News Regulations05 Jul 2018

India:Supreme Court stays tribunal's order against IRDAI member

05 Jul 2018

The Supreme Court has stayed an order passed by the Securities and Appellate Tribunal (SAT) 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 IRDAI, for falsely stating lack of evidence in a 9 January order passed by him. He dismissed a petition even though the petitioner, the UK-based reinsurance firm Atkins Special Risks, had submitted documentary evidence, reports Bloomberg Quint.

In March, the tribunal issued a strongly-worded order to IRDAI directing it to hear Atkins Special Risks’ appeal afresh. The SAT called the order issued by Joseph a “gross abuse of the process of law and dereliction of duty”. It 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”.

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

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 in 2012.

During the years 2002 to 2012, Atkins provided international reinsurance cover to Jagson International.

The IRDAI approached the Supreme Court challenging the SAT order. The court in an order passed on 14 May, 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 2 July.

"Until further orders, there shall be a stay of the order dated 16 March 2018 passed by the Securities Appellate Tribunal, Mumbai," said the court judgment.


 

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