The Supreme Court docket has directed all States to represent devoted Particular Investigation Groups (SITs) to probe suspected fraudulent motor accident compensation claims, after proceedings in a case involving allegations that the identical car had been proven as being concerned in a number of accidents revealed what the Court docket described as a possible fraud of “huge proportion.”
The Court docket additionally directed the insurance coverage firms to ahead the instances to the SIT, the place claims had been negated to conduct an in-house enquiry to establish whether or not the declare was processed in collusion with their officers.
A bench of Justice Ahsanuddin Amanullah and Justice Prasanna B. Varale handed the instructions on August 17 in proceedings arising from a person case, increasing the scope of the matter to handle alleged systematic fraud in motor accident claims throughout the nation.
The proceedings initially arose from a dispute over whether or not the car alleged to have brought on an accident was really concerned in that accident.
Nevertheless, because the proceedings progressed, the Court docket undertook a pan-India train to look at allegations that the identical car was being proven as concerned in a number of accidents and that such claims had been being allowed regardless of being doubtlessly fraudulent.
The Court docket stated the difficulty had persuaded it to enlarge the scope of the proceedings on a pan-India foundation to “unravel and likewise to test such fraudulent claims.”
The Court docket noticed that fraudulent insurance coverage claims not solely trigger monetary stress to insurance coverage firms however could in the end lead to real customers paying greater premiums to keep up insurers’ monetary viability.
“The matter began on an innocuous challenge of whether or not a car which was stated to be the reason for an accident, was the true car concerned within the stated accident. However because the occasions unfolded, an train has been taken pan India, pursuant to the order of this Court docket within the current proceedings to unearth whether or not fraudulent claims are being filed, that too, in a hard and fast sample, the place the identical car is proven to be concerned in a number of accidents, which ends up in such frivolous claims being allowed. This seemed to be a fraud of huge proportion and has persuaded the Court docket to enlarge the scope of the current proceedings to unravel and likewise to test such fraudulent claims, which in the end lead to not solely undue monetary stress on the Insurance coverage Corporations, but in addition on the system and one of many fallouts is that the frequent real client has to pay the next premium, simply because the Insurance coverage firms have to make sure their monetary viability.”, the Court docket famous.
Noting that the matter requires critical consideration, the Court docket directed all States to represent a particular devoted SIT on the State degree to cope with complaints referring to doubtlessly fraudulent insurance coverage claims.
All complaints acquired by insurance coverage firms indicating potential fraud are to be forwarded to the involved SIT, which has been directed to look at them expeditiously.
The States have additionally been directed to offer enough manpower to the SITs and disclose the process adopted for investigating such claims.
“A recent path is issued to all of the States to represent a particular devoted SIT for such functions on the State degree. All complaints by the Insurance coverage Corporations be forwarded to the stated physique, which might be appeared into expeditiously. The States are directed to offer enough arms to the SIT for completion of the investigations. The States also needs to disclose with regard to the process they’ve adopted for investigating within the current matter.”, the Court docket noticed.
“…a path is issued to the Insurance coverage Corporations that such issues the place the declare is negated on the bottom of fraud or collusion, the stated Insurance coverage Firm shall instantly ahead the small print of the stated case to the SIT of the State the place the declare is raised and likewise perform an in-house investigation with regard as to if there was contributory collusion by its officers.”, the Court docket added.
Suggestion to launch a typical portal to test veracity of insurance coverage claims to stop fraud
Adv. Jagdish Chandra Solanki, helping the Court docket, prompt creation of a typical portal containing insurance coverage claims knowledge, which may allow insurers to cross-check whether or not a specific car, particular person or entity has repeatedly featured in accident claims.
The suggestion included integration with current VAHAN and SARATHI platforms.
The Court docket was additionally knowledgeable concerning the Ministry of Street Transport and Highways’ e-Detailed Accident Report (EDAR) portal by Adv. Rupali Samuel, who appeared for the State of Tamil Nadu, which tracks accidents on nationwide highways.
