Delhi High Court
Max New York Life Insurance Co. Ltd vs Vighnaharta Direct Insurance ... on 8 February, 2018
$~22
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 663/2016
MAX NEW YORK LIFE INSURANCE CO. LTD. ..... Plaintiff
Through: Ms. Geeta Luthra, Sr. Adv. with Mr.
Piyush Singhal and Mr. Altamish
Siddiki, Advs.
Versus
VIGHNAHARTA DIRECT INSURANCE
BROKING PVT LTD ..... Defendant
Through: None.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
ORDER
% 08.02.2018
1. Yesterday, the following order was passed:
"1. The plaintiff instituted this suit, under Section XXXVII of
the Code of Civil Procedure, 1908 (CPC), for recovery of
Rs.7,94,42,409/-.
2. The defendant applied for leave to defend. Vide order
dated 30th July, 2014, with the consent of the counsel for the
plaintiff, the suit was ordered to be treated as an ordinary suit
and pleadings ordered to be completed. On 16 th March, 2016,
the following issues were framed in the suit and the parties
relegated to trial:
"(i) Whether the plaintiff is entitled to the suit amount
from the defendant or any other amount? OPP
(ii) Whether plaintiff is entitled to interest, if so at
what rate and for what period? OPP
(iii) Relief."
3. The defendant stopped appearing and was vide order
dated 17th August, 2017 proceeded against ex-parte.
4. The plaintiff has led its ex-parte evidence and the suit is
ripe for hearing.
5. On enquiry as to the basis of the money claim in the suit,
the counsel for the plaintiff has stated, (i) the plaintiff is an
insurance company operating in India; (ii) the defendant is a
broker licensed with the Insurance Regulatory and
Development Authority (IRDA); (iii) the defendant represented
to the plaintiff that it has the necessary infrastructure and a
large client base to solicit and procure life insurance business
to the plaintiff; (iv) on such representations of the defendant,
the plaintiff empanelled the defendant and two agreements were
executed between the parties; (v) the first was the Broker
Agreement dated 1st January, 2009 under which the defendant
was authorised to procure life insurance business on behalf of
the plaintiff and entitled to be paid brokerage in terms thereof;
(vi) the second was the Minimum Guarantee Revenue
Agreement dated 1st January, 2009 under which the defendant
undertook to procure minimum guaranteed revenues for the
plaintiff, as mentioned therein, Rs.39,44,00,000/-,
Rs.1,00,00,00,000/-, Rs.1,60,00,00,000/- and of
Rs.2,99,44,00,000/- in the successive years; (vii) Clause 2 of
the Minimum Guarantee Revenue Agreement stipulated that
failure to achieve the minimum guaranteed revenues by the
defendant, would constitute a material breach of the agreement
pursuant to which pre-agreed liquidated damages were agreed
to be paid; and, (viii) Clause 3 of the Minimum Guarantee
Revenue Agreement also stipulated that the amount of
liquidated damages were a genuine pre-estimate of damage
caused/likely to be caused to the plaintiff in the event of
termination of the agreement on account of defendant‟s breach
and that the compensation so agreed to be paid was
reasonable.
6. The counsel for the plaintiff states that the claim in the
present suit is for such compensation/liquidated damages under
the Minimum Guarantee Revenue Agreement.
7. I have enquired from the counsel for the plaintiff as to
what was the consideration for the defendant to guarantee
minimum business/revenue to the plaintiff.
8. No answer has been coming from the counsel for the
plaintiff. He now states that the two Agreements were co-
terminous and the consideration is the brokerage paid under
the first Agreement.
9. The same does not amount to consideration.
10. I have further enquired from the counsel for plaintiff,
whether the plaintiff has pleaded and proved loss/damage
suffered by the plaintiff for the reason of the breach by the
defendant of the Minimum Guarantee Revenue Agreement.
11. The counsel for plaintiff has replied in the negative and
further states that it is very difficult/impossible to evaluate such
loss/damage and for this reason only a pre-estimate of such
loss and damage was made and liquidated damages agreed to
be paid.
12. I have yet further enquired from the counsel for the
plaintiff, whether not the remuneration payable by the
Insurance Companies, as the plaintiff is, to brokers and the
other terms between Insurance Companies and brokers are
governed by the IRDA and whether the Minimum Guarantee
Revenue Agreement has sanction of law or of IRDA and
whether not such an agreement amounts to violation by the
plaintiff of rules and regulations relating to insurance business.
13. The counsel for the plaintiff now states that the suit is
listed today only for „directions‟, on closure of plaintiff‟s ex-
parte evidence and he needs to prepare.
14. A perusal of the order sheet shows that the Joint
Registrar, on closure of ex-parte evidence, posted the suit
before this Court on 15th December, 2017. On 15th December,
2017, I was engaged in a COFEPOSA hearing and hence the
suit was adjourned to 19th December, 2017. On 19th December,
2017, none appeared for the plaintiff on first call and post-
lunch the lawyers were abstaining from work and hence the suit
was posted to 21st December, 2017. On 21st December, 2017, I
was not holding Court and hence the suit was posted for today.
15. There is no reason for the counsel for the plaintiff to
today not come prepared.
16. Be that as it may, list tomorrow i.e. 8th February, 2018."
2. Today, the senior counsel for the plaintiff states that the plaintiff has
since altered the agreements entered into with its brokers/agents and under
instructions, withdraws the suit.
3. Dismissed as withdrawn.
No costs.
RAJIV SAHAI ENDLAW, J.
FEBRUARY 08, 2018
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