claim of the murder of a person insured for the accidental death unless such crimes are excepted in the policy explicitly and categorically and also conveyed to the ordinary consumer ab initio, at the time of purchase of the policy.
As per the facts of the case mentioned the deceased has taken a ‘Personal Accident Shield Insurance Company’ from Royal Sundaram Alliance Insurance Company Limited for a period from 05.11.2008 to 04.11.2009. Unfortunately on 21.01.2009 he went to the office but never returned. Later on FIR was lodged and it was discovered by the police that he has been murdered by few persons over some property dispute and the arrests were also made. Later, the survivors of the deceased made a claim for the insurance policy however their claim was denied by the insurance company stating that it is case of ‘murder simplicitor’ and did not fall within the definition of the ‘accident’ against for which the deceased was insured . A complaint was lodged in the Maharashtra State Consumer Disputes Redressal Commission (for short ‘State Commission’) by the survivors of the deceased and the State commission gave the decision in the favour of the complainant and directed the insurance company to pay the insured amount along with the interest of 9% per annum along with costs. Thereafter, aggrieved by the order of the State Commission, insurance company filed an appeal in the NCDRC.
The Apex consumer body relied upon the judgment of its own made in Maya Devi vs. LIC of India in which this Commission had quoted from the Halsbury's Law of England, Vol. 25 pg. 307, para 569, 4th Edition (2003 reissue), in which the meaning of the word 'Accident' had been stated to be as under:- “The event insured against may be indicated in the policy solely by reference to the phrase 'injury by accident' or the equivalent phrase 'accidental injury', or it may be indicated as 'injury caused by or resulting from an accident.' The word 'accident', or its adjective'accidental', is no doubt used with the intention of excluding the operation of the natural causes such as old age, congenital or insidious disease or the natural progression of some constitutional physical or mental defect; but the ambit of what is included by the word is entirely clear….. The test of what is unexpected is whether the ordinary reasonable man would not have expected the occurrence, it is being relevant that a person with expert knowledge, for example of medicine, would have regarded as inevitable. The stand point is that of the victim, so that even willful murder may be accidental as far as the victim is concerned."
Further, in the same order of the Commission, of the Halsbury's Laws of England Vol. 25 Pg. 311, para 575, 4th Edition (2003 reissue), has been quoted, which is stated as under:-
“Injury caused by a willful act. An injury caused by the willful or even criminal act of a third person, provided the insured is not a party or privy to it, is to be regarded as accidental for the purpose of the policy, since from the insured's point of view it is not expected or designed. Injuries sustained by gamekeeper in a criminal attack upon him by poachers, by a cashier who was murdered by a robber, and by a master at an industrial school who was murdered by the boys,have been held to be accidental. However, if the immediate cause of the injury is the deliberate and willful 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." The Commission held that the death of the insured was accidental,because the immediate cause of injury was not the result of any deliberate or willful act of the insured and the untoward event that had occurred was not expected or designed by the insured.
For the explanation of the exclusion clause under the policy the Commission again referred in its judgement given in Maya Devi vs LIC of India and explained that they have gone through the terms and conditions of the insurance policy in question mentioned under the heading ‘Exceptions’.The Commission said that nowhere under the said clause it has been stated that the insurance company was not liable to pay the claim in case of murder,however in the case of intentional self-injury, suicide, attempted suicide and also in the case of any war, rebellion, revolution, mutiny, insurrection etc,the claim was not payable. The Commission also made a clear remark 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 present case it is nowhere stated that even for 'murder simplicitor' the claim is not payable and hence the action of the insurance company in repudiating the claim cannot be justified and upheld the claim of the deceased. The Commission concluded that 'Murder' was not specifically excluded in the policy. If 'murder is not an accident' had to be adopted by the insurance company, or if every / select murder had to be inquired into and determined whether or not it was an accident covered under the policy, the same should have been explicitly and categorically stated in the policy. In the absence of explicit exclusion of ‘murder’ in the policy, a reasonable man of normal intelligence would conclude that murder is an accident within the terms of the policy. The onus of being ab initio explicit and categorical on its terms and conditions was on the insurance company (not on the insured). First not including murder in the exceptions, then, on murder occurring and claim being filed, raising the plea that 'murder is not an accident' and repudiating the claim, at its own end, as per its own interpretation,tantamount to unfair trade practice. Hence, after relying upon the above judgement and explanations, the Commission upheld the decision of the State Commission, ordered in the favour of the insured and directed the insurance company to pay the amount of insurance along with the compensation of Rs. 2 lakhs within four weeks of the date of the order.