Policyholder Murdered, LIC Claim Rejected: Punjab Commission Rules on Insurance Dispute
Policyholder murder dispute takes centre stage as the Punjab Commission examines LIC’s rejection of an insurance claim and rules on the dispute.
Policyholder murder case: Punjab Consumer Commission rules on a disputed LIC insurance claim following the policyholder’s death.
NEW DELHI – Policyholder: The Punjab State Consumer Disputes Redressal Commission has set aside a Moga District Commission order and held that the Life Insurance Corporation of India (LIC) failed to justify its repudiation of the double accident benefit on four policies of a man who was murdered in July 2020. In an order dated October 13, 2026, in First Appeal No. 58 of 2023, an Additional Bench directed LIC to pay the double accident benefit with 6 per cent annual interest from the date of repudiation and a composite Rs 50,000 as compensation and litigation costs.
The bench comprised Presiding Judicial Member H.P.S. Mahal and Member Kiran Sibal. The appeal was filed under Section 41 of the Consumer Protection Act, 2019 by the widow, minor son and mother of the deceased, Tajinder Singh Kambo, against the District Commission’s order of November 29, 2022 in CC/11/2022, which had dismissed their complaint. The appellants were represented by advocate Liza Bansal and LIC by advocate Sandeep Bhardwaj.
Policyholder: The policies and the claim
According to the complaint, Tajinder Singh held four LIC policies with the Double Accident Benefit rider, with sums assured of Rs 10 lakh, Rs 5 lakh, Rs 10 lakh and Rs 1.6 lakh. He died on July 14, 2020, after being murdered by unidentified persons while sitting at his shop in New Town, Moga, and an FIR was registered. His widow, Ripendeep Kaur Kambo, was the nominee under all four policies.
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LIC paid the basic death benefit under all four policies but declined the additional accident benefit. Its repudiation was based on material from social media and the police closure report, which it said showed the killing was a pre-planned murder attributed to gangster Sukhpreet Singh, alias Sukha Gill Lamme, carried out to create terror in the area.
LIC held that such a death was not accidental. The complainants sought the remaining Rs 26.6 lakh, interest at 12 per cent, Rs 2 lakh in compensation and Rs 20,000 in costs, and cited LIC’s Central Office Circular dated October 15, 2007 on double accident benefit claims.
Policyholder: Arguments before the Commission
For the appellants, the counsel argued that the DSP’s report showed the deceased had no role in the gangster’s activities and that the killers intended to target any known person in the city to build terror and facilitate ransom collection. It was also argued that LIC had placed no pleadings or evidence of specific enmity between the accused and the deceased.
LIC argued that the District Commission had rightly dismissed the complaint, that the murder was pre-planned and not unexpected, and that it could not be treated as an accident. It cited the dictionary meaning of “accident” and relied on the Supreme Court’s decision in Smt. Rita Devi vs New India Assurance Co. Ltd. and the National Commission’s ruling in Prithvi Raj Bhandari vs LIC of India. LIC also pointed to the DSP’s report, in which Sukha Gill Lamme was said to have claimed responsibility for killing the owner of a Moga showroom along with an associate.
Policyholder: Commission’s findings
The bench said it agreed with the legal proposition in Rita Devi and Prithvi Raj Bhandari, under which a killing aimed at a particular person is a murder simpliciter, but held the rulings inapplicable here. It noted that LIC’s own case was that the deceased was killed by a gangster to create terror in the area, and that the FIR and the DSP’s closure report indicated the killing was part of the gangsters’ criminal activities. It found LIC had brought no convincing material to show the deceased was involved in the incident or that his death was attributable to any act of his.
On the social media post of the accused, which LIC relied on to suggest a prior dispute with the deceased, the Commission said the claim was not corroborated by the FIR or the DSP’s report, which mentioned no threat or earlier communication between the two. It held the document had no evidentiary value unless proved. The bench also observed that the intention of the assailants to commit murder and the question whether the death falls within accidental death under a policy are two distinct matters, and that a pre-planned criminal act does not by itself make the claim non-payable, particularly without any policy terms to that effect.
The Commission said LIC appeared to have adopted a hyper-technical approach and was required to show that the circumstances of death fell outside the coverage, but had placed no exclusion clause on record. It also noted that LIC itself relied on Clause 6 of its 2007 circular, which says offices should not withhold or repudiate an accident benefit claim where a policyholder is murdered and the police report and charge sheet raise no suspicion that the murder was self-provoked or that the claimant had a hand in it.
The appellants additionally cited the National Commission’s ruling in Royal Sundaram Alliance Insurance Co. Ltd. vs Pawan Balram Mulchandani (2018), which upheld an award in a personal accident cover where the insurer had argued the death was murder simpliciter.
Policyholder: Directions issued
Holding that the repudiation, made without establishing an exclusion or placing any terms and conditions on record, amounted to deficiency in service, the Commission partly allowed the appeal and the complaint. LIC has been directed to pay the double accident benefit under the four policies with 6 per cent interest per annum from April 30, 2021 until realisation, to the appellants in equal shares, along with Rs 50,000 as composite compensation and litigation costs. The order is to be complied with within 60 days of receipt of a certified copy.
