PATHERYA J. - (1.) By this writ petition the petitioners seek to challenge the letter dated 1st August, 2002 issued by the respondent No. 4.
(2.) The case of the petitioners is that it is engaged in making the public aware of the numerous insurance schemes and for such purpose deputed persons to introduce people in remote villages to some of the insurance schemes. To extend group insurance amongst the public at large, the petitioners approached New India Assurance with a proposal to extend the insurance coverage not only to the investors but also to its employees, family members and friends of the insured persons and on basis thereof a 50% group discount was given. The said proposal was accepted and 50% group discount given after approval was obtained from the head office. Therefore the workers, family members and friends constitute a group. A Memorandum of Understanding was also entered into between the petitioners and the respondent No.1 in 1998. Subsequently the said understanding has been cancelled and in proceedings filed before this High Court the same has been stayed. By letter dated 6th January, 1998 the Janata Personal Accident Insurance Scheme was extended to the group constituted and by virtue of Clause -3 it was made clear that the premium would not be refunded. Therefore the letter dated 1st August, 2002 whereby cancellation notice has been given in respect of policies which exceeds Rs.1 lakh and five years period is not permissible. In any event the said letter of cancellation is bad as it is in violation of the principles of natural justice and does not assign any reason. The agreement also does not empower the respondent No.1 to cancel the existing policies. It is under Clause -5 of the policy that the said cancellation is sought to be effected. The petitioner is not aware of Clause -5 of the policy as no copy of the policy was ever given to the petitioner. In fact exercise of such power is arbitrary as it seeks to affect vested rights. Assuming that the decision to cancel is a policy decision the same can be challenged.
(3.) As held in AIR 1986 SC 1571 para -85 due to inequality of bargaining power the acts of the respondent No.1 be set aside.;