2004 PLP 246 (CLD)

(ii) Grant injunction restraining the respondents from acting on the impugned notice dated 29‑6‑2002 and/or from taking any action, coercive and/or otherwise under the head of impugned notice." Briefly the facts giving rise to this petition are that the petitioner is a Public Limited Company and is carrying on Insurance business in Pakistan and abroad. It is the case of the petitioner that as required by law the petitioner has submitted its annual accounts to the Securities and Exchange Commission of Pakistan who reported heavy losses including the losses in motor car claims amounting to Rs.500 Millions in respect of motor car claims in the United Arab Emirates and called upon the petitioner to explain such losses. Correspondences were exchanged between the petitioner and the Commission. It is further the case of the petitioner that in the meantime respondent (FIA) also started to conduct the enquiry and investigation on the same subject and issued letter dated 11‑6‑2002 to the petitioner to provide certain details which was dully replied to by the petitioner. It is the case of the petitioner that thereafter the respondent through its notice dated 29‑6‑2002 for enquiry in the matter which was also replied to by the petitioner and pointed out to them that the Securities and Exchange Commission of Pakistan has the exclusive jurisdiction in the matter and they should cease to conduct enquiries, into the same. Hence this petition. Notices were issued to respondent for filing parawise comments and accordingly the respondent filed comments and contended that the petition is not maintainable inasmuch as the petitioner‑Company has caused huge losses to the national exchequer. The said loss has been caused through fake, fraudulent and bogus insurance claims which were submitted by the officials of the Company to the PIC. Thus the officials of the Company committed offences punishable under sections 406/468/471, P. P. C. which are in the Schedule of the F.I.A. Act, 1974. The F.I.A. can enquire into and investigate these offences of fraud, cheating and embezzlement. We have heard the learned counsel for petitioner and learned D.A.‑G. at length and also perused the law on the subject. It is contended by the counsel for petitioner that under the Act of 1997 the Securities and Exchange Commission enjoys exclusive jurisdiction to investigate the matters relating to the Companies. The same powers also expressed in sections 59 and 60 of the Insurance Ordinance, 2000. Learned counsel has further pointed out that Insurance Companies are not included in the ambit of the Schedule of the Federal Investigation Agency Act of 1974. As against this learned D.A.‑G. has contended that the respondent has powers to investigate and enquire into the matters of fraud and bogus insurance claims etc. In order to appreciate the respective contentions of the learned counsel for the parties it would be appropriate to reproduce the relevant provisions of law. Section 3 of the Federal Investigation Agency Act, 1974 reads as under:‑‑ "3. (1) Notwithstanding anything contained in any other law for the time being in force, the Federal Government may constitute an Agency to be called the Federal Investigation Agency for inquiry into, and investigation of, the offences specified in the Schedule, including an attempt or conspiracy to commit, and abatment of, any such offence." It may be mentioned here that the Schedule attached to this Act excludes the Insurance Companies. Section 29 of the Securities and Exchange Commission of Pakistan Act, 1997 clearly provides powers to the Commission for investigation into the matters of Insurance Companies. The same powers are also given in the Insurance Ordinance, 2000. It is an admitted position that in the instant case no complaint of whatsoever nature has ever been lodged against the petitioner by any individual or company for fraud or embezzlement etc. The F.I.A. or the Police has powers only in respect of complaints. The Securities and Exchange Commission of Pakistan has the jurisdiction in the matter to look into any fraud etc. in the business of Insurance. No such record has been placed on record to prove that the petitioners are involved in such type of business. The letters addressed by the F.I.A. have questioned the losses suffered by the Company on account of Motor Car claims. Surely it is beyond the jurisdiction of the F.I.A. A loss no matter howsoever, high or low should be a matter of concern to the shareholders of the Company. A public limited company has its accounts audited and these are public documents open to question and scrutiny by the members/shareholders at the Annual General Meeting. The Securities and Exchange Commission oversees the activities of the Insurance Companies and, therefore, can check any so‑called illegal activities as the guiding laws is the Insurance Ordinance, 2000. It may be advantageous to reproduce section 59 of the Insurance Ordinance, 2000 which deals with investigation and directives etc. which reads as under:‑‑ "

59. Power of Commission to order investigation.‑‑‑(1) If the Commission believes upon reasonable grounds that an insurer is or is likely to become unable to meet its liabilities or that there has been or is likely to be a contravention of the provisions of the Ordinance or the rules made thereunder by the insurer, it may investigate the affairs of an insurer and wherever necessary employ an auditor or actuary or both for assisting it in any such investigation. (2) An investigation under subsection (1) shall be commenced and carried out in accordance with the provisions of Part VIII of the SECP Act: Provided that for the purposes of this section, the words `the Court referred to in Part II of the Ordinance' contained in subsection (1) of section 34 of the SECP Act shall be read as though they were omitted and replaced with the words `the Tribunal'. (3) When an investigation is made under this section, the Commission may, after giving an opportunity to the insurer to make a representation in writing or be heard in person, by order in writing require the insurer to take such action in respect of any matter arising out of the investigation as it may consider on reasonable grounds to be necessary to secure compliance with the provisions of this Ordinance." Sections 60 and 61 onwards of this Ordinance deals with the powers of the Commission to give directions to the insurer etc. We have seen from the record that the petitioner is one of the largest Insurance Companies in Pakistan and it has been recognized for its performance both in Pakistan and abroad. The recognition of a Company's achievement at the highest level reflects the integrity of the working of the Company. Apparently according to learned counsel for the petitioner the Company has enjoyed right from its inception an unblemished record. For the foregoing reasons we hold that the Federal Investigation Agency has no jurisdiction in the matter to issue the impugned notice to the petitioner because there is no complaint of any nature against the petitioner. We by our short order dated 13‑11‑2003 had allowed the petition and declared that the impugned notice is issued without any lawful authority and no legal effect. Foregoing are the reasons for the same. M.B.A./A‑524/K Petition allowed.