THE HON’BLE THE CHIEF JUSTICE ALOK ARADHE AND THE HON’BLE SHRI JUSTICE ANIL KUMAR JUKANTI Writ Appeal No.903 of 2007 JUDGMENT : (Per the Hon’ble the Chief Justice Alok Aradhe)

None for the parties.

Perused the record.

2. This intra court appeal emanates from order dated 07.09.2007, passed by a learned Single Judge, by which writ petition preferred by the respondent viz., W.P.No.12057 of 2002 has been allowed.

3. In order to appreciate the grievance of the appellant, relevant facts need mention, which are stated infra:

3.1. The respondent is a Police Officers’ Association in Adilabad District (briefly ‘the Association’ hereinafter). The appellant is an insurance company and is a subsidiary of General Insurance Corporation of India and functions under the control of Insurance Regulatory and Development Authority.

3.2. The General Insurance business was nationalized in the year 1972 by the General Insurance Business Nationalisation Act, 1972 and therefore, General Insurance Corporation of India is an instrumentality of the State. The appellant being its subsidiary is, therefore, amenable to writ jurisdiction of this Court under Article 226 of the Constitution of India.

3.3. The parties entered into a contract for Long Term Group Janata Personal Accident Insurance Policy (briefly ‘the JPA Insurance Policy’ hereinafter) for the employees working in police department to cover the risk of death and disability arising out of any accident or otherwise on payment of one time premium in lump sum. The Association obtained the willingness of its members to take JPA Insurance Policy. Accordingly, the members of the Association made one time lump sum payment of insurance premium payable towards the JPA Insurance Policy for the period from 05.02.1999 to 04.02.2009. However, by communication dated 12.04.2022, the appellant unilaterally cancelled the JPA Insurance Policy with effect from 27.04.2002. The aforesaid action of the appellant was assailed by the respondent in a writ petition. Learned Single Judge by an order dated 07.09.2007 inter alia held that the appellant, which is an instrumentality of the State, has to act in a fair and rational manner even in contractual field and cannot be permitted to unilaterally rescind the JPA Insurance Policy. Accordingly, the order dated 12.04.2002 was quashed and the appellants herein were granted liberty to issue a show cause notice to the Association and take a decision in accordance with law after hearing them. In the aforesaid factual background, this appeal has been filed. 4. The period for which the JPA Insurance Policy was in force i.e., from 05.02.1999 till 04.02.2009 has already expired. The appellant, which is an instrumentality of the State, is required to act in a fair, rational and reasonable manner even in contractual field. The action of the appellant has to be in consonance with the Article 14 of the Constitution of India. The action of the appellant in unilaterally rescinding the contract, therefore, has rightly been set aside by the learned Single Judge.

5. For the aforementioned reasons, we do not find any ground to differ with the view taken by the learned Single Judge.

6. In the result, Writ Appeal fails and the same is, hereby, dismissed. No costs.

As a sequel, miscellaneous petitions, pending if any, stand closed.

__________________ ALOK ARADHE, CJ ________________________ ANIL KUMAR JUKANTI, J Date: 03.01.2024 LUR