MARSH INDIA INSURANCE BROKERS PRIVATE LIMITEDversusM/S ATKINS SPECIAL RISKS LTD. & ORS.

             [2023] 9 S.C.R. 1301 : 2023 INSC 293                    1301


MARSH INDIA INSURANCE BROKERS PRIVATE LIMITED                        A
                                v.
         M/S ATKINS SPECIAL RISKS LTD. & ORS.
             (Civil Appeal No(s).4678-4681 of 2018)
                        MARCH 24, 2023                               B
 [ANIRUDDHA BOSE AND SUDHANSHU DHULIA, JJ.]
       Insurance Act, 1938: s.41(1) – Insurance Regulatory and
Development Authority (Insurance Brokers) Regulations, 2013
– Clause 37(1) – Complaint by the first respondent-insurance
broker alleging adoption of illegal means by appellant in            C
obtaining business of international reinsurance cover of J firm,
it paid bribe to Chairman of the J firm to obtain brokerage
contract, thus the appellant violated s.41(1) of the Act of 1938
and Clause 37(1) of the 2013 Regulations – Basis of the complaint
was certain emails by which the Chirman allegedly made demands
for i llegal gratification in exchange of handing over the           D
brokerage contract to the appellant as also a telephonic
conversation against the Chaiman informing the respondent no.
1 about demand of bribe from the appellant – Dismissed by the
Regulatory Authority-IRDA – Tribunal set aside the decision of
the IRDAI – Held: Order of the tribunal is in the nature of a
remand order which in effect only directed a fresh inquiry and       E
since the fact finding body has already come to its conclusion
on lack of evidence, no useful purpose would be served in
subjecting the appellant or their contract with J to another round
of inquiry – Barring the fact that the appellant had been given
the brokerage contract, no other cogent material showing any
illegality being committed by the appellant in obtaining the         F
contract from J – Order of the tribunal set aside – Order of the
IRDA is sustained – Insurance Law.
       CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.4678-
4681 of 2018.
       From the Judgment and Order dated 16.03.2018 and 21.03.2018   G
of the Securities Appellate Tribunal, Mumbai in Misc. Application
No.02 of 2018 and IRDA Appeal No.02 of 2018.
       Dr. Abhishek Manu Singhvi, Gopal Jain, Sr. Advs., Indranil
Deshmukh, Raunak Dhillon, Ms. Isha Malik, Ms. Saloni Kapadia,
Ms. Niharika Shukla, M/s Cyril Amarchand Mangaldas, Advs. for
the Appellant.                                                       H
                                1301
1302            SUPREME COURT REPORTS                         [2023] 9 S.C.R.


 A            Arvind Datar, Sr. Adv., T. Srinivasa Murthy, Senthil Jagadeesan,
       Ms. Shruti Iyer, Ms. Nishita Jagetia, M/s Bhave and Associates,
       Harihar Bhave, Dr. Shashwat Bajpai, Rohit Amit Sthalekar, Advs.
       for the Respondents.
              The Judgment of the Court was delivered by
              ANIRUDDHA BOSE, J.
 B
              The appellant before us is an Insurance and Re-insurance
       Brokerage firm questioning the legality of an order passed by the
       Securities Appellate Tribunal (“Tribunal”), Mumbai on 16th March
       2018. By that order, the Tribunal has set aside a decision of the
       Insurance Regulatory and Development Authority of India (“IRDA”)
 C     dismissing a complaint made by the first respondent alleging adoption
       of illegal means by the appellant in obtaining business of international
       re-insurance cover of another firm, Jagson International Limited
       (“Jagson”) on yearly brokerage/commission. The first respondent
       had such business with Jagson for the years between 2002-2012.
              2. By the impugned order, the Tribunal has directed the IRDA,
 D     in effect, to revisit the complaint made by the respondent no.1 and
       pass a fresh order. Substance of the complaint made by the first
       respondent, also an Insurance and Re-insurance Brokerage entity
       was that the appellant had paid bribe to one Mr. Jagdish Gupta
       (“respondent no.5”), the Chairman of Jagson for obtaining the
       brokerage contract. Jagson is involved in the business of oil exploration
 E     and such insurance is mainly with regard to its exploration equipments.
              3. The basis of complaint of the first respondent was certain
       emails referred to by the first respondent by which the respondent
       no.5 allegedly had made demand for illegal gratification in exchange
       of handing over the brokerage contract to the appellant. There is
 F     also allegation against the respondent no.5 of informing the respondent
       no.1, through telephonic conversation, about demand of bribe from
       the appellant. We find from pleadings that there was increase in the
       number and size of rigs of Jagson subsequent to the year 2012, which
       required enhanced coverage. Contention of the respondent
       represented by Mr. T. Srinivasa Murthy, learned counsel is that the
 G     appellant has used an India based direct insurance broker to pay
       money to respondent no.5, as part of the appellant’s commission to
       India. The case of the first respondent is that the payment, as is
       alleged to have been made to the respondent no.5, is violative of the
       provisions of Section 41(1) of the Insurance Act, 1938 as also Clause
       37(1) of the Insurance Regulatory and Development Authority
 H     (Insurance Brokers) Regulations, 2013.
 MARSH INDIA INSURANCE BROKERS PVT. LTD. v. M/S                            1303
  ATKINS SPECIAL RISKS LTD. [ANIRUDDHA BOSE, J.]

