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Judgment
Hon''ble Justice Debasish Kar Gupta
The first writ application bearing W.P. No. 6961 (W) 2012 is filed by a registered association of operators of passenger transport vehicles of different routes within the territory of the State of West Bengal and its Assistant Secretary assailing the order issued under memo no.IRDA/NL/NTFN/MOTP/076/03/2012 dated March 27, 2012 passed by the Insurance Regulatory and Development Authority, respondent no.2 for revision of premium rates for Motor Third Party Insurance Liability 2012-13. The Second writ application bearing W.P. No. 6962 (W) of 2012 is filed by a Registered Society of owners/operators of goods vehicles who are plying their vehicles either within the state of West Bengal or all over India and its General Secretary assailing the aforesaid order issued under memo no. ERDA/NL/NTFN/MOTP/076/03/2012 dated March 27, 2012 of Insurance Regulatory and Development Authority, respondent no.2 revising premium rates for Motor Third Party Insurance Liability- 2012-13.
Since the subject matter of challenge in both the aforesaid writ applications, is the self-same order passed by the respondent no.2 on same or identical grounds, both the writ applications are taken up for analogous hearing with the consent of the parties.
The facts of the aforesaid two cases are as follows:
The members of the petitioner no.1 of the first writ application are plying their passenger transport vehicles on different routes within the territory of the State of West Bengal. The members of the petitioner no.1 in the second writ application are the owners/operators of goods transport vehicles who are plying their vehicles either within the State of West Bengal or all over India. The operators of the aforesaid vehicles are under obligation to obtain certificate of Insurance in respect of their vehicles under the provisions of Chapters X and XI of the Motor Vehicles Act, 1988.
The premium rates applicable to Motor Insurance for Third Party Liability was revised by the tariff advisory committee constituted under the Insurance Act, 1938 for the year 1990-91. Several writ applications were filed in different High Courts in the country by operators of stage carriages, Mini Bus, Auto Risckew and goods carriers. For convenient disposal, those cases were transferred to the Hon''ble Supreme Court under Article 139A of the constitution of India. Those writ applications were disposed of by the Hon''ble Supreme Court by Judgment dated August 14, 1991 delivered in the matter of Joint Council of Bus Syndicate Vs. Union of India, reported in 1992 Supp (2) SCC 125 and the relevant portions of the above decision are quoted below:-
After hearing counsel for the different parties we have however, come to the conclusion that whether directly required by statute or not, it is appropriate that the parties who are affected by the escalation of the tariff rate should be given a hearing. We agree that such a hearing cannot personnel in regard to every one in the field. That would be a physical impossibility. Therefore, on zonal basis representations should be received an existing representations also could be taken into consideration and group wise hearing should be at all States or Union Territory headquarters. The Tariff Advisory Committee may have sittings at these places and where the Headquarters of a State or Union. Territory or two States are either at the same place or near about, they could be joined us for one set of hearing. We, however, do not disturb the escalation already adopted. In case after such a hearing is granted the Committee is satisfied that alterations are warranted, appropriate reduction of the tariff should be undertaken. We make it clear that the tariff as a result of this exercise would not be permitted to be enhanced. The exact procedure of hearing in term''s of our direction we do not intend to prescribe but we leave it open to the Committee to adopt afair way of hearing the parties and we hope and trust that a fair and reasonable hearing would be extended to the parties or such of them who appear in such occasion or occasions. The Committee may break itself into grounds for convenience of movement and quick disposal of the matter. After the hearing is over at the different centers, the entire Committee should meet and take its decision after appropriate deliberations.
The cases are accordingly disposed of. There will be no order as to costs.
