Kerala High Court
Max Bupa Health Insurance Company ... vs State Of Kerala on 20 March, 2025
Author: N.Nagaresh
Bench: N.Nagaresh
2025:KER:23436
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
2025:KER:23436
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:
2025:KER:23436
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.
2025:KER:23436
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:
2025:KER:23436
W.P.(C) Nos.6617 & 9915 of 2021
:5:
CR
N. NAGARESH, J.
`````````````````````````````````````````````````````````````
W.P.(C) No.6617 and 9915 of 2021
`````````````````````````````````````````````````````````````
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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 :6: 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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 :7: 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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 :8: 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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 :9: 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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 10 : 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:-
2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 11 : 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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 12 : 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.
2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 13 :
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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 14 : 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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 15 : 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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 16 : 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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 17 : 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 2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 18 : 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.
2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 19 : 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.
2025:KER:23436 W.P.(C) Nos.6617 & 9915 of 2021 : 20 :