Death While Fleeing Police Raid on Gambling Den Not Covered by Accident Insurance Due to 'Illegal Act' Exclusion Clause: UP State Consumer Commission

Death While Fleeing Police Raid on Gambling Den Falls Under 'Illegal Act' Exclusion, No Insurance Payout: UP State Consumer Commission

Lucknow, U.P. - The Uttar Pradesh State Consumer Disputes Redressal Commission has upheld an insurance company's decision to reject a ₹20 lakh personal accident claim, ruling that a death resulting from fleeing a police raid on a gambling den is not covered due to a policy exclusion clause for "wilful participation in an illegal act."

The bench, comprising Hon'ble Mr. Justice Ajai Kumar Srivastava (President) and Hon'ble Mrs. Sudha Upadhyay (Member) , dismissed the appeal filed by Suresh Chandra Gupta against the State Bank of India and SBI General Insurance Company. The Commission affirmed the original order of the District Consumer Commission, Barabanki, which had also dismissed the claim.

Background of the Case

The appellant, Suresh Chandra Gupta, had filed a claim following the death of his son, Dipendra Kumar Gupta, on August 16, 2018. The deceased held a personal accident insurance policy issued by SBI General Insurance. The claim was rejected by the insurer, a decision later supported by the Insurance Ombudsman.

The undisputed facts of the case, as established by the First Information Report (FIR) and post-mortem report, revealed that the deceased was engaged in gambling when police conducted a raid. In an attempt to evade arrest, he fled and jumped into a drain, sustaining fatal head injuries. The post-mortem confirmed the cause of death as "coma as the result of ante-mortem head injuries."

Arguments of the Parties

• Appellant's Contention: The appellant’s counsel argued that the death was purely accidental, caused by head injuries, and should be covered under the policy. He attempted to bifurcate the incident, claiming the "accident" was separate from the "gambling." It was further argued that participating in gambling and fleeing out of fear did not constitute a grave criminal activity that would warrant claim denial.

• Insurance Company's Defence: The respondents, SBI and SBI General Insurance, countered that the claim was rightfully rejected based on the policy's explicit exclusion clause. They argued that the death was a direct consequence of the insured's participation in an illegal act (gambling) and his attempt to resist arrest, both of which are specific exclusions.

The Decisive 'Exclusion Clause'

The Commission's decision hinged on the interpretation of the insurance policy's exclusion clause, which stated that the insurer is not liable for any loss where a contributing cause was the insured person’s:

“...actual or attempted commission, or wilful participation in, an illegal act or any violation or attempted violation of the law or resistance to arrest or insured person committing any breach of law with criminal intent.”

The Commission found that the circumstances leading to the death were inextricably linked to the illegal act of gambling and the subsequent attempt to evade law enforcement.

Legal Principles and Court's Reasoning

The Commission rejected the appellant's argument that he was unaware of the exclusion clause, noting that this point was never raised in the original complaint nor supported by any evidence.

Citing the Supreme Court's judgment in United India Insurance Co. Ltd vs M/S. Harchand Rai Chandan Lal (2004) , the Commission reiterated a settled legal principle:

"In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves... it is settled law that the terms of the contract has to be strictly read and natural meaning be given to it."

Applying this principle, the Commission concluded that the insured's actions squarely fell within the policy's exclusions. "In such a situation, their cause of death cannot be said to be separate from the illegal act of gambling," the order stated.

Final Decision

Finding no reason to interfere with the District Commission's "well-reasoned" decision, the State Commission dismissed the appeal as being "devoid of merit." The ruling reinforces the legal standing of exclusion clauses in insurance contracts, emphasizing that claims arising from the insured's involvement in illegal activities can be validly repudiated.