Rule 17h of the Insurance Rules, 1939 does not confer on the Controller of Insurance the power to cancel the registration of an insurer independently of section 3 (4) (f) of the Insurance Act, 1938.

( 1 ) THE following questions have been REFERRED TO the Full Bench by a Division Bench of this Court:- "1. Whether rule 17h confers power on the Controller of Insuranee to cancel the registration of an insurer independently of section 3 (4) (f) of the Act? If so, whether rule 7h is ultra vires of section 110 (a) of the Act? 2. Whether section 64m (3)ofthe Act read with rule 17h is ultra vires of article 14 of the Constitution as conferring unbridled, arbitrary and discriminatory powers on the Controller of Insurance?"

( 2 ) THE facts of the case are given in detail in the reference of the Division Pench. It may, however, be mentioned that Unique Motor and General Insurance Company Limited. Bombay (hereinafter REFERRED TO as the petitioner-company), is a public limited Company registered and incorporated under the Indian Companies Act, 1913, and was carrying on the business of general insurance and more particularly of motor insurance. On November 6, 1942, the petitioner-company was registered in respect of miscellaneous insurance business under section 3 (6) of the Insurance Act, 1938 (Act IV of 1938 ). called hereafter as the Act.

( 3 ) THE Controller of Insurance, Simla, by an order, dated April 17, 1964, cancelled the certificate of registration of the petitioner-company. The order purported to have been passed under sub section (3) of section 64m of the Act read with rule 17h of the Insurance Rules, 1939 (to be REFERRED TO for facility of reference as the Rules) and was in the following terms:- "i have the honour to say that your Company has disregarded two warnings given to it under sub-section (2) of section 64m of the Insurance Act, 1938. 2 I, therefore, in pursuance of sub-section (3) of section 64m of said Act read with rule 17h of the Insurance Rules, 1939, hereby cancel the certificate of registration bearing the number 339/2 dated the 6th November 1942 in respect of Miscellaneous insurance business granted to your company under section 3 of the said Act and the cancellation will take effect on the 27th April. 1964. "

( 4 ) UNDER provisions of section 64m (2) three warnings were administered to the petitioner-company, for contravention of section 40c of the Act with respect to the expenses of manacement in miscellaneous insurance business during the years 1957 1958 and 1959 (vide letters dated 10th December, 1959, 22nd December, 1959 and 11th January, 1961 respectively ). It was after these warnings had been given that the certificate of registration of the petitioner-company was cancelled.

( 5 ) THE petitioner-company filed an appeal against the order cancelling its certificate of registration to the High Court of Bombay. On November 23,1964 R, M. Kantawala, J. dismissed the appeal after holding that section 110 of the Act, which deals with appeals, does not provide for any appeal from an older made under section 64m of the Act read with rule 17h of the Rules. The petitioner-company then filed a petition for issuing a writ of certiorari for quashing the order of the Controller, dated April 17, 1964. It was during hearing of that petitioner that the above-mentioned questions were formulated and REFERRED TO the Full Bench.

( 6 ) AT this stage some of the provisions of the Act may be noticed briefly. Sub-section (1) of section 3 of the Act provides for registration of insurence. Sub-section (2) of that section mentions the documents which are required to accompany every application for registration. Sub-section (6) authorises the Controller on being satisfied that the application has fulfilled all the requirements of the section and subject to compliance of certain other provisions to register the insurer and grant him a certificate of registration. Sub-section (3) of the same section empowers the Controller to with-hold registration or cancel a registration already made if in a country where any insurer has his principal place of business or domicile Indian nationals are debarred from carrying on the bu