Appellate Division Cases
(Civil)
PARTIES
N. A Choudhury Sponsor Director of Agrani Insurance Company Limited
(proposed) ……………….Appellant
-Versus-
Thc Controller of Insurance and others. ……………. Respondents
Syed J. R. Mudassir Husain CJ
Mohammad Fazlul Karim J
Amirul Kabir Chowdhury J
Judgment Dated: 7th December 2005
The Insurance Act, 1938
The appellant’s company was not accorded permission for registration to carry on the business of general insurance …………….(2)
Rule Nisi was issued calling upon the respondents to show cause as to why the impugned action of failing to issue a permission letter in respect of the registration of the Agrani Insurance Company Limited (Proposed) should not be declared to have been taken without lawful authority and/or to be unconstitutional as being violative of the appellant’s fundamental rights guaranteed under Articles 27, 31 and 40 of the Constitution and as to why the respondents should not be directed to grant the appellant permission to register Agrani Insurance Company Limited (Proposed) as an Insurance Company in accordance with the recommendation dated 26.04.1995 of the Ministry of Commerce……….. (3)
We have considered the submissions and perused the materials on record. There is no denial that the respondents accorded permission to some other companies to do business of general insurance as well as life insurance as per provision of the Insurance Act, 1938. Such permissions are accorded keeping in view of the over all economic activities of the country. There is no hard and fast principle spelt out by the Government that any specific number of companies among which, the appellant were, would be accorded permission to have registration for doing the business of insurance and as such the argument that some other companies being given the permission refusal to give permission to the appellant is violative of the fundamental rights of the appellant does not stand on any foundation …………..(10)
Fulfilment of requirement or inclusion of the appellant’s company in the panel of the companies for consideration of according permission to do insurance business itself does not confer any legal right to claim that the respondents are bound to accord permission to the appellant to do the business ………………(11)
Md. Nawab All, Advocate-on-Record……………….. For the Appellant
Shamsul Hague Siddique, Advocate-on-Record …………….For the Respondents
Civil Appeal No.89 of 1999
(From the judgment and order dated 05.02.1998 passed by the High Court
Division in Writ Petition No.2677 of 1995.)
JUDGMENT
Amirul Kabir Chowdhury J: This appeal arises out of the judgment and order dated 5th February, 1998 passed by a Division Bench of the High Court Division in Writ Petition No.2677 of 1995 discharging the rule.
2. The facts, in short, arc that following an advertisement by the Government in the
newspapers inviting applications from interested persons to do business of general and life insurance in the private sector the appellant submitted application seeking registration of an Insurance Company under the name and style of Agrani Insurance Company Limited (Proposed) to do business of general insurance. Pursuant to the direction of the Cabinet Committee, a Committee constituted by the Ministry of Commerce recommended the applications of 23 applicants including that of the appellant. In July 1994 the Ministry of Commerce invited fresh application to do business of general insurance increasing the approved capital from Tk.6 crorcs to Tk. 15 crores. 39 applicants
including the appellant applied to do business of general insurance. The Controller of Insurance after scrutiny forwarded all the 39 applications for general insurance business and 8 applications for life insurance business to the Ministry of Commerce. The Ministry of Commerce prepared after scrutiny a list of 23 Companies, including the proposed company of the appellant, for consideration of the Cabinet Committee in its meeting held
on 26.4.95 recommended for registration of 11 applications for general insurance business and 2 applications for life insurance business. The appellant’s company was included in the recommendation of I the Cabinet Committee lor registration to do business of general insurance. Ultimately the Government accorded permission for registration of 8 Insurance Companies for carrying on general insurance business and 2 insurance companies for carrying on life insurance business. The appellant’s company was not accorded permission for registration to carry on the business of general insurance.
3. The appellant then filed the writ petition and a Rule Nisi was issued calling upon the respondents to show cause as to why the impugned action of failing to issue a permission letter in respect of the registration of the Agrani Insurance Company Limited (Proposed) should not be declared to have been taken without lawful authority and/or to be unconstitutional as being violativc of the appellant’s fundamental rights guaranteed under Articles 27, 31 and 40 of the Constitution and as to why the respondents should not be directed to grant the appellant permission to register Agrani Insurance Company Limited
(Proposed) as an Insurance Company in accordance with the recommendation dated 26.04.1995 of the Ministry of Commerce.
