IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 08.02.2011 Coram THE HON’BLE MR. JUSTICE VINOD K.SHARMA W.P.Nos.2988 and 2989 of 2009 W.P.No.2988 of 2009: General Insurance Agents Welfare Association, having Officer at No.7, Somu Mudali Street, Ranipet 632401, Vellore District represented by its President S.Thiyagarajan. ... Petitioner Versus 1.The Chairman Insurance Regulatory Development Authority, Parisrama Bhavanam 5-9-58/B, 3rd Floor Basheer Bakth, Hyderabad 500 004. 2.The Chairman-cum-Managing Director New India Assurance Company Limited New India Assurance Building 87, M.G.Road, Fort, Mumbari. 3. The Chief Manager New India Assurance Company Limited New India Assurance Building 87,M.G.Road, Fort, Mumbai. 4.The Regional Manager New India Assurance Company Limited Spencer Towers, 770/A, Anna Salai, 3rd Floor, Chennai 2. 5.The Regional Manager New India Assurance Company Limited Oblique Towers, 574, D.B.Road, R.S.Puram, Coimbatore 2 ... Respondents https://hcservices.ecourts.gov.in/hcservices/ W.P.No.2989 of 2009: General Insurance Agents Welfare Association, having Office at No.7, Somu Mudali Street, Ranipet 632 401, Vellore District rep. By its President S.Thiyagarajan ... Petitioner Versus 1. The Chairman Insurance Regulatory Development Authority, Parisrama Bhavanam, 5-9-58/B, 3rd Floor, Basheer Bakth Hyderabad 500004. 2.The Chairman-cum-Managing Director National Insurance Company Limited 3, Middleton Street, Kolkatta 700071. 3.The Regional Manager National Insurance Company Ltd., Coimbatore Regional Office, Stock Exchange Building 684, Trichy Road Coimbatore 641 005. ... Respondents. Prayer:- Writ Petitions filed under Article 226 of the Constitution of India praying for the issuance of a Writs of Certiorarified Mandamus, calling for the records of the order passed by the 3rd respondent in his proceedings IBD/ADMN.2008, dated 10.09.2008 and CBRO/Mktg/VVG/2008-09 dated 04.11.2008 and quash the same and further direct the respondents to release the agency commission for commercial motor vehicles to the members of the Petitioners Association, from the period of 7.6.2006 to 1.1.2007 along with interest and from the period of 1.8.2005 to 1.1.2007 along with interest respectively. For Petitioner : Mr.G.Sankaran For Respondents : Mr.M.B.Gopalan for R1 Mr.N.Vijayaraghavan for RR2 to 5 in WP No.2988/09 as per R3 in WP No.2989/2009 No appearance for R4 and R5. COMMON ORDER The Petitioner in these writ petitions, The General Insurance Agents Welfare Association has challenged the order passed by the third respondent in both the writ petitions i.e., The New India https://hcservices.ecourts.gov.in/hcservices/ Assurance Company Limited and National Insurance Company Ltd., dismissing the representation made by the petitioner for grant of commission, for business procured for commercial vehicles, between the period 01.08.2005 and 01.01.2007. In the case of National Insurance Company Limited and for the period 07.06.2006 to 01.01.2007 in the case of New India Assurance Company. 2. The members of the petitioner association were appointed as agents in pursuance to the application made to the Insurance Regulatory Development Authority (IRDA) which is a statutory body. It conducts pre-recruitment test and thereafter give practical training to the agents, with an object to procure business for the Insurance Companies. The members of the petitioner association after having qualified in the test and undergone training were appointed as agents by the Insurance Companies. 3. The case of the petitioner is that IRDA also regulates the payment of commission to the agent by the Insurance Companies. In exercise of statutory power, the IRDA fixed the maximum limit for payment of commission for statutory Insurances to the maximum of 10%. The members of the petitioner association were accordingly being paid the commission at the rate of 10% for the business procured by them. 4. The National Insurance Company Ltd., as well as the New India Assurance Company Ltd., in view of the heavy losses suffered by them decided not to pay any commission for procuring business of commercial vehicle of all ages (Passengers and goods carrying vehicles except Tractors), The tractors used for agricultural purposes were coming under the package, thereafter insurance for tractors was allowed the commission at 10%. 5. The petitioner being aggrieved by the decision of the Insurance Companies, challenged the order by filing W.P.No.28120 of 2005. 6. In view the fact that during the pendency of the writ petition, keeping in view the later developments and improvements in the financial position, the commission on commercial vehicles was revised, and is being paid to memers of the petitioner. 