A proposal was made to combine related accident and insurance coverage databases in order that the authenticity of accidents, automobiles concerned and accident areas might be verified extra effectively.
The Court docket famous the suggestion put forth by the counsels, which can be helpful to determine and monitor instances the place the claims are settled by means of fraudulent means.
IRDAI, MoRTH, Ministry of Finance and Common Insurance coverage Council impleaded as events
Contemplating the broader implications of the difficulty, the Supreme Court docket directed that a number of regulatory and authorities our bodies be impleaded within the proceedings.
The Insurance coverage Regulatory and Growth Authority of India (IRDAI) was impleaded as respondent No. 104, whereas the Ministry of Finance, by means of the Union authorities’s Secretary, was impleaded as respondent No. 105.
The Ministry of Street Transport and Highways was impleaded as respondent No. 106, and the Common Insurance coverage Council as respondent No. 107.
The newly added respondents have been directed to file affidavits explaining their current obligations and suggesting measures to handle fraudulent insurance coverage claims.
The matter is listed for September 23, 2026, the place events had been directed to file affidavits coping with the problems raised and requested counsel to be ready with a one-page précis or abstract of their affidavits on the subsequent listening to.
Background
The proceedings arose from a problem by The Oriental Insurance coverage Firm to a motor accident compensation declare. The insurer had alleged that the car proven because the offending car had been concerned in a number of different accidents and was being repeatedly projected because the car accountable for accidents as a result of it had legitimate insurance coverage protection.
The allegation was that such insured automobiles had been being “planted” in accident claims in order that compensation might be recovered from solvent insurance coverage firms.
Being attentive to the allegation, the Supreme Court docket had earlier in March 2025 directed the authorities in Odisha to conduct a wider fact-finding train.
The following inquiry revealed that the car concerned within the current proceedings had additionally figured in 4 different accident instances, which had been subjected to additional investigation.
Though the inquiry established that the car was genuinely concerned within the accident forming the premise of the current declare, the Court docket was involved by the broader sample that had emerged.
In an earlier order, the Court docket had taken observe of submissions by the Advocate Common of Odisha indicating a potential “large racket” involving a number of stakeholders. The State had knowledgeable the Court docket that arrests had been made and that additional investigation and custodial interrogation might be required.
The Court docket had additionally noticed that the details rising from the inquiry had been “very surprising” and indicated the “enormity of the scenario, ” prompting it to broaden the scope of the proceedings on a pan-Indian foundation.
Trigger Title: The Oriental Insurance coverage Co. Ltd. v. Tuni Pati & Ors.
Quotation : 2026 LiveLaw (SC) 861
Look:
For Petitioner(s) :Mr. H. Chandra Sekhar, AoR Mr. Jadhav Vishal, Adv. Mr. Pankaj Seth, Adv. Ms. Manjeet Chawla, AoR Ms. Jyoti, Adv. Ms. Shruti Jain, Adv. Ms. Sheetal Sharma, Adv.
