Delhi HC Comes Down Hard On Fraudulent Insurance Claim; Directs Initiation Of Criminal Proceedings Against Colluding Employer And Claimant [Read Judgment]

The Delhi High Court, on Thursday, directed initiation of criminal proceedings against an employer and an employee who, the Court concluded, had filed a “fraudulent and collusive” insurance claim petition.

Justice Valmiki J. Mehta directed the Registrar General of the Court to draw out an FIR against the employer and the employee. “…in terms of the present judgment the FIR so drawn be sent to the Competent Court for prosecution of the respondents herein,” the Court ruled.

Besides, the Court directed a copy of its judgment, as well as the impugned order of the Employees Compensation Commissioner to be sent to the State Ministry of Law, “to show as to how certain Employees Compensation Commissioners appointed by GNCTD are acting in a complete perverse fashion and allowing completely undeserving claim petitions which are in fact the result of collusion and an endeavor to defraud the insurance companies of their moneys.”

“On receipt of the judgment by the Law Minister as also by the Law Secretary of GNCTD, an affidavit shall be filed on behalf of these persons by authorized persons that the relevant departments have taken note of the present judgment as also of the concerned Employees Compensation Commissioner who in the present case has completely and most illegally and perversely allowed a totally undeserving claim petition,” it further demanded, directing an affidavit to be filed in this regard within a period of six weeks.

The Court was hearing an Appeal filed by the Oriental Insurance Company Ltd, against an order passed by the Employees Compensation Commissioner, whereby the employee’s claim petition was allowed. The Claim was made after the claimant met with an accident while driving a truck owned by the employer.

The Insurance Company had questioned the relationship of employer and employee between the parties, and had raised several doubts about the occurrence of the accident.

Agreeing with such contentions, the Court noted that the claim petition was filed seven years after the incident, and opined that the reasoning employed by the impugned judgment was ridden with loopholes.

“In my opinion, the impugned judgment of the Employees Compensation Commissioner reflects many shortcomings which are elevated to the level of gross perversity and illegality. The impugned judgment shows complete non-application of mind by the Employees Compensation Commissioner as to the requirement of existence of minimum amount of evidence/proof being required with respect to happening of the accident, the existence of relationship of employer and employee and the fact that whether at all the respondent no. 1/claimant was or was not a driver, in a case where admittedly no driving license has been pleaded to exist or has been filed and proved by the respondent no. 1/claimant,” the Court observed.

It opined that even though employer employee relationship can be proved easily when the same pertains to unorganized sector, the Commissioner should have at least taken note of the absence of an FIR and the discrepancies in the date of the occurrence. It further noted that the medical documents filed by the claimant also lacked any evidence of an accident having taken place.

“It is, therefore, seen that the judicial conscience of the Employees Compensation Commissioner should not have been convinced at all with respect to happening of an accident in the facts of this case,” the Court, therefore, remarked.

It then directed the Employees Compensation Commissioner to seek refund of the amount already released to the claimant, pursuant to an undertaking filed at the time of issuance of notice in the Appeal.