SAFIQ AHMAD versus ICICI LOMBARD GENERAL INSURANCE CO. LTD. & OTHERS on 16 December 2021

ORDER

1. The issue is with respect to filing of fake claim petitions forgetting compensation under the Motor Vehicles Act as well as under theWorkmen Compensation Act.

2. Pursuant to our earlier order dated 05.10.2021, the SpecialInvestigating Team (SIT) has filed a Status Report with respect tocomplaints filed/enquiry completed, the names of the accused, wherethe criminal complaints are filed and in which criminal cases the chargesheets have been filed. A separate sheet containing the names ofadvocates against whom the prima facie cases of cognizable offenceshave been found, is also filed in a separate sealed cover. It is stated inthe Status Report that total 1376 cases of suspicious claims from variousDistricts in the State of U.P. have been received so far by the SIT. That A

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Athe year-wise detail of 1376 cases received in various years thereof isas under:

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3. It is reported that out of total 1376 cases of suspicious claimsreceived by the SIT, after completing enquiry of 247 cases of suspiciousCclaims till date, total 198 accused persons have been prima facie foundguilty of cognizable offence and accordingly total 92 criminal cases havebeen registered in various districts. It is stated in the Status Report thatagainst some of the accused persons, more than 1 criminal cases havebeen registered. It is stated that enquiry of remaining cases of suspiciousclaims is underway.D

3.1 It is further stated that out of total criminal cases registered sofar, investigation of 36 criminal cases have been completed and chargesheets against accused persons have been filed in 32 criminal cases andfinal reports in 4 criminal cases have been forwarded to the concernedCriminal Court.E

3.2 It is further stated that total 92 criminal cases in various Districtshave been registered till date, of which, 28 advocates have been namedas accused persons in 55 cases. Charge sheets against 11 advocates in25 cases have been forwarded to the concerned trial Court till date.

F3.3 It is further stated in the Status Report that Headquarter ofthe SIT is situated in Lucknow. Officers/employees have to go in thedistricts of the entire State and sometimes have to go in other Statesoutside the State of Uttar Pradesh for conducting enquiry/investigationproceedings as and when so warranted. It is stated that due to the outbreakof Covid-19, there was a lockdown and termination of transportationGservices in the State and even some of the officers/employees havebeen got infected, enquiry/investigation process was adversely affected.It is stated that on getting the situation normal after completion oflockdown of Corona period, full attempts are being made to start thisenquiry/investigation process speedily.

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3.4 Learned counsel appearing on behalf of the SIT has alsosubmitted that as the respective insurance companies are not ready tobeing complainants in the FIR, the investigating officer of the SIT has tobecome the complainant and therefore also it takes some time. It isreported that the investigating officer is also present in the Court.

4. We impress upon the investigating officer of the SIT to expeditethe enquiry/investigation with respect to complaints already receivedfrom various insurance companies with respect to suspicious fake claims.We also call upon the SIT to file a further affidavit pointing out in howmany cases the charge sheets have been filed; when the charge sheetshave been filed (the date of filing of the charge sheets), in which Courtsthe charge sheets have been filed and in how many cases the chargeshave been framed by the concerned Magisterial Court.

5. A response affidavit has been filed on behalf of the Bar Councilof Uttar Pradesh dated 05.12.2021 affirmed by an Advocate and theMember Secretary of the Bar Council of Uttar Pradesh. It is stated inthe response affidavit that the Chairman and the Member Secretary ofthe Bar Council of Uttar Pradesh have assumed their office after beingelected on 06.07.2021. The Chairman and the Member Secretary of theBar Council of Uttar Pradesh have tendered unqualified andunconditionally apology for any act/s or omission/s on their part, which isneither deliberate nor intentional.

5.1 It is stated that the Bar Council of Uttar Pradesh also ensuresthat the errant advocates who are indulged in such activities of filingfake claim cases, in an unethical manner, may not be left scot-free andshall be dealt with appropriately in accordance with law. It is stated thatthe Bar Council of Uttar Pradesh is duty bound to take action againstthe errant advocates in accordance with law and it shall adhere with thedirections of this Court in letter and spirit and will also ensure to concludethe disciplinary proceedings in the specified time period.

