Fake Motor Accident Claims: Supreme Court Sets Four-Week Deadline for Database Integration

NEW DELHI, Motor Accident Claim: The Supreme Court has told the Centre and all states and Union Territories to join four government databases within a month, in a bid to catch fraudulent compensation claims filed after road accidents. The same order also put the leadership of several insurance firms on notice for contempt after they ignored earlier instructions to appear before the court.

The order, dated September 23, 2026, came from a bench of Justices Ahsanuddin Amanullah and Prasanna B Varale.

Motor Accident Claim: Four systems, one network

The systems to be connected are VAHAN, which holds vehicle registration data; SARATHI, which covers driving licences; the Electronic Detailed Accident Report (eDAR) portal; and the Insurance Information Bureau (IIB). Once linked, officials should be able to match an accident report against the vehicle, the insurer and any earlier claims made on the same policy or vehicle.

The court said the arrangement must also take in hit-and-run cases and the PM-RAHAT scheme, so that insurers get early word of an accident. It stressed that the work must be completed within four weeks.

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The order followed information placed before the bench that eDAR, which is run by the National Informatics Centre, exists but is being used by only a small number of states. The court directed every state to begin feeding accident data into it immediately. It also ordered eDAR to be connected to the IIB, which operates under the insurance regulator IRDAI, and asked the ministries responsible for the various portals to link them.

Authorities must report on their progress, and answer queries from earlier hearings, through affidavits filed before the next date. States that still have no special investigation teams, despite earlier instructions, were given one last chance to set them up within four weeks.

Motor Accident Claim: Origins of the case

The matter is Oriental Insurance Co. Ltd. versus Tuni Pati and others. It began as a compensation dispute that the Orissa High Court at Cuttack decided on May 19, 2022. The Supreme Court later broadened its review to cover possible insurance fraud, after it emerged that one insured vehicle had been named in several different accident cases.

Motor Accident Claim: Contempt notices and the insurers’ explanations

The bench also examined why a number of insurers had not responded to its earlier directions on appearing in court. Contempt notices were issued to the heads of firms that neither appeared nor gave a satisfactory reason. Companies named in this context included Navi General, Kotak Mahindra Life, Credit Access Life, Zurich Kotak General, New India Assurance, Zuno General, Aditya Birla Health, and GIC Re. Some of these matters were closed after the explanations were reviewed.

Navi General’s chief executive said a notice delivered on April 18, 2026, was not passed on to the right officials and so was never acted upon, and that some staff had been suspended over it. The bench was not persuaded that this was an honest slip, observing that the staff had not been given notice before being blamed. It dismissed the apology as superficial, issued a contempt notice and required the chief executive to file a personal affidavit on why action should not follow. He was excused from appearing for now.

For Liberty General Insurance, the court accepted the chief executive’s apology for missing the August 17 hearing, which he attributed to a missed morning flight from Mumbai to Delhi, and closed that issue. However, it opened a separate contempt matter because the company had failed to enter an appearance by May 26, 2026. The court gave no weight to the claim that the company did not know when notice was served, and described the conduct as careless and irresponsible. An affidavit was ordered, with personal appearance excused for now.

Zuno General Insurance’s chief executive must file a new affidavit and attend the next hearing in person. The court was unmoved by her reason, earlier commitments in Mumbai, since she had five days’ notice of the date. She may withdraw her earlier affidavits.

Motor Accident Claim: Cases closed and further directions

Proceedings ended against Kiwi General Insurance, whose head said the company obtained its licence in March 2026 and sold its first policy in May, and that the notice went to its Bengaluru office while operations were managed from Mumbai. The case against Zurich Kotak General was dropped because it had been listed among the defaulters by mistake. Kotak Mahindra Life and Aditya Birla Health were let off because lawyers had already appeared for them. Valueattics Reinsurance was cleared after the court found no intentional default, noting that it received notice on June 13 and submitted its vakalatnama the same day.

Other insurers were given specific instructions:

• Credit Access Life Insurance: Its current head must begin action against those responsible for the lapse and file a personally affirmed affidavit describing the steps taken.
  
• Narayana Health Insurance: Its chief executive must file a fresh affidavit, as an apology alone may not be enough.
  
• Niva Bupa Health Insurance: Its chairman must explain, by fresh affidavit, why he joined online when physical presence had been ordered.
  
• GIC Re: Its chairman must file a personal affidavit on why action should not be taken.

The bench asked a senior advocate to assist on the central issue and directed that relevant records held by the registry be shared with the lawyer he nominates. Affidavits can be filed in paper or electronic form, and all pending ones must be detailed and submitted before the next hearing.

The case returns to court on November 27, 2026, at 2 pm.

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