The Securities Appellate Tribunal (SAT) recently set aside an order passed by the Insurance and Regulatory Authority of India (IRDAI) in a case filed by UK-based Atkins Special Risks, an insurance broker..The order passed by, (Non-Life) member, P.J. Joseph, was set aside as being in “gross abuse of the process of law and dereliction of duty”..The appellant in this case, Atkins, specialises in broking special risk insurance and re-insurance with core competency in Marine and Energy insurance..Atkins was providing reinsurance cover to Jagson International Ltd. during the years 2002-2012. From the year 2010 onwards, the Chairman of Jagson, Jagdish Gupta, allegedly started demanding a cut from commission earned by the Atkins, which Atkins declined. Soon after, the re-insurance business of Jagson was shifted from Atkins to Marsh India Insurance Brokers Pvt. Ltd..Suspecting illegality, Atkins caused an investigation and found out that, “kick-backs were given to Jagdish Gupta by Marsh for diverting the reinsurance business from the appellant to Marsh”..A complaint was then filed with the IRDAI by Atkins alleging, violation of Section 41(1) of the Indian Insurance Act, 1938 and Regulation 37(1) of the IRDAI (Insurance Brokers) Regulations, 2013 ..However, no action was taken by the IRDAI and Atkins was forced to move to the Andhra Pradesh High Court by the means of a writ, where the court directed the IRDAI to consider the complaint filed by Atkins..Despite this, (Non-Life) Member, P.J. Joseph, passed an order simply stating that, Atkins has not submitted any documentary proof, material information or evidence in support of its contention..Atkins moved to the SAT against this order passed by P.J. Joseph..The SAT in its recent order, recorded that it had no doubts to the fact that Atkins had relied on documentary evidence in support of the its allegations against Jagdish Gupta. It further ruled,.“In such a case, to hold that the appellant (Atkins) has not submitted any documentary proof would be totally false. We fail to understand as to how Member (non-life) could make such false statement in the impugned order. In our opinion, the impugned order passed by Mr. P.J. Joseph (non-life) virtually amounts to aiding and abetting corruption in the insurance business by the regulator which cannot be tolerated.”.Without getting into the merits of the case, the SAT held,.“In these circumstances, we set aside the impugned order and direct IRDAI to entrust the matter to a competent officer other than Mr. P. J. Joseph, Member (non-life) for passing fresh order on the complaint filed by the appellant on merits and in accordance with law.”.T. Srinivasa Murthy and Ativ Patel appeared for Atkins, briefed by AVP Partners. Shrinivas Bhave and Gaurav Yadav, of Bhave & Co. appeared for the IRDAI. Animesh Bisht along with Saloni Kapadia, of Cyril Amarchand Mangaldas, appeared for Marsh..(Image taken from here).(Read the order)
The Securities Appellate Tribunal (SAT) recently set aside an order passed by the Insurance and Regulatory Authority of India (IRDAI) in a case filed by UK-based Atkins Special Risks, an insurance broker..The order passed by, (Non-Life) member, P.J. Joseph, was set aside as being in “gross abuse of the process of law and dereliction of duty”..The appellant in this case, Atkins, specialises in broking special risk insurance and re-insurance with core competency in Marine and Energy insurance..Atkins was providing reinsurance cover to Jagson International Ltd. during the years 2002-2012. From the year 2010 onwards, the Chairman of Jagson, Jagdish Gupta, allegedly started demanding a cut from commission earned by the Atkins, which Atkins declined. Soon after, the re-insurance business of Jagson was shifted from Atkins to Marsh India Insurance Brokers Pvt. Ltd..Suspecting illegality, Atkins caused an investigation and found out that, “kick-backs were given to Jagdish Gupta by Marsh for diverting the reinsurance business from the appellant to Marsh”..A complaint was then filed with the IRDAI by Atkins alleging, violation of Section 41(1) of the Indian Insurance Act, 1938 and Regulation 37(1) of the IRDAI (Insurance Brokers) Regulations, 2013 ..However, no action was taken by the IRDAI and Atkins was forced to move to the Andhra Pradesh High Court by the means of a writ, where the court directed the IRDAI to consider the complaint filed by Atkins..Despite this, (Non-Life) Member, P.J. Joseph, passed an order simply stating that, Atkins has not submitted any documentary proof, material information or evidence in support of its contention..Atkins moved to the SAT against this order passed by P.J. Joseph..The SAT in its recent order, recorded that it had no doubts to the fact that Atkins had relied on documentary evidence in support of the its allegations against Jagdish Gupta. It further ruled,.“In such a case, to hold that the appellant (Atkins) has not submitted any documentary proof would be totally false. We fail to understand as to how Member (non-life) could make such false statement in the impugned order. In our opinion, the impugned order passed by Mr. P.J. Joseph (non-life) virtually amounts to aiding and abetting corruption in the insurance business by the regulator which cannot be tolerated.”.Without getting into the merits of the case, the SAT held,.“In these circumstances, we set aside the impugned order and direct IRDAI to entrust the matter to a competent officer other than Mr. P. J. Joseph, Member (non-life) for passing fresh order on the complaint filed by the appellant on merits and in accordance with law.”.T. Srinivasa Murthy and Ativ Patel appeared for Atkins, briefed by AVP Partners. Shrinivas Bhave and Gaurav Yadav, of Bhave & Co. appeared for the IRDAI. Animesh Bisht along with Saloni Kapadia, of Cyril Amarchand Mangaldas, appeared for Marsh..(Image taken from here).(Read the order)