7. This Court in view of the later development held that the relief claimed had been rendered infructuous. However, for the period referred to above, the petitioners were given liberty to file representation to claim commission with liberty to Insurance Companies to take decisions thereon. 8. The representation of the petitioner stands rejected by way of impugned orders. 9. The learned counsel for the petitioner challenged the impugned order, by contending that the order is on the face of it arbitrary and amounts to colourable exercise of power, thus is hit by Article 14 of the Constitution of India. The members of the https://hcservices.ecourts.gov.in/hcservices/ petitioner association are being denied, the payment of commission, in spite of having been asked to work to get business, which was not gratis. 10. It is also the contention of the learned counsel for the petitioner that the respondent-Insurance Companies has misread the regulations of the IRDA to hold that it can even refuse to pay commission because it only fixes the maximum, and not the minimum. 11. It is also the contention of the learned counsel for the petitioner, that the order is otherwise against equity and good conscience therefore not sustainable in law. 12. On consideration, I find no force in this writ petition. Prima facie the writ petition itself is not competent, as the members of the petitioner association have no local standi to challenge the assignment between the Insurance Companies and that of the members of petitioner association. The relations of members of petitioner and Insurance company is that of principal and agent, the respective rights are governed terms of agency, which can not be enforced in writ jurisdiction. 13. The members of petitioner are governed by the terms and conditions of their appointment, which is in the nature of the contract having no statutory force of law. 14. Even on merit, the circular dated 27.07.2005 is prospective having effect from 01.08.2005. therefore, when it was made clear that no commission would be paid for procuring the business of commercial vehicle except tractors. The agents were a liability not to procure business, as the circular in no way stipulated or fixed liability on petitioner to work. It was left to the discretion of the petitioner to procure business for the commercial vehicle against the object of circular, which was to discourage the business, in this field as the Insurance Companies had suffered heavy losses because of the third parties claim, with regard to the commercial vehicles. The petitioner could claim that commission only in case they were asked to get business of commercial vehicle, or any target would have been fixed, in that event it could be said that agents did not work gratis. 15. The members of the petitioner association were aware at the time of procuring business, that no commission would be payable to them, as the circular was in force. 16. It cannot be said that the members of the petitioner association were forced to work against their wishes to procure the business without paying any remuneration to invoke the provisions of Article 14 of the Constitution of India, so as to call the action to be arbitrary. 17. Equity also is not in favour of the petitioner, as the respondent/Insurance Company had decided to stop paying commission because of the heavy losses it suffered. The bona fide of the https://hcservices.ecourts.gov.in/hcservices/ Insurance Company is proved from the fact, that moment the financial position of the Insurance company improved, the commission on the business stood revived. 18. For the reasons stated, there being no merit in the writ petition, it is ordered to be dismissed with no order as to costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar ksr To 1.The Chairman Insurance Regulatory Development Authority, Parisrama Bhavanam 5-9-58/B, 3rd Floor Basheer Bakth, Hyderabad 500 004. 2.The Chairman-cum-Managing Director New India Assurance Company Limited New India Assurance Building 87, M.G.Road, Fort, Mumbai. 3. The Chief Manager New India Assurance Company Limited New India Assurance Building 87,M.G.Road, Fort, Mumbai. 4.The Regional Manager New India Assurance Company Limited Spencer Towers, 770/A, Anna Salai, 3rd Floor, Chennai 2. 5.The Regional Manager New India Assurance Company Limited Oblique Towers, 574, D.B.Road, R.S.Puram, Coimbatore 2 6.The Chairman-cum-Managing Director National Insurance Company Limited 3, Middleton Street, Kolkatta 700071. https://hcservices.ecourts.gov.in/hcservices/ 7.The Regional Manager National Insurance Company Ltd., Coimbatore Regional Office, Stock Exchange Building 684, Trichy Road, Coimbatore 641 005 1 cc To Mr.G.Sankaran, Advocate, SR.9164 2 cc To Mr.M.B.Gopalan, Advocate, SR.9440,9441 2 cc To Mr.N.Vijayaraghavan, Advocate, SR.9439, 9442 W.P.Nos.2988 and 2989 of 2009 JRG (CO) RH (3.3.11) https://hcservices.ecourts.gov.in/hcservices/