For Respondent(s) :Mr. Goutham Shivshankar, AoR Ms. Renuka Sahu, AoR Mr. Saurabh Bhardwaj, Adv. (R.Nos. 1 to three) Mr. G. Balaji, AoR Ms. Arzu Paul, Adv. Mr. Ashwani Gahlot, Adv. Ms. Shaurya Mishra, Adv. Mr. Sabarish Subramanian, AoR Ms. Prerna Singh, Adv. Mr. Guntur Pramod Kumar, AoR Mr. Dhruv Yadav, Adv. [(R-5) STATE OF ANDHRA PRADESH] Ms. Eliza Barr, Adv. Ms. Akansha, AoR Mr. Govind Sharma, Adv. [(R-6) STATE OF ARUNACHAL PRADESH] Ms. Diksha Rai, AoR [(R-7) STATE OF ASSAM] Mr. Samir Ali Khan, AoR Mr. Kashif Irshad Khan, Adv. Ms. Komal Vats Singh, Adv. [(R-8) STATE OF BIHAR] Mr. Vinayak Sharma, Standing Counsel [(R-9) STATE OF CHHATTISGARH] Ms. Swati Ghildiyal, AoR Ms. Aditi Agarwal, Adv. [(R-11) STATE OF GUJARAT] Ms. Pallavi Langar, AoR Mr. Sujeet Kumar Chaubey, Adv. Ms. Anushka Raghunath, Adv. [(R-14) STATE OF JHARKHAND] Mr. Naveen Sharma, AoR Mr. Kunal Vajani, A.A.G. Mr. James P. Thomas, Standing Counsel Mr. Sanchit Garga, AoR Mr. Kunal Rana, Adv. Mr. Shashwat Jaiswal, Adv. Ms. Diksha Arora, Adv. Mr. Bhanu Pratap Singh, Adv. Mr. Guneet S. Sidhu, Adv. Mr. Amitoj Chadha, Adv. Mr. C. Okay. Sasi, AoR Mr. Ravi Sagar, Adv. [(R-16) STATE OF KERALA] Mr. Harmeet Singh Ruprah, AoR Mr. Surjeet Singh, Adv. Mr. Kanishq Sharma, Adv. Mr. Siddharth Shrivastava, Adv. Mr. Aaditya Aniruddha Pande, AoR Mr. Siddharth Dharmadhikari, Adv. Mr. Shrirang B. Varma, Adv. Mr. Sourav Singh, Adv. Ms. Chitransha Singh Sikarwar, Adv. [(R-18) STATE OF MAHARASHTRA] Mr. Pukhrambam Ramesh Kumar, AoR Mr. Karun Shamra, Adv. Ms. Anupama Ngangom, Adv. Ms. Rajkumari Divyasana, Adv. [(R-19) STATE OF MANIPUR] Mr. Avijit Mani Tripathi, AoR Mr. Z.H. Isaac Haiding, Standing Counsel Mr. Daniel Stone Lyngdoh, Adv. Ms. Marbiang Khongwir, Adv. [(R-20) STATE OF MEGHALAYA] Mr. Anando Mukherjee, AoR [(R-21) STATE OF MIZORAM] Ms. Okay. Enatoli Sema, AoR Mr. Amit Kumar Singh, Adv. Ms. Chubalemla Chang, Adv. Mr. Prang Newmai, Adv. Ms. Yanmi Phazang, Adv. [(R-22) STATE OF NAGALAND] Mr. Srisatya Mohanty, AoR Ms. Sakshi Mittal, Adv. Mr. Jyotiraditya Roychowdhury, Adv. [(R-23) STATE OF ODISHA] Mr. Mohd. Irshad, A.A.G. Ms. Abha Sharma, AoR [(R-25) STATE OF PUNJAB] Mr. Sameer Abhyankar, AoR Mr. Krishna Rastogi, Adv. Mr. Aryan Srivastava, Adv. [(R-27) STATE OF SIKKIM] Ms. Ruchira Goel, AoR Mr. Sharanya, Adv. Ms. Rishika Rishabh, Adv. Mr. Harsh Pratap Shahi, Adv. [(R-30) STATE OF UTTAR PRADESH] Mr. Adarsh Chamoli, AoR [(R-31) STATE OF UTTARAKHAND] Mr. Mukesh Kr. Verma, Adv. Ms. Indira Bhakar, Adv. Mr. Bhuvan Kapoor, Adv. Mr. Varun Chugh, Adv. Mr. Mukul Singh, Adv. Mr. Yogesh Vats, Adv. Mr. Shreekant Neelappa Terdal, AoR Mr. Vineet Singh, Adv. [(R-34) U.T OF ANDAMAN AND NICOBAR ISLANDS] [(R-35) UNION TERRITORY OF CHANDIGARH] [(R-36) U.T. OF