A two-judge bench comprising Justice Mushir Alam and Justice Mazhar Alam Khan Miankhel on 12-02-2018 after hearing the arguments had reserved the judgement, which was issued on Saturday.
The top court dismissed the appeals of SECP against the Lahore High Court verdict dated 16-01-2017. The SECP on 28-10-2009 being an adjudicatory and appellate authority had rejected the insurance companies'''' petitions.
In CPLA No. 1191 of 2017 M/s Y & U International Model Town, Sialkot, raised claim under Marine Cargo Policy for the consignments, which was later found damaged by water. The claim was repudiated by respondent (East West Insurance Company) on the ground of limitation and on the ground that consignments were disposed of prior to the survey, knowledge and approval of the insurance company.
It filed a complaint before the Insurance Ombudsman, which after due notice and hearing of the parties, was dismissed on the ground, inter alia, that the jurisdiction vests in the Insurance Tribunal constituted under Section 122 of the Insurance Ordinance, 2000.
However, on appeal under section 130(2) of the Insurance Ordinance, 2000 (Ordinance, 2000), the SECP being appellate authority formed an opinion that "mal-administration on part of the respondent is evident, therefore it was ordered to pay the amount of loss as assessed by the surveyors and also a reasonable allowance for damaged goods" together with liquidated damages for late settlement in terms of section 118 of the Insurance Ordinance, 2000.
In CPLA No.1192 of 2017, Insurance Ombudsman directed the insurance company to pay Rs 1 million to the insured with liquidated damages vide order dated 9.8.2007. The SECP dismissed the appeal filed against the order and maintained the order of the Insurance Ombudsman.
In CPLA 1193 of 2017, the Insurance Ombudsman vide order dated 16.12.2008 directed the insurance company to settle the claim amicably within thirty days. After survey report, the Insurance Company offered Rs 500,000 towards the settlement of the claim, which was not accepted and ultimately matter went up before the SECP and order was maintained.
All the three Insurance Companies (M/s East West Insurance Company, Adamjee Insurance Company Limited and M/s United Insurance Company Pakistan Ltd) challenged the order passed by the Federal Insurance Ombu-dsman, through three different writ petitions in the LHC, which set aside the SECP verdict and held that the claim of the insured falls within the jurisdiction of the Insurance Tribunal.
The apex court observed that Office of Insurance Ombudsman was established under section 125 of the Insurance Ordinance, 2000, jurisdiction. Functions and powers of Federal Insurance Ombudsman are enumerated in section 127 and it is only on the complaint of any aggrieved person.
Insurance Ombudsman may undertake investigation against "any insurance company" on the allegation of "maladministration" as defined under sub-section (2) of section 127. In case complaint is found to be justified, the Insurance Ombudsman may make recommendation of the nature provided for under section 130 of the Ordinance.
In terms of sub-section (2) of section 130, only "insurance company" or "official of an insurance company" or a "complainant" aggrieved by an order passed by the Insurance Ombudsman may file an appeal with the Securities and Exchange Commission of Pakistan (SECP).
The judgement said that the SECP, under the Insurance Ordinance, 2000, is the final adjudicatory and appellate authority provided under the Insurance Ordinance, 2000 against the recommendatory order of the Insurance Ombudsman.
Any order passed by the Insurance Ombudsman, which has not been appealed against, or any order passed by the SECP in appeal, as the case may be, becomes final and enforceable against the insurer, unless the complaint is dismissed or in cases where any party aggrieved by order of appellate authority, may invoke jurisdiction of judicial review of the High Court under the Article 199 of the Constitution.
Similarly, the judgement said since original investigatory or appellate authority are independent and impartial forms have no adversarial interest against either of the contesting party (ie, insurer or insured) before it. While performing such functions the Ombudsman and the SECP in fact are discharging their respective duty to probe into complaint of maladministration and settle rights and obligations against the parties in conflict before such forum.
In case insurance company or the official of an insurance company or complainant is aggrieved by the decision of SECP, only course available to an aggrieved party is to invoke jurisdiction of judicial review of High Court under Article 199 of the Constitution. Neither the Insurance Ombudsman nor the SECP is required to come forward to justify and or defend its order before the High Court or Supreme Court as the case may be, and it is for the person aggrieved to pursue the remedy any further.