Kerala High Court
Max Bupa Health Insurance Company ... vs State Of Kerala on 20 March, 2025
Author: N.Nagaresh
Bench: N.Nagaresh
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 20TH DAY OF MARCH 2025 / 29TH PHALGUNA, 1946
WP(C) NO. 6617 OF 2021
PETITIONER:
STAR HEALTH AND ALLIED INSURANCE COMPANY LIMITED,
NO.1, NEW TANK STREET, VALLUVARKOTTAM HIGH ROAD,
NUNGABAKKAM, CHENNAI 600 034,
REP.BY SHYJU E.J.,
ASSISTANT ZONAL MANAGER, KOCHI
BY ADVS.
P.RAMAKRISHNAN
PREETHI RAMAKRISHNAN (P-212)
T.C.KRISHNA
C.ANIL KUMAR
ASHA K.SHENOY
PRATAP ABRAHAM VARGHESE
RESPONDENT:
STATE OF KERALA,
REP.BY THE ADDITIONAL CHIEF SECRETARY
LABOUR AND SKILL DEPARTMENT,
GOVERNMENT SECRETARIAT, STATUE,
THIRUVANANTHAPURAM 695 001.
BY ADVS.
SHRI.N.MANOJ KUMAR, STATE ATTORNEY
SMT.SABEENA P. ISMAIL, GOVERNMENT PLEADER
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W.P.(C) Nos.6617 & 9915 of 2021
:2:
SHRI.ASOK M.CHERIAN, ADDL. ADVOCATE GENERAL
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 18.11.2024, ALONG WITH WP(C).9915/2021, THE
COURT ON 20.03.2025 DELIVERED THE FOLLOWING:
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W.P.(C) Nos.6617 & 9915 of 2021
:3:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 20TH DAY OF MARCH 2025 / 29TH PHALGUNA, 1946
WP(C) NO. 9915 OF 2021
PETITIONER:
MAX BUPA HEALTH INSURANCE COMPANY LIMITED,
C-98 LAJPAT NAGAR, PART 1, NEW DELHI-110024
AND CORPORATE OFFICE AT 14TH FLOOR,
CAPITAL CYBERSCAPE, SECTOR 59, GURUGRAM,
HARYANA 122102, REPRESENTED BY ITS SENIOR
EXECUTIVE HUMAN RESOURCE, ACHU SURESH
BY ADVS.
P.RAMAKRISHNAN
PREETHI RAMAKRISHNAN (P-212)
T.C.KRISHNA
C.ANIL KUMAR
ASHA K.SHENOY
PRATAP ABRAHAM VARGHESE
RESPONDENT:
STATE OF KERALA,
REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY,
LABOUR AND SKILL DEPARTMENT,
GOVERNMENT SECRETARIAT, STATUE,
THIRUVANATHAPURAM-695001.
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W.P.(C) Nos.6617 & 9915 of 2021
:4:
BY ADVS.
SHRI.ASOK M.CHERIAN, ADDL. ADVOCATE GENERAL
SMT.SABEENA P. ISMAIL, GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 18.11.2024, ALONG WITH WP(C).6617/2021, THE COURT ON
20.03.2025 DELIVERED THE FOLLOWING:
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W.P.(C) Nos.6617 & 9915 of 2021
:5:
CR
N. NAGARESH, J.
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W.P.(C) No.6617 and 9915 of 2021
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Dated this the 20th day of March, 2025
JUDGMENT
~~~~~~~~~
The petitioners in both these writ petitions are
Companies engaged in the business of providing health
insurance services to the general public. The petitioners seek
to set aside Notification GO(P) No.8/2020/LBR dated
16.01.2020 of the Government of Kerala, Labour and Skills (E)
Department to the extent it provides fixation of minimum
wages for insurance agents.
2. The petitioners state that minimum wages
were prescribed for insurance agents as per the Notification
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W.P.(C) Nos.6617 & 9915 of 2021
dated 16.01.2020. The petitioners submit that as per Section
3 of the Minimum Wages Act, the appropriate Government can
fix minimum wages payable to the employees employed only
in scheduled employment. Insurance business has not been
included either in Part I or Part II of the scheduled
employment. By a Notification GO(MS) No.177/2012/LBR
dated 31.12.2012, the Government of Kerala has notified only
"Financial Institutions". Insurance business is different from
the business carried out by financial institution.
