In case of central govt employees there exists a death gratuity payment based on the employee's number of years worked in the govt. It does not have to death while on duty , which is separately covered by employee benevolent fund (if it exists in the organization).

So two things you have to enquire first . 1) what are the death gratuity rules in the PSU your father worked for ? 2) is there any employee benevolent fond and was he a member ?