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The Defects in Tribunal Constitution do not invalidate their decisions, as protected by Section 121(6) of Insurance Ordinance, 2000 --- Lahore High Court, Lahore

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The Defects in Tribunal Constitution do not invalidate their decisions, as protected by Section 121(6) of Insurance Ordinance, 2000 --- Lahore High Court, Lahore

Islamabad 16-11-2024: In a landmark decision, the Lahore High Court has upheld the validity of Insurance Tribunals constituted under the proviso to Section 121(1) of the Insurance Ordinance, 2000, dismissing challenges to their legality. This decision ensures the continuity of insurance dispute adjudication under tribunals empowered by the Federal Government.

The Court ruled that tribunals constituted under notifications issued by the Federal Government, in consultation with the Chief Justices of Lahore High Court, are valid despite not meeting the formal requirements of Section 121(2), which mandates a Lahore High Court Judge as Chairperson and members with specialized expertise. The ad hoc arrangements, the Court noted, prevent a vacuum in the resolution of insurance-related disputes.

The Court highlighted that the proviso to Section 121(1) allows the Federal Government to confer the powers of Insurance Tribunals on District or Additional District & Sessions Judges in situations where formal tribunals are not constituted. This provision ensures access to justice for insurance-related matters without undue delay.

The judgment clarified that under Section 121(6), any defect in the tribunal’s constitution does not invalidate its proceedings or decisions. The Court emphasized the importance of upholding the decisions of tribunals operating under valid notifications to maintain the integrity of the judicial process.

The Court reversed findings in Premier Insurance Limited Vs. Messrs Ihsan Yousaf Textile Private Limited (2023 CLD 135), which had earlier questioned the legitimacy of these tribunals. The Court held that the 2023 judgment failed to consider binding precedents, rendering it per incuriam.

The Court reiterated the importance of judicial discipline, noting that a bench of equal strength cannot deviate from earlier binding decisions. Any deviation must be referred to a larger bench, in line with precedents such as Multiline Associates Vs. Ardeshir Cowasjee (PLD 1995 SC 423) and Qaiser & Another Vs. The State (2022 SCMR 1641).

The Court directed the Federal Government to ensure the establishment of tribunals under Section 121(2) while safeguarding the decisions of existing tribunals functioning under the proviso to Section 121(1).

This judgment reinforces the Federal Government’s authority to establish temporary forums for dispute resolution in the absence of formal tribunals. It ensures that citizens’ rights and remedies are not left in limbo, particularly in the specialized area of insurance disputes.