Supreme Court of Pakistan: The Division Bench of Mushir Alam and Mazhar Alam Khan Miankhel, JJ. dismissed a petition filed by Securities and Exchange Commission of Pakistan (SECP) on the ground that being an appellate adjudicatory authority, it could not challenge the order passed High Court in purely adversarial proceeding by and between the policyholders and the insurance companies.
In this case, the respondent raised a claim under marine cargo policy for consignment that was damaged by water; but the said claim as repudiated. Complaint filed before the Insurance Ombudsman was dismissed. On an appeal under Section 130(2) of the Insurance Ordinance, 2000, petitioner being appellate authority held that mal-administration on part of respondent was evident, and ordered it to pay the amount of loss assessed by surveyors. The respondent insurance company challenged this order before the Lahore High Court, which set aside petitioner’s judgment. Thus, the instant petition.
The Court noted that the office of Insurance Ombudsman is created under Section 125 of the Ordinance. Person aggrieved by order of the Insurance Ombudsman may file an appeal with SECP. Under the Insurance Ordinance, SECP is the final adjudicatory and appellate authority against the recommendatory order of the Insurance Ombudsman.
It was opined that Insurance Ombudsman, is an investigatory and recommendatory authority; and SECP, being the final appellate authority against the order of Insurance Ombudsman performs the judicial function within the parameters laid down under the Ordinance.
Insurance Ombudsman and SECP, after passing an order become functus officio, i.e., any order passed by the Insurance Ombudsman, which has not been appealed against, or any order passed by the SECP in appeal, becomes final and enforceable against the insurer, unless the complaint is dismissed or judicial review is invoked. 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. Reliance in this regard was placed on Syed Yakoob v. K.S.Radhakrishnan, AIR 1964 SC 477 where it was held that Tribunals are not supposed to defend its own orders unless allegations are made against them.
In view thereof, the petition was dismissed for being without merit.[Securities & Exchange Commission of Pakistan v. East West Insurance Company, Civil Petition No. 1191 of 2017, Order dated 12-02-2018]