National Commission ruled out while hearing an appeal filled by the insurance company challenging the decision of murder not to be treated as accident, stating that an insurance company cannot deny claim in case of murder of a person insured for accidental death unless such crimes are excepted in the policy. The National Commission said that murder of an insured person has to be treated as accidental death if the murder was not the result of any deliberate act of the insured himself. The two member bench comprising S M Kantikar and Dinesh Singh asked the insurance company to amend its terms and conditions and explicitly convey its position in respect of “murder” so that consumers can understand it easily at the time of purchase of the policy.
In the instant case, Balram Mulchandani, had taken personal accident shield insurance policy from M/s Royal Sundaram Alliance Insurance Company Limited for the period of 05.11.2008 to 04.11.2009 for an assured sum of Rs. 20,00,000/-. He had been paying the premium amount without any break. On 21.01.2009, Balram Mulchandani had gone to his office never to return home. His family members lodged a complaint of missing person at the police station. After investigation, police arrested some persons who revealed that they had murdered Balram Mulchandani for some property related dispute.
Balram’s son Pawan Mulchandani filed a death claim with the insurance company but they repudiated the claim on the ground that the death was not due to accident but was a murder simplicitor. Aggrieved by the repudiation, Pawan Mulchandani filed a case in Maharashtra State Commission where it directed the insurance company to pay Rs. 20,00,000/- along with cost of 25,000/-.
The insurance company approached the National Commission challenging the order of the State Commission. The insurance company relied on the case of Rita Devi vs. New India Assurance Co. Ltd. in which 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. 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 simplicitor, which was not within the scope of the policy.
The National Commission held 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 was not expected or designed by the insured. The Commission categorically stated that unless the immediate cause of injury was deliberate and wilful act of the insured himself, it was difficult to hold that the murder was not an ‘accident’.
While deciding the case, the commission had taken strict view of gaps and ambiguities which resulted in consumer complaints. The Commission said that a plethora of consumer dispute could be avoided if the gaps and ambiguity in respect of murder being covered or not covered in the policy and if conditionally covered under what facts and circumstances is clearly defined.
The Commission ordered the insurance company to discontinue its unfair trade practice regarding murder with immediate effect. The insurance company shall ensure that its terms and conditions in respect of murder are explicitly and categorically conveyed to the ordinary consumer at the time of purchase of the policy.
The Commission upheld the order passed by the Maharashtra State Commission by adding a compensation of Rs. 2,00,000/- for deficiency in service and Rs. 2,00,000/- towards unfair trade practice.