An insurance company cannot deny claim in case of the murder of a person insured for accidental death unless such crimes are excepted in the policy, the apex consumer body has ruled.

The ruling by National Consumer Disputes Commission (NCDRC) came in connection with a 2009 murder case in which it upheld the decision of the Maharashtra state consumer disputes redressal commission to direct the insurance company- Royal Sundaram- to pay the insured amount of Rs 20 lakh to one Pawan Muchandani whose father was murdered. The apex consumer body directed the firm to pay Rs 2 lakh compensation, over and above the claim, to the victim’s kin while terming the insurance company’s approach as an “unfair trade practice”.

NCDRC has asked the company to pay the compensation within four weeks. The two-member bench comprising S M Kantikar and Dinesh Singh has also 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.

The company has been asked to file a compliance report with the commission within three months. The NCDRC bench passed the order on Tuesday while hearing an appeal filed by the insurance company challenging the decision of the Maharashtra consumer body.

“Murder was not specifically excepted 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 ‘murder’ in the exceptions and in the absence of such explicit and categorical averment in the policy, a reasonable man of normal intelligence would conclude that murder is an accident within the terms of the policy,” the NCDRC bench said in the order.

It added that the onus of being explicit and categorical from the beginning on its terms and conditions lied with the insurance company and not on the insured. “First not including murder in the exceptions and 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,” it said.

Coming down heavily on the insurance company, the bench observed, “We are dealing with consumer justice, in a fight among unequal — an ordinary consumer who in good faith readily and straightaway believes that murder will (obviously) be an accident versus a pan country insurance company that first keeps gaps and ambiguity in its terms and conditions and then comes forth with its own interpretation of its own gaps and ambiguity after the murder occurs and after the claim is made.”

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