The Supreme Court while observing that the jurisdiction or power of Insurance Regulatory and Development Authority of India (IRDAI) was of wide amplitude, has set aside the order of Securities Appellate Tribunal as none of the e-mails were related to any illegal demand made by the appellant, to trigger off an inquiry on the aspect of bribery.

The Bench of Justice Aniruddha Bose and Justice Sudhanshu Dhulia observed that “...we find that barring the fact that the appellant had been given the brokerage contract, there is no other cogent material which would warrant a detailed investigation. The Tribunal has, exfacie, gone wrong in observing that the respondent no.5 had relied on documentary evidence in support of the complaint. We have referred to the nature of the documents but we accept the argument of Mr. Datar that these cannot constitute materials to trigger off an inquiry on the aspect of bribery being indulged into by the appellant to obtain the business from Jagson.”

Senior Advocate Abhishek Manu Singhvi appeared for the appellant, Senior Advocate Arvind Datar appeared for the IRDAI and Advocate T. Srinivasa Murthy appeared for the respondent.

A complaint was filed by the respondent before IRDAI wherein it was alleged that the appellant- an Insurance and Re-insurance Brokerage firm, by adopting illegal means was obtaining business of international re-insurance cover of another firm, Jagson International Limited (“Jagson”) on yearly brokerage/commission. The complaint was dismissed by IRDAI.

Against the order of IRDAI, the respondent approached the Securities Appellate Tribunal, Mumbai whereby the decision of IRDAI was set aside and further directed to conduct the inquiry into the complaint. Aggrieved by this order, the appellant approached the Apex Court.

The Apex Court noted that no proof of evidence had been brought on record to prove any illegal demand made by the appellant in obtaining the contract from Jagson.

“The fact finding body has already come to its conclusion on lack of evidence. In the given circumstances, we do not find any useful purpose that would be served in subjecting the appellant or their contract with Jagson to another round of inquiry. In the order under appeal, the Tribunal has observed that the complaint showed that the appellant had relied on documentary evidence in support of the contention that Jagdish Gupta had sought bribe and was bribed by the officers of Marsh for diverting their re-insurance business. But we fail to find any such document from which such a conclusion could be reached.” observed the Court.

Accordingly, the appeals were allowed, and the order of the tribunal was set aside.

Cause Title- Marsh India Insurance Brokers Private Limited v. M/S Atkins Special Risks Ltd. & Ors.

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