In the year 2001 the respondent no.3 once again prescribed revision of premium rates for Motor Insurance for Third Party Liability. The operators of passenger transport Vehicles and goods transport vehicles challenged the aforesaid revision of premium rates for Motor Insurance Third Party Liability by way of filing an application under Article 226 of the constitution of India bearing W. P. No. 6004 (W) of 2001 which was dismissed on October 8, 2002. The above operators preferred an appeal against the aforesaid order of dismissal. A Division Bench of this court disposed of the above appeal bearing MAT no.3669 of 2002 of December 8, 2006 with the following orders:
We have perused the judgment and order under appeal. We, however, feel that such increase of rate was for a particular period. Mr. Das, however, submits that Tariff Advisory Committee however has not taken up the issue of further increase as of date. We, however, feel that in view of refusal of stay such increased rate has been made applicable throughout the country and for years together the transporters are paying at the said rate. The appellant is an association of transporters operating from Asansol a sub-division of Burdwan district in the State of West Bengal. We feel that the issue has now became academic by efflux of time. Hence, we refrain from dealing with the issue at the stage.
Before parting with we, however, observe that Tariff Advisory Committee in future must adhere to the directive of the Supreme Court given in the case of Joint Council of Bus Syndicate & Ors. Vs. Union of India & Ors. dated August 14, 1991 appearing at pages 24-27 of the paper book. By the said order the Apex Court was of the view that hearing should be given to the affected parties before revision of such tariff. Once the Tariff Advisory Committee takes a decision to increase the tariff, in our view, they should given opportunity of hearing to the aggrieved parties by following the procedure laid down by the Apex Court in the said order. While doing so, they should also make available relevant documents for inspection of the aggrieved parties so that an effective representation is made by the affected parties before the Tariff Advisory Committee and the Tariff Advisory Committee would be in aposition to take a right decision on the issue.
We further make it clear that we have no gone into the merits of the matter in view of the observation made by us hereinabove. The appeal is disposed of accordingly without any order as to costs. Urgent xerox certified copy of this order, if applied for, may be given to the parties on priority basis.
(Ashim Kumar Banerjee, J.)
(Sankar Prasad Mitra, J.)
The Motor Insurance Premium Rates for Third Party Liability was revised further in the year 2007 by notification no. 043/IRDA/De-Tatiff/Jan-07 dated 23rd January 2007. According to the petitioners, no effect was given to the above revised rates of premium for Motor Insurance Third Party Liability.
By a notification no. IRDA/NL/NTFN/MOTP/066/04/2011 dated April 15, 2011 the respondent no.2 again revised the premium rates for Motor Insurance Third Party Liability. The operators of different types of transport vehicles filed an application under 226 of the constitution of India bearing W.P. No. 7376 (W) of 2011 challenging the aforesaid notification. Though the above writ application was admitted, no interim relief was passed in the above writ application. The petitioners preferred an appeal bearing AST 173 of 2011 and the same was disposed of on May 3, 2011. Subsequently, an application bearing CAN 5261 of 2011 was filed by the appellants in connection with aforesaid appeal bearing AST no.137 of 2011 and the same was disposed of by a Division Bench of this court by an order dated June 7, 2011 as follows:-
This application has been taken out by the appellant for passing appropriate orders on the ground of discovery of relevant materials subsequently.
It is stated that on 27th April, 2011 the Madras High Court has passed an order granting stay of operation of the decision taken by the respondent. The said decision was also challenged in this court before the learned trial Judge and the said writ petition is still pending for hearing. Learned trial Judge did not grant any interim relief. Hence, the appeal was preferred before us. We disposed of the appeal on 3rd May, 2011 by passing appropriate orders.
We are of the view that had this order of Madras High Court dated 27th April, 2011 been produced before us at the time of hearing, we could have passed a different order and this should have been brought to our attention by the respondents, unfortunately it was not done so.
In view of the discovery of the materials which was existing at the time of filing of the writ petition in this court and at the time of hearing of the appeal we in exercise of our inherent power modify our order dated 3rd May, 2011 directing all the parties to maintain status quo as of today with regard to realization of third party insurance premium. This order will continue till the disposal of the writ petition pending before this court. We can take note of the fact that Kerala High Court has also passed the similar orders.
This application is thus, disposed of.
Supplementary affidavit be kept on record.
Leave is granted to correct the name of the learned Judge, which has been mentioned incorrectly at page 3 of the supplementary affidavit.
Original records of the learned trial Judge be sent down.
Urgent xerox certified copy of this order be supplied to the applicants.
(Kalyan Jyoti Sengupta, J.)
(Syamal Kanti Chakrabarti, J.)
