Calcutta High Court
Golden Trust Financial Services & Ors vs Union Of India & Ors on 18 March, 2019
1
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Original Side
W.P. No. 1144 of 1999
Golden Trust Financial Services & Ors.
Vs.
Union of India & Ors.
with
W.P. No. 2146 of 2002
Safiuddin & Ors.
Vs.
Union of India & Ors.
with
G.A. No. 524 of 2018
W.P. No. 2343 of 2002
Golden Trust Financial Services & Ors.
Vs.
Union of India & Ors.
For the Petitioner : Mr. Anindya Mitra, Sr. Advocate
Mr. Arnab Chakraborty, Advocate
Ms. Pragya Bhowmick, Advocate
For the Respondent No. : Mr. Saptangsu Basu, Sr. Advocate
3&4 Mr. Proloy Kar, Advocate
Mr. Ayan Banerjee, Advocate
Ms. Debasree Dhamali, Advocate
Hearing concluded on : February 20, 2019
Judgment on : March 18, 2019
DEBANGSU BASAK, J.:-
Three writ petitions have been heard analogously. An interim application has also been taken up for consideration. W.P. No. 1144 2 of 1999 is the first in point of time. For the sake of convenience it is referred to as the first writ petition. W.P. No. 2146 of 2002 is the second writ petition in point of time and is referred to as the second writ petition. W.P. No. 2343 of 2002 being the third writ petition in point of time, is referred to as the third writ petition.
Learned Senior Advocate appearing for the petitioners has addressed the Court on the basis of the third writ petition. The first and third writ petition are at the behest of a partnership firm and their partners are claiming that the partnership firm carries on business of mobilizing investable funds of the general public in various schemes of the financial institutions and debentures of large corporate houses. The second writ petition is at the behest of a person, who has claimed that there exists a contract for insurance between him and the insurance company. All the petitioners have claimed that, the insurance company is not entitled to cancel the existing contract of insurance.
Learned Senior Advocate appearing for the petitioner in the third writ petition has submitted that, the insurance company wanted to enlarge the number of persons covered by Group Janata Personal Accident (J.P.A.) Insurance Policy. The insurance company 3 had issued a letter dated October 8, 1997 in this regard. J.P.A. Policy was brought into being noting the competition in the market. J.P.A. Policy brought into being was for a long term of 15 years with the entire premium being paid up front. The writing dated October 8, 1997 does not contain any clause by which, the insurance company can cancel the contract for insurance at any point of time prior to the expiry of 15 years from the date of the contract for insurance. He has submitted that, the decision to issue a J.P.A. Policy for 15 years was a business decision and not a policy decision. He has referred to the certificate of insurance issued by the insurance company. He has submitted that, the certificate of insurance be treated as a sample of the numerous certificates of insurance 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 4 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 insurance company could not validly terminate the contract for insurance. The impugned writing dated August 1, 2002 therefore should be quashed.
Referring to J.P.A. Policy, he has submitted that, the policy is such that, public are involved. When public are involved, and more so when an Article 12 authority instrumentality is the insurance company, it is bound to act fairly and reasonably. The action of the insurance company in the present case is arbitrary. Assuming that, the insurance company has a power to cancel a contract for insurance, then also, the insurance company is required to act reasonably and not arbitrarily and capriciously. In the present case, the insurance company being an instrumentality under Article 12 of the Constitution of India, has acted arbitrarily. The insurance 5 company has misutilized its dominant bargaining position and has sought to foist an unreasonable decision upon the petitioner and the beneficiaries of J.P.A. Policy. Such an action by the insurance company must be quashed.
Learned Senior Advocate appearing for the petitioner has drawn the attention of the Court to the letter dated August 1, 2002 and submitted that, such a letter was issued to the partnership firm why no individual cancellation letter has been issued to the policy holders. Therefore, the purported cancellation sought to be done by the impugned writing dated August 1, 2002 is not binding upon an individual policy holder.
Learned Senior Advocate appearing for the petitioner has drawn the attention of the Court to the writing dated October 8, 1997 as well as the certificate of insurance and submitted that, the insurance company took the premium of J.P.A. Plocy for its entire period. After the insurance company having taken such premium from the respective policy holders, it is not entitled to cancel the policy before expiry of the entire period of the contract for insurance. The action taken by the insurance company stands vitiated on the principle of promissory estoppel. He has relied upon, All India 6 Reporter 1987 Supreme Court page 2414 (Delhi Cloth & General Mills Ltd. v. Union of India) in support of his contentions. A contract for insurance is a part of a fundamental right guaranteed under Article 21 of the Constitution of India. The insurance company cannot make selective cancellation. In support of such contention, he has relied upon 2008 Volume 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 7 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 1, 2002. That there does not exist any policy of insurance, is an admitted fact, and in support of such contention, learned Senior Advocate appearing for the petitioner in the third writ petition, has drawn the attention of the Court to various paragraphs of the writ petition as well as the affidavit-in- opposition.
