IN THE HIGH COURT OFJ UDICATURE AT MADRAS DATED: 27.7.2010 CORAM: THE HONOURABLE MR.JUSTICE B.RAJENDRAN C.M.A.No.246 of 2007 & M.P.No.1 of 2007 The New India Assurance Co. Ltd., 114, Katchery Road, Mylapore, Chennai. .. Appellant/3rd Respondent Vs. 1. K.N.Shanmugham 2. Vadivel 3. Tmt.Hosannah Begau (Respondents 2 and 3 ex-parte in lower Court and hence, notice dispensed with) .. Respondents/Petitioner and Respondents 1 & 2 Civil Miscellaneous Appeal against the Award and decree dated 11.7.2006 in M.C.O.P.No.166 of 2002 on the file of the Motor Accidents Claims Tribunal (Fast Track Court No.4), Coimbatore at Tiruppur. For appellant : Mr.N.Vijayaraghavan For respondent-1 : Mr.S.S.Swaminathan JUDGMENT Aggrieved by the Award of the Tribunal for the injuries sustained by the first respondent-claimant, at Rs.3,56,400/- with interest @ 7.5% p.a. , as against the claim of Rs.5,00,000/-, the Insurance Company has come forward with this appeal. 2. When the appeal is taken up for enquiry, learned counsel for the first respondent-claimant made an endorsement on the memorandum of grounds of appeal that "the main MCOP 166 of 2002 itself is not being pressed by the respondent-claimant and hence, the appeal may be allowed." 3. Learned counsel for the first respondent-claimant would contend that in the Tribunal, similar memo was filed, but as no case was pending, the same could not be recorded. https://hcservices.ecourts.gov.in/hcservices/ 4. Learned counsel for the appellant-Insurance Company submitted that the Insurance Company has already given a complaint with regard to the aspect that no accident has occurred and the CBCID enquiry is progressing and that is the reason as to why the claimant is withdrawing the MCOP itself. 5. In this regard, it is necessary to notice that earlier, the First Division Bench of this Court in W.P.Nos.7389, 39956 and 39968 of 2006, by order dated 1.3.2006 (National Insurance Co. Ltd. Vs. Director General of Police) reported in 2006 (3) CTC 470, has directed the CBI to investigate into the bogus claims before the Motor Accidents Claims Tribunals and various complaints of insurance scam and also further directed the CBI to investigate into the complaints filed by the Insurance Companies and the complaints relating to the use of fake FIRs by different Police Stations. The relevant portion of the order passed by the First Bench, in the said decision reported in 2006 (3) CTC 470 (cited supra), is extracted hereunder: "6. .... Having considered the submissions of the learned counsel for the parties, we are inclined to handover the investigation in the matter to the CBI. 7. Motor Accident Insurance has been made compulsory by Parliament for the benefit of innocent motor accident victims. The Parliament has further mandated that the defence of the insurer shall be limited so as to ensure that innocent victims get compensation from the Insurance Companies rather than seek relief from men of straw. It is a beneficial legislation to ensure certainty of compensation to victims and the Insurance Companies have a duty to ensure the same. It is this beneficial legislation which has been totally abused by some unscrupulous elements and it is distressing to note that a large number of police officials and medical doctors are involved in the scam. We are, however, refraining from entering upon the details lest it may likely to prejudice either party, but we think that since the accusations are directed mainly against the local police officials, it is desirable to entrust the investigation of the matter to an independent agency like the CBI so that all concerned including the Insurance Companies may feel assured that an independent agency is looking into the matter and that would lend the final outcome of the investigation credibility. Mr.Somayaji maybe right in saying that the local police are carrying out the investigation faithfully, but the same will lack credibility, since the allegations are mainly against the Police Department. Therefore, in our opinion, it would be advisable and desirable as well as in the interest of justice to entrust the investigation to the CBI forthwith in https://hcservices.ecourts.gov.in/hcservices/ respect of the complaints filed by the National Insurance Company as well as other Insurance Companies. 8. We accordingly direct that the CBI shall investigate into the said complaints filed by the Insurance Companies as well as complaints relating to the use of fake FIRs by different police stations. The learned counsel appearing for the Insurance Company states that the entire cost of the CBI would be met by the Insurance Companies. The State is directed to extend its full cooperation and support and provide all necessary infrastructure to the CBI in investigation of the complaints. The CBI is directed to submit its preliminary report within a period of four months from today. All future complaints by the Insurance Companies shall be directly filed before the CBI. The Director of Central Bureau of Investigation, New Delhi is directed to constitute a Special Team of Investigators for carrying the investigation in the present matter. It is further directed that when filing of such complaint is brought to the notice of the concerned Motor Accident Claims Tribunal, the Tribunal shall take note of it before passing the order and if necessary to record further evidence in order to ascertain the genuineness of the claim. We make it clear that our order should not be taken as a reflection on the credibility of either the local police or the State Government. We have passed the order keeping in mind the larger requirements of justice." 6. Subsequently, it is stated by the counsel for the parties that some of the MCOPs. before the Tribunals concerned, came to be withdrawn, as observed by another Division Bench of this Court in W.P.M.P.No.1060 of 2009 in W.P.No.7389 of 2005, etc., (The Director, CBI, New Delhi Vs. National Insurance Co. Ltd.), by order dated 22.12.2009, and the said subsequent Division Bench also gave certain directions to the CBCID for proceeding with their investigation with regard to bogus insurance claims. The said order of the subsequent Division Bench, dated 22.12.2009, is also extracted hereunder: "W.P.M.P.No.1060 of 2009 is filed by the Director, Central Bureau of Investigation, New Delhi, seeking a direction that all cases of false insurance claims may be investigated by the Tamilnadu Police, unless specifically directed by this court for investigation by C.B.I. 2. The matter in issue pertains to false insurance claims lodged by the claimants by filing cases under the Motor Vehicles Act, 1988. 