Fake MACT Claim By Lawyers- Supreme Court Suggests Ministry Of Road Transport To Extend Operation of ‘VAHAN’ Portal To Tackle The Issue

On transient perusal of some of the recommendations put forth by Senior Advocate, Mr. Atul Nanda, showing on behalf of the insurance coverage firm, a Bench comprising Justices M.R. Shah and Sanjiv Khanna requested Mr. Nataraj to get directions from the Ministry of Road Transport and Highways, if a centralised mechanism will be developed so that every one the knowledge essential to a declare will be on the identical portal.

The Bench was listening to the matter pertaining to the fake claim petitions filed by advocates in Uttar Pradesh underneath the Motor Accident Claims Tribunal and the Workmen Compensation Act. A S.I.T was constituted by the High Court of Allahabad to, inter alia, examine these issues. On the final date of listening to, the Apex Court displeased with the inaction of the Bar Council of U.P. in adopting measures in opposition to the erring advocates directed the presence of the President and Secretary of the U.P. Bar Council. At the outset, the Counsel showing on behalf of the Bar Council of U.P. knowledgeable the Court that the President and Secretary have been current in compliance with its earlier order.

The Counsel showing on behalf of the Petitioner apprised the Court that he had filed the petition in opposition to the formation of the SIT, because it had dismissed his shopper’s real declare.

“The Petitioner has filed this petition in opposition to the formation of SIT. SIT was fashioned in 2015. The function of SIT was to investigate the court docket data, advocate’s recordsdata and many others.. Kindly see the order on the premise of which SIT was fashioned…Till the time of SIT, there was no FIR in opposition to advocates, however… data that some false circumstances have been there’s UP…This formation of SIT, on the premise of which my declare has been dismissed…My son has died..I’ve no different treatment.”

Pointing out on the magnitude of the problem at hand, the Court clarified that it isn’t coping with particular person circumstances. In case of any hostile order in opposition to real claims, the Court requested the Petitioner to problem the identical, independently.

“We usually are not contemplating particular person circumstances…If there’s an hostile order, file an attraction. You have seen the bigger subject, what is going on within the Court. Have you seen the info that has come about. Let’s assume in a single case a incorrect order has been handed, it’s a must to problem the order. We can’t put aside the structure of SIT.”

The Counsel humbly submitted, “I’ve some questions earlier than the Hon’ble Court. I’ve challenged the formation of SIT.”

The Court assured the Counsel for the Petitioner that it might undergo the problems highlighted by him and take into account them.

Thereafter, the Counsel showing on behalf of SIT knowledgeable the Court that, “The listing of advocates and accused have been filed two days in the past.”

Dissatisfied with the dearth of data within the listing offered by SIT, the Bench said –

“List of circumstances and chargesheet additionally filed…On which dates chargesheets have been filed, earlier than which court docket chargesheet had been filed nothing has been given. Suppose we need to subject some course…We can atleast direct Ld. Magistrate to border expenses..’

The Counsel for SIT assured the Court that he would file an in depth doc.

“I’ll place it on report…These cost sheets have been filed within the final two months.”

Justice Khanna enquired, “Has sanction underneath 193 and many others. has been obtained?”

The Counsel for SIT submitted, “Till as we speak in none of the circumstances it was required.”

The Bench additional enquired, “In none of these circumstances FIR was registered? These are motor accident claims, there can be corresponding FIRs, the place in these circumstances chargesheet filed?”

The Counsel for SIT knowledgeable the Court that it was not conscious of the opposite circumstances, however within the involved 1372 circumstances, out of 92 circumstances in 36 circumstances chargesheet have been filed.

“I’m not conscious of the opposite circumstances however in 92 circumstances with respect to 1372 circumstances. Out of 92 circumstances in 36 circumstances chargesheet has been filed.”

As the Counsel for SIT talked about within the passing that no police officer in UP was discovered to be concerned in these circumstances of faux claims, the Bench requested him:

“When you say no police officer in UP is concerned, there must be first some investigation… SIT of UP?”

The Counsel for SIT responded that, the discovering in opposition to the cops in U.P. was of negligence, however not of involvement within the faux claims.

“Yes, your lordship. Negligence was discovered, involvement in these faux circumstances not discovered. Some statements weren’t taken of the car house owners. That was the negligence…Disciplinary proceedings have been initiated.”

Displeased with the poor progress within the investigation by SIT, the Bench remarked –

“Please see the SIT report. Is it not stunning?…Out of 1376 circumstances by now, although SIT was constituted in 2015, you might have been capable of full the investigation solely in 247 circumstances…Tell your officers, it’s none of our enterprise to do all this stuff, it is for the supervisor authority to think about.”