        4. A complaint to that effect was made with the IRDA on 11 th      A
August 2015 on behalf of the first respondent, which was followed
by a writ petition in the High Court (at that time it was the High
Court for the State of Telangana and the State of Andhra Pradesh)
seeking an inquiry in respect of the said complaint. This writ petition,
registered as W.P. No. 27220 of 2017, was disposed of on 19 th
September 2017 with a direction on the IRDA to consider the complaint      B
of M/s. Atkins Special Risk Limited by following due process;
preferably within a period of four weeks from the date of receipt of
copy of the Order. In the ensuing hearing, IRDA disposed of the
complaint finding lack of any evidence substantiating the complaint.
In its order passed on 9th January 2018, P.J. Joseph, Member (Non-
Life) of IRDA who heard the complaint recorded that it was                 C
established that no proof of evidence had been brought in by the
representative of the first respondent to prove his allegations and the
authority could not further proceed with the complaint.
        5. The Insurance Regulator i.e., IRDA, represented by Mr.
Arvind Datar, learned senior counsel has reiterated this stand before      D
us.
        6. Dr. Abhishek Manu Singhvi, learned senior counsel
appearing for the appellant has argued that there was no foundation
of the complaint made by the first respondent. As a result, there was
no scope of interference by the Tribunal with the order of the IRDA.
Drawing our attention towards various e-mails referred to by Mr.           E
Murthy, it has been argued on behalf of the appellant that none of
them related to any illegal demand made by the appellant from Jagson
or respondent no.5. Barring a statement of a telephonic conversation
of one Mr. Graham Atkins, managing director of the respondent no.1,
in which respondent no.5 was alleged to have mentioned that appellant
had agreed to pay him certain sum of money to obtain the business,         F
there was no other material showing any illegality being committed
by his client in obtaining the contract from Jagson.
        7. Mr. Murthy on the other hand submitted that the scope and
power of the investigation of IRDA is very wide and his client had
obtained an investigation report by a private investigator which hinted
                                                                           G
at ‘illegality’ being committed by the appellant.
        8. Argument was also made as to whether the IRDA could
enter into this controversy having regard to the scope of their
intervention delineated in Section 14(2) of the Insurance Regulatory
and Development Authority Act, 1999.
                                                                           H
1304                SUPREME COURT REPORTS                      [2023] 9 S.C.R.


 A             9. In this judgment, however, we are not getting into that
       controversy as regards jurisdiction of the IRDA to conduct
       investigation as such investigation was directed by an order of the
       High Court, particulars of which we have given earlier. So far as
       jurisdiction or power of IRDA is concerned, we accept the submission
       of Mr. Murthy that it is of wide amplitude.
 B             10. But, on going through the materials made available before
       us at the time of hearing, we are of the opinion that there was no
       occasion for interfering with the order of the IRDA by the Tribunal.
       It is a fact that the order of the Tribunal is in the nature of a remand
       order and this order in effect has only directed a fresh inquiry. Mr.
       Murthy had argued that so far as his client’s complaint is concerned,
 C
       they had discharged their onus by raising sufficient suspicion as
       regards the deal between the respondent no.5 and the appellant. But,
       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, ex-facie, gone
 D     wrong in observing that the first respondent 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.
 E             11. 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 first respondent had relied on documentary evidence in support
 F     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.
               12. Under these circumstances, we set aside the order of the
       Tribunal and allow the present appeals. The order of the IRDA passed
 G
       on 9th January 2018 is sustained.
               13. Pending application(s), if any, shall stand disposed of.

       Nidhi Jain                                                 Appeals allowed.


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