3. This Court, vide order dated. 1.3.2006 made in W.P.Nos. 7389, 39956 and 39968 of 2005, directed the C.B.I. to take up investigation in all cases pertaining to fraudulent insurance claims and also directed that all future complaints lodged by the insurance companies shall be directly dealt with the C.B.I. itself. https://hcservices.ecourts.gov.in/hcservices/ 4. The special Leave Petition preferred by the Tamilnadu challenging the said order was also dismissed by the Hon'ble Supreme Court on 11.07.2006. 5. The C.B.I. has filed a review petition and the Hon'ble Supreme Court modified the order directing the C.B.I. to initially register 13 cases of fraudulent insurance claims. Accordingly, the C.B.I. has registered 13 cases and also filed final reports before the competent courts. 6. It is stated in the affidavit in support of this petition that totally 29 cases were registered by the C.B.I. as per the orders of this Court, investigation has been completed, final reports have been filed in 21 cases and closure reports have been filed in the remaining 8 cases. 7. It is also stated that the C.B.I. is relatively a small organisation compared to the State Police and its specialised agency is available in the State in the form of C.B.C.I.D. and they may be directed to take up the undertaken that if this court specifically directs them to register and investigate such cases, they will do so. 8. On behalf of National Insurance Company, Coimbatore, an affidavit has been filed stating that after the registration of cases pertaining to fraudulent insurance claims by the C.B.I., hundreds of M.C.O.Ps. came to be withdrawn and claims worth Rs.81 Crores were withdrawn at various stages. However, still several M.C.O.Ps. are being filed and therefore, a specialised agency, viz., C.B.C.I.D., Chennai, with Additional Director General of Police at the helm, with a monitoring or supervisory mechanism, has to be formed. 9. This Court considered the submissions of Mr.N.Chandrasekaran, learned Special Public Prosecutor for C.B.I. cases, Mr.P.Kumaresan, Learned Public Prosecutor and Mr.N.Vijayaraghavan, Learned Counsel appearing for the consortium of insurance companies. 10. Taking into consideration the facts and circumstances of the case, the following directions are issued:- a. In respect of the cases that were already registered or the complaints that were already received and also any future complaints pertaining to the false insurance claims lodged by the insurance companies, the C.B.C.I.D., Chennai shall take up all the cases and investigate into the matter; b. The Additional Director General of Police shall form a special team for registration and investigation of cases relating to false insurance claims. https://hcservices.ecourts.gov.in/hcservices/ c. The consortium of insurance companies will provide necessary infrastructural support to the C.B.C.I.D Chennai for undertaking this task. d. The C.B.C.I.D., after investigation, shall file final reports before the jurisdictional court at Chennai; e. A copy of the final report to be filed by the C.B.C.I.D is to be furnished to the insurance company on payment of necessary and required charges. 11. It is really a matter of vanquish that in spite of the orders that have been passed, even today, it is reported that such false claims are being filed and the value of such claims amounts to crores of rupees. The learned Public Prosecutor assures that with the above directions, the C.B.C.I.D will take effective steps, form a team and see that the menace is reduced. 12. With the above directions and observations, W.P.M.P.No.1060 of 2009 is disposed of. The above directions also cover the matter relating to other connected writ petitions and criminal Original petitions referred to above." 7. Following the abovesaid orders of the Division Benches, it is hereby observed that the withdrawal of the present MCOP will not in any way affect the pendency or investigation in respect of the criminal case proceeded by the CBCID/CBI and it will not also in any way hamper the CBCID/CBI or the Police authorities in enquiring into the allegations of fraud committed against the Tribunal by the claimant in filing the MCOP. The claimant is permitted to withdraw the MCOP itself. It is made clear that this permission is granted to the claimant and aforesaid endorsement for withdrawal of the MCOP is accepted only to the limited extent that as the Award and decree had been passed, the same have to be set aside. 8. In view of the endorsement made by the learned counsel for the first respondent-claimant, the appeal is allowed, setting aside the impugned Award and decree of the Tribunal. MCOP No.166 of 2002 on the file of the Tribunal, is itself treated as withdrawn. No costs. The Miscellaneous Petition is closed. 9. In view of the setting aside of the impugned Award and decree of the Tribunal, the amount as deposited by the appellant-Insurance Company, along with the interest, as per the interim order of this Court at the time of admission of the appeal and the amount deposited at the time of filing of the appeal, shall be withdrawn by them. https://hcservices.ecourts.gov.in/hcservices/ 10. The enquiry insofar as the criminal case and the investigation into the bogus insurance claims and fake FIRs, are concerned, by the CBI/CBCID, the same shall be proceeded by the CBI / CBCID, in accordance with law, as directed by the Division Benches in the above extracted orders dated 1.3.2006 and 22.12.2009. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar cs To 1. The Motor Accidents Claims Tribunal (Fast Tract Court No.4), Coimbatore at Tiruppur. 2. The Section Officer, V.R. Section, High Court, Madras. 3. The Director, Central Bureau of Investigation, New Delhi, 4. Additional Director General of Police, C.B.C.I.D., Chennai. 1 cc To Mr.S.S.Swaminathan, Advocate, SR.54815. 1 cc To Mr.N.Vijayaraghavan, Advocate, SR.54430. C.M.A.No.246 of 2007 SSK(CO) RVL 15.11.2010 https://hcservices.ecourts.gov.in/hcservices/