4. Of the two respondents only respondent No.2. Secretary, Ministry of Commerce,
filed an affidavit-in-opposition and after stating that all the allegations of the appellant in the writ petition are matters of record and need no comment, stated that as per provision of the Insurance Act, 1938 the Controller of Insurance is empowered to grant certificate of registration to any person for carrying on business only after prior permission is granted by the Government.
5. The Hiah Court Division discharged the rule on the ground that mere filing of an
application does not confer any legal right to the appellant for registration of his company and the refusal to accord permission cannot be judicially enforced. No case of arbitrary exercise of power by the Government or of acting in a discriminatory manner or being unjust and unfair has been made out and that it was in the discretion of the Government to grant permission and as such no- direction on the respondents to accord permission to the appellant for registration of his company to carry on business of insurance can be
issued.
6. Being aggrieved the appellant moved this Division in civil petition for leave to appeal wherein learned Counsel for the appellant submitted that in view of the laconic and bald statement in the affidavitin-opposition filed by respondent No.2 and in view of the fact that respondent No.l Controller of Insurance did not file any affidavit-in-opposition at all it has remained unexplained as to why out of 11 Insurance Companies recommended for
registration to carry on general insurance business, only 8 Insurance Companies were accorded permission and as to why the appellant’s proposed Insurance Company was not accorded any permission and that if the two respondents had taken a stand that the final selection was made on the basis of comparative merits and demerits of the recommended proposed companies or in the larger economic interest of the country with a view to
allowing insurance business in the private sector by instalments and through a process of controlled experimentation, the appellant would have had a consolation. But when the respondents are silent about the reasons for non-inclusion of the appellant in the final list of approval the issue before the High Court Division was whether the Government acted fairly and reasonably and with transparency in the matter and that it is not correct that the
appellant did not raise the allegations of discriminatory treatment and the issue of fairness and reasonableness in the writ petition. It was further submitted that the High Court Division failed to locate the real issue involved in the writ petition and rejected it merely on the technical ground that the appellant has got no legal right to receive permission.
7. Leave was granted to consider the above submissions of the learned Counsel.
8. In support of the appeal Mr. Nawab Ali, learned Advocate-on-Record appearing on behalf of the appellant submits, inter alia, that the High Court Division failed to appreciate that in the circumstances of the case the appellant having been found, by
the Controller of Insurance, the Evaluation Committee, the Ministry of Commerce, and the Cabinet committee, to have fulfilled the requirements for being granted permission by the Government to do general insurance business and an unusually brief affidavit-In-opposition filed by the Government having admitted the facts disclosing o reason for denial of the permission the High Court Division committed error in discharging the rule.
9. He further submits that the appellant having complained that there was a duty upon (he respondents to grant permission to carry insurance business and by denying the permission the respondents acted without jurisdiction and as such the High Court Division ought not to have discharged the rule.
10. We have considered the submissions and perused the materials on record. There
is no denial that the respondents accorded permission to some other companies to do business of general insurance as well as life insurance as per provision of the Insurance Act, 1938. Such permissions are accorded keeping in view of the over all economic activities of the country. There is no hard and fast principle spelt out by the Government that any specific number of companies among which, the appellant were, would be accorded permission to have registration for doing the business of insurance and as such the argument that some other companies being given the permission refusal to give permission to the appellant is violative of the fundamental rights of the appellant docs not stand on any foundation.
11. Fulfilment of requirement or inclusion of the appellant’s company in the panel of the companies for consideration of according permission to do insurance business itself docs not confer any legal right to claim that the respondents are bound to accord permission to the appellant to do the business. Though attempts have been made to allege malafidc in the action of the respondents, but there is nothing on record to indicate that there
was any malafide on the part of the respondents in refusing permission. Moreover it appears that out of 11 applications recommended by cabinet committee, 8 applications have been considered for giving permission for doing general insurance and so, the application of the some others also have been refused. In such view of the matter the allegations of malafide is unfounded. Mere filing application for registration and recommendation by. various committees and enlisting the name of the appellant in the panel docs not vest any legal right in favour of the appellant judicially enforceable in a writ petition.
12. In such view of the matter, we are of the view that the respondents’ action in denying the permission for doing insurance business in favour of the appellant cannot be found fault with. The High Court Division under the facts and circumstances took correct decision in discharging the rule.
13. Before we part with we, however, like to observe that the appellant is at liberty to
file fresh application to the respondents to consider his prayer and if such an application is filed the respondents may consider it in accordance with law.
14. With the aforesaid observations the appeal stands dismissed. The parties do bear their respective costs.
Source : V ADC (2008),588