GENERAL INSPECTORATE OF PAKISTANV. CONTROLLER OF Versus CONTROLLER OF INSURANCE
1. This appeal under section 110(12) of the Insurance Act, 1938 hereinafter referred to as the "Act") has been brought against the judgment dated 29‑10‑1988 of the Insurance Appellate Tribunal Karachi whereby the appeal of the appellants Messrs General Inspectorate of Pakistan was dismissed.
2. The facts leading to the filing of the above appeal are that the appellant was granted a certificate of Insurance Surveyor Marine, in the year, 1978, and the same was renewed every year and lastly so was done on 1‑6‑1986. Messrs Kraft Limited had imported two consignments of sack kraft paper, consisting of 2859 reels, weighing 1743.153 Metric Tons. The said consignments after clearance were stored in the Customs Private Ware House No.152/82, situated at Hub, District Lasbella, Balochistan. The said Kraft Ltd., wrote a letter on 2‑6‑1986 to the Customs Authorities stating that the goods had deteriorated substantially, for reason beyond its control. It, therefore, requested that necessary survey be conducted, under section 108 of the Customs Act. The Custom Authorities as per their letter dated 25‑6‑1986 advised the said company to get the goods surveyed from an approved surveyors alongwith the customs' representative, namely, Riazul Hassan, Appraiser of Customs House, Gadani. The said company contacted the appellant and the later insured survey certificate dated 26‑6‑1986.
3. After some time the Customs Authorities came to know that inspection certificate issued by the appellant was bogus/false, and no survey was conducted, as on the relevant date, there were no goods in the said ware house. An inquiry was held and it was revealed that the said Kraft Ltd., had committed fraud in collusion with the appellant and evaded Government revenue to the extent of Rs.64,00,000. Accordingly the said company was directed to pay immediately the penalty equal to twice amount of the duty evaded. The Director‑General of Vigilance and Inspection filed a written complaint with the respondent for taking necessary legal action against the appellant. During the enquiry Riazul Hasan, Appraiser, submitted his written explanation stating that he had no knowledge of the so‑celled survey by the appellant. Iftikhar Ahmad, proprietor of the appellant also appeared in the said inquiry and stated that he had issued the certificate on verbal report of his employee namely S.Riaz, who according to him, had left the job in August, 1986. The proprietor of the appellant in confirmation of his above statement dated 15‑10‑1986, once again vide his letter dated 28‑10‑1986, stated that said survey was not conducted by him and he had issued the inspection certificate on verbal report of his said employee. The respondent served the show‑cause notice upon the appellant. After completing all the formalities and giving full opportunity of personal hearing, the appellant's insurance certificate was cancelled.
4. The appellant filed an appeal under section 110, subsection 1(o) of the Act before the Insurance Appellate Tribunal. The Tribunal after hearing the learned counsel for the parties came to the conclusion that the respondent before cancellation of insurance certificate had given an opportunity to the appellant to explain its point of view and the certificate was cancelled after completing all the formalities. In that view of the matter it found that the appellant deliberately misused its insurance certificate and the respondent had rightly cancelled the certificate. The appeal, therefore, was dismissed. The appellant being aggrieved has filed the above appeal after seeking necessary certificate from the Tribunal.
5. I have heard Mr. AA. Ashary, learned counsel for the appellant in support of the appeal and Mr. M.Umer Qureshi, learned counsel for the respondent. I have gone through the impugned judgment and perused the R & P of the case with the assistance of the learned counsel for the parties.
6. In order to appreciate the respective contentions of the learned counsel for the parties, it is necessary to reproduce provisions of sections 44‑A of the Act, which reads as follows:‑
7. "44‑A. Insurance Surveyors to hold certificates. ‑‑(1) No person other than an insurance surveyor holding an appropriate certificate under this section shall after the expiry of six months from the commencement of the Insurance (Amendment) Act, 1958 undertake in Pakistan the surveying, assessment or adjustment of any loss in respect of general insurance business and no insurer shall pay any claim in respect of general insurance business transacted, by him in Pakistan unless the loss has been surveyed, assessed or adjusted as the case may be, by an insurance surveyor holding an appropriate certificate under this section:
8. Provided that the provisions of this subsection shall not apply to such persons and to such losses as may be presrcibed.
