2023 (6) TMI 779 - SC - Indian Laws

Bribe - Adoption of illegal means by the appellant in obtaining business of international re-insurance cover of another firm on yearly brokerage/commission - HELD THAT - There was no occasion for interfering with the order of the IRDA by the Tribunal. It is a fact that the order of the Tribunal is in the nature of a remand order and this order in effect has only directed a fresh inquiry. Appellant had argued that so far as his client s complaint is concerned, they had discharged their onus by raising sufficient suspicion as regards the deal between the respondent no.5 and the appellant. But, it is found that barring the fact that the appellant had been given the brokerage contract, there is no other cogent material which would warrant a detailed investigation. The Tribunal has, exfacie, gone wrong in observing that the respondent no.5 had relied on documentary evidence in support of the complaint. The fact finding body has already come to its conclusion on lack of evidence. In the given circumstances, we do not find any useful purpose that would be served in subjecting the appellant or their contract with Jagson to another round of inquiry. In the order under appeal, the Tribunal has observed that the complaint showed that the appellant had relied on documentary evidence in support of the contention that Jagdish Gupta had sought bribe and was bribed by the officers of Marsh for diverting their re-insurance business - no such document found from which such a conclusion could be reached. The order of the IRDA passed on 9th January 2018 is sustained - appeal allowed.

Summary

Issues:
The legality of an order passed by the Securities Appellate Tribunal regarding a complaint of adoption of illegal means in obtaining re-insurance business.

Details of the Judgment:

Issue 1: Complaint of Adoption of Illegal Means
The appellant, an Insurance and Re-insurance Brokerage firm, challenged an order by the Tribunal setting aside a decision of the Insurance Regulatory and Development Authority of India (IRDA) dismissing a complaint alleging bribery in obtaining re-insurance business. The complaint was made by the first respondent, an Insurance and Re-insurance Brokerage entity, against the appellant for allegedly paying a bribe to obtain a brokerage contract from Jagson International Limited. The complaint was based on emails suggesting illegal gratification demands by the Chairman of Jagson. The Tribunal directed the IRDA to revisit the complaint and conduct a fresh inquiry.

Issue 2: IRDA's Decision and Tribunal's Order
The IRDA initially dismissed the complaint due to lack of evidence, which was challenged by the first respondent. The IRDA's decision was upheld by the Tribunal, stating that the evidence provided did not warrant a detailed investigation. The Tribunal observed that there was no substantial material to support the bribery allegations against the appellant. The Tribunal's order was set aside by the Supreme Court, upholding the IRDA's decision of January 9, 2018.

Conclusion:
The Supreme Court found that the Tribunal erred in directing a fresh inquiry as there was insufficient evidence to support the bribery allegations. The Court emphasized that the documents relied upon were not substantial enough to trigger an inquiry. Therefore, the Court set aside the Tribunal's order and upheld the IRDA's decision, concluding that no useful purpose would be served by subjecting the appellant to another round of investigation.