Fake Motor Accident Claims: Supreme Court Seeks Status Reports From States, Asks Bar Councils About Actions Against Errant Advocates

A Division Bench of the Supreme Court resumed its hearing concerning the filing of fake claim petitions for getting compensation under the Motor Vehicles Act. The Bench, comprising Justices Sanjiv Khanna and S.V.N. Bhatti, directed the State governments to file up-to-date status reports regarding fake claims and actions taken. Further, the State governments were also asked to inform the Court whether special investigation teams (SITs) have been constituted.

In addition to the above directions given to the States, the Court also directed the Bar Council of each state to file status reports indicating whether any complaints relating to fake cases and involvement of advocates have been decided or are pending. Lastly, the insurance companies were also asked to file status reports with complete details regarding fake claim cases.

Brief Background

The present appeal has arisen from the impugned order of the Allahabad High Court dated October 07, 2015, wherein it noted that there are a large number of fake claims and since there was involvement of various departments located at different places, the Court found it necessary to constitute a SIT and handed over the investigation to it. SIT so constituted was required to enquire all the cases where fraudulent transactions came to its notice.

When the matter was preferred in appeal, the Apex Court, on January 05, 2017, refused to interfere with the impugned order. Pertinently, the Court also supported the High Court’s direction of constituting a SIT, keeping in view the seriousness of the kind of fraud.

Further, having taken note of the facts, the Apex Court observed that it is imperative to find out whether the same scenario is prevailing in other Districts and other States. Hence, it proposed to take up the matter for the aforestated purpose, to see what guidelines can be issued to prevent the filing of such false and fabricated cases. Thus, notice was issued to all the States/Union Territories and insurance companies as to what steps could be taken to rule out the filing of fake cases and what remedial measures could be taken.

In a detailed hearing dated December 16, 2021, SIT had informed the Court that at least 92 criminal cases were registered from 2015 to 2021 in Uttar Pradesh in relation to filing of fake motor accident claims. The Court was further informed that in 55 of those 92 cases, 28 lawyers have been arraigned as accused. Accordingly, the Court in its order recorded:

“A total 92 criminal cases in various Districts have been registered till date, of which, 28 advocates have been named as accused persons in 55 cases. Charge sheets against 11 advocates in 25 cases have been forwarded to the concerned trial Court till date,”

Moving forward, the Court had requested Additional Solicitor General of India, KM Nataraj to appear on behalf of the Ministry of Transport, Government of India and to assist the Court and to come out with suggestions how to curb the menace of filing false/fake claim petitions.

Courtroom Exchange

Justice Khanna: What is the position now?

Counsel, appearing for SIT, informed the bench that a status report has been filed.

Justice Khanna: Have prosecutions been lodged against accused persons? Have complaints been made to the bar council?

Counsel replied in affirmative.

Counsel, appearing for UP Bar Council, informed that a committee was constituted following which “some have been debarred for lifetime, some have been debarred for five years and some are under observation. I can file that status report.”

Justice Khanna: File your status Report.

Counsel agreed and further informed that in toto 27 advocates were suspended.

Justice Khanna: Someone will have to go through the proceedings and tell us the exact situation as of today and from the bar council, I want to know the total number of advocates involved.

Moving forward, Justice Khanna inquired that in how many states there was a problem of this nature.

To this, Counsel, appearing for ICICI Lombard, replied that there are several States involved in this and this is a pan-India issue.

Counsel, appearing for SIT, informed that on January 5, 2017, notice was issued to all states but later of cases with respect to State of U.P. has only been proceeded.

Justice Khanna: Other states have not appeared before us.

Counsel: They are appearing but SIT report has not been filed.

Counsel (ICICI Lombard): Now, every state is being represented. SIT was constituted in UP due to the High Court’s order. In Rajasthan and Gujarat, it is there but they are hardly working. No status report has been filed till date and we don’t know what is the progress of those. There is a stalemate even though the matter is of grave seriousness.

Justice Khanna: Information regarding fake claims has to be furnished by the insurance companies.

At this, ASG KM Natraj drew Bench’s attention to a statutory Form which has been prescribed in terms of gazetted notification dated February 28, 2022. He clarified that Stage two of the same requires MACT (Motor Accidents Claims Tribunal) to provide claim details. Thus, certain details have to be provided by MACT.

On being asked how this solves the issue, he asserted that once this is done, the information will be available pan-India. Pursuant to this, the possibility of registration of fake claim will be very less. This format will have to be strictly implemented by the respective officers.

Justice Khanna: You want these details to be uploaded?

KM: Yes, unless there is a direction from this Court this cannot be done. We cannot ask MACT to upload these details.

Thereafter, Justice Khanna told the counsel, representing High Courts, to take instructions on the same and directed that compliance will be filed by the High Courts within six weeks from today. The matter is next posted on January 2024.

Case Title: SAFIQ AHMAD vs. ICICI LOMBARD GENERAL INSURANCE CO. LTD

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