Law: Insurance Ordinance, 2000

Section: 127

(a) Insurance Ordinance (XXXIX of 2000)--Ss. 127, 129 & 130---Securities and Exchange Commission (Insurance) Rules, 2002, R.35---Appeal against order passed by the Federal Ombudsman---Appellant entered into an agreement with a company and invested amount---Said company as per contract furnished a Performance Guarantee from respondent/Insurance Company---Company was required to pay the appellant sum limited to the liability on a claim made within the validity period without any objection---Insurance company having defaulted to pay the agreed amount to the appellant, appellant terminated the contract---As the Guarantee period covered one year, notices were served on the Insurance Company, but Insurance Company turned down the claim of the appellant summarily---Finance Department of Provincial Government (appellant) lodged a complaint with Ombudsman against the Insurance Company, but without following the mandatory procedure of filing the complaint under S.129 of Insurance Ordinance, 2000---Ombudsman recorded that complaint filed by the appellant/Provincial Government was incomplete---Appellant lodged another complaint, which attracted the bar contained under S.127(1)(b) of Insurance Ordinance, 2000 which ousted the jurisdiction of the Ombudsman relating to the sub judice matters---Ombudsman closed the file without undertaking the proceedings on the points complained against---Aggrieved by the order of the Ombudsman, appellant/Provincial Government had filed present appeal before the Commission---Commission had observed that Public money had been mishandled; that Guarantee obtained was not a performance guarantee, but a financial guarantee for which appellant did not have the reinsurance arrangement; that point raised by the Insurance Company that Government was like other litigants, was correct, however, non-receipt of premium, was not a valid justification for avoiding liability under a contract of insurance, according to R.35 of the Securities and Exchange Commission (Insurance) Rules, 2002; that performance guarantee would not hold conditional provisos; that the courier receipt confirmed that the complaint was not in compliance with the requirements of…

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