In a recent legal case, the court delves deep into analyzing strategies to curb fraudulent claims and unethical practices in the insurance industry. The emphasis is on the court’s meticulous legal analysis and the issuance of directions to ensure transparency and prevent false/fraudulent claim petitions. Stay informed about the latest developments in this crucial aspect of legal proceedings.
Facts
- 1376 cases of suspicious claims received by the SIT in total
- 247 cases of suspicious claims have been enquired into
- 198 accused persons found guilty of cognizable offence
- 92 criminal cases registered in various districts
- Some accused persons facing multiple criminal cases
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Arguments
- Shri Atul Nanda and Shri Vishnu Mehra, representing two insurance companies, highlighted the non-adherence to the provisions of the Motor Vehicles Act despite court directions.
- Reference was made to various court decisions such as General Insurance Council v. State of Andhra Pradesh, Jai Prakash v. National Insurance Company Ltd., and a recent decision dated 16.03.2021.
- Discussion was held on the modus operandi of advocates filing fake cases under Motor Vehicles Act and Workmen Compensation Act.
- Implementation of earlier directions by the Court and compliance with Section 159 of the Motor Vehicles Act can help in solving the issue of filing multiple claims in different states for the same accident.
- Accident information report as per Section 159 (post 2019 amendment) should be available on the Government Portal ‘VAHAN’ and ‘SAARTHI’.
- Transparency and ease in issuance and verification of driving licenses and vehicle registration have been achieved through compliance with Section 159.
- Respective State Governments should be directed to form Special Investigation Teams (SIT) to address suspicious fake claims/petitions, led by an officer of at least Additional Director General of Police rank.
- Modification of the ‘VAHAN’ portal to allow police officials investigating accidents to endorse information on the portal, with automatic intimation to the vehicle owner, can prevent fake claim submissions.
- Transport Authorities maintain a National Register of vehicle registration (‘VAHAN’ and ‘SAARTHI’) under the Motor Vehicles Act, 1988.
- SITs need to be established in every state, currently existing in only UP, Rajasthan, and Gujarat.
- Existing databases like ‘VAHAN’ and ‘SAARTHI’ can be expanded to include accident and driver details for aiding in claim adjudication.
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Analysis
- Impress upon the investigating officer of the SIT to expedite the enquiry/investigation with respect to complaints related to suspicious fake claims.
- Call upon the SIT to provide details such as the number of cases charge sheets have been filed in, date of filing of charge sheets, courts where charge sheets have been filed, and cases where charges have been framed.
- Response affidavit filed by the Bar Council of Uttar Pradesh stating apologies for any unintentional acts or omissions.
- Instances of fake claims through false petitions, such as converting non-road accident injuries into road accident claims or fraudulent implantation of vehicles and drivers.
- Direction for insurers to appoint nodal officers for each tribunal and provide contact details for efficient communication.
- Cases involving filing the same case in multiple courts or connivance between vehicle owners, drivers, and advocates for illegal gains.
- Instructions for detailed accident reports and reporting procedures to be followed by police stations and tribunals.
- Actions taken by the Bar Council of Uttar Pradesh to address unethical practices of advocates filing fake claims.
- Updates on criminal cases registered, investigations completed, and actions taken against accused advocates.
- Directions for maintaining transparency in compensation distribution and email communication between tribunals, insurers, and claimants.
- The court heard learned counsel representing insurance companies and the State of UP/SIT.
- Before issuing further directions, the court seeks response from the Ministry of Transport, Government of India.
- Suggestions for remedial and preventive measures to curb false/fraudulent claim petitions are sought from the Ministry of Transport.
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Decision
- The Registry is directed to implead the Ministry of Transport, Government of India as a party-respondent and issue notice.
- The tribunal shall issue summons along with the Report or the application for compensation to the insurer by email.
- Further directions may be issued after receiving response/suggestions to be applied pan India.
Case Title: SAFIQ AHMAD Vs. ICICI LOMBARD GENERAL INSURANCE CO. LTD. . (2021 INSC 910)
Case Number: SLP(C) No.-001110-001110 / 2017
