The Orissa High Court has recently granted anticipatory bail to 14 claimants and lawyers accused of laying false motor accident claims to syphon off huge amounts of compensation from insurance companies, even without registration of police complaints for involvement of vehicles in such accidents. [2026 LiveLaw (Ori) 94]

Holding physical custody and interrogation of the petitioners unnecessary, the Bench of Justice Radha Krishna Pattanaik observed–

“Since, the compensation were allowed long before, this Court is also of the view that the petitioners, who allegedly laid false claims may be directed to cooperate with the investigation since they are locals and most unlikely to abscond. At a time when the inquiry and investigation is in progress and there is a possibility of involvement of many others including the officials of the Insurance Companies, this Court is of the view that the interim protection granted to the petitioners should be allowed to continue.”

While deciding a motor accident claim case [The Oriental Insurance Co. Ltd. v. Tuni Pati & Ors., SLP(C) No. 5582 of 2023], the Supreme Court had found that no police case was ever registered in certain fraudulent claim cases. Therefore, by an order dated 06.04.2026, it had directed as follows–

“Before parting, we indicate to the Advocate General for the State of Odisha, who has joined the proceedings through virtual mode that all investigations of the cases be carried out in respect of the Officials of the concerned Insurance Company(ies) to find out whether there was complicity in view of the fact that cases of such fraudulent nature were not reported to the police for appropriate action by them. We also indicate that only the lowermost officials will not be investigated, but also officers at the highest level depending on whether they had information of such fraud being committed and still chose not to direct for lodging of appropriate proceedings before the competent authorities/police.”

Pursuant to the aforesaid direction of the Apex Court, an inquiry was held by the CID CB from which it was found that false accidents claims were made in order to defraud insurance companies. It was further found that false unnatural death (UD) cases were filed in respect thereof and ultimately, those culminated in grant of compensation.

Moreover, the inquiry revealed that cases were filed seeking compensation, claiming accidents to have taken place involving vehicles but without any such information ever been lodged at jurisdictional police stations. Resultantly, it has been awarded to the injured and kin of the deceased.

Finding prima facie complicity of the petitioners in such fraudulent claims, cases were registered for commission of offences under Sections 3(5), 315, 316, 336 (2), 337, 338 and 339 of the BNS. Apprehending arrest, the petitioners, including some lawyers who conducted the claims cases, approached the High Court for pre-arrest bail.

The primary contention of the petitioners was that the cases were settled long back and some cases have attained finality by getting confirmed by the Apex Court itself. Thus, at this juncture, any arrest would be improper. They vehemently argued that they being law abiding permanent residents of the jurisdiction and some of them being legal practitioners, there is no flight-risk and thus, they deserve anticipatory bail.

Justice Pattanaik noted that the incidents are more than a decade old. The involvement of vehicles and cause of death were clandestinely presented in a fraudulent manner, which could only be traced during the recent inquiry. Thus, the CID CB, the Judge held, ought to “pinpoint” the brains behind such mischief. The Court further observed–

“An inquiry shall have to be made by the CID CB even with regard to the involvement of any such officials of the Insurance Companies, who had the knowledge or information of such fraud but still ignored in lodging complaints. It cannot be readily assumed at this stage that the petitioners, who were the lawyers of the claim cases, did have had the knowledge or a party to the fraud and mischief committed. Whether such mischief was committed with the complicity of the vehicle owners is also a matter to be gone through during investigation.”

Finding no need for custodial interrogation of the petitioners, the Court directed the investigating agency to release them in case of arrest upon furnishing a bail bond of Rs.30,000/ (rupees thirty thousand) each with one solvent surety for the like amount each, with such other conditions imposed by the Courts below as are deemed just and proper.

Case Title: Narayan Prasad Behera v. State of Odisha & tagged matters

Case No: ABLAPL No. 836 of 2026 & tagged cases

Counsel for the Petitioners: Mr. Lalatendu Samantaray & Mr. S. Mohapatra, Sr. Advocates, Mr. P.K. Mohanty, Mr. S.K. Dwibedi, Mr. A. Mohanty, Mr. P. Mohapatra, Mr. D. Patnaik, Mr. S.K. Padhi & Mr. H. Mohapatra, Advocates

Counsel for the State: Mr. Partha Sarathi Nayak, Addl. Govt. Advocate

Citation: 2026 LiveLaw (Ori) 94

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