According to the petitioners the aforesaid order of status quo was passed upon consideration of an order dated April 27, 2011 passed by the Madras High Court in the matter of Erode District Bus Owners Association Vs. Insurance Regulatory and Development Authority. The above writ application was dismissed by the High Court of Madras on June 14, 2011. But interim order of status quo dated June 7, 2011 passed in the appeal bearing AST No.173 of 2011 has been continuing due the pendency of the writ application bearing W.P. no. 7376 (W) of 2011.
By virtue of the impugned order issued under memo no. IRDA/NL/NTFN/MOTP/076/03/2012 dated March 27, 2012 passed by the respondent no.2 the premium rates for Motor Third Party Liability 2012-13 was revised. The instant writ applications are filed challenging the aforesaid impugned order.
At the very out set, a preliminary objection with regard to the maintainability of this writ application is raised by Mr. Anirban Bose, learned advocate appearing on behalf of the respondent nos. 9 & 22. It is submitted by him that the office of the respondent no.2 is situated outside the territorial jurisdiction of this High Court and no part of the decision making process of the impugned order takes place within the territorial jurisdiction of this High Court. According to Mr. Bose no pleading is available in these writ applications to show that the cause of action even in part took place within the territorial jurisdiction of this High Court. It is also submitted by Mr. Bose that no other respondent takes part in the decision making process. According to him, the insurance companies are the bodies for implementing the impugned order and as such they had nothing to do with the impugned decision. Therefore, according to him, this writ application is not maintainable before this High Court due to lack of territorial jurisdiction.
Mr. Bose relied upon the decision of Oil and Natural Gas Commission Vs. Utpal Kumar Basu and Others, , Kusum Ingots and Alloys Ltd. Vs. Union of India (UOI) and Another, , National Textile Corpn. Ltd. and Others Vs. Haribox Swalram and Others, and Navinchandra N. Majithia Vs. State of Maharashtra and Others, in support of his above submissions.
The above submission are also adopted by Mr. Avijit Gangopadhyay appearing for respondent nos.2,4,5,6,7,11 & 18.
Mr. Rajesh Singh appearing on behalf of the respondent nos. 8,10,12,14,16,19 & 20 also adopts the above submissions made by Mr. Anirban Bose.
It is submitted by Mr. Moloy Kumar Basu, learned senior advocate appearing on behalf of the petitioners that the premium rates for Motor Third Party Insurance Liability prescribed by the impugned order is applicable all over the country. Drawing the attention of this court towards the impugned order it is submitted by him that the reflection in the actual experience of the data with regard to the increasing court awards, increasing wages, inflation etc. has been collected from all the states including the State of West Bengal by the respondent no.2 to pass the impugned order. According to him, even a fraction of the cause of action takes place within the State of West Bengal, this court has territorial jurisdiction to take up this matter. According to him, in the facts and circumstances as mentioned by him the cause of action arise partly within the territorial jurisdiction of this High Court.
Mr. Bose relies upon the decision of Rajendra Chingaravelu Vs. R. K. Mishra, reported in (2010) 1 SCC 457 in support of above submissions.
At the very outset the preliminary objection with regard to maintainability of these writ applications on the ground of lack of territorial jurisdiction is taken up for consideration.
The cause of action implies a right to file an application under article 226 of the constitution of India. The facts which are imperative for the petitioner to allege and prove constitute the cause of action. Cause of action has been judicially interpreted to mean that every fact which would be necessary for the petitioner to prove, if traversed, in order to support his right to the judgment of the court. In other words, it would mean that everything, if not proved, gives the respondent an immediate right to judgment, would be part of cause of action.
Therefore, in absence of a cause of action, as discussed hereinabove, the writ application must be rejected summarily.
Clause (2) of Article 226 of the constitution of India reads as follows:-
Power of High Courts to issue certain writs.-
(1).....
(2) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories.
(3) ......
(4) ......
Keeping in mind the above expressions, the entire bundle of facts pleaded need not constitute cause of action as what is necessary to be proved and the material facts are only relevant for entertaining an application under article 226 of the constitution of India. The term material fact is also known as integral facts. Necessary to point out, even if a small fraction of cause of action takes place within the territorial jurisdiction of the court, the court would have jurisdiction in the matter.
