KASHMIR MOTOR DRIVERS ASSOCIATION Vs. UNION OF INDIA

JUDGEMENT

(1.) Through the medium of this writ petition, the petitioners, out of whom the first petitioner, namely, the Kashmir Motor Drivers Union, is a company registered under the Indian Companies Act of 1956, which operates as many as 486 passenger buses, and the second petitioner, namely, the Western Bus Stand is a union of transporters, which also operates 490 passenger buses owned by different owners is the State of Jammu and Kashmir, have challenged the revised tariff recommended by the Tariff Advisory Committee, for short T. A. C., respondent No. 2 herein, which has been made applicable with effect from 1-2-1982. Precisely speaking, the grounds of challenge are as follows:-- (1) The revised rates of premia we highly arbitrary and unreasonable, which have been enforced without any rational basis and without following the guidelines provided therefor by Section 64-UC of the Insurance Act of 1938. Respondent No. 3, namely, the General Insurance Corporation of India, being the agency/instrumentality of the Government of India and respondents 3 to 7 having the monopoly of the business in insurance of motor vehicles, the impugned tariff is liable to be struck down as being violative of Article 14 and Article 19 (1) (g) of the Constitution, read with Clause (6) of the said Article. (2) The impugned tariff is highly discriminatory and is liable to be struck down as being violative of Article 14 of the Constitution. (3) The contract of insurance being subject to periodical renewal, the respondents could not have enhanced the rates unilaterally. Consequently, their action is opposed to the principles of natural justice. (4) Under Section 64-UC (3) of the Insurance Act, approval of the Controller of Insurance was necessary to give effect to the impugned tariff. No such approval has been accorded by him so far. Consequently, respondents 3 to 7 cannot charge insurance premium according to the revised rates.

(2.) The respondents have denied almost all the allegations made in the writ petition. But briefly, their case is that the revised tariff is neither arbitrary nor unreasonable, but the same is based upon the past loss experience and similar loss apprehension in future. The revision is based upon actuarial calculations and opinion of experts based upon sample surveys. The factors that havecontributed to the rise in the rates of the premia are, among others, the increase in statutory liability under the Workmen's Compensation Act, 1923, and the Motor Vehicles Act, 1939, the decision given by the Supreme Court in Motor Owners Insurance Co. Ltd. v. Jadavji Keshavjee Modi, AIR 1981 SC 2059, the steep rise in the cost of vehicles and their repairs, the 10% commission that has to be paid to Commission agents and 20% of the premium required for meeting the administrative expenses. The rise, according to them, is nominal as the premium chargeable is only six to seven percent of the operational cost of the vehicles. They have also denied that the impugned tariff is discriminatory in nature for which no material, according to them, has been placed by the petitioners on the file, and have further challenged the maintainability of the writ petition on the grounds : firstly, that no writ lies to avoid contractual obligations secondly, that fixation of rates by the T. A. C. being a legislative act, the presumption of validity will be attached to it and the Court will not examine it by microscopic analysis, but wilt interfere only if on the acceptable data the rates fixed by it appear to the Court to be patently unreasonable or coufiscatory is character; thirdly, that the loss that the business community may have to suffer on account of such a legislative act will be no ground to hold that it places an unreasonable restriction on its rights to carry on trade or business; fourthly, that the petitioners are guilty of suppressio veri and suggestio falsi; and fifthly, that in any event the petition is liable to be dismissed because it raises disputed questions of fact.

(3.) Before coming to its merits, it may be necessary to first dispose of the plea set up as a bar at the very threshold to the maintainability of the writ petition. The plea is that the mutual rights and obligations of the insurer and the insured in each case having been reduced to the form of a written contract, no writ lies to enforce or avoid the contract. This argument was put forth on the authority of three Supreme Court decisions viz., Har Shankar v. The Deputy Excise and Taxation Commr., AIR 1975 SC 1121, Radhakrishna Agarwal v. State of Bihar, AIR 1977 SC 1496 and The Divisional Forest Officer v. Bishwanath Tea Co. Ltd., AIR 1981 SC 1368.