DADRA AND NAGAR HAVELI AND DAMAN AND DIU] [(R-38) UNION TERRITORY OF LADAKH] Mr. Aravindh S., AoR Ms. Anika Bansal, Adv. [(R-40) UNION TERRITORY OF PUDUCHERRY] Mr. Brijesh Kumar Tamber, AoR Mr. Vinay Singh Bist, Adv. Mr. Yashu Rustagi, Adv. Mr. Sahas Bhasin, Adv. Ms. Chanchala Kumari, Adv. Mr. Dhimaan Dutta, Adv. [(R-41) Life Insurance Corporation of India] Ms. Udita Singh, AoR [(R-42) Axis Max Life Insurance Limited] Mr. Sanjay Okay Chadha, Adv. Mr. Amaditya, Adv. Mr. Kanishk Mor, Adv. Mr. Dharmendra Kumar Sinha, AoR [(R-44 ICICI Prudential Life Insurance Company Limited] [(R-45) Kotak Mahindra Life Insurance Company Limited [(R-95) Aditya Birla Health Insurance Co. Ltd.] Mr. Joydip Bhattacharya, Adv. Mr. Sarath S Janardanan, AoR Ms. Ipsita, Adv. Ms. Namita Kumari, Adv. [(R-47) Tata AIA Life Insurance Company Limited] Mr. Piyush Singhal, Adv. Ms. Srishti Prabhakar, AoR Mr. Ishpreet Singh, Adv. Mr. Nishant Bishnoi, Adv. Mr. Kushagra Sinha, Adv. Ms. Shweta Singh Parihar, AoR [(R-49) Bajaj Allianz House] [(R-50 PNB Metlife India Insurance Company Limited] Mr. Anuj Bhandari, AoR [(R-52) Aviva Life Insurance Company India Limited] Mr. Hitesh Kumar, Adv. Mrs. Sapna, Adv. Mr. Zakir Hussain, AoR [(R-54) Shriram Life Insurance Company Limited] Mr. Aman Malik , AoR Mr. Ali Khan, Adv. [(R-56) Generali Central Life Insurance Company] Mr. Piyush Singhal, Adv. Mr. Saurabh Upadhyay, Adv. Mr. Ishpreet Singh, Adv. Ms. Mansi Sharma, Adv. Mr. Ajit Kumar, Adv. Mr. Manish Chaurasia, Adv. Ms. Khushi Chhetri, Adv. Mr. Piyush Garg, Adv. Ms. Hardikaa Kalia, AoR [(R-78) kshema General Insurance Limited] Mr. Rajesh Kumar Chaurasia, AoR Mr. Anurag Jain, Adv. Mr. Jaideep Singh Sethi, Adv. Mr. Surya Pratap, Adv. Mr. Nitin Kumar Gupta, Adv. Mr. Sujeet Kumar, Adv. Mr. Soni, Adv. [(R-43 HDFC Life Insurance Company Limited] [(R-46) Aditya Birla Sunlife Insurance Company Limited] [(R-58) Canara HSBC Life Insurance Company Limited] [(R-60) Pramerica Life Insurance Company Limited] [(R-61) Union Dai-Ichi Life Insurance Company Limited] [(R-63) Edelweiss Life Insurance Company Limited] Mr. Daga Sachin Subhash, AoR Ms. Shreyashi Panda, Adv. [(R-51) Indusind Nippon Life Insurance Company Limited] [(R-55) Bharti Life Ins Co Ltd] [(R-59) Bandhan Life Insurance Limited] [(R-62) India First Life Insurance Company Limited] Mr. Manik Ahluwalia, AoR [(R-65) Acko Life Insurance Limited] [(R-67) Acko General Insurance Limited] Ms. Anuja Pethia, AoR Mr. Rishabh Nigam, Adv. Mr. Rishabh Govila, Adv. Ms. Kshirja Agarwal, Adv. Ms. Amisha Aggarwal, Adv. Ms. Puja Dewan, AoR Mr. Anand Prakash, Adv. Mr. Uday Seth, Adv. [(R-71) ECGC Ltd.] Mr. Rajat Khattry, Adv. Mr. Abhay Kumar, AoR Mr. D. Vardrajan, Adv. [(R-48) SBI Life Insurance Company