(2) ......................................................
(3) ......................................................
(4) ......................................................
(5) ......................................................
(6) ......................................................
9. (6‑A) ......................................................
(7) Where it is found that an insurance surveyor being an individual is or being a company or firm contains a director or partner who is suffering from any of the disqualifications mentioned in subsection (4) of Section 42, without prejudice to any other penalty to which he may be liable, the Controller shall and where it is proved to the satisfaction of the Controller that the insurance surveyor has:‑
(i) given a false report; or
(ii) grossly overassessed any loss; or
(iii) made an adjustment of loss in a grossly unjust manner, the Controller may cancel the certificate held by that insurance surveyor:
10. Provided that in the event of cancellation of certificate under the discretionary powers of the Controller under this subsection the Central Government may, upon an application made to it in this behalf call for a report from the Controller and, after considering such report and hearing the applicant give such direction to the Controller as it may deem fit.
(8) ..........................................................
(9) ..........................................................
11. The perusal of the provisions of the above section shows that no person other than an insurance surveyor holding an appropriate certificate shall undertake in Pakistan, the surveying assessment or adjustment of any loss in respect of general insurance business and no insurer shall pay any claim in respect of general insurance business transacted, by him in Pakistan, unless the loss has been surveyed, assessed or adjusted as the case may be, by an insurance surveyor holding an appropriate certificate under this section.
12. Subsection (2) provides that an application for a certificate shall be made to the Controller of Insurance in the prescribed manner and be accompanied a prescribed fee which shall not be more than rupees fifty. Subsection (3) provides that the insurance surveyors may be classified into such classes or sub‑classes as the case may be. Subsection (4) provides that the Controller of Insurance or any person authorised by him in this behalf may call for such information or explanation as he may deem fit or ask the applicant to appear before him and on being satisfied that the applicant fulfils requirements as may be prescribed and is a fit to hold the certificate applied for, grant such certificate.
13. Subsection (7) provides that where it is found that the insurance surveyor is suffering from any of disqualifications mentioned in subsection 4 of S.42 has given a false report or grossly over assessed any loss; or made an adjustment of loss in a grossly unjust manner, the Controller may cancel the certificate held by the surveyor.
14. Under subsection (7) of section 44‑A the Controller may cancel the certificate if the case falls under any of clauses (i) to (iii) (that is) the insurance surveyor has (i) given a false report; or (ii) grossly overassessed any loss; (or) made an adjustment of loss in a grossly unjust manner.
15. The Controller held an inquiry and after complying all the formalities found that the appellant had deliberately misused its insurance certificate. In that view of the matter he cancelled the certificate. The Tribunal on reappreciation of the evidence on the record held that the Controller of Insurance/respondent not only had given an opportunity to the appellant to explain his position, but also maintained complete record of hearing. In that view of the matter it found that all legal formalities, in letter and spirit were strictly followed. It held that the Controller had rightly cancelled the certificate. There is one more aspect of the case that the Controller of Insurance and the Insurance Appellate Tribunal have concurrently found on a fuller and detailed discussions of the oral and documentary evidences as well, that the appellant misused the certificate. This concurrent finding cannot be interfered with in this appeal when the authorities below have taken all the material evidences on record into consideration.
16. It is not possible to accept the contention of Mr. Ashary that provisions of S‑44‑A of the Act are not attracted in the instant. The only provisions in the Act relating to cancellation of certificate are to be found in subsection (7) of section 44‑A of the Act.
17. In the result, this Misc. Appeal fails and is 'dismissed but in the circumstances of the case, there will no order as to costs.
18. AA./G‑205/K Appeal dismissed,