Judicial Oversight in Insurance Disputes

The Supreme Court of Pakistan’s decision in Adamjee Insurance Company Ltd. vs. Muhammad Ramzan (PLD 2020 SC 414) addresses significant issues related to the procedural aspects of insurance litigation under the Insurance Ordinance, 2000. This case examines the scope of appeals, the application of constitutional remedies, and the balance between legislative intent and judicial oversight in insurance disputes.

Key Issues:

Scope of Appeal under Section 124 of the Insurance Ordinance, 2000: The central issue in this case was the interpretation of Section 124 of the Insurance Ordinance, 2000, particularly whether it allows an appeal against every order of the Insurance Tribunal or only against final decisions on insurance claims or penalties exceeding a specified amount. Adamjee Insurance argued that the Tribunal's decision to close its right to file a written reply should be appealable. However, the Tribunal and the Lahore High Court held that such an order, being procedural and interlocutory, did not fall under the scope of Section 124(2) of the Ordinance, which is limited to final orders on substantive claims.

Application of Constitutional Jurisdiction under Article 199: Another critical issue was whether the petitioner could invoke the constitutional jurisdiction of the High Court under Article 199 of the Constitution to challenge the Tribunal's order, given the limited scope of appeal under the Insurance Ordinance. The Supreme Court reaffirmed the principle that sub-constitutional legislation, such as the Insurance Ordinance, cannot curtail the constitutional jurisdiction of the High Court. The Court clarified that while the Ordinance aims to expedite insurance disputes, it cannot deny an aggrieved party access to constitutional remedies when statutory appeals are not available.

Judicial Interpretation and Legislative Intent: The Court also considered the legislative intent behind limiting appeals to final decisions under the Ordinance. It was observed that the legislative framework seeks to ensure swift resolution of insurance claims, avoiding unnecessary delays caused by appeals on procedural matters. However, the Court recognized that certain procedural orders with significant implications might still warrant judicial review through constitutional petitions, ensuring fairness and justice.

State Life Insurance Corporation of Pakistan vs. Additional District Judge-I (2010 CLD 845): This case was cited to support the limited scope of appeals under Section 124, emphasizing that only final adjudications on claims or penalties are appealable, thereby preventing delays in the resolution of insurance disputes.

Arshad Mehmood vs. Commissioner/Delimitation Authority, Gujranwala (PLD 2014 Lahore 221): The Supreme Court referred to this decision to underline the principle that constitutional courts retain their jurisdiction even when specific legislation provides limited statutory remedies, reinforcing the balance between legislative intent and judicial oversight.

Court's Conclusion: The Supreme Court concluded that the order of the Insurance Tribunal closing Adamjee Insurance's right to file a written statement was not appealable under Section 124(2) of the Insurance Ordinance, 2000, as it did not constitute a final decision on the insurance claim. However, the Court held that the petitioner had the right to seek relief under Article 199 of the Constitution, as the Ordinance could not abrogate the High Court’s constitutional jurisdiction. The Court ultimately set aside the Tribunal’s order and allowed Adamjee Insurance to file its written statement, directing the Tribunal to proceed expeditiously in deciding the matter.

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