In support of the contention that, a contract of insurance involves public element, learned Senior Advocate appearing for the petitioner has relied upon 2008 Volume 10 Supreme Court Cases page 404 (United India Insurance Company Limited v. Manubhai Dharmasinhbhai Gajera & Ors.). He has submitted that, the clauses of the contract for insurance must be fair. Although directive principles of state policy, are not fundamental rights, then also, instrumentalities under Article 12 of the Constitution, is required to keep the directive principles of said policy in mind, while discharging its functions. He has submitted that, the impugned writing dated August 1, 2002 not being issued to individual policy holders, such a right cannot be said to have become effective. 8 Moreover, although, the interim order granted in the writ petition expired on February 28, 2018, even then, the insurance company did not refund the pro rata insurance premia received from the individual policy holders.
Relying upon Regulation 2(c) of the Insurance Regulatory and Development Authority (Protection of Policy Holders' Interest) Regulation, 2002, learned Advocate appearing for the insurance company has submitted that, the certificates of insurance issued in favour of individuals are the cover of insurance within the meaning of such regulation. The certificates of insurance were issued in favour of natural persons. None of such natural persons are not before the Writ Court. The beneficiary of the insurance cover is the partnership firm. Therefore, the first and the third writ petitions are not maintainable at the instance of the partnership firm. No interest of the partnership firm stands affected by the letter dated August 1, 2002. The partnership firm has no role to play in the contract of insurance between the insurance company and the natural persons. The partnership firm has no right to espouse the cause of the beneficiary of the insurance. In support of such contention, he has relied upon 2009 Volume 2 Calcutta High Court Notes page 379 (Calcutta Swimming Club v. Lalit Singh & Ors.).
9
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, a proceeding under Article 226 of the Constitution is not maintainable in respect of such a contract. In support of such contention he has relied upon 1991 Volume 1 10 Calcutta Law Journal page 467 (Marine Engineer & Ors. v. Siddeswar Halder & Ors.), 2007 Volume 3 Calcutta High Court Notes page 807 (Maple Technologies v. State of West Bengal & Ors.).
Referring to the averments made in the affidavit-in- opposition, learned Senior Advocate appearing for the insurance company has submitted that, the subsisting contract of insurance was terminated due to a change of policy. Therefore, according to him, the principles of promissory estoppel will not apply where the action taken was on the basis of change in policy. On the effect of a policy decision, learned Senior Advocate appearing for the insurance company has relied upon All India Reporter 1965 Supreme Court page 1288 (Central Bank of India, Ltd., Amritsar v. Hartford Fire Insurance Co. Ltd.) and All India Reporter 1966 Supreme Court page 1644 (General Assurance Society Ltd. v. Chandumull Jain & Anr.). He has also referred to Section 14 of the Insurance Regulatory and Development Authority Act, 1999. He has submitted that, the change of policy happened under statute and under the guidance of Insurance Regulatory and Development Authority (I.R.D.A.). Since the policy was changed under the directions of I.R.D.A., the principles of promissory estoppel are not 11 attracted. In support of such contentions, he has relied upon 1989 Volume 2 Supreme Court Cases page 116 (Bareilly Development Authority & Anr. v. Ajai Pal Singh & Ors.), 1998 Volume 1 Supreme Court Cases page 572 (Sales Tax Officer & Anr. v. Shree Durga Oil Mills & Anr.) and All India Reporter 2011 Supreme Court page 3298 (A.P. Dairy Development Corporation Federation v. B. Narasimha Reddy & Ors.).
The following issues have arisen for consideration in the three writ petitions:-
(i) Are the writ petitions maintainable?
(ii) Are the letters of cancellation of the policy of insurance bad?
(iii) To what relief or reliefs, if any, are the parties entitled to?
The partnership firm has filed the first writ petition assailing a letter dated May 7, 1999 issued by the insurance company. By such letter, the insurance company has issued few directions with regard to the group discount in respect of J.P.A. (Group) Policy. The second writ petition is at the behest of a natural person who claims 12 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 to receive premia on behalf of the insurance company for J.P.A. Group Insurance Policy. The insurance company issued a certificate of insurance containing some terms and conditions of the certificate of insurance. Such certificate 13 of insurance is to be read along with J.P.A. Group Policy. J.P.A. Group Policy contains six conditions. Condition No. 5 is relevant for the purpose of adjudication of the present writ petition. The Condition No. 5 as laid down in J.P.A. Group Policy is as follows:-
"5. The Company may at any time by notice in writing terminate this Policy provided that the Company shall in that case return to the insured the then last paid premium in respect of such persons in respect of whom no claim arisen, less pro-rata part thereof for the portion of the current insurance period which shall have expired. Such notice shall be deemed sufficiently given if posted address to the Insured at the address last registered in the Company's books and shall be deemed to have been received by the Insured at the time when the same would be delivered in the ordinary course of post."
