Territorial jurisdiction and natural justice governed licence renewal, with irrelevant grounds rejected and remand ordered for fresh consideration.

Territorial jurisdiction under Article 226(2) was upheld because the applicant's registered office and business were in Mumbai, the renewal request was made there, and the impugned refusal had its effect there, so part of the cause of action arose within the Court's limits. On licence renewal, the authority could not rely on an irrelevant non-disclosure ground where the dispute was not pending and the prescribed particulars had been disclosed. The remaining issue under Regulation 23 required fair hearing and proper consideration of material not previously put to the applicant. The Court therefore declined to direct renewal outright and remanded the matter for fresh decision after hearing the applicant.

---

---

Issues: (i) Whether the High Court had territorial jurisdiction under Article 226(2) of the Constitution of India. (ii) Whether the refusal to renew the composite broker licence was vitiated by consideration of irrelevant material and breach of natural justice, and whether the Court should itself direct renewal or remand the matter.

Issue (i): Whether the High Court had territorial jurisdiction under Article 226(2) of the Constitution of India.

Analysis: The petitioner's registered office and business operations were at Mumbai, the renewal application was made from Mumbai, and the impugned decision, though taken at Hyderabad, affected the petitioner at Mumbai. On these facts, part of the cause of action arose within the territorial limits of the Court. The preliminary objection based on place of decision was therefore not decisive.

Conclusion: The petition was maintainable before the High Court.

Issue (ii): Whether the refusal to renew the composite broker licence was vitiated by consideration of irrelevant material and breach of natural justice, and whether the Court should itself direct renewal or remand the matter.

Analysis: The authority relied on two principal grounds: alleged non-disclosure of the dispute between a shareholder and another entity, and investment of insurance money in fixed deposits yielding interest. The first ground was held to be irrelevant because no dispute was pending at the time of renewal and the applicant had disclosed the material required by the prescribed format. The second ground raised a question under Regulation 23 of the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations, 2002, but the relevant material had not been put to the petitioner in a fair manner. In judicial review, the Court could interfere with an arbitrary administrative decision, but it would not itself usurp the statutory function of the regulator by directly ordering renewal in the facts of this case.

Conclusion: The impugned refusal could not stand on the first ground, and the matter had to be reconsidered afresh on the question under Regulation 23 and any other relevant ground, after giving the petitioner an opportunity of hearing.

Final Conclusion: The petition succeeded in part. The authority was directed to exclude the irrelevant ground from consideration, hear the petitioner on the remaining issue, and pass a fresh decision within the stipulated time.

Ratio Decidendi: In judicial review, a licensing authority must base its decision on relevant considerations and comply with the audi alteram partem rule; if one ground is irrelevant and another requires fair hearing, the proper course is remand for fresh consideration rather than a direct judicial command to renew the licence.

---