Limited] [(R-70) Cholamandalam MS General Insurance Company Ltd.] [(R-72) Generali Central Insurance Company Limited] [(R-86) SBI General Insurance Company Limited] Mr. Shoeb Alam, Sr. Adv. Mr. Rajeev Maheshwaranand Roy, AoR Mr. Nilesh Kumar, Adv. Mr. P Srinivasan, Adv. Mr. Shivam Madhur, Adv. [(R-66) Go Digit Life Insurance Limited] [(R-73) Go Digit General Insurance Limited] [(R-74) HDFC Ergo General Insurance Company Limited] [(R-75) ICICI Lombard General Insurance Company Limited] [(R-80) Magma General Insurance Limited] [(R-83) Raheja QBE General Insurance Co. Ltd.] [(R-84) IndusInd General Insurance Company Limited] [(R-103) Valueattics Reinsurance Limited] Mr. Arun Okay. Sinha, AoR [(R-68) Agriculture Insurance Company Of India Limited] Mr. Shubham Janghu, Adv. Mr. Yoshit Jain, Adv. Mr. Gopal Singh, AoR [(R-76) Iffco Tokio General Insurance Company Limited] Mr. Jagdish Chandra, Adv. Mr. Vishal Meghwal, AoR [(R-57) Ageas Federal Life Insurance Company Limited] [(R-69) Bajaj General Insurance Limited] [(R-85) Royal Sundaram General Insurance Company Ltd.] Mr. Amit Kumar Singh, AoR Ms. Chubalemla Chang, Adv. Mr. Prang Newmai, Adv. [(R-81) National Insurance Company Limited] [(R-88) Tata AIG General Insurance Company Limited] [(R-91) United India Insurance Company Limited] Mr. Vishnu Kant, AoR [(R-82) Navi General Insurance Limited] Mr. Abhishek Kumar Gola, Adv. Mr. Sudhir Naagar, AoR Mr. Anshul Mehral, Adv. Mr. Arun Kumar Nagar, Adv. Mr. Yogendra Kumar, Adv. Mr. Yogesh Kumar, Adv. [(R-87) Shriram General Insurance Company Limited] Ms. Awantika Manohar, AoR Ms. Parul D., Adv. [(R-89) The New India Assurance Company Limited] Mr. Rajat Khattry, Adv. Mr. Siddhartha Iyer, AoR Mr. Aman Gupta, Adv. Ms. Jaispriya Poply, Adv. [(R-92) Universal Sompo General Insurance Company Ltd.] Mr. Suraj Raj Kesherwani, Adv. Mr. Karun Sharma, AoR Mr. Mayank Raj, Adv. [(R-93) Zuno General Insurance Ltd.] Mr. Manu Luv Shahalia, Adv. Ms. Manjeet Chawla, AoR Ms. Jyoti, Adv. Ms. Usha Pant Kukreti, Adv. Ms. Reenu Kumar, Adv. [(R-96) Care Health Insurance Limited] Ms. M. B. Ramya, Adv. Mr. Arindam Ghosh, AoR [(R-97) Galaxy Health Insurance Company Limited] Mr. Dheeraj Nair, AoR Mr. Jayant Mehta, Sr. Adv. Mr. Varghese Thomas, Adv. Ms. Padmaja Kaul, Adv. Mr. Kushagra Sah, Adv. Mr. Azeem Parvez, Adv. Mr. Joydeep Saha, Managing Director and Chief Govt Officer [(R-99) Manipal Cigna Health Insurance Company Limited] Mr. Shishir Mathur, Adv. Ms. Anshul Singh, Adv. Ms. Preeti Gupta, AoR Mr. Amit Anand Daspande, Adv. [(R-101) Star Health and Allied Insurance Co. Ltd.] Mr. H. Chandra Sekhar, AoR Mr. Jadhav Vishal, Adv. [(R-90) The Oriental Insurance Company Limited] [(R-102) General Insurance Corporation Of India (GIC RE)]