The Counsel for SIT elucidated the sensible issues that the investigating company is going through within the matter at hand. One of probably the most essential points was that the insurance coverage corporations weren’t able to act as complainants within the circumstances of faux claims, which was inflicting undue delay.

“The downside that SIT is going through is that the insurance coverage corporations usually are not turning into complainants in FIR. SIT is simply submitting FIR. I’m searching for course, let they turn into a complainant within the FIR, so there can be speedy registration of FIR.”

Aware of the explanation for the insurance coverage corporations to behave on this method, Justice Khanna requested the Counsel for SIT –

“You realise the explanation they don’t need to turn into complainant?”

Justice Shah clarified that the harassment meted out to the complaints in our nation discourages folks to return ahead and file a grievance.

“Because of the conduct. Many a occasions within the nation complainants are handled as accused, and there’s harassment, that’s the reason nobody desires to turn into a complainant…If you assure that there shall not be harassment…In European nations they take into account it’s there obligation to defend the witness…”

Justice Khanna added –

“Not solely from the police, the entire class of folks concerned, there can be threats…”

Stating {that a} police officer can very properly act because the complainant, Justice Shah requested the SIT to turn into the complainant.

“You can turn into the complainant now.”

Another downside highlighted by the Counsel for SIT was that there are two units of Investigating officers within the SIT – one is enquiring and the opposite investigating.

“The downside we face is one IO is concerned in enquiry…thereafter new IO will come.

We are having 2 units of IO, one enquiring and one other set will examine.”

Explaining the process that the SIT is to observe, the Bench said –

“You are there for conducting enquiry, thereafter it’s a must to file a report earlier than the involved police station. Thereafter, the IO of the PS would be the investigating officer.”

The Counsel for the SIT responded, “Here, the IO of the SIT is investigating the matter.”

The Bench was not happy that the SIT may examine.

“That is incorrect. Ask him whether it is permissible or not?”

It was clarified by the Counsel showing for SIT, “As per the HC order, we have now to lodge the FIR and examine the matter.”

Unconvinced, the Bench commented, “That was enquiry.”

The Counsel for SIT asserted, “No, your lordship, the impugned order says investigation.”

Again on the problem of gradual progress of the investigation, the Bench remarked, “In 5 years, how solely 247 circumstances.”

Providing rationalization for the delay, the Counsel for SIT reiterated –

“These circumstances have been forwarded by the insurance coverage corporations…Can we report within the order Milords, that they won’t be harassed. Let them turn into…They are required to be as a witness.”

The Counsel showing for the Bar Council of India vehemently opposed the thought of the insurance coverage corporations performing because the complainants, as he was of the opinion that it might delay the processing of real claims.

“I cannot conform to this proposition…Now in case the insurance coverage corporations turn into complainants they could for each declare that has come, they could ship a report and all the real claims can even get pending, other than the harassment.”

The Bench reminded the Counsel that it ought to not be presumed that the insurance coverage corporations will file false complaints –

“Insurance corporations are additionally not all for saying that each case is a false case. The complete quantity of circumstances throughout 5 years is 1300 odd…”

Reiterating his concern, the Counsel for BCI submitted –

“What I’m saying that the insurance coverage firm can provide them the grievance…They shouldn’t be made complainants…All real circumstances can even get… Let the SITs of all of the States look into it.”

The Bench requested Mr. Atul Nanda, to advise the insurance coverage corporations to file complaints, as it’d expedite the method.

“Ultimately you might have despatched the grievance, you advise them. You will also be the complainant.”

Agreeing to do the needful, Mr. Nanda commenced his arguments by referring to Section 159 of the amended Motor Vehicles Act which offers with the method of offering data of the accident. He highlighted that the Accident Information Report (AIR) turns into the premise for the declare petition earlier than the Motor Accident Claims Tribunal. To put the content material of the supply into context, he additionally referred to 3 judgments of the Supreme Court –

“I need to present three judgments from 2009 onwards. Kindly have the Motor Vehicles Act modification in 2019. My lords kindly have Section 159 (data to be given relating to the accident). How does it kick off and the way it’s to kick off….Now, the AIR turns into the premise of the declare petition. Kindly see 166(4)…There are guidelines underneath MV Act.”

Mr. Nanda submitted that in 2007, when the supply was thought-about, the Supreme Court had directed necessary implementation of the supply.

“In 2007, this provision was thought-about. Fake claims, expeditious disposal of claims was on the again of the thoughts…The Supreme Court stated that you will need to implement this provision in each State…”

In 2009, he averred, the Delhi High Court had clarified that the AIR to be forwarded to the jurisdictional accident declare tribunal. He additional emphasised that the Supreme Court had later endorsed the High Court’s order. Mr. Nanda, elucidated the following improvement to point that it doesn’t seem that the States have adopted the rules laid down by the Apex Court.

