2010 PLP 588 (CLD)

NASREEN RASHID, MEMBER.

Mr. Muhammad Waqar Rana has already filed Power of Attorney in his favour from the appellant.

2. Mr. Muhammad Zeehan Abdullah filed Wakalatnama to appear in this matter on behalf of the respondent.

3. This order will dispose of the appeal filed by Messrs Mangala View Resort (Private) Limited, against the order dated 24-7-2008 passed by the learned Insurance Ombudsman in respect of the complaint (Miscellaneous Application No.198 of 2007) lodged by Messrs Mangla View Resort (Private) Limited against Messrs United Insurance Company Limited.

4. To conduct the hearing, Securities and Exchange Commission of Pakistan (the Commission) invited Messrs Mangla View Resort (Private) Limited and Messrs United Insurance Company Limited to visit the Commission's Karachi Office on 18-12-2009 at 10-00 a.m.

5. The Advocate for the appellant was heard against the above order of the learned Insurance Ombudsman. The Advocate for the respondent was also given the opportunity to present his case.

6. The appellant pointed that the order of the learned Ombudsman is against the law and facts because the jurisdiction of the learned Ombudsman is barred only in cases where the matters are sub judice before the Court of competent jurisdiction whereas the jurisdiction of a civil Court is barred as it is provided in section 122(3) of the Insurance Ordinance, 2000. He asserted that the Contractor and respondent have used the suit to avoid the encashment of the Performance Guarantee and, therefore, the respondent should be ordered to encash the bond. He pointed that a literal interpretation of section 127(1)(b) defeats the very intent of law and leads to an absurdity. If the literal interpretation leads to an absurdity, it should be avoided and the interpretation made should not be literal but beneficial. Ultimately, objective of all laws is to deliver justice, and the respondent is trying to take refuge behind a technicality. All rules of law are meant to provide justice and technicalities should be avoided. The appellant gave references of a number of judicial decisions in support of his stance that the objective and spirit of enacting a law should be considered while applying it.

7. The respondent pointed that an admitted position of this matter that the complaint was filed on 7-11-2007, but on the said day the civil suit at Islamabad was pending as the same had been filed on 19-9-2007, even pending till today, which is a suit for specific performance, declaration, permanent and mandatory injunctions and the subject-matter of the suit and the relief claimed directly and indirectly relates to violation of the terms of contract and liability of the insurance company to encash the guarantee bonds, hence the Ombudsman, by virtue of, proviso of 127(1)(b) of the Ordinance has no jurisdiction to entertain, investigate or inquire into mater. He added that if the matter is still pending in the Court, it has to be treated as sub judice, otherwise there can be a conflict between the two forums. He added that section 122(3) is not applicable to the present case as that section does not put any bar upon the Court, if the matter is pending before Insurance Ombudsman. The bar on the Court to exercise jurisdiction is applicable only when the matter comes within the jurisdiction of the Insurance Tribunal provided under section 122(1) of the Ordinance.

8. The learned Insurance Ombudsman in his afore-referred Order has stated:-- Admittedly, this complaint was filed on 7-11-2007 whereas the first suit titled as Messrs FAL Engineers v. Deputy Chief Executive, Mangla View Resort (Pvt.) Ltd. was filed on 16-8-2007 in the Court of learned Civil Judge, Islamabad which was followed by another suit titled Messrs FAL Engineers v. Messrs Mangla View Resort (Pvt.) Ltd. and Messrs the United Insurance Co. of Pakistan Limited filed on 19-9-2007 in the Court of learned Senior Civil Judge, Islamabad and still reported to be pending. The first suit was for declaration and permanent injunction etc. whereas the subsequent suit is for specific performance, declaration and permanent and mandatory injunctions and the subject-matter of the suit and the relief claimed directly and indirectly relates to violation of the terms of the contract and liability of the insurance company to encash the guarantee bonds. Hence I find force in the contention of the learned counsel for the insurance company that the matter was sub judice at the time of filing of this complaint and still sub judice, as such the Insurance Ombudsman has no jurisdiction." He decided: The upshot of the discussion made is that the matter being sub judice at the time of filing of this complaint, and even today, hence in view of the bar contained under section 127(1)(b) of the Ordinance, Insurance Ombudsman has no jurisdiction to adjudicate upon the matter in controversy or to determine the competency of the civil Court to adjudicate upon the matter in controversy with regard to obligations of the parties as per terms of contract. With the above observations, this file is closed. The parties and at liberty to agitate their rights before any other Court, forum or Tribunal as provided by law, if so advised.

9. After hearing the parties at length, examining the material on record and keeping in view the conclusion of the learned Ombudsman, the Commission considers that the suit filed by the Contractor against the appellant and the respondent was instituted before the complaint was filed with the Ombudsman. Hence, the matter was sub judice at the time of filing the complaint with the Ombudsman on 7-11-2008. Whether a suit is maintainable or not can only be decided by the Court before which it is pending or its appellate authority. The Commission has considered the judicial decisions submitted by the appellant. However, from the clear wording of the section 127(1)(b), the intention of the legislature is apparent, and no interpretation can be made by this forum to ensure whether the objective of law is served.

10. In view of the above, the appeal is dismissed. The parties are at liberty to agitate their rights before any other Court, forum or Tribunal as provided by law, if so advised. H.B.T./14/SEC Appeal dismissed.