Although the provision of the Code of Civil Procedure, 1908 would not apply to writ proceedings in view of section 141 of the Code the provisions of sub-section(c) of Section 20 of the CPC and Clause (2) of Article 226, being in pari materia, the decisions of the Hon''ble Supreme Court with regard to interpretation of Sub-section (c) of Section 20 of the Code of Civil Procedure, 1908 shall apply to the writ proceedings also. So the provisions of sub-section (c) of Section 20 of the Code of Civil Procedure, 1908 are quoted below:
Other suits to be instituted where defendants reside or cause of action arises. - Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction-(a)....
(b)....
(c) the cause of action, wholly or in part, arises.
The cause of action will arise only when an order is passed by an executive authority under the provisions of a statute or otherwise giving rise to civil or evil consequence to the petitioner on its implementation within the territorial jurisdiction of a court.
Reference may be made to the Kusum Ingots and Alloys Ltd. Vs. Union of India (UOI) and Another, and the relevant provisions of the above decision are quoted below:
The view taken by this Court in U.P. Rashtriya Chini Milla Adhikari Parishad that the situs of issue of an order or notification by the Government would come within the meaning of the expression "cases arising in clause 14 of the (Amalgamation) Order is not a correct view of law for the reason hereafter stated and to that extent the said decision is overruled. In fact, a legislation, it is trite, is not confined to a statute enacted by Parliament or the legislature of a State, which would include delegated legislation and subordinate legislation or an executive order made by the Union of India, State or any other statutory authority. In a case where the filed is not covered by any statutory rule, executive instructions issued in this behalf shall also come within the purview thereof. Situs of office of Parliament, legislature of a State or authorities empowered to make subordinate legislation would not by itself constitute any cause of action or cases arising. In other words, framing of a statute, statutory rule or issue of an executive order or instruction would not confer jurisdiction upon a court only because of the situs of the office of the maker thereof.
When an order, however, is passed by a court or tribunal or an executive authority whether under provisions of a statute or otherwise, a part of cause of action arises at that place. Even in a given case, when the original authority is constituted at one place and the appellate authority is constituted at another, a writ petition would be maintainable at both the places. In other words, as order of the appellate authority constitutes a part of cause of action, a writ petition would be maintainable in the High Court within whose jurisdiction it is situate having regard to the fact that the order of the appellate authority is also required to be set aside and as the order of the original authority merges with that of the appellate authority.
The preliminary objection raised on behalf of the respondents is to be decided in the light of the aforesaid settled principles of law taking into consideration the pleading of the writ application. Admittedly, the respondent no.2 is an authority constituted under the provisions of Section 3 of the Insurance Regulatory and Development Act, 1999 having its office at Hyderabad in the State of Andhra Pradesh. The impugned order is passed revising the premium rates for Motor Third Party Insurance Liability 2012-13 using the formula prescribed by its notification no. IRDA/NL/NTFN/MOTP/066/04/2011. Respondent nos. 4 to 22 are different insurance companies. The members of the writ petitioner no.1 of this writ application are plying their passenger transport vehicles or goods vehicles as the case may be, within the state of West Bengal and/or all over India. They are under obligation to pay premium for Motor Insurance Third Party Liability 2012-13 as prescribed under the impugned order. Respondent nos.4 to 22 are different insurance companies to realise the aforesaid premium from the members of the writ petitioner nos.1 in both the writ applications. Therefore, an integral part of cause action arises on the occasion of implementation of the revised premium rates for Motor Third Party Insurance Liability 2012-13 as determined by the impugned order having civil consequences to the members of the writ petitioner nos.1 in both the writ applications within the territorial jurisdiction of this court.
