The Madras High Court on Friday warned four public sector insurance companies of criminal action if they do not conduct in-house inquiries on bogus motor accident claims and submit the details to an expert body appointed by the court under the chairmanship of Justice K. Chandru, a retired judge of the court.
Justice P.N. Prakash issued a warning to United India Insurance Company, New India Assurance Company, Oriental Insurance Company and National Insurance Company. He said, “custodians of public wealth could not be permitted to sweep the dirt under the carpet and sleep as if nothing affected them.”
The judge said it was indeed strange to hear from N. Vijayaraghavan, counsel for Cholamandalam General Insurance Company, at whose instance the court came across a mega racket of bogus claims that the four public sector companies had not acted despite being informed of the proceedings pending before the Expert Body.
“In fact, even the Expert Body had sent notices for response from these four public sector insurance companies as could be seen from paragraph number five of its interim report dated October 4, 2018. Perhaps, they too have enough skeletons in their cupboard which they do not want the world to know,” he added.
‘Unearth duplicate claims’
The judge directed the four insurance companies to “wake up at least now and conduct in-house inquiries to unearth duplicate claims” and said: “It is made clear that if they still stand to continue to be a Rip Van Winkle, this court may have to draw an inference that officials of these companies are in league with the bogus claimants.”
Mr. Justice Prakash had appointed the Expert Body early this year after coming across 353 bogus motor accident claims, estimated at ₹60.71 crore, having been preferred before various motor accident claims tribunals across the State. The claims related to five insurance companies.
The court took note of a turf war between legal practitioners in motor accidents claims tribunals having gone to the “miserable extent” of 55 case bundles of an advocate named S. Thambi having gone missing from one of the tribunals functioning within the Madras High Court premises.
Shocked over the disquieting features, the judge on July 19 ordered a Crime Branch-Criminal Investigation Department (CB-CID) inquiry into the missing bundles. He also appointed the expert body led by Mr. Justice Chandru to examine the 353 bogus claims and suggest remedial measures.
72 claims dropped
After the order was passed, curiously 72 motor accident claims totally valued at ₹ 8.90 crore were quietly withdrawn from various tribunals.
In the meantime, the Expert Body too conducted a thorough inquiry and found about 76 duplicate claims having been filed before various tribunals in the State.
It also found credible materials to suspect the involvement of seven advocates in the racket. Taking serious note of the revelation, Mr. Justice Prakash stayed all proceedings in the 76 motor accident claims and directed the seven lawyers to explain the charges levelled against them by December 13.