“In 2009 the Delhi High Court, in a really steadiness strategy, got here and laid down that each time there’s an accident, you will need to as a police officer in compliance of Section 159 ahead this to the jurisdictional accidents declare…These instructions are contained in a judgment, Rajesh Tyagi which bought approval of Supreme Court in 2009. Justice Ravindran stated…. You will unscrupulously observe the course of Delhi High Court…Thereafter in 2020 J. Sikri reiterates, not adopted. It is mandate of regulation that underneath 159 cops ought to confirm these information… Not solely that , the newest order of 2021 by J. Kaul. Kindly see, if that is finished, then why does faux declare happen. Because we have now an excessive amount of time between the declare petition and the accident…Now, that is the newest is. I’m speaking about prevention, I’ll come to the treatment later. Your lordship should ask the states what they’ve finished 2007 onwards…These are the course:

The jurisdiction police station ought to report the accident to the Tribunal and the insurer inside the first 48 hours over electronic mail or at a devoted web site…for the adjudication of such claims what’s required within the Identification of particular person injured/deceased, authorized heirs, their age, age of deceased and what kind of employment he was in. If these components are there then it turns into simple for the Motor Vehicle tribunal to go order in 30 days.”

The Bench added, “Involvement of the car additionally.”

It was highlighted by Mr. Nanda, that the scope of manipulation elevated manifold as a result of of the time hole between the accident and the declare. He urged that if a declare is remitted to be filed inside a day, then the quantity of faux claims will lower.

“Yes, involvement of the car. The motorcar varieties are very complete. You should click on photos…very very tough to govern. Manipulation occurs when there’s a time hole…if that is finished inside 1 day..the best way they’re conspiring and creating faux claims will diminish.”

The Bench enquired in regards to the sorts of faux claims –

“What kind of faux claims are filed? Either the autos weren’t concerned, or no accident occured.”

Mr. Nanda submitted that he had been capable of categorise the faux claims into 5 teams.

“I categorise these into 5. The first kind of case is when the particular person has met the pure loss of life. In my word I’ve filed circumstances of States, the place an individual has died of most cancers and a motor accident declare has been filed.”

The Bench urged that the knowledge pertaining to the modus operandi of the faux claims will also be offered by the SIT.

“We will ask the IO additionally. He will know the way the faux claims are filed.”

The Counsel for the SIT knowledgeable the Court, “SIT has filed the modus operandi of faux claims.”

Referring to his notes Mr. Nanda apprised the Bench that the problem of faux claims is just not restricted to U.P., however is a pan India downside. Thereafter, he continued together with his submissions pertaining to the categorisation of the faux claims –

“Second, there are a big quantity of circumstances…the fraudulent implantation of autos takes place..Third, there’s a false implantation of a driver…kindly see, many a occasions claimants are illiterate, there are ambulance chasers, they provide claimants who file false claims…Unlike CPC, the MV Act..my accident can happen in Delhi, I can file a declare in Guwahati…Fabricated insurance coverage, pertaining to exaggerated claims. In the later half of my word I’ve offered recommendations.”

Some recommendations have been proposed by Mr. Nanda, which he thought may help the Court in tackling the problem at hand. He knowledgeable the Court in regards to the Government portal VAHAN, which already has the main points of the proprietor, insurer and specific of the insurance coverage. He really helpful that the stated portal will be utilised for disseminating the knowledge pertaining to the AIR, so that everybody is made conscious of the declare.

“Now, luckily, expertise has improved…There is one thing referred to as a VAHAN portal…In the VAHAN portal there’s the cellular quantity of the proprietor, particulars of insurance coverage coverage and the insurance coverage firm, if there’s any data on VAHAN of that AIR. If it’s to be applied inside 48 hours as per J. Kaul’s order, inside 48 hours the proprietor will know that his car has been impounded ..the insurance coverage corporations can even set in movement…Now, kindly have the instructions to the States. Three HCs have arrange SIT – Rajasthan, Gujarat and UP…When my firm went to Punjab, please arrange SIT…The Hc refused to entertain by plea saying that the matter is pending earlier than the Supreme Court. There is a necessity for my lords to offer apply instructions, not solely to the MACTs, the police institution, Home Dept, in addition to the transport ministry of GOI…Kindly have 2 judgments, your lordships, (2007) 12 SCC 352…I’ll solely give the related paragraphs. (2007) 12 SCC 352, related paragraphs are 2, 5 and 10. The Supreme Court exhibits that this has not been applied in….(2010) 6 SCC 768 para 8 and 9…I’ll cite one order of DHC. Here it was laid down that AIR is a should. This judgment bought an approval of my lords in J. Ravindran’s order within the celebrated judgment of …(2010) 2 SCC 607…Relevant paragraphs, para 14, course are given in para 16.”