The argument advanced on behalf of the respondents that situs of issue of the impugned order would give jurisdiction is not sustainable in law in view of the facts and circumstances of this case. In other wards, passing of the impugned order by the respondent no.2, who is an authority constituted u/s 3 of the Indian Regulatory and Development Act, 1999, would not confer jurisdiction upon a court only because of the situs of the office of the maker thereof is not the proposition of law in view of the settled principles of law decided in the matter of Kusum Ingots & Alloys Ltd. (supra). The decision of Oil and Natural Gas Commission (supra) is an authority for the proposition that the mere fact of submission of tender document, sending fax from Kolkata and receiving a reply thereto at Kolkata would not constitute an integral part of cause of action. The above decision has no manner of application in this case in view of the distinguishable facts and circumstances of this case as discussed therein above. Similarly, the decision of National Textile Corporation (supra) is an authority for the proposition that only those facts give rise to a cause of action within a court''s territorial jurisdiction which have a nexus or relevance with the lis that is involved in the case, not otherwise. Since it has been held hereinabove that the integral part of cause of action of realisation Motor Third Party Insurance Liability, 2012-13 at a rate as revised by the impugned order takes place within the territorial jurisdiction of this High Court, the above decision is not applicable in this case. In the matter of Navinchandra N. Majithia (spura) the Hon''ble Supreme Court while considering the question of entertaining an application under article 226 of the constitution of India by Bombay High Court for quashing of criminal complaint filed at shillong held that the relief shot by the writ petitioner was one of the relevant criteria for consideration though not the sole consideration in the matter. Therefore, the preliminary objection raised by the respondent in these cases cannot be entertained taking into consideration the law settled in the above cases on the ground of issue involved in the instant matter and the distinguishable facts and circumstances of the cases.
In the view of the discussions and observations made hereinabove, the preliminary objection raised by the respondents is rejected.
So far as the merit of this case is concerned, it is submitted by Mr. Moloy Kr. Basu, learned senior advocate appearing on behalf of the petitioners, that the impugned order was passed contrary to an interim order dated June 7, 2011 passed in application bearing CAN 5261 of 2011 arising out of an appeal bearing no. AST 173 of 2011. According to Mr. Basu, a Division Bench of this court directed the parties to maintain status quo with regard to the realisation of third party insurance. The second ground for challenge is this the respondent no.2 passed the impugned order without adhering to the directions of the Hon''ble Supreme Court dated August 14, 1991 passed in the matter of Joint Council of Bus Syndicate and Others Vs. Union of India (UOI) and Others and National Insurance Co. Ltd. and Others, According to him, the opportunity of submitting representations on zonal basis was not given to the petitioners nor group wise hearing was conducted in terms of the aforesaid order.
On the other hand, it is submitted by Mr. Avijit Gangopadhyay, learned advocate appearing on behalf of the respondent nos. 2,4,5,6,7,11 and 18, that the interim order of status quo was passed a Division Bench in connection with AST 173 of 2011 taking into consideration an order dated April 27, 2011 passed by the Madras High Court. According to him, the above interim order was vacated subsequently. Thereafter an application bearing CAN 6199 of 2011 is filed in connection with W.P. no. 7376 (W) of 2011 for vacating the above interim order. It is also submitted by Mr. Gangapadhyay that vacating of the above interim order has now become a mere formality in view of the fact of the interim order by the Madras High Court subsequently. With regard to the second ground for challenging the impugned order, it is submitted by Mr. Gangopadhyay that the directions given by the Hon''ble Supreme Court in the matter of Joint Council of Bus Syndicate (supra) have been fully complied with. According to him the respondent no.2 prescribed a formula for determining the premium rates for Motor Third Party Insurance Liability by virtue of notification no. IRDA/NL/NTFN/MOTP/066/04/2011 dated April 15, 2011. It is submitted by him, that by virtue of public notice the respondent no.2 invited representations from the persons concerned on zonal basis. Group wise opportunity of hearing was also given to the parties is concerned. The impugned order was passed for the purpose of revision of the premium rates for Motor Third Party Liability 2011-13 on the basis of the formula prescribed in the aforesaid notification dated April 15, 2011.
Mr. Gangapadhyay relies upon the decision of Balco Employees Union (Regd.) Vs. Union of India, reported in (2002) SC 350, Ashok Kumar Sonkar Vs. Union of India (UOI) and Others,
Mr. Anirban Bose appearing on behalf of the respondent no.9 and 22 adopts the arguments of Mr. Gangopadhyay.