3. The petitioners would further submit that the
term "insurance agent" is defined under Section 2(10) of the
Insurance Act and Section 42 of the Act provides for
appointment of insurance agents. The appointment of an
insurance agent is regulated by Insurance Regulatory and
Development Authority of India (Appointment of Insurance
Agents) Regulations, 2016 made in exercise of power under
Section 114A of the Insurance Act. The payment of
remuneration to insurance agents is governed by Insurance
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W.P.(C) Nos.6617 & 9915 of 2021
Regulatory and Development Authority of India (Payment of
Commission or Remuneration or Reward to Insurance Agents
and Insurance Intermediaries) Regulations, 2016. The
Regulations, 2016 provide for payment of commission to
insurance agents.
4. The Notification dated 31.12.2012 had
included "Employment in Private Financial Institution" in Part I
of the Schedule to the Minimum Wages Act, 1948. The
petitioners are aggrieved by the Minimum Wages Notification
dated 16.01.2020 which is ultravires the powers of the
Government.
5. The petitioners state that as per Section 3 of
the Minimum Wages Act, the appropriate Government can fix
minimum rates of wages payable to employees employed only
in scheduled employment. Insurance business has not been
included either in Part I or Part II of the scheduled
employment. Institutions running insurance business cannot
be considered as financial institutions. Insurance business is
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W.P.(C) Nos.6617 & 9915 of 2021
regulated by distinct and different enactments.
6. The petitioners further argued that the
Insurance Act defines the term "insurance agent" and permits
an insurance agent to act as an agent for more than one
insurer. There are statutory provisions prescribing wages for
insurance agents. Therefore, a Notification issued under the
Minimum Wages Act applicable to financial institutions cannot
be made applicable to insurance agents.
7. The petitioners further submit that Ext.P6
Notification totally ignores the distinct nature of work of
insurance agents. Insurance agents are independent
individuals. There is no employer-employee relationship
between an insurer and insurance agents. The insurance
agents receive commission, and not wages. As there is
separate Act governing insurance sector and separate
statutory regulations governing insurance agents, the well
settled doctrine of generalia specialibus non derogant would
apply and the Insurance Act, 1938 will prevail over the
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W.P.(C) Nos.6617 & 9915 of 2021
provisions of the Minimum Wages Act. Ext.P6 is therefore
liable to be set aside to the extent it provides for fixation of
minimum wages for insurance agents.
8. The State of Kerala resisted the writ petitions
filing counter affidavit. Ext.P6 Notification is issued to ensure
minimum wages to employees employed in private financial
institutions. The petitioners in the writ petitions are doing
health insurance business. The petitioners are effecting
contracts as part of their business, which provides for sickness
benefits or medical or surgical or hospital expense benefits,
travel cover of patients and personal accident cover. Thus, the
petitioners are doing some financial business for making
monetary benefits.
9. The products of the petitioners are financial
products. The petitioners are therefore financial institutions.
The Minimum Wages Act is a benevolent legislation to ensure
payment of minimum wages to a particular class of
employees. Minimum wages are fixed after extensive
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W.P.(C) Nos.6617 & 9915 of 2021
deliberations, with strict adherence to all set legal practices.
10. The respondents urged that the doctrine of
generalia specialibus non derogant if at all applies, then it is
the Minimum Wages Act which should prevail over the
Insurance Act since the Minimum Wages Act is not a general
law. Since the insurance companies paid remuneration to the
respective insurance agents for the work done by them, there
is definitely an employee-employer relationship between the
insurance companies and the insurance agents.
11. I have heard the learned counsel for the
petitioners and the learned Government Pleader representing
the respondents.
12. The questing arising in the writ petitions is
relating to the legality of Ext.P6 Notification dated 16.01.2020
published by the Government of Kerala, Labour and Skills (E)
Department prescribing minimum wages to insurance agents
working in the insurance sector. The title to the Schedule to
Ext.P6 Notification reads as follows:-
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W.P.(C) Nos.6617 & 9915 of 2021
Private Financial Institutions
(including Banking, Non Banking, Insurance, Micro
finance, Foreign exchange, Hire purchase, Chitty,
Kuri, Mortgage institutions)
Minimum wages in the scale of pay of ₹14750-750-18500-
850-22750 has been prescribed as minimum wages payable
to Insurance Agents and Insurance Advisor in the Notification.