5.2 In the response affidavit, it is stated that pursuant to the earlierdirections issued by this Court, directing the Bar Council of India and theBar Council of Uttar Pradesh to file a detailed report and steps taken,the Bar Council of Uttar Pradesh has taken the following actions:

i) Vide letter dated 22.09.2021, it called upon the WorkmenCompensation Commissioner, Uttar Pradesh and the GeneralManager, ICICI Lombard General Insurance Company Ltd. to A

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Aprovide the details and copy of the complaint. However, till29.09.2021 no response was received.

ii) Subsequent thereto, the Bar Council of Uttar Pradesh againsent a reminder letter on 29.09.2021 to the Workmen CompensationCommissioner, Uttar Pradesh and the General Manager, ICICIBLombard General Insurance Company Ltd.

iii) the Office Superintendent of the Bar Council of Uttar Pradeshwas also called upon to submit its report about the action takenpursuant to the earlier directions issued by this Court. However,no satisfactory response was furnished. Some complaintsCpertaining to the year 2013 were supplied. It was further reportedthat as per the office report, ICICI Lombard General InsuranceCompany Ltd. has not sent any complaint under the Advocates’Act as such an appropriate action could be taken upon receipt ofsuch complaint. Furthermore, the Secretary of the Bar Councilwas called upon to provide the details of the advocates alleged toDhave been involved into such unethical practice, along with theirnames, enrolment number and addresses, so that appropriateproceedings can be drawn against the errant advocates incompliance of the directions issued by this Court.

a) The Bar Council of India vide its letter dated 22.11.2021Esuspended 28 (twenty-eight) Advocates and the ‘Bar Council ofUttar Pradesh’ was directed to conclude the disciplinaryproceedings against them within a specified period of 3 (three)months.

b) Pursuant to that, an emergent meeting of General House of theFBar Council of Uttar Pradesh was called on 27.11.2021 andDisciplinary Committees were also constituted on the same day.

c) That on the next day, i.e., 28.11.2021, the Chairman of the BarCouncil of Uttar Pradesh, allocated that said cases to theDisciplinary Committees and consequently the said DisciplinaryGCommittees issued notice issue to the errant 27 (twenty-seven)advocates, fixing therein next date of hearing on 08.12.2021. Itmay be clarified here that 1 (one) advocate namely Jai Singh hasalready been passed away/died.

6. We appreciate the steps taken by the Bar Council of UttarHPradesh, taken on or after 22.09.2021, which shall ensure to maintain the purity of the legal profession in the State of Uttar Pradesh. We alsoimpress upon the Bar Council of India/Bar Council of Uttar Pradesh toconclude the disciplinary proceedings in accordance with law as earlyas possible.

7. We have also heard at length Shri Atul Nanda, learned SeniorAdvocate and Shri Vishnu Mehra, learned Advocate appearing on behalfof the two insurance companies and learned counsel appearing on behalfof the State of Uttar Pradesh/SIT on the modus operandi of the advocatesfor filing fake cases under Motor Vehicles Act and WorkmenCompensation Act. Separate notes have been filed pointing out the modusoperandi in instituting the fake compensation petitions. Some of the modusoperandi adopted are as under:

i)Non-road accident injury-death converted into road accidentclaims;

ii)fraudulent implantation of vehicle;

iii)false implantation of driver;

iv)claimant implantation;

v)multiple claims at various for a at different territoriallocations for compensation out of injury/death caused arisingout of the same accident. Often the claim applications arefiled both before various MACT Tribunals as well as theauthorities under the Employees Compensation Act, 1923;

vi)fake/fabricated insurance policies; and

vii)fake/fabricated income documents/medical documents forexaggerated compensation 7.1 Investigating Officer of SIT has also filed a short note onmodus operandi in instituting fake compensation petitions, which are basedon rich experience during investigation/enquiry of the Criminal Cases/FIRs/Complaints, which are as under:

1. CASES OF HIT AND RUN

Such road accidents which are occurred from unknownvehicles, alleged eyewitnesses are prepared therein, on thebasis of their affidavit/statements, facts are brought in thelight showing accident committed by some other insured A

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566SUPREME COURT REPORTS

Avehicle and petition is instituted against owner/driver/insurance company of the aforementioned vehicle.

