UNIQUE MOTOR AND GENERAL INSURANCE COMPANY LIMITED Vs. S K VAIYPURI

JUDGEMENT

(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."