Court No. - 32
Case :- WRIT - C No. - 14274 of 2019 Petitioner :- Smt. Suman Pandey Respondent :- The Union Of India And 3 Others Counsel for Petitioner :- Hanuman Prasad Dube,Vipul Dube Counsel for Respondent :- A.S.G.I.
Hon'ble Shashi Kant Gupta,J. Hon'ble Pankaj Bhatia,J.
Heard Sri Hanuman Prasad Dube & Sri Vipul Dube, learned counsels for the petitioner and Sri Rajesh Kumar Jaiswal, learned counsel for the Union of India.
The present petition has been filed by the petitioner seeking the quashing of the orders dated 15.2.2019 & 25.3.2019 passed by respondent no.4, Reliance General Insurance Company Ltd. The respondent no.4 vide the said orders had rejected the claim for insurance on the ground that the fitness certificate was invalid at the time of the accident which renders the vehicle to be unregistered. The petitioner was also advised to approach the Insurance Ombudsman for redressal of any grievance that the petitioner may have against the rejection of the claim.
Counsel for the petitioner has argued that the writ petition against a private Insurance Company is maintainable and has relied upon the provisions of Section 14 (2) of the Insurance Regulatory and Development Authority Act, 1999 to buttress his submissions that even against the private Insurance Company, the writ petition is maintainable mainly on the ground that although the Insurance Company is private, however, it is carrying out a public utility obligation under the provisions of The Insurance Act, 1936. Counsel for the petitioner has also relied upon a judgment of the Supreme Court in the case of United India Insurance Company Limited Vs. Manubhai Dharmasinhbhai Gagera and others (2008) 10 Supreme Court Cases 404.
Counsel for the petitioner submits that Section 14 (2) of the IRDA Act defines the duties, powers and functions of the authorities which includes the duty to regulate, promote and ensure orderly growth of the insurance business and the reinsurance business. Section 14 of the IRDA Act is quoted herein below:-
"Duties, Powers and Functions of authority -
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA.
Subject to the provisions of this Act and any other law for the time being in force, the authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business.
Without prejudice to the generality of the provisions contained in sub-section (1) the powers and functions of the Authority shall include,
(a) Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration;
(b) protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance;
(c) Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents;
(d) Specifying the code of conduct for surveyors and loss assessors;
(e) Promoting efficiency in the conduct of insurance business;
(f) Promoting and regulating professional organisations connected with the insurance and re- insurance business;
(g) Levying fees and other charges for carrying out the purposes of this Act;
(h) calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business;
(i) control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938);
(j) Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries;
(k) Regulating investment of funds by insurance companies;
(l) Regulating maintenance of margin of solvency;
(m) Adjudication of disputes between insurers and intermediaries or insurance intermediarie;
(n) supervising the functioning of the Tariff Advisory Committee;
(o) specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f);
(p) specifying the percentage of life insurance business and general insurance business to be under taken by the insurer in the rural or social sector; and
(q) exercising such other powers as may be prescribed."
The counsel for the petitioner submits that IRDA Act being the statutory authority was bound to adjudicate upon the dismissal of the claim by the insurer the respondent no.4 whereas the IRDA Act vide its order dated 21.1.2019 has refused to adjudicate the same and has relegated the petitioner to maintain her claim before the Insurance Ombudsman under the Insurance Ombudsman Rules, 2017.
Thus, the first question to be considered by this Court is;
(i) whether a writ petition would be maintainable against a private Insurance Company ? and;
ii) whether the same comes within the words 'other authority' as enshrined under Article 12 of the Constitution of India ?
It is trite law that a writ can be issued only against the State or any authority discharging a public utility service. In the present case the respondent no.4 is a private Insurance Company on which the State Government or the Central Government has no ownership control, however, the respondent no.4 is governed by provisions of the Insurance Act, and a limited role is played by the Insurance Regulatory and Development Authority Act. Clearly, the respondent no.4 is a non State Enterprises in its ownership with the State having no pervasive control. The said Company is a Company incorporated under the Companies Act without there being any obligation of the said Company to perform any public duty. It deals in the business of insurance, it does not have any monopoly over the insurance business. It does not exercise any legislation power and it has no positive obligation of public nature. It is also clear that the respondent no.4, a company does not have any statutory power nor is it supported by any State.
A reference to Section 14 of the Insurance Regulatory and Development Authority Act, 1999 is wholly misconceived, to argue that a writ petition would lie even against the private Insurance Company. Section 14 of IRDA Act only provides for duties, powers and functions of the IRDA and there is no specific power of adjudication conferred upon the authority under the provisions of the Act. It is true that in terms of the powers conferred under Section 14 (2) of the IRDA Act, the authority has a duty to protect the interest of the Policy holders relating to all the interests including the settlement of Insurance claim, however, the said power only authorizes the authority to take steps to ensure safeguards for protecting the interest of the Policy holders, and the same by any stretch of imagination cannot be interpreted to mean that the Insurance Regulatory Development Authority Act has been conferred with the power to adjudicate inter se disputes raising in between the Policy holders and the Insurance Company.
The counsel for the petition has relied upon the judgment of the Supreme Court in the case of United India Insurance Company Limited Vs. Manubhai Dharmasinhbhai Gagera (supra), the Supreme Court while considered the Insurance business in India held that the General Insurance Company which are under the control of the Government even if they do not enjoy monopoly status come within the purview of 'State' as provided under Article 12 of the Constitution of India. In paragraph 25 of the said judgment, it was held as under:-
"25. There is no escape from the fact that the appellant is a `State' within the meaning of Article 12 of the Constitution. It has been created under the 1972 Act. The said Act, as the preamble shows, was enacted for achieving certain purposes, economic benefit of the people and/or group of people, being one of it. At the point of time when the 1972 Act was enacted the insurance companies enjoyed a monopoly status. But would it mean that only because it ceases to enjoy the same by itself is sufficient to hold that it is not required to follow the constitutional or statutory norms."
The Supreme Court further while dealing with the distinction of the private player of the public sector Insurance Company, held as under:-
"56. There exists a distinction between a private player in the field and a public sector insurance company. Whereas a private player in the field is only bound by the statutory regulations operating in the field, the public sector insurance companies are also bound by the directions issued by the General Insurance Corporation as also the Central Government. They cannot be ignored. The said directions are not said to be in derogation of the statutory provisions. Their validity is not under challenge."
Thus, the judgment mainly dealt with the General Insurance Companies, i.e. the Companies owned and controlled by the Government. We are afraid to hold that the said judgment is of no avail to the petitioner.
In view of the facts and the law recorded above, we hold that writ petition is not maintainable against a private Insurance Company as it does not fall within the definition of 'State' or other authority as enumerated under Article 12 of the Constitution of India. We hold that the respondent no.4 does not fall within the definition of 'State' as defined under Article 12 of the Constitution of India. Even otherwise, the writ petition is not maintainable as the petitioner has an equally efficacious remedy available before the Insurance Ombudsman under the Ombudsman Rules, 2017. Thus, the writ petition fails and is dismissed on the ground of maintainability and on ground of alternative remedy also.
Order Date :- 25.4.2019 Hasnain