LHC bars consumer courts from hearing insurance policyholder disputes
Justice Jawad Hassan set aside a Bhakkar consumer court order and sent the case back for a fresh ruling within one month.
The Lahore High Court has ruled that consumer courts cannot hear complaints filed by insurance policyholders against insurance companies, holding that claims arising from a policy belong before a specialised tribunal.
Justice Jawad Hassan set aside an order of the District Consumer Court in Bhakkar on a petition filed by the United Insurance Company of Pakistan Limited, Dawn reported. The company had objected that the policyholder's complaint was not maintainable. The district consumer court overruled that objection, holding the complaint maintainable because the dispute stemmed from the provision of insurance services.
The judge found that the lower court had not properly analysed Article 122 of the Insurance Ordinance 2000, UA.News reported, citing Dawn. Under subsection (3) of that article, no court other than a specialised tribunal may hear a claim by an insurance policyholder against an insurance company concerning or arising from an insurance policy.
Under the article as interpreted by the court, a policyholder who wants to sue an insurer over a policy must go to the specialised tribunal rather than to a consumer forum.
The reasoning rested on the difference between a general law and a special one. Justice Jawad Hassan held that a law enacted by parliament takes precedence over a provincial act, and that a special statute with its own defined dispute-resolution mechanism cannot be displaced by general consumer protection provisions, UA.News reported. He referred to Article 143 of the Constitution and to earlier case law, in particular the precedent in the Adamjee Insurance Company case.
The case has been remanded to the consumer protection court, which must reconsider whether the complaint is maintainable in the light of the statute and the case law. UA.News reported that a fresh reasoned decision has to be issued within one month.
The Bhakkar complaint itself remains undecided. The consumer court will first rule again on whether it can hear the matter at all.
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