Supreme Court Expands Probe into Odisha Insurance Fraud Racket After Motor Accident Case
The Supreme Court of India has taken a significant step in addressing an alleged insurance fraud racket in Odisha, following a hearing on a petition related to a 2017 motor accident case. The court, expressing concern over "shocking facts" uncovered during the investigation, has broadened the scope of the probe to examine potential fraudulent activities across the state and beyond.
Background of the Case
The case originated from a petition filed by a general insurance company challenging a compensation award. On May 19, 2022, the Orissa High Court had directed the payment of Rs 39 lakh to three claimants in connection with a motor accident that occurred in Kendrapada district. The insurance company contested this order, arguing that the vehicle involved had been implicated in multiple accidents and was fraudulently linked to this case solely because it had valid insurance coverage, allegedly to extract compensation.
Court's Initial Response and Investigation
Taking serious note of these allegations, the Supreme Court, on December 15 last year, directed the Odisha authorities to verify the claims of fabrication. A compliance affidavit was submitted by the state on February 5, presented by Advocate General Pitambar Acharya via video conferencing. The affidavit stated that while the vehicle had been involved in four other accident cases, the inquiry confirmed its involvement in the Kendrapada accident.
Uncovering a Wider Racket
During the hearing, the Advocate General informed the court that a team of senior officers was investigating what appeared to be a "wide racket" involving multiple stakeholders. Several arrests have already been made, and further action, including interrogation of concerned individuals after obtaining necessary approvals, is underway. The two-judge bench, comprising Justices Ahsanuddin Amanullah and Prasanna B Varale, observed that this "illegal activity may not be limited to the state of Odisha."
Court's Directives and Future Steps
In response, the bench asked the petitioner to furnish a list of all insurance companies operating in various sectors, such as vehicle, medical, life, crop, fire, and marine insurance. This move aims to assess the extent of potential fraud across different insurance domains. The matter has been scheduled for further directions on March 18.
Compensation and Legal Proceedings
Despite the broader probe, the bench declined to interfere with the compensation awarded to the three claimants. The court directed the Motor Accident Claims Tribunal (MACT) in Cuttack to ensure that the entire amount, as per the High Court's order, is paid to the claimants within four weeks. The insurance company had already deposited the full amount with the MACT, with a portion disbursed.
State's Investigation Findings
In the compliance affidavit, Director General of the state crime branch, Vinaytosh Mishra, provided detailed findings from the investigation. Between 2019 and 2025, 104 suspected fake insurance claim cases were examined. As a result:
- Orders were issued for re-investigation in five cases.
- Twenty-five cases were reopened.
- Forty FIRs were registered.
- Allegations could not be substantiated in 34 cases.
This comprehensive probe highlights the scale of the alleged fraud and underscores the Supreme Court's commitment to addressing systemic issues in the insurance sector. The ongoing investigation is expected to bring more clarity and accountability in the coming months.
