Madras HC Orders District-Level SITs to Probe Fake Motor Accident Insurance Claims Across Tamil Nadu
The Madras High Court directed the State government to constitute Special Investigation Teams in every district to investigate fraudulent motor accident insurance claims, including fake accidents and forged medical records, while separately ordering CDRs to be furnished in eight specific cases within two weeks.
Justice G.K. Ilanthiraiyan, sitting singly at the High Court of Judicature at Madras, disposed of a writ petition filed by Go Digit General Insurance Company Ltd on 29 July 2026, issuing seven specific directions to the State of Tamil Nadu and the Director General of Police to set up district-level Special Investigation Teams (SITs) tasked exclusively with probing fraudulent motor accident insurance claims. The petition, filed under Article 226 of the Constitution of India seeking a Writ of Mandamus, arose from a pattern of fake accidents, forged insurance policies, fabricated injury records, and false medical bills that the court found to be causing mounting financial losses to insurance companies. The judgment also addressed a Supreme Court direction in Safiq Ahmad v. ICICI Lombard Insurance Company that had not been effectively implemented by the State.
The Dispute Before the Court
Go Digit General Insurance Company Ltd, having its office at Anna Salai, Teynampet, Chennai, approached the High Court with a prayer to direct the first respondent — the State of Tamil Nadu, Department of Home Affairs — to form SITs at every district level, with financial and administrative support, to investigate fraudulent insurance claims. The petition sought authority for these teams to initiate criminal action under IPC/BNS or, alternatively, to authorise the District Crime Branch and Economic Offences Wing to investigate suspicious claims.
The petitioner had earlier filed Crl.O.P. No. 2302 of 2021 seeking an SIT headed by retired judges of the court, and another, Crl.O.P. No. 44174 of 2021, seeking transfer of investigations into complaints concerning fake insurance policies. An earlier order dated 9 February 2021 had directed the respondent police to complete investigation and file a final report. Despite these proceedings, fraudulent claims continued and the petitioner subsequently submitted a representation seeking institutional implementation of Annexure XIII — Procedure No. 25 under Rule 150A of the Central Motor Vehicles Rules, 2022. No action was taken on that representation.
The Problem of Fraudulent Claims and the Alleged Nexus
The court observed that Motor Accident Claims Tribunals were passing awards in favour of fraudulent claimants based on misplaced sympathy, leaving insurance companies as the principal financial victims. The judgment described what it called “an unholy nexus among fraudulent claimants, the insured, drivers, auto mobile repair shops, police men” and certain members of the legal and medical professions. Financial losses to insurance companies from such claims were described as increasing day by day.
The Supreme Court, in S.L.P. No. 1110 of 2017 in Safiq Ahmad v. ICICI Lombard Insurance Company Co. Ltd. and Others, had directed State governments to form SITs to enquire into seven categories of fake claims: non-road accident injuries converted into road accident claims; fraudulent implantation of vehicles; false implantation of drivers; claimant implantation; multiple claims at different locations for the same accident filed before both Motor Accident Claims Tribunals and Labour Courts; fake or fabricated insurance policies; and fake or fabricated income and medical documents for exaggerated compensation. The court in the present matter found that these directions had not been effectively implemented in Tamil Nadu.
What Section 159 and Rule 150A Provide
The court extracted and analysed Section 159 of the Motor Vehicles Act, 1988, as amended by the Motor Vehicles Amendment Act, 2019 (Act No. 32 of 2019). Section 159 requires a police officer, during investigation, to prepare an accident information report in the prescribed form within three months and submit it to the Claims Tribunal and such other agencies as prescribed. The court read this provision as placing claimants and insurance companies on equal footing in advancing accurate insurance claims and curbing false ones.
The court then turned to Rule 150A read with Annexure XIII, Procedure No. 25 of the Central Motor Vehicles Rules, 2022. Procedure No. 25 imposes a duty on insurance companies to verify the correctness and genuineness of every claim through their own officers or appointed investigators or surveyors. Where a claim is found to be based on incorrect information, the designated officer must send the surveyor's report to the concerned Deputy Commissioner of Police. Where a fake accident is detected, the insurance company is at liberty to apply before the Deputy Commissioner of Police for call detail records (CDRs) of the driver of the offending vehicle.
