Scam In Filing Motor Accident Claims: Madras High Court Orders Inquiry Against Advocates Involved

The bench of Justice Anand Venkatesh made the above order in a petition filed by Cholamandalam MS General Insurance Company Limited seeking for a direction to constitute a Special Investigation Team (SIT) in order to investigate the complaints given by the Insurance Company, which pertains to nearly 120 claims made through fake and fabricated insurance policies.

When the matter was heard on 24.01.2022, the court had directed the Special Investigation Team to enquire about the concerned officials and record their statements and take follow-up actions. As part of the order, enquiry was conducted. The enquiry revealed that the Advocates were in the habit of approaching the accident victims and instigating them to file claims with fake and falsified bills arranged by the advocates themselves in collusion with the hospital medical records executive and attempted to chest the insurance companies for huge falsified claim amounts.

Further, when these lawyers smelled an enquiry by the hospital authorities, they withdrew these cases as not pressed, without the knowledge of the claimants/petitioners. Thus, no claim either fabricated or falsified was admitted and decreed in favor of claimants.

The enquiry further revealed that fake/excess amount Medical Bills were prepared by one Antony Joseph of Cauvery Hospital Hosur at the instigation of the advocates for their own benefits and that in the MCOP cases the above named advocates were in the habit of filing fake/fabricated medical bills with the excess amount before the courts claiming excess compensation amount. After remittance of the compensation amounts from the courts to the victims' bank accounts, the Advocates who kept the passbooks and cheque books of the claimants used to get signatures in the cheque and withdrew the total rewarded amounts. These advocates would pay only minimum amounts to the victims, and take huge balance amounts for themselves.

The enquiry also revealed that in many of these cases, the injury sustained by the claimants were genuine. However, in some cases, they were admitted in different hospitals and in others even if they were admitted in the Cauvery Hospital, they had not paid excess fee compared to their claims. After, taking statements of the claimants, it was also made clear that these exorbitant amounts were claimed without the knowledge of the claimants.

The court directed the Special Investigation Team, Coimbatore, West Zone to give a formal complaint based on the orders passed in the petition before the concerned jurisdictional police stations within a period of two weeks from the date of the order. The court also directed that after the FIR is registered by the Concerned jurisdictional police station, the investigation shall be transferred to the file of the Special Investigation Team, West Zone and the investigation shall be conducted by the Deputy Superintendent of Police, CCIW, CID Coimbatore Sub Division. This officer shall be conferred with all the powers of investigation including arrest, remand, seizure etc.,

The court further directed the Investigating Officer to file the Final Report within a period of four months from the date of registration of the FIRs before the concerned Jurisdictional Court. The court also directed the Tamil Nadu State Legal Services Authority to assist the petitioners /claimants in the 23 cases where they informed that they want to prosecute further with the MCOP cases.

The court also thought it wise to summon even such claimants/petitioners who have expressed that they do not want to prosecute the case, to find out if such statements were being made voluntarily or due to some threat exerted from elsewhere.

The court was of the view that mere filing of the claim with the fake and fabricated documents is an offence which requires enquiry and action to be initiated against the concerned persons.

On the petition filed by New India Assurance Company Limited, it was informed that a separate status report has been filed. It was submitted by the Company that there have been cases where fake insurance policies have been created and though complaints were given as early as on 2018, no action has been taken on the same. The court directed the company to file a fresh complaint along with all the necessary particulars to the concerned jurisdictional police stations. After filing of FIR, the file shall be transferred to the file of the Special Investigation Team and the investigation shall commence immediately by the investigation officer nominated by the Additional Director General of Police, Economic Offences wing and who will be conferred with the powers of investigation. The investigation shall be completed and the final report shall be filed as expeditiously as possible.

The matter has been posted to 13.06.2022 for passing further orders.

Case Title: M/s. Cholamandalam MS General Insurance Co. Ltd and another v. The Director General of Police and others

Case No: Crl. O.P No. 2302 of 2021 and Crl O.P 4174 of 2021.

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