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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 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 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:-

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 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 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.

In the present case, the parties are governed by the terms and conditions of J.P.A. Group Policy. The stand taken by the 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 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.