Justice Khanna requested Mr. Nanda, “Is it right that in phrases of CrPC, all of the FIRs to be registered on the Central server.

Mr. Nanda responded, “Not a central server… There is a portal from every States.”

Rephrasing the earlier assertion, Justice Khanna enquired, “Central server can be a incorrect time period, it’s a devoted server…Just test it up, if that is factually right, what I’m saying.”

Justice Shah added, “All purposes are to be made on-line, so no query of additional manipulation…”

Pointing out some sensible difficulties in implementing the suggestion given by Mr. Nanda, Justice Khanna said –

“Once FIR knowledge is genuine, date and time can’t be backdated. Data is then accessible to all people…The problem is then we must improve all of the workers at MACT in order that they will suo moto register…Look on the sensible downside, underneath 116(1) you possibly can file individually additionally, then there can be a number of declare purposes registered. Then, suppose FIR is incorrectly registered…so long as we have now the info of FIR, it must be made necessary or the Court workers ought to connect it.”

Further, Justice Shah added, “If it is just on the stage of AIR, then it must be despatched. That is just for the aim of declare petition.”

Concluding his submissions, Mr. Nanda apprised the Court that 25% to 35% of the claims filed have been seen to have been faux, which incorporates circumstances of exaggerated declare.

“Only request, SLP the place my WP was dismissed for structure of SIT…One humble submission..if my lords direct that since.. There is an insurance coverage bureau that collects knowledge. My studying of knowledge of accountable our bodies is 25 to 35% faux. It could also be faux as a result of it’s completely faux or perhaps as a result of it’s exaggerated.”

The Bench assured, “We will take into account your recommendations…Mr. Nanda, these are coverage issues additionally…It will be finished as a pilot challenge in a single or two locations…if it really works properly, hiccups that come..We need to know their (UOI) response. They are critical about faux claims we need to know.”

The Counsel for SIT learn out the 11 sorts of faux circumstances that it had recognized.

“On 06.12.2021, we have now given modus operandi. There are 11 sorts of circumstances.”

The Bench sought ASG, Mr. Nataraj’s help within the matter to see how the circumstances of faux claims may very well be tackled at a pan India stage.

“Mr. Nataraj, we are going to prefer to have your help, you possibly can contact Jayant Sood additionally, he can help you additionally…These are faux petitions underneath the MV Act in addition to the Workman Compensation Act. Initially on this case it was discovered that this was occurring in UP…now it is pan India. Now your Ministry of transport has give you some VAHAN..that may be improved additionally…How are you able to (Ministry of Transport) assist in getting such faux claims down…One suggestion was underneath S. 159 AIR register is to be maintained, police officer inside 48 hours is required to ship all particulars of the involved to MACT Court. This can be thought-about as a declare petition. It was discovered that, declare petition will be filed pan India. Now in a single court docket it’s filed, the identical factor is filed in one other place and no person is aware of… Can it not be that the particulars of AIR will also be on the Vahan portal, so that everyone is aware of that this car is concerned in an accident…Fake petition filed a number of occasions, easy methods to test that.”

Mr. Nataraj knowledgeable the Court, “We will attempt to develop a centralised system for this.”

The Council showing on behalf of the Bar Council of U.P. submitted that three disciplinary committees have been constituted and the hearings have been happening.

“Three disciplinary committees have been fashioned on 27.11.2021. The listening to is occurring. It occurred as we speak additionally. I’m humbly requesting that the president and secretary are there. I’ll help your lordship.”

The Bench emphasised on the conduct of the State Bar Council in not contemplating the complaints it obtained for an entire 12 months, in order that the identical routinely goes to the BCI and they’re relieved from their obligation of passing any hostile order in opposition to their members.

“We need to impress upon them that they’re the representatives of the advocates…could circumstances it’s discovered that when Complaints are filed in opposition to the advocate, they’re saved pending for a couple of years. So, Section 36(b) would come into play and it might routinely get transferred to the Bar council of India, in order that they don’t have to take any choice. They don’t need to displease their pals. UP is to dispose it off inside one 12 months…Only in distinctive circumstances when it isn’t disposed off for a legitimate purpose, solely it’s required we switch….We wished to impress upon them that the purity of this establishment is of their palms – the Bar Council of State and Bar Council of India.”

Expressing remorse on behalf of the President and Secretary, the Counsel for Bar Council of U.P. reiterated, “I can be current. If your lordship dispenses them (President and Secretary)”

The Bench is to go an in depth order, the day after tomorrow i.e. Thursday.

[Case Title: Safiq Ahmad v. ICICI Lombard General Insurance Co. Ltd. & Ors. SLP (C) 1110/2017]