An Indian army officer shot dead three unarmed civilians in Indian-administered Kashmir to claim a cash reward for killing insurgents, police investigators say.

Capt. Bhoopendra Singh – who was charged with murder and conspiracy in late December over the July killing of the three laborers – staged a gun battle hoping to be rewarded with 2 million rupees ($27,200), according to part of a police charge sheet seen by Agence France-Presse (AFP) Monday.

Singh and two civilian associates claimed the trio was armed, but a police investigation alleged Singh planted weapons on the men to make them look like militants.

Government forces are paid up to $27,000 by authorities for killing militants, amid an insurgency against the Indian government that has left tens of thousands dead since 1989. The rewards are offered by the government, rather than the military. Rights activists warn the financial incentives have led to extrajudicial killings of innocent people.

"Legal impunity ... combined with the policy of cash rewards is likely to continue to lead to staged gun battles in which innocent civilians are killed," a leading human rights lawyer, Parvez Imroz, told AFP.

Kashmir has been under an emergency military law since 1990 that gives soldiers wide powers to shoot suspected rebels. The law bars soldiers accused of crimes from being tried in civilian courts unless specifically permitted by the government. Such permission has never been granted during the last three decades, despite dozens of requests by the police after investigations into actions by security forces.

In 2010, three Indian army officers were found guilty by a court martial of killing three laborers who had been branded Pakistani infiltrators near the so-called Line of Control. The killings sparked months of protests that left more than 100 civilians dead.

In 2000, the army claimed it had killed five "terrorists" responsible for the massacre of 35 Sikhs, but an investigation found the five were locals killed by soldiers in a staged gun battle.

Jammu and Kashmir, a Muslim-majority Himalayan region, is held by India and Pakistan in parts but claimed by both in full. A small sliver of the region is also controlled by China. Since they were partitioned in 1947, India and Pakistan have fought four wars – in 1948, 1965, 1971 and 1999 – three of them over Kashmir.

Some Kashmiri groups have been fighting against Indian rule for independence or unification with Pakistan. According to several human rights organizations, thousands have been killed and tortured in the conflict which flared up in 1989.