NATIONAL INSURANCE CO.LTD vs Theegala Laxmi

THE National Insurance Co.Ltd. (Petitioner herein) has filed the present revision petition against the order of the State Consumer Disputes Redressal Commission, Andhra Pradesh (hereinafter referred to as the ''State Commission'') in Appeal No.1002/2003 wherein THEegala Laxmi & others were Respondents.

IN her complaint before the District Forum, Respondent/complainant had contended that her late husband (hereinafter referred to as the ''insuree'') during his life time had joined the Chakra Deposit Scheme of the Petitioner/INsurance Company and had paid a sum of Rs.5,000/ - as well as 4 installments under the said Scheme. As per the conditions of the above Scheme, if the deposit holder (insuree) dies an accidental death, Petitioner/INsurance Company would be liable to pay accidental benefit of Rs.1 lakh. The insuree died on 04.06.1996 in an encounter which was an accidental death. Respondent, therefore, approached Petitioner/INsurance Company to pay her the amount of Rs.1 lakh due under the Chakra Deposit Scheme but despite legal notice, there was no response from Petitioner/INsurance Company. Aggrieved by this, Respondent filed a complaint before the District Forum and requested that Petitioner/INsurance Company be directed to pay her Rs.1 lakh as admissible under the Scheme, Rs.10,000/ - for mental agony and Rs.1,000/ - as litigation cost with interest @ 18% per annum from the date of filing of the complaint.

THE Petitioner/Insurance Company while admitting that the Respondent''s husband had joined the Chakra Deposit Scheme stated that the claim was rightly repudiated because the death of the insuree was not accidental in nature since he did not die due to accidental firing by the police party. As per the crime records, the insuree was a member of an organization (CPI ML PWG) which is acting against the State Government and Government of India by indulging in violent unlawful activities and the insuree was killed in an encounter in exchange of fire between him and the police. Since the insuree participated in the said unlawful act which knowingly endangered his life, as such the claim is not covered under the insurance policy which states that the Company shall not be liable under this policy for any claim ''arising or resulting from the insured person committing any breach of law with criminal intent''.

THE District Forum after hearing both parties allowed the complaint by inter alia observing that no credible evidence had been filed except some police records to show that the deceased was an extremist indulging in illegal activities and that he was consequently killed by the police in an encounter and his death was thus not an accidental death. Petitioner/Insurance Company has also not denied that insuree was a member of the Chakra Deposit Scheme nor was it their contention that insuree had not paid the premium amount towards the said Scheme. THE District Forum, therefore, directed the Petitioner/Insurance Company to pay the Respondent Rs.1 lakh on account of accidental death of her husband with interest @ 9% per annum from the date of filing of the complaint till realization along with litigation cost of Rs.1,000/ - within one month from the date of receipt of the order.

AGGRIEVED by this order, Petitioner/Insurance Company filed an appeal before the State Commission which observed as under: "Admittedly, the policy was issued in the name of Sudharshan Gowd who was a member of the Chakra Deposit Scheme. Opposite Party No.1 took the policy from opposite party No.2 for its subscriber. Admittedly, the policy holder Sudarshan Gowd was killed in an encounter. So murder is in an accident. The policy is a Personal Accident Insurance Policy (Group). Therefore, the complainant being the wife, nominee is entitled to the benefit under the policy. As per the terms and conditions of the Personal Accident Insurance Policy issued, under ''Exceptions'' condition No.5(e) reads as follows ''arising or resulting from the insured person committing any breach of law with criminal intent''. There is no evidence that the insured person has committed any breach of law. There is no evidence that the insured person has committed any breach of law. There is no evidence that any finding is given by the Court that he is an extremist and he was killed while involving in criminal activity. It is established principle that death by murder is also an accident. Hence, the policy holder covered under the policy issued by the opp.]party."

THE order of the District Forum was, therefore, upheld by the State Commission and the appeal was dismissed with Rs.1,000/ - as costs. Hence, the present revision petition.

COUNSEL for Petitioner was present. None appeared on behalf of the Respondent. However, in view of the fact that substituted service by publication has taken place, the same is deemed to be complete and the case is being decided ex parte.

COUNSEL for Petitioner reiterated that as per the terms and conditions of the insurance policy, there is no ambiguity that in case of a death not due to an accident, the claim will not be covered under the insurance policy. In the instant case, the insuree died while committing an act knowingly endangering his life and that too by breach of law with criminal intent, therefore, the claim was rightly repudiated. Also, there is adequate evidence on record including that of the Police that the insuree was killed in a police encounter while indulging in illegal activities and in fact a number of FIRs had also been registered against him in the past which he did not disclose to the Petitioner/Insurance Company at the time of joining the insurance scheme. Therefore, learned Fora below erred in not appreciating the above two facts on the basis of which the claim was rightly repudiated.

WE have heard learned Counsel for Petitioner and have gone through the evidence on record. The fact that the insuree had taken a policy under the Chakra Deposit Scheme of the Petitioner/Insurance Company and his having paid the premium and other admissible amounts is not in dispute. It is also not in dispute that the Petitioner was killed by the police in an alleged encounter. However, we agree with the Fora below that there is no independent credible evidence to support the Petitioner/Insurance Company''s contention that the insuree was killed in an encounter while indulging in unlawful activities because of which the accidental death benefit could have been denied. Learned Fora below have rightly concluded that in the instant case, the insuree was murdered as a result of the encounter and that death by murder is an accidental death. This has also been the view of this Commission in Maya Devi Vs. Life Insurance Corporation of India '' R.P. No.2824 of 2007 decided on 21.05.2008. The present case is squarely covered by this judgment.

IN view of the above facts, we agree with the finding of the Fora below that the insuree was murdered which amounts to an accidental death. The order of the State Commission is, therefore, upheld and the revision petition is dismissed being devoid of any merit. No costs.