Page 40 - Insurance Times December 2022

Insurance companies need to be more cautious to curb

the menace of false compensation claims under the

Motor Vehicle Act

atified with an objective to regulate and documents for the culprits. The insurance companies relying
R Motor Accident Claims Tribunal has been on these documents are falling prey to such dubious claims
maintain the safety of road accident victims, the
and were asked to pay money.
established by the Motor Vehicle Act 1988. The
Claim for Compensation under Motor
State Governments constitute Claims Tribunals
to adjudicate on the claims for compensation, which emerge Vehicle Act
from motor vehicle accidents, ensuing death or bodily injury
Who can claim compensation?
to persons or damage to any property of third parties.
A person who has himself sustained an injury, or owns the
Its objective is to provide a remedy to the victims of property which has been damaged in a vehicular accident,
accidents by motor vehicles at an appropriate time without or is the legal representative of the deceased who died in
any procrastination. Motor Accident Claims Tribunals [MACT the motor accident, or is the duly authorized agent by the
Courts] handle those claims concerning the loss of life/ injured person, or by the legal representatives of the
property or injury cases arising out of Motor Accidents. deceased, as the case maybe- can claim compensation,
Alleging an increase in the number of fraudulent cases states in the Section 166 of MV Act 1988.
before the Motor Accident Claims Tribunal (MACT) owing
When can the compensation be claimed?
to collusion between claimants, medical practitioners, police
As per the recent amendment carried in Motor Vehicle Act,
and advocates, the Indian legal system is getting more
the limitation period i.e., the time in which the claim for
cautious of similar incidents.
compensation has to be filed is six months from the
After having observed rampant discrepancies in Motor occurrence of the accident. It means that after the
Accident Claims Tribunal cases, the Honourable High Court expiration of six months, any application that is claiming
of Allahabad, Lucknow Bench, had directed the State damages cannot be validated or considered.
Government to constitute a Special Investigation Team (SIT)
In addition, the Claims Tribunal under Section 172 (1) states
to re-investigate MACT cases. The SIT (Special Investigation
that an insurer or any party in a compensation claim is
Team) has been carrying out the responsibility and duties of
obliged to pay special costs as compensation. If it is certain
investigation, initiation of proceedings and prosecution of
that either the compensation claim is invalid as the policy
cases that are not been carried out appropriately. As a
of insurance was obtained through any kind of fraud or
result,multiple lawyers have been found to be filing claim
misrepresentation or that any party or insurer has proposed
petitions based on concocted medical documents and false
a false or abrasive claim or defence during the proceedings
accident cases.Based on the reports of the Special
of the case. These special costs must be compensated to
Investigation Team (SIT), the Bar Council of Uttar Pradesh
the insurer or the party against whom such claim or defence
after proper inquiry has decided to terminate the licences
had been advanced.
of 30 lawyers involved in the submission of fake claims under
the Motor Accident Claims Tribunal. Many reports indicated that these lawyers have caused a
loss of several crores to insurance companies by submitting
According to a report, the special investigation team (SIT)
fake claims under the Motor Accident Claims Tribunal. Uttar
has unearthed 1,376 charge-sheeted claims in the past
Pradesh's Special Investigation Team after its existence has
seven years, beginning from 2015. As per the report, the
been able to identify several fraudulent matters thereby,
SIT arrested 198 persons, including 28 lawyers, of whom
saving hundreds of crores of public money.
many were charge-sheeted and The State Bar Council
initiated disciplinary proceedings against them. The reports This effort by the Uttar Pradesh SIT helps safeguard the
shows that, though the alleged victims have not sustained public from insurance fraud and this should be taken up by
any grievous injuries, certain hospitals have also issued false other State Governments as well, to ensure the safety of
certificates, discharge summaries and supportive medical public money.
36 December 2022 The Insurance Times