Describing it as “biased and prejudiced and against due process of law’’, the insurance regulator, IRDAI has decided to knock at the door of the Supreme Court’s challenging the SAT’s(Securities Appellate Tribunal) judgment against an order passed by IRDAI Member (Non-Life) P.J. Joseph and directing the regulator to conduct a probe by a “competent officer” and pass a fresh order on the alleged malpractices adopted by Marsh India Insurance Brokers for illegally acquiring business from another UK based broker.
“We are filing our appeal by this weekend in the SC after looking into the SAT order. The whole SAT judgment is appears to be a `hasty decision, prejudiced and biased ‘’and has been delivered without giving a fair chance to IRDA and its member Joseph. We are sure it won’t stand to the SC’s scrutiny ,’’ said a senior official the IRDAI adding that it was at the instruction of the Telangana and Andhra Pradesh High Court, IRDA had considered the case and any appeal against IRDAI’s order should be been done in the Telangana and Andhra Pradesh High Court.
“Besides, SAT never summoned Joseph to explain his stand and judgment has been delivered within two days of the completion of the hearing of the case, which it appears has been done in an absolute hurry,’’ said official.
The SAT is a statutory body for hearing and dispose of appeals against orders passed by the capital market regulator Sebi, the insurance regulator IRDAI and pension fund regulator, PFRDA and any judgment of the Appellate body can be challenged only in the highest court of law Supreme Court.
On Friday, while disposing an appeal filed by a UK based Atkins Special Risks, the SAT bench comprising presiding officer Justice J.P. Devadhar and member Dr. C.K.G. Nair questioned an order passed by IRDAI Member (Non-Life) P.J. Joseph and directed the regulator to conduct a probe by a “competent officer” and pass a fresh order.
“We fail to understand as to how Member (Non-Life) could make such false statement… the impugned order… virtually amounts to aiding and abetting corruption in the insurance business…” the Bench said.
UK based Atkins Special Risks(appellant), a specialised re/insurance broker with core competency in Marine and Energy insurance, had alleged that Jagson International- with whom they had a buisiness relationship since 2002- in 2012 had shifted a broking contract awarded to them to Marsh Insurance Brokers because of non-paymentof bribe in form of taking a cut in commission, which is an illegal act..
From 2010 onwards, Jagdish Gupta, Chairman of Jagson started demanding -via email written to the Atkins-, a cut from commission of 27.5 per cenr earned by the Atkins, which the UK based broker declined..
The complaint argued that in view of evidence gathered, as also the third party evidence regarding kickbacks, it is apparent that Section 41(1) of the Indian Insurance Act, 1938 and Regulation 37(1) of the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations, 2013 have been violated.
Atkins Special Risks in its complain to SAT has said it had filed a complaint with IRDAi in August 2015 on the issue, but as no action was taken, it had filed a writ petition in the Telangana and Andhra Pradesh High Court, which disposed of the case on September 2017 by directing IRDAI to consider the complaint filed by them.
However, after hearing the appellant, Joseph, took a decision to dispose of the complaint by stating that the appellant has not submitted any documentary proof, material information or evidence in support of its contention.
Rejecting Joseph's decision on the case, the SAT says, “Perusal of the complaint filed by the appellant clearly shows that the appellant had relied on documentary evidence in support of the contention that Jagdish Gupta, Chairman of Jagson had sought bribe and was bribed by the officers of Marsh for diverting the reinsurance business from the appellant to Marsh.’’
The appellate tribunal, however, said that the said judgment made it clear that the SAT has not expressed any opinion on the merit of the complaint filed by appellant.