13. The Minimum Wages Act, 1948 (Act 11 of
1948) has been framed to provide for minimum rates of wages
in certain employments. Section 3 of the Minimum Wages
Act, 1948 provides that the appropriate Government shall fix
the minimum rates of wages payable to employees employed
in an employment specified in Part I or Part II of the Schedule
and in any employment added to either Part by notification
under Section 27. Employment in insurance institutions is not
specifically included in Part I or Part II of the Schedule.
However, the Government of Kerala as per Ext.P4 Notification
has added employment in Private Financial Institutions to Part
I of the Schedule to the Minimum Wages Act in its application
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W.P.(C) Nos.6617 & 9915 of 2021
to the State of Kerala.
14. The explanatory note to Ext.P4 Notification
SRO No.34/2013 reads as follows:
"The Government have decided to include the
employment in footwear manufacturing, employment
in paper industry and paper products industries,
employment in Private Financial Institutions and
employment in photography and videography and
incidental works in Part I of the Schedule to the
Minimum Wages Act, 1948, for the purpose of fixing
the minimum rate of wages payable to the employees
employed in the abovesaid industries."
The Notification is intended to achieve the above object.
15. In exercise of powers under Section 5(1), the
respondent published Ext.P5 Notification dated 28.07.2016
proposing the rates of minimum wages payable to employees
employed in Private Financial Institutions. In Ext.P5, the
Government has fixed pay scales for different category of
employment in the financial institutions. The proposal
contained minimum wages for the banking institutions as also
the institutions engaged in insurance service.
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W.P.(C) Nos.6617 & 9915 of 2021
16. The Kerala Non Banking Financial
Companies Welfare Association had challenged Ext.P5
Notification. This Court, as per judgment in Kerala Non
Banking Financial Companies Welfare Association v.
State of Kerala [2019 (4) KLT 977] struck down the
prescription for service weightage, special allowance for extra
duty and risk allowance prescribed in Ext.P5.
17. Subsequently, the respondent issued Ext.P6
Notification GO(P) No.8/2020/LBR dated 16.01.2020 fixing the
minimum wages payable to the employees employed in
Private Financial Institutions. By Ext.P6, the pay scale
prescribed in Ext.P5 Notification was decided as the minimum
wages payable.
18. The argument of the petitioners is that the
insurance industry is governed by the Insurance Act and
Regulations made thereunder. Ext.P2 is the Insurance
Regulatory and Development Authority of India (Appointment
of Insurance Agents) Regulations, 2016. The said
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W.P.(C) Nos.6617 & 9915 of 2021
Regulations, 2016 define insurance agents to mean an
individual appointed by an insurer for the purpose of soliciting
or procuring insurance business including business relating to
the continuance, renewal or revival of policies of insurance.
The Regulations also provide for payment of commission or
remuneration or reward to insurance agents. The petitioners
argued that insurance agents being governed by the Insurance
Act and the Regulations made thereunder cannot be brought
under the category of private financial institutions.
19. The further argument is that insurance
service is not a financial service. Insurance products are not
financial products.
20. Though the insurance business is unlike
other financial businesses like banking, non-banking, chitties,
etc. and insurance business is primarily intended to insure life
and property of its consumers, the end product given by the
insurance companies have the nature of financial products.
Therefore, the Government of Kerala has treated private
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W.P.(C) Nos.6617 & 9915 of 2021
institutions doing insurance business as private financial
institutions for the purpose of prescription of minimum wages
to insurance agents.
21. Though the term 'financial institutions' may
have different and distinct meaning under other enactments,
that cannot by itself dis-empower the respondent to include
institutions doing insurance business under the head of
"private financial institutions" for the purpose of prescription of
minimum wages. Inclusion of insurance institutions under the
head "private financial institutions" in Ext.P6 Notification is only
for the purpose of prescribing statutory minimum wages to the
employees working under the insurance sector. There cannot
be any illegality in such inclusion. Therefore, the argument of
the petitioners that insurance institutions not being strictly
financial institutions, cannot be included in Ext.P6 Notification
is only to be rejected.
22. The fact that the insurance industry is
governed by the Insurance Act, 1938 and by the Insurance
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W.P.(C) Nos.6617 & 9915 of 2021
Regulatory and Development Authority Act, 1999 will not take
away the right of the respondent to prescribe minimum wages
for the employees in the insurance sector in exercise of the
powers conferred under the Minimum Wages Act, 1948.
