The Supreme Court has ordered a Special Investigation Team (SIT) probe into a forged insurance policy used in a motor accident case. The Court also directed investigators to name the Chairman and Managing Director (CMD) of the National Insurance Company (NIC) as an accused. Other officials, including the local branch manager, must also be included [National Insurance Company v. K. Saravanan].
A Bench of Justice Ahsanuddin Amanullah and Justice R. Mahadevan passed the order. The Bench criticised NIC for its conduct. It noted that the company claimed the policy was forged but did not file a criminal complaint. The Court termed this a serious lapse.
Calling the matter a “test case,” the Court ordered the SIT to register a fresh case. The probe must include the NIC CMD, company officials, and the bus owner. The Court directed a complete and time-bound investigation into the alleged fabrication of the policy.
The case arose from a claim filed by K. Saravanan. He suffered injuries in a bus accident. He underwent surgeries and received long treatment. Due to his condition, he resigned from his job. He then approached the Motor Accident Claims Tribunal (MACT) seeking compensation from the bus owner and NIC.
Before the MACT, NIC contested the claim. It argued that the insurance policy was invalid. The Tribunal rejected this defence. It held NIC liable. On appeal, the Madras High Court upheld the findings. It modified the compensation amount. The matter then reached the Supreme Court.
Earlier, the Court directed the Tamil Nadu Director General of Police (DGP) to appear. This followed an affidavit stating that police do not verify insurance documents during accident investigations. The Court expressed concern over this position.
The DGP appeared and offered an unconditional apology. The Court accepted it. He explained that manual verification had limitations earlier. However, he said systems have improved. He referred to the E-DAR system and the Vahan portal. These now allow instant verification of insurance details. He also said the State issued guidelines in 2024 and 2025. These aim to help officers detect discrepancies early. The Court then dispensed with his appearance.
Despite this, the Court expressed shock at NIC’s inaction. It noted that the company did not act even after claiming the policy was fake. The Court said insurers must inform authorities in such cases.
To avoid delay, the Court directed NIC to pay compensation within four weeks. It also allowed NIC to recover the amount from the person controlling the vehicle, namely the lessee.
Advocates Manu Luv Shahalia, Manjeet Chawla, Usha Pant Kukreti, and Jyoti appeared for NIC. Senior Advocate Vipin Sanghi represented the State of Tamil Nadu. He was assisted by advocates Sabarish Subramanian, Veshal Tyagi, Vishnu Unnikrishnan, Jahnavi Taneja, Arpitha Anna Mathew, and K.S. Badhrinathan. Advocate Goutham Shivshankar appeared for Saravanan. Advocates G. Balaji, Arzu Paul, Shiv Kumar, and Vaishnavi appeared for Vel Tech Engineering.
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