Delhi High Court
Titus Abraham vs Union Of India & Ors. on 16 March, 2018
$~24
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ WRIT PETITION(CIVIL) No. 2524/2018
Date of decision: 16th March, 2018
TITUS ABRAHAM ... Petitioner
Through Mr. Wills Mathews, Mr. Ginesh P and
Mr. Paul John Edison, Advocates.
versus
UNION OF INDIA & ORS. ..... Respondents
Through Mr. Waize Ali Noor, Mr. Prateek Dhanda
and Mr. Saeed Qadri, Advocates for R-1 and 2.
Ms. Suman Bagga, Advocate for R-5.
Mr. H.S. Parihar, Advocate for RBI.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE CHANDER SHEKHAR
SANJIV KHANNA, J. (ORAL):
Titus Abrham in the present writ petition has challenged vires of
Notification dated 3rd August, 2000, issued by the Central Government in
exercise of power under Section 6(1)(O) of the Banking Regulation Act,
1949, whereby it is lawful for the banking company to engage in insurance
as a form of business.
Impugned Notification reads:-
"MINISTRY OF FINANCE
(Department of Economic Affairs)
(Banking Division)
NOTIFICATION
W.P. (C) No. 2524/2018 Page 1 of 4
New Delhi, the 3rd August, 2000
S.O. 724 (E).- In exercise of the powers under Section
6 (1) (O) of the Banking Regulation Act, 1949, the
Central Government hereby specifies „Insurance‟ as a
form of business in which it is lawful for a banking
company to engage.
[No.7/24/97-BOA]
M. DAMODARAN, Jt. Secy."
2. Contention is that the aforesaid Notification in nature of delegated
legislation violates and is in conflict with the mandate of Section 2C of the
Insurance Act, 1938, which stipulates that no person shall carry on insurance
business in India unless it is a public company; a society registered under the
Cooperative Societies Act, 1912 or under any other law for the time being in
force in any State relating to cooperative societies; or a body incorporated
under the law of any other country outside India not being in nature of
private company. Reference is made to the third proviso to Section 2C,
which reads:-
"Provided also that no insurer other than an Indian
insurance company shall begin to carry on any class
of insurance business in India under this Act on or
after the commencement of the Insurance
Regulatory and Development Authority Act, 1999."
The aforesaid proviso was inserted by Insurance Regulatory and
Development Authority Act, 1999 with effect from 19th April, 2000.
3. We do not find any merit in the contention raised and argued, for we
do not accept that there is any conflict between the Notification dated 3rd
August, 2000 and Section 2C of the Insurance Act, 1938. The Insurance Act
W.P. (C) No. 2524/2018 Page 2 of 4
under Section 2(4-A) referring to banking company states that they shall
have meaning respectively assigned to them in clauses (c) and (d) of sub-
Section (1) of Section 5 of the Banking Companies Act, 1949. A banking
company vide the impugned Notification can lawfully carry on business of
insurance. However, to carry on the said business, they would have to, like
all other entities, comply with the provisions of the Insurance Act including
Section 2C. Notification in question permits a banking company to
undertake insurance business and does not interfere or make the provisions
of the Insurance Act inapplicable. All mandated compliances with the
Insurance Act are required and necessary. Petitioner has not been able to
establish that the impugned notification interferes with the statutory
requirements, mandates and compliances under the Insurance Act.
4. ICICI bank, the sixth respondent, is a shareholder and promoter of
ICICI Lombard General Insurance Company Limited, the fifth respondent.
It is accepted and admitted that the fifth respondent is a separate legal entity
being a company. Fifth respondent on compliance with all statutory
requirements has been authorized to carry on business of insurance under the
Insurance Act.
5. In view of the aforesaid discussion, challenge to the vires of the
Notification dated 3rd August, 2000 has to be rejected.
6. The second prayer made in the writ petition relates to Loan Suraksha
Policy No. 4065/ICICIAL/11285926/00/000 with coverage period from 29th
December, 2015 to 28th December, 2020, issued by the fifth respondent.
7. Petitioner seeks refund of Rs.1,28,618/- paid as the premium along
with the interest @ 18 %. This insurance policy was taken by the wife of
W.P. (C) No. 2524/2018 Page 3 of 4
the petitioner, who has died after battling cancer. Allegations have been
made against officers of the fifth and sixth respondent. It is asserted that the
petitioner‟s wife was compelled to take the insurance policy as a pre
condition for grant of loan for purchase of car. Respondent No. 5
subsequently has refused to pay the claim on the ground of suppression of
material facts as the ailment was not disclosed.
8. Second issue raised in the writ petition raises several disputed
questions of facts pertaining to the insurance contract. The petitioner is at
liberty to initiate civil proceedings and to approach appropriate forum in
accordance with law. We are not inclined to examine disputed contractual
aspects in the present writ petition.
9. With the aforesaid observations, we reject the first prayer of the
petitioner challenging the vires of the Notification and with regard to the
second prayer, leave it open to the petitioner to take recourse to any other
remedy available to him in law. On the second aspect, the writ petition is
not entertained. We clarify that we have not expressed any opinion on
merits on the said aspect.
SANJIV KHANNA, J.
CHANDER SHEKHAR, J.
MARCH 16, 2018
Mr/NA
