The Supreme Court on 02 April 2026 directed the Director General of Police, Tamil Nadu, to constitute a Special Investigation Team (SIT) to investigate the fabrication of an insurance policy in a motor accident case involving serious injuries to the claimant. Justices Ahsanuddin Amanullah and R. Mahadevan passed the order while dealing with a special leave petition filed by National Insurance Company Limited challenging the Madras High Court’s judgment enhancing compensation.
The bench observed that the issue of forged or fabricated insurance policies appears to be widespread across the country. It noted that once an Insurance Company comes to know that a policy has been fraudulently obtained and cannot be acted upon to fasten liability, it is incumbent upon the company to inform the police authorities, as the creation and use of such documents constitute an offence. Failure to do so may also give rise to an inference of possible connivance, the Court remarked.
The development came after the DGP, Tamil Nadu, informed the Court that, till date, the Insurance Company had not lodged any complaint regarding the forged policy produced before the police. This fact was not disputed by the company’s counsel, who submitted that the company would now be advised to make the appropriate complaint. The bench, however, expressed strong disapproval of the company’s casual approach and lack of responsibility.
The Court further directed that a fresh case be registered on the basis of the facts of the present case. The array of accused shall include officers of the Insurance Company who were aware of the fraud, including those posted at the relevant time in the concerned local branch from where the policy was purportedly issued or renewed, as well as the owner of the vehicle and any other person found responsible for the creation of the forged policy.
The bench also referred to its earlier judgment in National Insurance Company Limited v. Maya Devi (Civil Appeal Nos. 15016-15017 of 2024, dated 02.09.2024) and observed that the Insurance Company must act with due diligence since it deals with public funds contributed by policyholders. The DGP was directed to ensure that the SIT completes the investigation expeditiously and with due seriousness. A status report is to be filed on the next date of hearing, fixed for 28.04.2026.
On the merits of the claim, the Court directed the petitioner-Insurance Company to deposit the entire compensation amount, as awarded by the High Court, within four weeks directly with the claimant. However, the vehicle owner (Respondent No.2) was held liable for the payment, and the company was granted liberty to recover the same from him.
Case Title: National Insurance Company Limited v. K. Saravanan
Case No.: SLP (C) No. 1003/2022
Date of Order: 02 April 2026
Coram: Hon’ble Mr. Justice Ahsanuddin Amanullah and Hon’ble Mr. Justice R. Mahadevan
Click HERE to Read the ORDER.
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