The court held that this framework already empowers insurance companies to investigate claims through independent sources, and that CDRs play a major role in proving or disproving facts relating to an alleged accident.
Why a District-Level SIT Was Found Necessary
A Status Report filed by the Assistant Inspector General of Police disclosed that constituting an SIT headed by an officer not below the rank of Additional Director General of Police in every district was not practically feasible due to administrative and logistical constraints. That rank of officer was already burdened with supervising investigations under the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 (TNPID Act) and other special enactments. The Economic Offences Wing alone was also found insufficient, given manpower shortages and the large volume of independent cases.
The court therefore fashioned a workable structure: SIT investigations at the district level to be handled by Deputy Superintendents of Police attached to District Crime Branches in the districts, and by Assistant Commissioners of Police attached to City Crime Branches in Commissionerate areas — officers at a more operational rank than what the State had considered impractical.
The Seven Directions Issued
The court issued the following directions to the first and second respondents — the State of Tamil Nadu and the Director General of Police:
Constitution of SITs: SITs are to be constituted at the district level in every district of Tamil Nadu, with necessary financial and administrative support, to conduct comprehensive investigation into fraudulent insurance claims involving fake accidents, misrepresentation of facts, forged insurance policies, fabricated injuries, and false medical reports and bills, and to initiate appropriate criminal proceedings against those responsible.
Compliance obligation: The first and second respondents are to ensure that SITs are constituted in every district and function in strict compliance with the court's directions.
Leadership of SITs: Each district SIT is to be headed by the Deputy Superintendent of Police, District Crime Branch, in districts, and by the Assistant Commissioner of Police, City Crime Branch, in Commissionerate areas.
Supervision structure: The functioning of each SIT is to be monitored, supervised, and periodically reviewed by the concerned Superintendent of Police, District Crime Branch, in the respective zones, under the overall guidance and supervision of the Additional Director General of Police, CBCID, Chennai.
Jurisdiction of SITs: Each SIT shall have jurisdiction to receive, enquire into, and investigate complaints relating to fraudulent insurance claims, including fake motor vehicle accidents, fabricated insurance policies, false injury claims, forged medical records and bills, and all connected fraudulent activities.
CDR requests under Rule 150A: Whenever an insurance company makes a request in accordance with Rule 150A read with Annexure XIII, Procedure No. 25 of the Central Motor Vehicles Rules, 2022, the SIT shall process the request and facilitate collection of relevant materials, including CDRs, from competent authorities, wherever legally permissible, within a reasonable time.
Departmental proceedings: Heads of departments are directed to initiate appropriate departmental disciplinary proceedings against officials found responsible for dereliction of duty or misconduct in facilitating or failing to prevent fraudulent claims, without prejudice to criminal proceedings wherever warranted.
Directions in the Eight Specific Cases
Separately, the court addressed eight Motor Accident Claims Petition cases in which the petitioner had filed complaints. These cases span MACT courts in Chennai (Courts of Small Causes, including the Chief Judge's Court and the II Judge's Court) as well as courts at Karur and Chidambaram. The claims involved amounts ranging from Rs 10 lakh to Rs 1 crore and above, with police stations including M1-Madhavaram, T12-Poonamallee Traffic Investigation, Velayuthampalayam, Omerabad, TIW-Chrompet, TIW-Red Hills, and Annamalai Nagar.
The investigating officers in all eight cases are directed to furnish the CDRs of the drivers of the vehicles concerned, in accordance with law, within two weeks from the date of receipt of a copy of the order, to the petitioner.
Outcome
The writ petition was disposed of with all seven directions to the State and police authorities, along with the separate direction for CDR disclosure in the eight identified cases within a fortnight. No costs were awarded. The matter was heard with Mr. N. Shylappa Kalyan appearing for the petitioner and Mr. R. Ganesh Kumar, Counsel for the Government of Tamil Nadu (Criminal Side), appearing for the respondents.