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2020 Supreme(Mad) 466
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
A.P. SAHI, SUBRAMONIUM PRASAD, JJ.
P. Soundara Rajan & Ors. - Petitioners
Versus
The Union of India, Rep. by its Secretary, Ministry of Finance, Department of Financial Services & Ors. - Respondents
W.P.(MD) No.10110 of 2015 and M.P.(MD) Nos.2 to 4 of 2015
Decided On : 25-02-2020
For the Petitioners: Mr. M. Ajmal Khan, Senior Counsel for M/s.Ajmal Associates.
For the Respondent: Mr. S. Jeyasingh, Mr. Anwar Sameem for Mr. T. Antony Arul Raj.
Headnote:
Constitution of India,1950 - Article 226 - UM of the Insurance Act, 1938 - Section 6 - Payment of fee - Licence shall cease to be valid automatically - Petition to challenge vires of Section UM of the Insurance Act as introduced by Insurance Laws Amendment Act to be ultra vires Constitution of India and therefore void - Petitioner is a loss Assessor - Insurance Act was amended by Act of whereby Section UM of Act was introduced which prescribes that no person shall act as Surveyor or Loss Assessor in respect of General Insurance business unless he possess such academic qualifications as may be specified by Regulations to be made Insurance Act - Section also prescribes that apart from having educational qualification Loss Assessor Surveyor should also be member of professional body of surveyors and Loss Assessors namely the Indian Institute of Insurance Surveyors and Loss Assessors – Held, Discremination on account of inability to acquire qualification can never be pleaded and accepted by Courts - It is well settled that provision can be struck down only if legislature bringing out enactment is not competent to bring out same or enactment is contrary to any of provisions of Constitution or Section or Rule or Regulation sought to be brought in is contrary to parent Act or provision is manifestly arbitrary - It is now well settled that manifest arbitrariness must be something done by legislature capriciously irrationally and or without adequate determining principle – Also when something is done which is excessive and disproportionate such legislation would be manifestly arbitrary - Nothing has been brought out by petitioner to demonstrate that Section UM of Act which is under challenge in instant writ petition suffers from vice of manifest arbitrariness - Reliance is placed on Judgment rendered by Five Judges of Honble Supreme Court in HAMDARD DAWADHANA v. UNION OF INDIA, reported and more particularly paragraph wherein Honble Supreme Court has struck down amendment on ground that parliament has established no criteria no standars and has not prescribed any principle on which particular disease or condition is to be specified in Schedule - Judgment has no application to facts of case – Petition dismissed
ORDER :
SUBRAMONIUM PRASAD, J.
PRAYER: Writ Petition filed under Article 226 of the Constitution of India, to issue a writ of declaration declaring Section 64 UM of the Insurance Act, 1938, as amended by Section 82 of the Insurance Laws (Amendment) Act, 2015, (Act. 5 of 2015) to be ultra vires the Constitution of India and therefore void.
This writ petition seeks to challenge the vires of Section 64 UM of the Insurance Act, 1938, as introduced by the Insurance Laws (Amendment) Act, 2015 (Act No.5 of 2015) to be ultra vires the Constitution of India and therefore void.
2. The writ petitioner is a loss Assessor. The Insurance Act, 1938, was amended by Act 5 of 2015 whereby Section 64 UM of the Act was introduced which prescribes that no person shall act as a Surveyor or Loss Assessor in respect of General Insurance business unless he possess such academic qualifications as may be specified by the Regulations to be made under the Insurance Act, 1938. The said Section also prescribes that apart from having the educational qualification, the Loss Assessor / Surveyor should also be a member of a professional body of surveyors and Loss Assessors, namely the Indian Institute of Insurance Surveyors and Loss Assessors.
3. The challenge in this Section is primarily on the ground that it gives unbridled and uncanalized power to the authorities to frame Regulations regarding the academic qualification. The submission therefore is that in the absence of any guidelines prescribed under the Section 64 UM which gives unbridled power to the Government to frame Regulation laying down qualification suffers from the vice of excessive delegation. Apart from that, it also takes away the rights of existing Surveyors and Loss Assessors who would not be able to continue to function after the framing of the Regulation unless they possess the requisite qualification. At this juncture, it is pertinent to mention that when the writ petition was filed, the Regulations stipulating the educational qualifications had not yet come into force.
4. By a notification dated 30.10.2015 the Insurance Regulatory and Development Authority of India (Insurance Surveyors and Loss Assessors) Regulations came into force. The said Regulations laid down the educational qualifications which a Surveyor or Loss Assessor had to possess to performing the work of a Surveyor or Loss Assessor. The said notification also laid down that all those Surveyors and Loss Assessors who are not complaint with the requirements stipulated in Section 64 UM of the Act, have to become complaint within a period of three years from the date of notification of the Regulations failing which, their licence shall cease to be valid automatically. These Regulations have not been challenged.
5. Heard the learned counsel for the parties.
6. The purpose of bringing the Insurance Laws (Amendment) Act, 2015, was to remove archaic and redundant provisions in the legislations and to incorporate provisions to provide Insurance Regulatory and Development Authority of India (IRDAI) with the flexibility to discharge its functions more effectively and efficiently. The Act was also brought in to regulate the functions, code of conduct, etc., of surveyors and loss assessors. To achieve the above mentioned object, which is to regulate the functions and Code of conduct of Surveyor and Loss Assessors, Section 64 UM of the Act, was brought which gives power to the Insurance Company to lay down the qualifications of Surveyors and Loss Assessors. The importance of Surveyors and Loss Assessor in the field of Insurance to assess the loss suffered by the insured which is the foundation of a claim cannot be ignored. The legislature was therefore, well within its rights to prescribe the qualifications which a Surveyor or Loss Assessor must possess. So that there is uniformity in the performance and nature of work done by the Surveyors
