Supreme Court orders SIT probe on claim of planted vehicle involved in accident

New Delhi: The Supreme Court has ordered a probe into a claim by an insurance company that a fraud was being played upon the system by planting same vehicle in a number of accidents to seek compensation under the Motor Vehicle Act.

Holding that insurance companies cannot be left powerless to deny a claim which may not be genuine, a bench of Justices Ahsanuddin Amanullah and Prashant Kumar Mishra ordered Odisha's Director General of Police (DGP) to form a special investigation team to probe the contention by an insurance company that a planted vehicle was involved in an accident.

The matter related to a plea by the Oriental Insurance Company against the Orissa High Court's judgment of May 19, 2022.

The High Court had directed the insurance company to pay the claimants Rs 40,42,162 as compensation, along with interest 7% per annum from the date of filing of the claim application, for an accident which occurred on October 19, 2017.

Advocate H Chandra Sekhar, appearing for the insurance company, claimed that the vehicle, said to be involved in the accident, was a planted one. He said that within one year that vehicle was involved in four other claims which clearly showed that the whole claim of the said vehicle, being involved in the accident, was done with mala fide intention and in fact was a fraud on the system.

The counsel submitted that the brother of the deceased, who is the informant also, on the very first instance had said that an unknown vehicle had hit his brother but after two days when the FIR was filed, the number of the vehicle was given without there being any justifiable reason as to why, on the very first day, the vehicle number was not disclosed.

Upon this, the bench said, "We find that there is no sufficient ground for us to hold either way, but when a larger issue is involved regarding insurance policies being misused with ulterior motive and the insurance companies are required to pay heavy amount of compensation to the claimants, it becomes imperative that the claim is based on genuine factual foundation. In the absence of the same, the insurance companies cannot be left powerless to deny a claim which may not be genuine."

The court asked the DGP to get it verified as to whether the vehicle in question was actually the vehicle involved in the accident, or it was some other vehicle.

The bench sought a report within a period of one month and scheduled the matter for hearing on April 17, 2025.