TMI Blog2019 (4) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the materials on the basis of which the impugned decision was taken. In the facts of the present case, change of policy is a complete justification for the termination. The impugned letter dated August 1, 2002 therefore, in such that it cannot be said to be arbitrary requiring interference by a writ Court. The insurance company having acted in terms of the contract between the parties as contained in J.P.A. Group Insurance Policy, it cannot be said that, such an action is arbitrary or unreasonable. The parties to a contract must abide by it howsoever unreasonable, one of the parties may find such terms to be. It is of no consequence that, the Court might find the action taken on the basis of the agreed terms to be unreasonable. It is not for the Court to rewrite the contract for the parties. There is no infirmity in the impugned actions taken by the insurance company - petition dismissed. - W.P. No. 1144 of 1999, W.P. No. 2146 of 2002, G.A. No. 524 of 2018 With W.P. No. 2343 of 2002 - - - Dated:- 18-3-2019 - MR DEBANGSU BASAK, J. For The Petitioner : Mr. Anindya Mitra, Sr. Advocate, Mr. Arnab Chakraborty, Advocate And Ms. Pragya Bhowmick, Advocate For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urance issued by the insurance company in respect of the J.P.A. Policies. The certificate of insurance concludes the contract of insurance. The certificate of insurance issued by the insurance company does not specify that, the contract for insurance can be terminated prior to the expiry of 15 years from the date of the contract of insurance. J.P.A. Policy was for 15 years with the premium being paid up front. He has drawn the attention of the Court to the letter dated August 1, 2002 and submitted that, the insurance company has purported to cancel the J.P.A. Policy of more than 1 lakh/period of insurance for more than 5 years without any basis. The letter dated August 1, 2002 refers to Condition No. 5. Condition No. 5 of the policy which has been referred to in the writing dated August 1, 2002 does not exist in the certificate of insurance. Therefore, there is no foundational basis for the insurance company to cancel J.P.A. Policy on the ground that, the insurance company retains the right to cancel J.P.A. Policy in terms of the alleged Condition No. 5 of the policy. Such a condition, as referred to in the writing dated August 1, 2002 of the insurance company, being absent, the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olume 1 Andhra Law Times page 772 (Police Officers Association, Adilabad Unit, Adilabad v. United India Insurance Co. Ltd., Chennai Anr.) and the judgment and order dated January 25, 2019 passed by the Hon ble Supreme Court in this Appeal No. 1128 of 2019 arising out of SLP (C) No. 33038 of 2017 (M/S. Twenty First Century Media Private Limited vs. New India Assurance Company Ltd.) . He has submitted that, the purported cancellation is discriminatory and is violative of Article 14 of the Constitution of India. Right to insurance is a fundamental right under Article 21 of the Constitution of India and the same has been recognised in 1995 Volume 5 Supreme Court Cases page 482 (LIC of India Anr. v. Consumer Education Research Centre Ors.) . Learned Senior Advocate appearing for the petitioner has submitted that, Clause 5 of the policy as referred in the letter dated October 1, 2002 is not applicable. No policy of insurance was ever issued to any of the policy holders. The pleadings do not disclose any policy of insurance. Therefore, the insurance company cannot be allowed to rely upon Clause 5 of the so-called policy of insurance in the impugned letter dated August ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alit Singh Ors.) . Without prejudice to the point of maintainability, learned Senior Advocate appearing for the respondents has submitted that, there was a memorandum of understanding between the insurance company and the partnership firm permitting the partnership firm to collect premia in respect of J.P.A. (Group) Policy. Condition No. 5, referred to in the letter dated August 1, 2002, is a covenant in J.P.A. (Group) Policy document. The parties acted on the basis of such policy. Condition No. 5 of J.P.A. (Group) Policy document permitted the insurance company to cancel the subsisting contract for insurance. Therefore, the contract between the parties as contained in such memorandum of understanding, permitted the insurance company to cancel a contract for insurance which the insurance company did by the letter dated August 1, 2002. There is no infirmity in such action being taken by the insurance company. Learned Senior Advocate appearing for the insurance company has submitted that, the contract of insurance is neither a statutory contract nor a contract under Article 299 of the Constitution. It is purely and simply a commercial contract between two parties. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd writ petition is at the behest of a natural person who claims to be a beneficiary of a J.P.A. Group Insurance Policy. He has assailed the letter dated August 1, 2002 issued by the insurance company. The partnership firm has filed the third writ petition assailing the letter dated August 1, 2002 of the insurance company. The partnership firm has claimed itself to be engaged in the business of mobilizing investable funds of the general public in various schemes of financial institutions and debentures of large corporate houses. The partnership firm and the insurance company entered into a memorandum of understanding by virtue of which, it was agreed by and between the partnership firm and the insurance company that, the insurance company would be extending benefits of group insurance to the investors mobilized by the partnership firm, the workers of the partnership firm and field agents and their friends. The memorandum of understanding underwent few modifications. One of the modifications undertaken is the letter dated May 7, 1999 issued by the insurance company. Pursuant to and in terms of such memorandum of understanding, the insurance company allowed the partnership firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the sense that, such a decision, is likely to affect the quantum of business that the partnership firm is able to generate for itself. J.P.A. Group Policy apparently was one of the incentives for the workers, field agent and their friends of the partnership firm in mobilizing investable funds from the general public. Moreover, the first petition is directed against a writing dated May 7, 1999 issued by the insurance company to the partnership. In such factual background, the first and the third writ petition cannot be said to be not maintainable at the instance of the partnership firm. The rights of the partnership firm stands affected by the actions taken by the insurance company. The insurance company is an instrumentality of the State within the meaning of Article 12 of the Constitution of India. Calcutta Swimming Club (supra) has held that, in order to maintain a suit, the plaintiff must prove that the right to sue has accrued in his favour. A plaintiff cannot file suit alleging that by the action of the defendant, although none of his rights is infringed, yet, somebody else's right is going to be affected and such right of the third party should be protected. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the person aggrieved is non-statutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract, and the petitioner complains about breach of such contract by the State. 17. Patna High Court had held that so far cases coming under categories (i) and (ii) were concerned, a writ application under Article 226 of the Constitution was maintainable. So far cases falling in category (iii) was concerned, i.e. where the contract entered into between the State and the person aggrieved is non-statutory and purely contractual and the petitioner complains about the breach of the terms of such contract by the State, it had been held that no application invoking jurisdiction of the High Court under Article 226 of the Constitution was maintainable. After referring to cases falling under category (iii) it was said by the Supreme Court as follows:- It then, very rightly, held that the cases now before us should be placed in the third category where questions of pure alleged breaches of contract are involved. It held, upon the strength of Umakant Saran v. State of Bihar, AIR 1973 SC 964 and Lekhraj Sathram Das v. N.M. Shah, AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assurance or representation. It has gone to say that, the doctrine of promissory estoppel cannot be used to compel the public bodies or the Government to carry out the representation or promise which is contrary to law or which is outside their authority or power. Promissory estoppel stems from equitable doctrine. It therefore requires that he who seeks equity must do equity. The doctrine of promissory estoppel cannot be invoked if it is found to be inequitable or unjust in its enforcement. Shree Durga Oil Mills Anr. (supra) has held that, a government can change its industrial policy if the situation so warrants. If such change is there, the question of promissory estoppel does not arise. A.P. Dairy Development Corporation Federation (supra) has held that, a Court will not pass any order binding the government by its promises unless it is so necessary to prevent manifest injustice or fraud, particularly, when Government acts in its governmental, public or sovereign capacity. Estoppel does not operate against the Government or its assignee acting in such capacity. It has made such observations, in the context of the provisions of Andhra Pradesh Mutually Aided Cooper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he new premium may not be arbitrary, unjust, excessive or oppressive. Manubhai Dharmasinhbhai Gajera Ors. (supra) has held that, insurance policies issued by public sector insurance companies must be fair and reasonable. Such companies cannot resort to the contractual power to cancel the policy at any time by sending the insurer 30 days notice or refunding the premium prorata despite their monopoly in the field of general insurance being brought to an end. In that case, the Supreme Court has considered mediclaim policies and the renewal of mediclaim policies. It has held that, renewal is not automatic. Renewal of a mediclaim policy is subject to just exceptions. It has directed the Insurance Regulatory Development Authority to consider the matter with regard to renewal of mediclaim policies and to take corrective measures, if it finds that, insurance company are taking recourse to arbitrary methodologies in matters of entering into contracts of insurance or their renewal. M/s. Twenty First Century Media Pvt. Ltd. (supra) has considered a case where, although, the insured was protected against floods and rains by virtue of a contract for insurance, when such an incid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change its policy. This change in policy led to the issuance of the impugned letter dated August 1, 2002. It is claimed by the insurance company that the terms and condition of J.P.A. Group Insurance Policy allows it to terminate the subsisting policy. The parties are governed by the terms of the contract between the parties. It is not for the writ court to rewrite the terms of the contract. The terms of the contract allow the insurance company to cancel the insurance policy after giving a notice. The cancellation is in terms of the Condition No. 5 of J.P.A. Group Policy document. Where the terms of the contract between the parties allows a party to terminate the same, the act of the party choosing to terminate the contract in terms of thereof cannot be said to be arbitrary. In any case, the insurance company justifies its act on the ground of change of policy. The fact that there is a change of policy is not disputed. The writing dated August 1, 2002 itself not contains the justification of change in policy. The justification is set forth in the affidavit of the insurance company. A Court is entitled to consider the materials on the basis of which the impugned decision was taken. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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