In 5 yrs, only 18% of probe complete in UP fake claims cases: Why SC slammed SIT for ‘lethargy’

Allahabad HC had set up an SIT in 2015 when instances of fake compensation claims were brought to its notice. But lack of movement on the probe pushed SC to comment adversely.

File photo of the Supreme Court of India | Manisha Mondal | ThePrint

New Delhi: A Special Investigation Team (SIT) formed five years ago to probe complaints over malpractices of filing fake insurance claims cases in Uttar Pradesh has only completed its investigation in less than one-fifth of the cases, a report submitted to the Supreme Court has revealed.

The disclosure came to notice this month after the top court directed the Bar Council of India (BCI) to take action against 28 lawyers named in the report, since the UP Bar Council was dithering in doing so, despite repeated SC orders going as far back as 2017.

In its order, the apex court blasted the SIT for its “lethargy” and “negligence” in finishing the probes.

“It is very unfortunate that despite the fact that the FIRs have been filed as far as back in the year 2016-17, still the investigation is reported to be pending,” an SC bench led by Justice M.R. Shah observed in its order, which revealed that the probe is complete in just 18 per cent of the complaints.

Why Allahabad HC set up SIT

The SIT inquiry was set up five years ago by the Allahabad High Court, and has received 1,376 complaints of suspicious claims, of which only 246 cases have been probed, data from the SC order showed.

The HC had formed the SIT in October 2015 when instances of fake compensation claims, either under the Workmen Compensation Act or Motor Accident Claims Tribunal Act, were brought to its notice. 

Recounting these instances, the HC order highlighted 29 fake claims, which trial courts had already ruled on, releasing compensation to the tune of Rs 1.23 crore. According to the HC order, claims for over Rs 6 crore were pending then for final adjudication.

The top court added that the HC had set up the panel with a specific purpose — for conducting inquiry and investigation of fake claims, causing loss worth crores to the insurance companies. Yet, it was unfortunate that “even the SIT has not taken the prompt action and has not completed investigation/inquiry”.

The police have registered 92 criminal cases so far, after the SIT found prima facie offence against 166 persons, including the 28 advocates that have now been suspended by the BCI pursuant to the SC order. These lawyers are accused in 55 cases.

Out of the total 92 cases, the police have filed charge sheets only in 32, and even in the cases where charge sheets have been filed, no charges have been framed by the courts, the SC order noted. 

Moreover, the SIT highlighted in its report that a total of 233 suspicious claims against various insurance companies were dismissed in UP over a period of time either due to default or for want of being pursued. The total amount that could have been raised as compensation via these fake claims was estimated at over Rs 30 crore, revealing the size of the alleged scam. These claims are not part of the 1,376 complaints which the SIT is looking into.

Matter drags in SC, UP Bar Council flouts order

The matter had reached the Supreme Court in December 2016, but it remained pending without any effective hearing for over four years.

On 5 January 2017, the top court took cognisance of the matter, as it refused to quash the constitution of the SIT, as demanded by a petitioner. Instead, the court expanded the scope of the investigation and arrayed all states as parties in the matter. 

In its 2017 order, the court expressed concern over fake compensation cases, seeking to evolve a mechanism to prevent them.

Notices were issued to registrars of all HCs to ascertain, from Motor Accident Claims Tribunals, doubtful cases that prima facie may have required investigation. The top court had then also sought response from the UP Bar Council and the BCI on the proposed action against advocates who were identified to have indulged in the unethical practice.

The matter was listed seven times but never got heard until Justice M.R. Shah’s bench took it up in September this year and sought a status report from the UP Bar Council on disciplinary proceedings taken against the errant lawyers, if any.

Upon learning that the state bar council had taken no steps with regard to its directives, the SC in October instructed the BCI to step in and take appropriate action against the lawyers. On 16 November, the court issued specific orders to the SIT to provide BCI with the names of the lawyers whose names emerged during the probe. It was only then that the apex body for advocates intervened and issued the suspension orders.

The court will next take up the matter on 8 December, when it will also hear the investigating officer and the insurance companies to understand the modus operandi adopted to file fake compensation claims.

(Edited by Amit Upadhyaya)