EASTERN GENERAL INSURANCE CO. LTD. Versus CONTROLLER OF INSURANCE, GOVERNMENT OF PAKISTAN, DEPARTMENT OF INSURANCE, KARACHI

The only question which requires to be considered in this appeal is, whether the learned Controller of Insurance while passing the order, dated 18‑7‑1982 had travelled beyond the parameters laid down by the order of this Court, dated 25‑8‑1981, remanding the case to the learned Controller of Insurance for a fresh disposal.

2. It may be pointed out that the registration of the appellants had been cancelled by the respondent as he found that the appellants had committed default by their failure to produce the relevant record before him. The appellants filed Misc. Appeal (MA. No.1/1978) before this Court and when the same came up for hearing before a learned Single Judge of this Court he found it appropriate that before imposition of extreme penalty of cancellation of registration the appellant should have been given opportunity to produce all the relevant documents which could have been required in connection with finalization of enquiry report against them under section 27 of the Insurance Act. Consequently, a list of documents required to be produced before the respondent was supplied to the appellants and vide order, dated 25‑8‑1981 the case was remanded to the respondent for taking action in accordance with law. The operative part of the order passed by the learned Judge of this Court reads as under:‑

"The order of the appellate Tribunal as well as that of the Controller of Insurance passed in the case cancelling the licence of the appellant is set aside and the whole case is remanded back to the Controller of insurance with the direction that the appellant shall produce before the Controller of Insurance all the documents list whereof has been supplied today in Court to the counsel for the appellant. The learned counsel for the appellant undertakes to produce the documents required by the Controller of Insurance within four months from today. After production of the documents or in case of their non-production within 4 months the Controller of Insurance shall be free to decide the case and to consider all the contentions which may be raised before him, in accordance with the law. The learned Counsel for the appellant further undertakes to file the returns for the subsequent years within the period of four months allowed for production of the documents. The appeal is accordingly disposed of in terms of the above consent order and in the circumstances of the case there will be no order as to costs."

3. It appears that after disposal of the case by this Court the appellants failed to produce all the relevant documents before the learned Controller and. in fact, there appears to he no controversy on this issue. However, as is evident from the order, dated 18‑7‑1982, the respondent served a notice on the appellants dated 6‑7‑1982 requiring them to submit accounts/returns under sections 11 and 15 of the Insurance Act for the year 1981. The appellants were also directed to submit returns under section 27‑A and the Schedule attached thereto for the year 1981. However, as is evident from the said order, the appellants failed to produce such returns before the respondent. Consequently, it was concluded by the respondent that the appellants had contravened the provisions of sections 11, 15 and 27‑A of the Insurance Act and he once again ordered cancellation of the appellants' registration.

4 The appellants being aggrieved by such order preferred an appeal before the learned Insurance Appellate Tribunal, Karachi but the learned Member of the Tribunal was not impressed and the appeal filed by the appellants was dismissed vide order passed by him on 31‑3‑1985, and hence the present appeal.

5. The only contention of Mr. Riazul Hassan, learned counsel for the appellants before me has been that, the respondent while passing the order dated 18‑7‑1()82 had travelled beyond the limits provided by the remand order of this Court. According to Mr. Riazul Hassan the appellants were required to produce the relevant documents within four months of the passing of the said order of this Court dated 25‑8‑1981. Although the appellants were also required to file returns for the subsequent years but the same were also required to be filed within the said period of four months which was earlier allowed for production of other relevant documents. Therefore, according to the learned counsel, the respondent acted outside the ambit of his authority vesting in him by virtue of order of remand by issuing notice dated 6‑2‑1982 to the appellant for production of accounts and returns under sections 11, 15 and 27‑A of the Insurance Act pertaining to the year 1981. Admittedly, such returns were due at the expiry of June 1982. Mr. Ikram Ahmed Ansari, learned counsel for the respondent, has, however, argued that the appellants by undertaking to file returns for the subsequent years had given their consent for filing their returns pertaining to the year 1981 as well.

6. After perusing the relevant record and hearing the learned counsel, I find myself in full agreement with the learned counsel for the appellants. No doubt, the appellants had undertaken before the learned Single Judge of this Court at the time of passing of remand order, dated 25‑8‑1981 to file the returns for the subsequent years as well, but that does not mean that the appellants were required to file returns for 1981 when admittedly the same became due at the end of June, 1982. The remand order clearly indicates that the relevant documents were required to be sent to the respondent within four months from the date of passing of the said order and evidently returns for 1981 which were to become due at the expiry of June 1982 were not meant to be sent to the respondent in terms of the said order. I am, therefore, clearly o the view that by requiring the appellant to send returns for the year 1981 the respondent had clearly travelled beyond the parameters laid down by the! remand order, dated 25‑8‑1981.

7. Mr. Ikram Ahmed Ansari has, however, argued that even if the appellant could not be required by the respondent to file returns for the year 1981 vide notice dated 6‑7‑1982, but, as is evident from the order, dated 18‑7‑1982, the action has been taken by the respondent not on this ground alone and, as is indicated by para No.7 of the said order, one of the grounds on which action was taken against the appellant also was that they had failed to produce before the respondent the books of accounts and documents specified by the order passed by this .Court in Misc. Appeal No.1/1978, reference to which has earlier been made in this judgment. Although it is true that one of the grounds on which the action of the respondent is based is what has been shown in para. 7 of the order, dated 18‑7‑1982, but if action has been taken by an authority on different grounds and any one or more of such grounds cannot be sustained in law, the entire action would suffer from infirmity as in such a case it would be difficult to ascertain which of the grounds upon which action was taken weighed more with such authority. In the present case the action taken by the respondent is based also on the ground that the appellant had failed to furnish returns for the year 1981, as pointed out earlier, and, as has been just indicated by me, any action based on such ground would suffer from want of jurisdiction being outside the ambit of the remand order. Consequently, in my opinion, the entire order suffers from an illegality. In the result, this appeal is accepted and the orders passed by the learned insurance Appellate Tribunal and the respondent, cancelling the appellant's registration, are set aside and the case is once again remanded to the respondent to pass a fresh order strictly in accordance with the directions contained in the remand order, dated 25‑8‑1981 passed in MA. No.1/1978 after allowing the appellant another opportunity to submit the required documents within two months from today. There shall be no order as to costs.

AA./E‑57/K Appeal accepted.