Mr. Rajesh Singh, learned advocate appearing on behalf of the respondent 8, 10,12,13,14,16 and 19,20 also adopted the arguments advanced by Mr. Gangopadhyay. It is further submitted by Mr. Singh that in the matter of Federation of Bus Operators Association of Tamil Nadu Vs. Indian Regulatory and Development Authority (in re. SLA (Civil) no. 30852-30853/2011) the Hon''ble Supreme Court was not inclined to pass an order staying operation of the aforesaid notification dated April 15, 2011.
Having heard the learned counsel appearing for the respective parties and after considering the facts and circumstances of this case carefully I find that the seet anchor of the case of the petitioners is the direction given by the Hon''ble Supreme Court in the matter of Joint Council of Bus Syndicate (supra). Admittedly, the Hon''ble Supreme Court directed the respondent authority to give opportunity of filing representations to the persons concerned for submitting representations on zonal basis as also to give group wise hearing to them. After considering the facts and circumstances of this case I find that notice was issued by the respondent no.2 inviting representations in respect of the proposed revision of Motor Third Party Premium before issuing notification no. IRDA/NL/NTFN/MOTP/066/04/2011 dated April 15, 2011. The aforesaid notification prescribed a formula for revision of premium rates for Motor Third Party Insurance Liability. Therefore, the above notification was issued after due compliance of the directions given by the Hon''ble Supreme Court in the matter of Joint Council of Bus Syndicate (supra).
On perusal of the impugned order I find that the premium rates for Motor Third Party Liability 2011-13 were revised on the basis of formula prescribed in notification dated April 15, 2011. In applying the above formula the reflection of actual experience of data with regard to the increase in court awards, increase in wages, inflation etc. were collected from all the states including the state of West Bengal.
After further perusal of the decision in the matter of Joint Council of Bus Syndicate (supra) I find that the Hon''ble Supreme Court came to a conclusion that whether directly required by statue or not, it should be appropriate that the parties who are affected by the escalation of tariff rate should be given opportunity of filing representations on zonal basis as also group wise hearing to the affected parties at the time of escalation of tariff rate. It is not in dispute that the escalation of tariff rate is the outcome of the impugned order. It does not matter whether the respondent authority applied a particular formula prescribed in an earlier notification or not. The premium rates for Third Party Insurance Liability 2012-13 was increased/revised taking into consideration awards increasing wages, inflation etc. behind the back of the petitioners. There was a departure from the procedure which had been found appropriate by the Hon''ble Supreme Court in the matter of Joint Council of Bus Syndicate Vs. Union of India (supra).
The impugned order cannot be sustained in law on the ground that the notification No, IRDA/NL/NTFN/MOTP/066/04/2011 dated April15, 2011 was upheld by the other High Courts and the impugned order was passed adhering to the formula prescribed therein. Because, the Hon''ble Supreme Court found it appropriate to give opportunity of filing representation of the affected parties as also opportunity of hearing following a procedure mention therein at the time of escalation of tariff. Therefore, the decision making process and the impugned order cannot be sustained in law.
The decision of Balco Employees Union (Regd.) Vs. Union of India (supra) is an authority on the issue that opportunity of hearing need not be given to everybody while taking a policy decision. In view of the distinguishable facts and circumstances of this case in the light of the directions given by the Hon''ble Supreme Court in Joint Council of Bus Syndicate (supra) the above decision has no manner of application in this case. Similarly, the decision of Ashok Kumar Sonkar (supra) is an authority on the general principle of a doctrine real prejudice in the matter of adhering to the principles of natural justice. It has not manner of application in this case in view of the direction given by the Hon''ble Supreme Court in the matter of Joint Council Bus Syndicate (supra).
Consequent upon the discussions and observations made hereinabove the impugned order is quashed and set aside. This order will not prevent the respondent authority from revising/increasing the premium rates for Motor Third Party Insurance Liability 2012-13 adhering to the directions given by the Hon''ble Supreme Court in the matter of Joint Council of Bus Syndicate (supra).
These writ applications are disposed of accordingly.
There will be, however, no order as costs. Urgent Photostat certified copy of this judgment, if applied for, be given to the parties, as expeditiously as possible, upon compliance with the necessary formalities in this regard.