M K SASI; N P BAWA; P M VARGHESE; M K SAJEEVAN; LAILA ASHARAF; T E JOSEPH; P G KRISHNAN NAIR; KAMALASANAN; P P JOY; P K CHACKO; P M PAUL; JOY VARGHESE; P M ALIYAR; A C SATHEESAN; M T MATHAI AND M R JOY Vs. INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA, REPRESENTED BY ITS CHAIRMAN

JUDGEMENT

(1.) This batch of writ petitions could be jointly disposed of especially taking note of the stand taken by the Insurance Regulatory and Development Authority, the Tariff Advisory Committee (General Insurance) and the four Insurance Companies in the public sector, viz., New India Assurance Company Limited, National Insurance Company Limited, Oriental Insurance Company Limited and the United Insurance Company Limited. O.P.No. 31646 of 2002 is taken as the leading case, since pleadings are complete. The parties above referred to are respectively respondents 1 to 6 in the said writ petition. The counsel representing the petitioners in the other Original Petitions were also heard and the positions explained were acceptable to them. Apparently this is because the Ist and 2nd respondents had risen to the occasion, understanding the appreciating the grievances that were voiced in the batch of cases, and bound by the edicts issued by them, the insurers were disabled to strike discordant notes, though they would have very much wished to have freedom for negotiations. This is because under Section 64UC of the Insurance Act, the Advisory Committee, statutorily recognised, has been vested with power for fixing, amending or modifying any rates, advantages, terms or conditions, relating to any risk and the decisions are given finality. A breach would have led to a presumption that the insurer would have contravened the provisions of the Act.

(2.) The issue agitated was about the demand and insistence for increased tariff pertaining to third party premium, in respect of the vehicles, and especially commercial vehicles. Petitioners submit that the premium payable in respect of the different classes of vehicles, are statutory fixed by the Tariff Advisory Committee (hereinafter referred to as TAC). By Ext.P1, in a comprehensive manner, they had laid down Rules, Regulations, Rates, advantages, terms and conditions, for transaction of motor insurance in consonance with Part II B of the Insurance Act, 1938. The tariff superceded the one existing as on 30-06-2002. Rationalisation was brought about by order dated 25-04-2002 and on 17-05-2002, the Chairman, TAC clarified the methodology for 'loading' [added increase of the rates] as following:

(3.) Thus the increase was only to be on the basis of individual cases, noticing their track record. But overlooking the binding orders, certain instructions came to be passed by the State owned companies in effect permitting their offices to load much more than permissible limits. The TAC had therefore issued further instructions, by Circular dated 28.05.2002 positively holding that loading was to be done only within permissible limits, on the claim experience of particular individual/fleet owner and not on a universal basis. By Ext.P4 the Regulatory Authority also had come to the scene, as it had been found that the insurers were attempting to have filed days. Most of the cases came to be filed in the above period. The companies were instructed to issue Circulars to all operating offices, for the purpose of general instruction and for avoiding complaints, but this was not being dutifully followed.