In the cases of such road accident which have beencommitted by unknown vehicles, for the purpose ofinstitution of the compensation petitions, in a well designedBplanning, documents related to vehicle/driver are obtainedfrom some advocates and documents of such vehicles/driverused in some other compensation petitions/cases are usedin institution of false petitions.

Such road accidents which are occurred from some unknownCvehicles, in that accidents are shown to have beencommitted by such vehicles which are old and their vehicleowners remain first registered owners. Advocates purchasesuch aforementioned vehicles as old vehicles, they do notget such vehicles registered in their own names whereasDthe actual/registered owners of those vehicles have alreadydied. Despite of death of original owner, fake General Powerof Attorneys are executed/prepared in the names of suchdeceased vehicle owners through their companionsadvocates. Aforementioned vehicles are shown in such roadaccident, which were occurred from unknown vehicles.EAforementioned vehicles have been shown in accident inmany such cases and compensations petitions have beeninstituted.

In the cases of such road accidents wherein FirstInformation Reports are registered against unknownFvehicles and when those unknown vehicles are not tracedand local Investigating Officers submit their Final Report inthe cases before the Hon’ble Courts. In such accidents if aperson has died while travelling in those vehicles and secondperson has injured, then holding that injured person himselfGto be driver of the aforementioned vehicle, showing hisnegligence, by impleading as opposite party to the insurancecompany of his own vehicle for receiving compensation,compensation petitions are also filed for receiving amountof compensation.

2. CASES OF KNOWN VEHICLES WITHOUT INSURANCE.H

If road accident is occurred with known vehicle and notAinsured at that time, in connivance with owner or driver ofother insured vehicle in place of that vehicle, compensationpetitions are instituted by showing aforementioned roadaccident of the said insured vehicle.

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3. CASES OF FICTIONAL ACCIDENT AND FALSEPETITIONS

Such false compensation petitions have also come into lightwherein name and address of the petitioner could not beascertained and imaginary story is created on behalf of suchpetitioner and false Claim petitions are instituted.

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4. CASES RELATED TO CONNIVANCE OF VEHICLEOWNER/VEHICLE DRIVER/ADVOCATE

For the purpose of earning illegal money, some actual vehicleowners and actual drivers of vehicles in connivance withadvocates, submits registration certificates of their vehiclesand Driver Licences in the unknown motor accident casesfor filing fake petitions.

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5. IMPLEADING NAME AND ADDRESS OF FAKEPERSONS IN ACTUAL ACCIDENTS

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Persons of fake names and addresses showing as drivers/cleaners in place of actual and correct injured persons(driver/cleaner) involved in the actual accident cases,compensation petitions are instituted in the W.C.A. courtsby showing them injured in the aforementioned accidents.

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6. CASES RELATED TO HANDICAPPED/ DECEASEDPERSONS DUE TO OTHER REASONS

During course of enquiry/investigation, such fakecompensation petitions have also come into light whereinpetitioner has become handicapped due to some other reason(like chopping off hand from thrasher machine), and secondcopy of fake handicapped certificates of their beingdisabled/ handicapped obtained again showing date ofaccident after date of fake accident and fake compensationpetitions have also been instituted.

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568SUPREME COURT REPORTS

A Despite not being injured in the road accidents, after deathor injured for any other reasons, his family members or hehimself showing him or that person to be the driver/cleaner/labourer who died or injured, compensation petitions areinstituted in fake manner.

B7. CASES RELATED TO FILING SAME CASE IN MORETHAN ONE COURTS

In one road accident, wherein a person has died or injured,his family members or he himself submits compensationpetition in the M.A.C.T. court related to aforementionedCroad accident. If decision of the court is not in his favour,then the same petitioner changes the story and again submitshis petition before the W.C.A. court (Workmen’sCompensation Act).

