File photo of Supreme Court of India in New Delhi. 

Supreme Court Stays SAT Order Against IRDAI Member PJ Joseph

The Supreme Court has stayed an order passed by the Securities and Appellate Tribunal against a member of the Indian insurance regulator, PJ Joseph.

The matter dates back to March, when a bench headed by Justice JP Devadhar at SAT, reprimanded Joseph, a non-life member at the Insurance Regulatory & Development Authority of India, for falsely stating lack of evidence in a Jan. 9 order passed by him. SAT had observed even though the petitioner, the U.K.-based reinsurance firm Atkins Special Risks Ltd., submitted documentary evidence, the matter was dismissed by Joseph.

The tribunal issued a strongly-worded order to IRDAI directing it to hear Atkins’ appeal afresh.

Atkins Special Risks had filed a case with the IRDAI in 2015, alleging Jagdish Gupta, Chairman of Jagson International Ltd., had unlawfully diverted their reinsurance business to another broking firm, Marsh India Insurance Brokers Pvt. Ltd.

The insurance regulator approached the Supreme Court in the matter, which in an order passed on May 14, said that SAT’s decision was an ex-parte order without notice being issued to IRDAI. Based on that, a stay was issued on the SAT order on July 2.

A similar observation was made by a bench headed by Justice SJ Kathawalla at the Bombay High Court, who in a separate case filed by Marsh India Insurance against a news website, http://www.dopahar.in, said even the SAT order clearly mentioned it didn’t express opinion on the merits of the complaint filed by Atkins. Based on this, the Court directed the website to remove articles that defamed Marsh India and misinterpreted SAT’s order.

Background

Atkins Special Risks had filed a case with IRDAI in 2015 alleging Jagdish Gupta, Chairman of Jagson International Ltd., had unlawfully diverted their reinsurance business to another broking firm, Marsh India Insurance Brokers.

According to Atkins, Gupta had written emails to the firm demanding a cut from their earned commission which they declined. Their reinsurance business was subsequently diverted to Marsh. Atkins alleged the firm had offered kickbacks worth $400,000 to Gupta for securing the business.

The case was dismissed by PJ Joseph, member (non-life), via an order passed Jan. 9 on grounds of lack of documentary evidence to support Atkin’s plea. The SAT, however, called the order a “gross abuse of the process of law and dereliction of duty”.

Without passing an order in the matter, SAT has re-directed the matter to IRDAI for a fresh hearing. It has also observed that considering there was an email trail between Gupta and Atkins that was left unverified, “the impugned order passed by Mr. PJ Joseph (non-life) virtually amounts to aiding and abetting corruption in the insurance business by the regulator which cannot be tolerated”.

BloombergQuint
Stay Updated With Law & Policy News On BloombergQuint