9911796707
TMI Blog2010 (9) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... to and connected with the business of insurance, failing which the IRDA would initiate action both under the IRDA Act as well as the Insurance Act, 1938 ( IA ). 2. The background to the present petition is that on 20-9-1997 the Petitioner entered into a broker agreement with a Ukranian State Joint Stock Company named Ukrinmedstrakh, which in turn was acting on behalf of its general broker company Vitex Ltd. Austria. This was pursuant to a Cabinet Resolution of the Government of Ukraine on 17-9-1997 requiring rendering of medical aid to foreign citizens who happened to be temporarily in the territory of Ukraine. In terms of the said Resolution, medical insurance of foreigners could be conducted only by a specially licensed insurance company incorporated in Ukraine. It is stated that Ukrinmedstrakh has a monopoly of medical insurance business in Ukraine. The Petitioner is stated to be an agent of Ukrinmedstrakh. 3. In terms of the agreement dated 20-9-1997 between the Petitioner and Ukrinmedstrakh, emergency medical aid was to be provided to foreign citizens. For this purpose, the Petitioner was authorised to sell certificates of emergency aid to such foreigners and non-citi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 10-9-2001, the Petitioner also wrote to the DEA for renewal of permission for issuance of mandatory mediclaim insurance certificate. It is stated that by a separate letter dated 10-10-2001, the RBI and by a letter dated 25-9-2001, the DEA renewed the permission. The Petitioner states that there were similar arrangements in relation to Indians visiting Belarus. The Petitioner has thus been issuing certificates of emergency medical aid to intending visitors to Ukraine and Belarus and the premia so collected are remitted to the Government of Ukraine and Government of Belarus respectively. 8. It is stated that a complaint was made in 2003 against the Petitioner which was investigated by the EOW, Delhi Police and closed. Again in 2008, another complaint was made. This time, by a letter dated 22-12-2008, the IRDA issued a notice to the Petitioner to which the Petitioner replied on 7-1-2009. The Petitioner informed the IRDA that if any other sanction or permission was required, it should be informed so that compliance may be made. One Shri Nikhil Gandhi filed a Writ Petition (Civil) No. 7305 of 2009 in this Court in which direction was issued to Police to conduct an inquiry. On 4- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in USD and remit it to Ukrinmedstrakh from the normal banking channels is covered under the FEMA. The Petitioner had applied and obtained the relevant permission and sanction under the FEMA even prior to the IRDA Act coming into force. 11. It is mentioned that prior to the issuance of the impugned order, the IRDA had referred the matter to the General Insurance Corporation of India ( GIC ). In response, the GIC on 11-9-1998 advised the IRDA as under: "We note from the resolutions dated 28-1-97 and 17-9-98 passed by the Cabinet of Ministers of Ukraine that it is obligatory to take mediclaim insurance by visitors to that country from the State Joint-Stock Insurance Company "Ukrinmedstrakh". In view of this, we feel it would be in order for remittance of premium collected from passengers bound for Ukraine to the State Joint Stock Company "Ukrinmedstrakh". 12. In the counter affidavit, the stand of the IRDA is that every entity operating in the insurance sector and carrying out the business of insurance/reinsurance as an insurer or dealing with any policy holder as an agent or intermediary, is required to obtain a certificate of registration to that effect or licence as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a travel insurance policy. In other words, the Petitioner was merely a post office for collecting and remitting the premia and this it was doing with the permission of the IRDA as well as DEA. Referring to section 3(1) of the IA, it is submitted that since no contract was concluded in India and the policy was merely delivered in India whereas it was issued in Ukraine, there was no need for the Petitioner to seek registration under the IA. Reference was also made to section 2(15) of the IA which defines principal agent as under : "2(15) "principal agent" means a person who, not being a salaried employee of an insurer, in consideration of any commission, ( i )performs any administrative and organising functions for the insurer, and ( ii )procures general insurance business whether wholly or in part by employing or causing to be employed insurance agents on behalf of the insurer;" 15. Reference was also made to the third proviso to section 3(1) of the IA to contend that the permission granted by the GIC and the RBI to the Petitioner to collect premia should be considered to be a certificate already granted, which would continue after coming into force of the IRDA Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not traceable in the Department. IRDA may take appropriate action as per extant rules and regulations in the matter under intimation to this Department." 19. It was in the above context that when the Petitioner made a representation on 14-6-2010, the IRDA wrote back on 16-8-2010 stating that its earlier order dated 29-4-2010 was reconfirmed. 20. The above submissions have been considered by this Court. The only issue that arises in the present case is whether in the above facts and circumstances, the Petitioner could be said to be carrying on insurance business in India. Under the meaning of section 2(10) of the IA, an "insurance agent" is one who "receives or agrees to receive payment by way of commission or other remuneration in consideration of his soliciting or procuring insurance business including business relating to the continuance, renewal or revival of policies of insurance." An insurer in terms of section 2(9)( a )( iii ) of the IA could be any body corporate incorporated under the law of any country other than India, which carries on insurance business and which "with the object of obtaining insurance business, employs a representative, or maintains a place o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiff instituted a suit at Kozhikode alleging that its account with the defendant Bank at its Calcutta branch had been wrongly debited and it was claimed that that court had jurisdiction as the defendant had a branch there, it was held that the existence of a branch was not part of the cause of action and that the Kozhikode Court therefore had no jurisdiction. But when a company though incorporated outside India gets itself registered in India and does business in a place in India through its agent authorized to accept insurance proposals, and to pay claims, and to do other business incidental to the work of agency, the company carries on business at the place of business in India." 22. The above passage significantly notes that "when a company though incorporated outside India gets itself registered in India and does business in a place in India through its agent authorised to accept insurance proposal, and to pay claims, and to do other business incidental to the work of the agency, the company carries on business at the place of business in India." The above example in fact supports the stand of the IRDA. The Petitioner does not deny that it is acting as an agent of a Uk ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
