The Securities Appellate Tribunal has quashed an order passed by the Insurance Regulatory and Development Authority of India (IRDAI) against Malaysia-based Confiance International Reinsurance Broker LLC and its Managing Director Steven Chetty. The appellant is in the business of Reinsurance Broking and had been barred from doing any insurance/ reinsurance business in India.
“We are of the opinion that the appeal is maintainable. We are also of the opinion that the impugned order is violative of principles of natural justice. Since no notice or opportunity of hearing was provided to the appellants, the impugned order cannot be sustained and is quashed,” said the Appellate Tribunal bench of Justice Tarun Agarwala and Justice M.T. Joshi.
“The order amounts to blacklisting the appellants in as much as the authority has directed the Indian insurers not to do business with the appellants. Such blacklisting is in gross violation of the principles of natural justice. We are of the opinion that no such directions can be issued by the authority without first giving a notice and opportunity of hearing,” the bench said.
The present appeal has been filed against IRDAI’s order dated January 8, 2020 passed by its Member (Distribution) under Section 14(1) of the IRDA Act, 1999 directing Indian insurers and its offices overseas not to engage in any business activity with Confiance and its Managing Director Steven Chetty. Further, Chetty was debarred from doing any insurance/ reinsurance business in India.
The Appellate Tribunal noted, “The mere fact that an order is passed under 14(1) will not automatically make the said order an administrative order. In the given case, we find that the determination and direction given by the authority in the impugned order is a quasi-judicial act and, therefore, the appeal is maintainable.”
The Tribunal remarked, “The impugned order by no stretch of imagination can be said to be an administrative order. In this regard, we find that the authority has given a finding that a fraud as well as forgery has been committed by the appellant. This determination cannot be conceived by any means to be an administrative order.”
The facts leading to the filing of the present appeal is, that the Appellant no. 1 is a Company incorporated under the Labuan Companies Act, 1990 and has been granted a license to transact Reinsurance Broking Business under the Labuan Financial Services and Securities Act, 2010. The Appellant no. 1 is based in Malaysia and is in the business of Reinsurance Broking. The Appellant no. 2 Mr. Steven L. Chetty, is the Managing Director of Appellant no. 1 Company.
The present appeal was allowed and parties were asked to bear their own costs.
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