J.P.A. Group Policy was initially for 15 years with a coverage of Rs. 10 lacs. By the impugned writing dated August 1, 2002, the insurance company has sought to cancel J.P.A. Group Policy and restrict the amount of coverage to Rs. 1 lac and the period of coverage to 5 years.
That the insurance company and the partnership firm entered into memorandum of understanding is an admitted fact. That the partnership firm and the insurance company had acted on the basis of such memorandum of understanding, the partnership 14 firm having mobilized business of insurance for the insurance company in the sense that, the partnership firm identified persons in favour of whom, J.P.A. Group Policy were issued by the insurance company is also an admitted fact. The insurance company had issued the certificates of insurance in favour of the natural persons covered under J.P.A. Group Policy. Such certificates of insurance contain the name of the partnership firm also. The impugned writing dated August 1, 2002 seeks to rework the terms of J.P.A. Group Policy. The reworking of J.P.A. Group Policy will have an effect on the memorandum of understanding entered into between the insurance company and the partnership firm. It will also hamper the business interest of the partnership firm 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 15 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 the facts of that case it has found prima facie that, there was no cause of action for the plaintiff to file the suit. In the present case, rights of the partnership firms are affected by the actions taken by the insurance company. It cannot be said that the partnership firm has no cause of action to institute a proceeding. The first and the third writ petitions disclose causes of action on the basis of the claims made in the writ petitions. The second writ petition, at the behest of the natural person, also discloses causes of action as he claims his right as beneficiary stand affected. Existence of cause of action will ipso facto not make a writ petition maintainable against an authority under Article 12 of the Constitution on the allegation of breach of contract. The maintainability of such a writ petition is required to be tested on the 16 ratio laid down in Marine Engineers & Ors. (supra), Maple Technologies (supra) and Bareilly Development Authority & Anr. (supra).
Marine Engineer & Ors. (supra) has considered the nature of contracts that an instrumentality of a State under Article 12 of the Constitution enters into and the amenability of such contracts under Article 226 of the Constitution of India. It has noticed a Supreme Court decision and a High Court decision. It has held as follows:-
"16. The Supreme Court in the well known case of Radha Krishna Agarwal v. State of Bihar (AIR 1977 SC 1496) examined different types of contracts in connection with the exercise of power under Article 226 of the Constitution and then it was said as follows:
"The Patna High Court had, very rightly divided the types of cases in which breaches of alleged obligation by the State or its agents can be set up into three types. These were stated as follows:
(i) Where a petitioner makes a grievance of breach of promise on the part of the State in cases where on assurance or promise made by the State he has acted to his prejudice and predicament, but the agreement is short of a contract within the meaning of Article 299 of the Constitution;17
(ii) Where the contract entered into between the person aggrieved and the State is in exercise of a statutory power under certain Act or Rules framed thereunder and the petitioner alleges a breach on the part of the State; and
(iii) Where the contract entered into between the State and 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 1966 SC 334 and B.K. Sinha v. State of Bihar, AIR 1974 Patna 230 that no writ or order can issue under Article 226 of the Constitution in such cases "to compel the authorities to remedy a breach of contract pure and simple,"18
Maple Technologies (supra) has held that, where contracts which have not been entered into by an Article 12 authority, in exercise of the powers under Article 298 of the Constitution or in terms of any other statutory provisions, and at the same time there is no public law element in such contract, the aggrieved party cannot come up with an application under Article 226 of the Constitution of India for his grievance. In such situations, the dissatisfied party should enforce the contract in accordance with ordinary law of the land. Bareilly Development Authority & Anr. (supra) has held that, where the contract entered into between the State and the persons aggrieved is non-statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution so as to compel authorities to remedy a breach of contract pure and simple.
The contract between the parties is non-statutory and contractual in nature. No public element is involved. The policy was not open to the public at large. It was open to the categories of persons who had something to do with the partnership firm, a 19 private party. The partnership firm, a private party, decided which person can approach the insurance company for the insurance cover. The public at large could not have obtained the J.P.A. Group Policy on their own. The partnership firm decided who could approach the insurance company for the Policy. The dealings of the private party in the facts of these cases cannot be construed to mean that public element is involved. In such circumstances the writ petitions are held to be not maintainable. The first issue is answered accordingly.
