AI Drafter 
TaxTMI 
TaxTMI 
2009 (7) TMI 797
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....after referred as the 'complainant-company'). WP No. 1743 of 2001 has been filed by the complainant-company, requesting for a writ of mandamus and for issuance of directions to the Insurance Regulatory Authority of India, as well as the Insurance Company, to make the payment as per the award dated 10-4-2001 passed by the Ombudsman. For the sake of convenience, the main order is being passed in WP No. 1998 of 2001. 2. The complainant-company M/s. Ruchi Worldwide Ltd. is a company incorporated under the Companies Act, 1956. The Oriental Insurance Company Ltd. is an Insurance Company governed by the provisions of the Insurance Act, 1938 (hereinafter referred as the 'Act') and the Rules framed thereunder. 3. The complainant-company imported 5,000 metric tons of white crystal sugar from Brazil. The said consignment was insured and covered by a Marine Insurance Cover, issued by the Oriental Insurance Company. At the time when the said consignment was discharged at Calcutta Port, it was realized that the consignment had suffered damage on account of cut/torn bags, and as such the complainant-company claimed that it had incurred huge losses. Consequently, the complainant-company took....
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....e that the amount awarded by the Ombudsman along with the interest, has not been paid to the complainant-company, and, therefore, directions have been sought against the Insurance Company, as well as the Insurance Regulatory Authority to take up the matter with the Insurance Company, so that the said payment can be released and the award of the Ombudsman can be satisfied. 7. The Insurance Company has challenged the order dated 4-12-2000, Annexure P-16, passed by the Ombudsman, and assumption of jurisdiction by him in the complaint filed by the complainant-company, by maintaining that under the Rules, it was only an individual, who had obtained a personal insurance, who could have approached the Ombudsman with a complaint, and since the complaint in question had been filed by a company, incorporated under the Companies Act, therefore, such a complaint was not maintainable before the Ombudsman, and consequently, the Ombudsman had no jurisdiction to deal with such a complaint. Reliance in this regard has been placed upon various rules, which shall be referred to in the later portion of the order. 8. It may be noticed that although in the pleadings, averments have been made with ....
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.... 13 of the Rules is required to be read in the context of the definition clause contained in rule 4 of the Rules, and, therefore, no broader meaning could be attached to the aforesaid phrase. 14. According to Shri Mathur, the phrase "any person" used in rule 13 of the Rules has to be interpreted in a restricted and exhaustive sense alone, without giving it any enlarged meaning. To support the aforesaid conten-tion, learned senior counsel has also referred to certain other provisions contained in the Rules. Shri Mathur has placed strong reliance upon a judgment of the Apex Court in Commissioner of Trade Tax, UP v. Kajaria Ceramics AIR 2005 SC 2968, wherein it has been laid down that the word "means" shows that the definition is exhaustive. The sheet-anchor of the arguments of Shri Mathur is a Division Bench judgment of Kerala High Court, reported as National Insurance Co. Ltd. v. Indus Motor Co. (P.) Ltd. 2005 (4) KLT 391, wherein in almost an identical situation, the Division Bench of Kerala High Court had held that the complaint filed by a company, incorporated under the Companies Act, before the Ombudsman, is not maintainable under the Rules. 15. All the aforesaid contentio....
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....ued by the Excise Commissioner in exercise of its statutory power or the conditions of sale memo framed, would be subject to the provisions of the Act. For proper interpretation of the statutory provisions, the Act and the Rules are required to be harmoniously read." (p. 196) [Emphasis supplied] 20. That being the legal position with regard to the interpretation of the rules, it would be pertinent now to extract certain provisions of the Insurance Act, 1938, as well as certain relevant provisions of The Redressal of Public Grievances Rules, 1998, as follows : The preamble of the Act reads as follows : "An Act to consolidate and amend the law relating to the business of insurance. Whereas it is expedient to consolidate and amend the law relating to the business of insurance; it is hereby enacted as follows:-" Section 2(2) of the Act defines policy-holder as under : "(2) 'policy-holder' includes a person to whom the whole of the interest of the policy-holder in the policy is assigned once and for all but does not include an assignee thereof whose interest in the policy is defeasible or is for the time being subject to any condition;" Section 2(9) of the Act defin....