Similarly, the fact that Regulations are made for prescribing
wages to the employees under the insurance sector, will not
take away the power and authority of the appropriate
Governments for prescribing minimum wages. The arguments
of the respondents in that regard are also liable to be rejected.
23. The further argument of the petitioners is that
insurance agents are not workmen of the insurance companies
and no wages are paid to them. There is no employer-
employee relationship between insurance companies and
insurance agents. What is paid to the insurance agents is
commission. Therefore, insurance agents cannot be treated
as employees or workmen of the insurance companies.
24. How and on what terms an employee or
agent is appointed, their nature of duties, the power of
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W.P.(C) Nos.6617 & 9915 of 2021
supervision of the employer, disciplinary control by the
employer over such employees/agents, etc. may vary from
employer to employer. Therefore, whether persons appointed
as insurance agents would fall within the ambit of
employee/workmen is a matter to be decided on a case to
case basis. That by itself cannot be a reason not to prescribe
minimum wages to the insurance agents who are lower rung
employees working in insurance sector.
25. For all the afore reasons, I do not find any
illegality in Ext.P6 Notification and in the action of the
respondents in treating the employees/agents working in
insurance sector as employees/agents working in "private
financial institutions" for the purpose of prescription of
minimum wages.
The writ petitions fail and hence they are
dismissed.
Sd/-
N. NAGARESH, JUDGE
aks/07.03.2025
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W.P.(C) Nos.6617 & 9915 of 2021
APPENDIX OF WP(C) 6617/2021
PETITIONER'S EXHIBITS
EXHIBIT P1 TRUE COPY OF CERTIFICATE OF
REGISTRATION OF THE PETITIONER COMPANY
DATED 16.3.2006
EXHIBIT P2 TRUE COPY OF INSURANCE REGULATORY AND
DEVELOPMENT AUTHORITY OF INDIA
(APPOINTMENT OF INSURANCE AGENTS)
REGULATION 2016.
EXHIBIT P3 TRUE COPY OF INSURANCE REGULATORY AND
DEVELOPMENT AUTHORITY OF INDIA (PAYMENT
OF COMMISSION OR REMUNERATION OF REWARD
TO INSURANCE AGENTS AND INSURANCE
INTERMEDIARIES) REGULATIONS 2016
EXHIBIT P4 TRUE COPY OF NOTIFICATION DATED
31/12/2012 ISSUED BY THE RESPONDENT.
EXHIBIT P5 TRUE COPY OF NOTIFICATION DATED
28.7.2016 ISSUED BY THE RESPONDENT.
EXHIBIT P6 TRUE COPY OF NOTIFICATION G.O.(P)
NO.8/2020/LBR DATED 16/1/2020 ISSUED BY
THE RESPONDENT.
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W.P.(C) Nos.6617 & 9915 of 2021
APPENDIX OF WP(C) 9915/2021
PETITIONER'S EXHIBITS
EXHIBIT P1 TRUE COPY OF CERTIFICATE OF
REGISTRATION NO.145 ISSUED BY THE
INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY TO THE PETITIONER COMPANY.
EXHIBIT P2 TRUE COPY OF INSURANCE REGULATORY AND
DEVELOPMENT AUTHORITY OF INDIA
(APPOINTMENT OF INSURANCE AGENTS)
REGULATION 2016 DATED 15/04/2016.
EXHIBIT P3 TRUE COPY OF INSURANCE REGULATORY AND
DEVELOPMENT AUTHORITY OF INDIA(PAYMENT
OF COMMISSION OR REMUNERATION OR REWARD
TO INSURANCE AGENTS AND INSURANCE
INTERMEDIARIES) REGULATIONS 2016)
EXHIBIT P4 TRUE COPY OF NOTIFICATION DATED
31/12/2012 ISSUED BY THE RESPONDENT.
EXHIBIT P5 TRUE COPY OF NOTIFICATION DATED
28/07/2016 ISSUED BY THE RESPONDENT.
EXHIBIT P6 TRUE COPY OF NOTIFICATION GO(P)
NO.8/2020/LBR DATED 16/01/2020 ISSUED
BY THE RESPONDENT.
EXHIBIT P7 TRUE COPY OF INTERIM ORDER DATED
15/03/2021 IN WPC NO.6617/2021.
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