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2021 Supreme(Guj) 595
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R.M.CHHAYA, BIREN VAISHNAV, JJ.
GAURAV V GIANANI - Appellant
Versus
ORIENTAL INSURANCE COMPANY LTD - Respondent
LETTERS PATENT APPEAL NO. 608 of 2021
In SPECIAL CIVIL APPLICATION NO. 13678 of 2012
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2019
In LETTERS PATENT APPEAL NO. 608 of 2021
Decided On : 23-09-2021
For The Appellant : MR VISHWAS K SHAH, MS MOHINI K SHAH
For The Respondent: MR VIBHUTI NANAVATI, MS DHARMISHTA RAVAL
Point of Law : Court is not inclined to invoke Article 226 for alleged violation of Article 14 as firstly each public sector Insurance Company is a separate identity and the decision taken is as per their respective commercial wisdom. Secondly, the purpose behind the petition now is only of the financial implication and that too for a specific period and such situation cannot be treated so gross a violation of fundamental rights so as to invoke Article 226.
Headnote:
Constitution of India,1950 – Article 14,21 and 226 - Insurance Act, 1938 – Section 40(3) - Insurance - License - Appellants were original petitioners by virtue of license granted by Insurance Regulatory and Development Authority, under Regulation 42 - They were authorized to act as insurance agents for procuring and securing insurance business of Oriental Insurance Co. Ltd - It is the case of appellants – original petitioners that they were acting as agents for insurance business for years - They were also authorized to procure health cover on behalf of company - According to appellants for Mediclaim policy floated by Company, rate of interest for agents was fixed - Whether High Court could have issued mandamus commanding appellate to carry out census in a particular manner and at that stage.
Finding of the Court:
No writ to be issued to interfere any rules or regulations which did not have any statutory force - In the instant case also, claim for difference in rate of commission is not based on any statutory right and therefore, Court is not inclined to invoke Article 22- However, Court has proceeded to hold that when notification was not under assail and same is in consonance with Act, it is really unfathomable how High Court could issue direction as to manner in which the census would be carried out - This, in opinion of this Court, will not take case of the petitioner any further court are in complete agreement with decision of learned Single Judge and finding no merit in the appeal, same deserves to be dismissed and accordingly, same is dismissed.
Result: Civil Application also stands dismissed
ORDER :
BIREN VAISHNAV, J.
1. This Appeal under Clause 15 of the Letters Patent arises out of an Oral Order dated 24.6.2019 passed by the learned Single Judge in Special Civil Application No.13678 of 2012, whereby, the Petition filed by the original petitioners has been dismissed.
2. The Petition was filed praying inter-alia as under:
“A. Your Lordships may be pleased to issue a writ of certiorari or any other writ, order or direction declaring that the commission rate prescribed under the Head of Individual Mediclaim Policies issued by the respondent no.1 Company reducing / altering the acquisition cost/rates of commission in respect of the Individual Health segment as beyond its power, unreasonable and arbitrary and this violative of Articles 14 and 21 of the Constitution and quashing and setting aside the same.
B. Your Lordships may be pleased to issue a writ of mandamus commanding the respondent authorities to pay and continue to pay licensed agents commission at the prevailing rate prior to the issue or circular dated 23.07.2012, as has been paid hitherto without exercising any cut in the rate of commission.
BB. Your Lordships may be pleased to issue a writ of certiorari to quash and set aside the circular dated 29.10.2012 issued by respondent no.1, Oriental Insurance Co. Ltd.”
3. The facts in brief are as under:
3.1. The appellants were the original petitioners by virtue of the license granted by the Insurance Regulatory and Development Authority, Hyderabad under Regulation 42. They were authorized to act as insurance agents for procuring and securing insurance business of the Oriental Insurance Co. Ltd.
3.2. It is the case of the appellants – original petitioners that they were acting as agents for insurance business for the last 9 to 13 years. They were also authorized to procure health cover on behalf of the company namely; Oriental Insurance Co. Ltd.
3.3. According to the appellants for the Mediclaim policy floated by the Company, the rate of interest for the agents was fixed @ 15% of the premium.
3.4. By a Circular dated 23.07.2012, the rates of commission were reduced in respect of the individual health segment as under:
Individual Mediclaim Policies:
For the Insured below the age of 35 years - 15%
Between 35 and 55 years.- 10%
Above 55 years - 5%
3.5. This reduction of rates of commission was the subject matter of challenge.
3.6. By way of an amendment, the appellants also brought on record a policy circular dated 29.10.2012 which prescribed new rates of commission for individual Mediclaim policies.
| Age Group | Commission/Brokerage |
| Insured below the age of 35 | 15% |
| Between 35 and 45 | 12% |
| Above 45 years | 10% |
4. Pending final hearing of the Petition the Insurance Company came out with a new Circular dated 18.07.2017 reviewing the limits of commission/brokerage and the linkage of commission to the age bands was removed as mandated in the Circular dated 29.10.2012. The commission rates as provided in the Circular dated 18.07.2017 were to be effective from 19.07.2017. Therefore before the learned single judge the question for consideration was the rights of the Appellants to claim difference of the commission paid at the rates fixed under the Circular of 2012 till the same was withdrawn in the year 2017 i.e. approximately for a period of 5 years.
5. Having considered the submissions made by Mr. Vishwas Shah, learned advocate appearing for the appellants, Mr.Vibhuti Nanavati, learned advocate for respondent Nos.1 and 4 as well as Ms. Dharmishta Raval, learned counsel for respondent No.2 and perusal of the memo of the petition and the reply filed by the regulatory authority/insurance company, what emerges is as under:
5.1. Reading the conditions of the license pursuant to which the Petitioners/Appellants were carrying on the business, reading the conditions, make it clear that the appellants were authorized to sell insura