After institution of compensation related to a road accidentDin a court and after receiving its compensation amount, againsame accident is shown with other vehicle which is insuredwith other insurance company and second Claim petition isinstituted in the W.C.A. court of any other district forreceiving compensation amount again.

E8. CASES RELATED TO AFFIXING PHOTOGRAPH OF ASAME PERSON IN THE COMPENSATION AMOUNTCHEQUE DISTRIBUTION REGISTER IN MORE THANONE PETITIONS

Some compensation petitions were instituted in the W.C.A.Fcourt in the names of different persons. After judgement ofthe aforementioned court, photograph of the same personis affixed in more than one case/petition, on the ChequeDistribution Register for receiving cheque related tocompensation amount and compensation amount wasGreceived and thereafter, entire aforementioned amount wasgot transferred by the concerned advocate in his own bankaccount or in the bank accounts of his family members.

9. CASES TO GET THE PETITIONS DISMISSED AFTERTRANSFER OF FAVOURING DEPUTY LABOUR

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COMMISSIONER, RE-SUBMITTING THE PETITIONS ATHIS NEWLY POSTED PLACE

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During investigation/enquiry of the compensation petitions,it is also found that petitions related to occurrence ofaccidents instituted in the W.C.A. court of concernedDistrict. When Deputy Labour Commissioner of W.C.A.court of aforementioned District transferred to some otherdistrict, then some advocates of aforementioned district gettheir compensation petitions dismissed, and thereafter theyinstituted new petitions again in aforementioned districtwhere the then Deputy Labour Commissioner wastransferred by showing fake address in the petitions.

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10. INSTITUTION OF PETITIONS IN OTHER DISTRICTINSTEAD OF INSTITUTING PETITIONS IN THE DISTRICTOF ACCIDENT SPOT/PLACE

During investigation/enquiry of the compensation petitions,Dit is also found that some compensation petitions were notinstituted in the court of district of place/spot of accident,rather they were instituted in the court of other district bymentioning only temporary address instead of mentioningoriginal address of the petitioner. It is also pertinent to mentionEhere that this temporary address also remains incomplete.

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11. CASES RELATED TO FAKE VAKALATNAMA

During investigation/enquiry of the compensation petitionsrelated to road accidents, this fact has also come into lightthat actual/main advocate who has filed the claim petition,does not submit his own Vakalatnama in the concerned court,he submits Vakalatnama on behalf of such Advocate, whodoes not file the compensation petitions by mentioning hismobile number on the compensation petitions.

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During investigation/enquiry of the compensation petitionsrelated to road accidents, this fact has also come into lightthat advocate who has submitted compensation petition inthe concerned court, he mentioned name of such fake personin place of name of Advocate, whose whereabouts couldnot be ascertained. Whereas such case was pursued by H

the advocate who submitted this petition in camouflagemanner.

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7.2 Shri Atul Nanda and Shri Vishnu Mehra, learned counselappearing on behalf of the two insurance companies have submittedthat despite various directions issued by this Court as well as the variousBHigh Courts, there is non-adherence to the provisions of Section 158(6)(pre 2019 amendment) and Section 159 (post 2019 amendment) of theMotor Vehicles Act. Reliance is placed on the decisions of this Court inthe cases of General Insurance Council v. State of Andhra Pradesh,reported in (2007) 12 SCC 354; General Insurance Council v. Stateof Andhra Pradesh, reported in (2010) 6 SCC 768; Jai Prakash v.CNational Insurance Company Ltd., reported in (2010) 2 SCC 607and recent decision of this Court dated 16.03.2021 passed in Writ Petition(Civil) No. 534/2020, reported in 2021 SCC OnLine SC 418. It is submittedthat this Court in its order dated 16.03.2021 passed in Writ Petition (Civil)No. 534/2020 has issued the following directions:

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A. Accident Information Report-

The jurisdictional police station shall report the accident underSection 158(6) of the Act (Section 159 post 2019 amendment)(hereinatfer “the report”) to the tribunal and insurer within first48 hours either over email or a dedicated website.