Delhi Cloth & General Mills Ltd. (supra) has considered Section 115 of the Evidence Act, 1872. It has considered the principle of promissory estoppel and its applicability. It has held that, the concept of detriment is whether it appears unjust, unreasonable or inequitable that the promisor should be allowed to resile from his assurance or representation, having regard to what the promisee has done or refrained from doing in reliance on 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 20 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 Co- operative Societies (Amendment) Act, 2006.
Police Officers' Association, Adilabad Unit, Adilabad (supra) has considered an unilateral cancellation of Long Term Group Janata Personal Accident Policy. It has held that, a writ petition assailing such cancellation is maintainable. It has also held that, the insurance company being a public authority could not have cancelled the policy or withdrawn the same by invoking Condition No. 6 of the Policy without assigning any reasons therefor. In the facts of that case, the learned Judge has found that, the insurance 21 policy was sought to be cancelled with effect from a particular date by a letter which did not contain any reason for the cancellation. Such a letter was found not to be a sufficient notice or a notice furnishing reasons. The action of the insurance company was found to be arbitrary and therefore the same was quashed.
Consumer Education & Research Centre & Ors. (supra) has held that, terms and conditions prescribed in insurance policies of Life Insurance Corporation involve public element. An action of a State instrumentality having public element must be just, fair and reasonable in public interest and in consonance with the constitutional provisions and socio economic justice. It has considered a case where, the petitioner having applied for policies for convertible term insurance plan of different amounts and having presented proposal to the Life Insurance Corporation under Table 58, the same were turned down. This action of L.I.C. was challenged before the writ court. The High Court, after holding that, the prescription of conditions for first class lives as eligibility and other criteria laid down in the policy under Table 58 are neither unjust nor arbitrary, declared a part of the condition, namely, further proposal for assurance under the plan will be entertained only from persons in Government or quasi Government organisation or a reputed 22 commercial firm which can furnish details of leave taken during the preceding year in Table 58, as subversive of equality, and therefore constitutionally invalid. Such a declaration by the High Court was upheld by the Supreme Court. The Supreme Court however made it clear that, in order to make a policy viable and easily available to the general public, it may be open to the appellants to revise the premium in light of the law declared in the judgment. The 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 pro- rata 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, 23 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 incident happened, the insurance company unilaterally made an endorsement dated October 18, 2010 deleting the expressions 'floods, rains etc.' from the policy. This has been found to be arbitrary and violative of the fundamental right of the insured under Article 14 of the Constitution. There only one contract of insurance was involved were a coverage of floods, rains, etc. were sought to be excluded. The policy would otherwise continue. Certain coverage under the policy where sought to be excluded without the policy itself being terminated. In this case, the entire policy is terminated on the ground of change of policy. This difference to my understanding is substantial.
Hartford Fire Insurance Co. Ltd. (supra) has considered a clause of insurance. It has held that, the Court must give effect to the plain meaning of the words used in a contract, however it may 24 dislike the result. Chandumull Jain & Anr. (supra) has followed Hartford Fire Insurance Co. Ltd. (supra). It has held that, where parties agree upon certain terms which are to regulate their relationship, it is not for the Court to make a new contract, however unreasonable, if the parties have not made it for themselves.
The doctrine of promissory estoppel requires a party making promise to make good such promise, provided that, the promisee altered its material position to its prejudice acting on the promise, Promissory estoppel however does not apply to compel a Government body or a Government to carry out any representation or promise which is contrary to law or which was made outside their authority or power. A Government or a Government body can change its policy. The principles of promissory estoppel does not apply when there is a change of policy. Moreover, the Court should not bind the Government to its promise unless, it is necessary to prevent manifest injustice or fraud.
In the present case, the parties are governed by the terms and conditions of J.P.A. Group Policy. The stand taken by the 25 insurance company is that such policy underwent a revision subsequently and that, the insurance company changed its policy. The change in the policy is reflected in the writing dated August 1, 2002. The insurance company is no longer in a position to continue with a long-term J.P.A. Group Insurance cover for 15 years granting a cover of Rs. 10 lacs. An insurance company is entitled to 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 26 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. 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.
In such circumstances, I find no infirmity in the impugned actions taken by the insurance company. The second issue is therefore answered in the negative and in favour of the insurance company.
27
In view of the decisions arrived at with regard to the first and the second issues, no relief can be granted to the petitioners. The third issue is answered accordingly.
W.P. No. 1114 of 1999, W.P. No. 2146 of 2002 and W.P. No. 2343 of 2002 are dismissed. In view of the dismissal of the writ petitions no relief can be granted to the writ petitioners in G.A. No. 524 of 2018. G.A. No. 524 of 2018 is dismissed accordingly. No order as to costs.
[DEBANGSU BASAK, J.]