P L D 2000 Lahore 418 (PLP)

The dispute in this petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973' arises out of an insurance policy taken by the petitioner from Messrs Orient Insurance Company Limited for the period 1991‑1992 against damage by floods etc.

2. It is common ground between the parties that in July, 1999 heavy damage was caused by the floods to the property of the petitioner company which lodged a claim of about Rs.7 crores, however, on survey it was found that actual damage caused was to the extent of Rs.1,08,38,904.

3. In the meanwhile, winding up proceedings were initiated by PICIC against Messrs Ali Textile (Jhang) Limited. During the course of those proceedings a question as regards the liability of Orient Insurance Company Limited was raised. In response to the notice issued by this Court the said Company appeared and stated that its liability was conflne4 to 80% of the loss and damage while the remaining 20% was the liability of Pakistan General Insurance Company (respondent No.4) which was the co‑insurer.

4. It appears that respondent No.4 failed to pay its part of the claim with the result that the petitioner was obliged to file an application under section 33 of the Insurance Act, 1938 which was processed and decided by the Controller of Insurance who was of the view that the said application did not lie under section 33 of the Insurance Act; 1938 and that the petitioner should have resorted to the Claim Settlement Board constituted under section 47‑L of the Insurance Act, 1938.

5. Dr. A. Basit, learned counsel for the petitioner has contended that the Controller of Insurance has misdirected himself in observing that he had no jurisdiction in the matter and that the petitioner should have resorted to the Claim Settlement Board which according to the learned counsel has been set up to settle dispute arising out of motor insurance.

6. In order to appreciate this contention of the learned counsel a perusal of section 33 of Insurance Act, 1938 is necessary which is reproduced as under:‑‑ "

33. Power of Controller of Insurance to order investigation.‑‑‑(1) The Controller may, at any time, investigate the affairs of an insurer and wherever necessary, employ an auditor or actuary of both for assisting him in any such investigation. (2)??????? It shall be the duty of every Manager, Managing Director or other officers of the insurer to produce before the Controller, auditor or actuary all such books of account, registers and other documents in his custody or power and to furnish him with any such statement or information relating to the affairs of the insurer within such time as the Controller, auditor or actuary may require. (3)??????? When an. investigation is made under this section, the Controller may, after giving an opportunity to the insurer to make a representation in writing , or be heard in person, by order in writing‑‑ (a)??????? require the insurer to take such action in respect of any matter arising out of the investigation as he may think fit to secure compliance with the provision of this Act; or (b)??????? cancel the registration of the insurer under clause (1) of ??????????? subsection (4) of section 3; or (c)??????? apply to the Court for the winding up of the insurer, if a company whether the registration of the insurer has been cancelled under clause (b) or not. (4)??????? ... ... ... ... ... ... ... ... ... ... (5)??????? ... ... ... ... ... ... ... .. . ... On a plain reading of the abovecited provision it is apparent that the only l power which the Controller has under this section is to investigate into the affairs of an insurance company and to take such action as may be required after giving an opportunity to the insurer to make representation in writing or to be heard in person. There is, however, no power vesting in the Controller whereby the claim of insurer against the insurance company can be entertained and adjudicated upon. 7.???????? In law the remedy of the petitioner in such situation lay in approaching the Claim Settlement Board constituted under section 47‑L of the Insurance Act, 1938 which reads as under:‑? "47‑L. Other jurisdiction of Board.‑The Central Government may, by notification in the official Gazette, authorise the Board‑? (a) to enquire into, and determine the causes and quantum of and fix the responsibility for, any such loss or series of losses payable under a policy of insurance as may , be specified in the notification and to suggest to the Central Government measures calculated to prevent such losses; and (b) to adjudicate upon such class of disputes arising under a policy relating to a class of insurance business other than motor insurance as may be so specified and thereupon the provisions of sections 47‑C to 47‑K shall apply to such inquiry and to such class of disputes as they apply to a dispute arising under a policy insuring a motor vehicle." It is admitted on all hands that a Notification has been issued by the Federal Government whereby the Board has been authorised to adjudicate upon the claim and disputes arising under an insurance policy. This Notification is dated 27‑8‑1990. Controller of Insurance was, therefore, justified in observing that the petitioner should resort to the Claim Settlement Board. In view of the above, this petition is disposed of with a direction to the Claim Settlement Board that if any application is filed by the petitioner before the said Board the same shall be decided within a period of one month without fail and compliance of this order shall be reported to the Registrar of this Court. No order as to costs. Q. M . H. /M. A. K. /A‑47/L?????????????????????????????????????????????????????????????????????????????????????? Order accordingly.