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B. Detailed Accident Report-

Police shall collect the documents relevant to the accident and forcomputation of compensation and shall verify the information anddocuments. These documents shall form part of the Report. Itshall email the Report to the tribunal and the insurer within threemonths. Similarly, the claimants may also be permitted to emailthe application for compensation with supporting documents, underSection 166 to the tribunal and the insurer within the same time.

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C. The tribunal shall issue summons along with the Report or theapplication for compensation, as the case may be, to the insurerGby email.

D. The insurer shall email their offer for settlement/response tothe Report or the application for claim to the tribunal along withproof of service on the claimants.

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E. After passing the award, the tribunal shall email an authenticatedcopy of the award to the insurer.

F. The insurer shall satisfy the award by depositing the awardedamount into a bank account maintained by the tribunal by RTGSor NEFT. For this purpose, the tribunal shall maintain a bankaccount and record the relevant account details along with thedirections for payment to the insurer in the award itself.

G. Each tribunal shall create an email ID peculiar to its jurisdictionfor receiving the emails from the police and the insurer as mentionedabove. Similarly, all insurer throughout India shall also create anemail ID peculiar to the jurisdiction of each claim tribunal. Theseemail IDs would be prominently displayed at tribunal, the policestations and the office of the insurers for the benefit of theclaimants. Similarly, these email IDS shall also be prominentlydisplayed on the website maintained by the tribunal and the insurer.

H. Insurers shall appoint nodal officers for each tribunal andprovide their contact details, phone and mobile phone numbers,and email address to Director Generals of State Police and thetribunals.

7.3 Shri Atul Nanda, learned senior counsel appearing on behalfof Bajaj Allianz General Insurance Company Limited has also made twosuggestions in its note. He has submitted that if the earlier directionsissued by this Court in the aforesaid decisions are implemented fully andin letter and spirit and Section 159 of the Motor Vehicles Act is compliedwith by all the Police Officers pan India and the accident informationreport as contemplated under Section 159 (post 2019 amendment) is outon the Government Portal – National Register of vehicle registrationknown as “VAHAN” AND “SAARTHI”, in that case, it can solve theproblem of filing more than one claims in different States with respect tothe same accident. It is submitted that the Transport Authorities underthe Motor Vehicles Act, 1988 is maintaining a National Register of vehicleregistration known as “VAHAN” AND “SAARTHI”. It is submittedthat this has rendered the issuance and verification of the driving licensesand registration of vehicles, transparent and hassle free. It is submittedthat these existing databases can be rendered useful for the purposes ofadjudication of claims also if they can be expanded to include details ofthe accidents and drivers. It is submitted that if the “VAHAN” portal is A

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Amodified to allow and the police officials who is investigating the accidentin question is required to mandatorily endorse an entry of the accidentagainst such portal with an automatic intimation on the registered mobileof the owner, it will be very useful in preventing the submission of suchfake claims.

B7.4 It is further submitted by Shri Atul Nanda, learned seniorcounsel that SITs are required to be constituted in each of the States. Itis submitted that only in the States of UP, Rajasthan and Gujarat, the SITis existing. It is therefore prayed that the respective State Governmentsmay be directed to constitute SIT with respect to complaints of suspiciousfake claims/petitions which may be headed by an officer not below theCrank of Additional Director General of Police, with adequate infrastructureand human resource.

8. Having heard learned counsel appearing on behalf of therespective insurance companies and the learned counsel appearing onbehalf of the State of UP/SIT and the suggestions made, we are of theDopinion that before any further directions are issued, we may have theresponse from the Ministry of Transport, Government of India to havetheir suggestions for remedial and preventive measures for curbing themenace of filing of false/fraud claim petitions.

We accordingly direct the Registry to implead the Ministry ofETransport, Government of India as a party-respondent and issue notice.We request Shri K.M. Nataraj, learned Additional Solicitor General ofIndia to appear on behalf of the Ministry of Transport, Government ofIndia and to assist the Court and to come out with suggestions how tocurb the menace of filing false/fake claim petitions. After getting theFresponse/suggestions, we may issue further directions to be applied panIndia.

Put up for further consideration on 25.01.2022.

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Bibhuti Bhushan Bose

Directions issued.

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