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....s. The relevant portion thereof, may be extracted as below : "4. Definitions.-In these rules unless the context otherwise requires,- (a)to (h)****** (i)'insured person' means an individual by whom or on whose behalf an insurance policy has been taken on personal lines; (j)****** (k)'personal lines' means an insurance policy taken or given in an individual capacity." "12. Power of Ombudsman.-(1) The Ombudsman may receive and consider- (a)complaints under rule 13; (b)any partial or total repudiation of claims by an insurer; (c)any dispute in regard to premium paid or payable in terms of the policy; (d)any dispute on the legal construction of the policies insofar as such disputes relate to claims; (e)delay in settlement of claims; (f)non-issue of any insurance document to customers after receipt of premium. (2) The Ombudsman shall act as counsellor and mediator which are within his terms of reference and; if requested to do so in writing by mutual agreement by the insured person and insurance company. (3) The Ombudsman's decision whether the complaint is fit and proper for being considered by it or not, shall be final. 13. Manner in which c....
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....mmendation shall be made not later than one month from the date of the receipt of the complaint. (2) If a complainant accepts the recommendation of the Ombudsman, he will send a communication in writing within 15 days of the date of receipt of the recommendation. He will confirm his acceptance to Ombudsman and state clearly that the settlement reached is acceptable to him, in totality, in terms of recommendations made by the Ombudsman in full and final settlement of complaint. (3) The Ombudsman shall send to the insurance company a copy of the recommendation along with the acceptance letter received from the complainant. The insurer shall thereupon comply with the terms of the recommendations immediately not later than 15 days of the receipt of such recommendation and the insurer shall inform the Ombudsman of its compliance. 16. Award.-(1) Where the complaint is not settled by agreement under rule 15, the Ombudsman shall pass an award which he thinks fair in the facts and circumstances of a claim. (2) An award shall be in writing and shall state the amount awarded to the complainant : Provided that Ombudsman shall not award any compensation in excess of which is nece....
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....ct, to carry out the purposes of the Act. The aforesaid Rules have to be interpreted in a manner, so as to advance the object and intention of the Act, and cannot be assigned any such meaning, which may be in derogation of the said purpose, or may lead to a restrictive operation of any provisions of the Act. 27. Rule 2 of the Rules shows that the said Rules apply to all the Insurance Companies, unless so exempted by the Central Government, in a case where there is already a grievance redressal machinery set-up by the company itself. Rule 3 specifically stipulates; the objects of these Rules as "to resolve all complaints relating to settlement of claim on the part of insurance companies in cost-effective, efficient and impartial manner". Rule 12 of the Rules, enumerates the powers of Ombudsman. Clause 1(a) thereof empowers the Ombudsman to receive and consider complaints, under rule 13. Various other clauses of the said rule deal with various other powers of the Ombudsman. Rule 13 of the Rules lays down the procedure and the manner in which a complaint is to be made before the Ombudsman. It stipulates that any person, who has a grievance against an insurer, may himself or through....
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....4(i) and by nobody else. 31. However, having given my thoughtful consideration to the aforesaid contention of the learned senior counsel for the Insurance Company, I find myself unable to accept the same. 32. A complaint before the Ombudsman may be filed by a complainant, who may be an insured person, as defined under rule 4(i) of the Rules, or may be any other person, who has a grievance against the insurer (as clear from rule 13 of the Rules). Rule 13 intentionally appears to have not employed the phrase "insured person", but rather has used wider terms such as any person "who has a grievance" or "the complainant". Even rule 15 envisages a situation where a complaint is settled, through mediation of the Ombudsman, undertaken by him in pursuance of request made in writing by complainant and insurer through mutual agreement. A conjoint reading of rules 12(2) and 15, would show that two separate and distinct cases of complaints have been recognized under the Rules. A complaint may be filed by an insured person, which of course, would be a person as defined under rule 4(i) of the Rules. But a complaint may also be filed by any other person who has a grievance against the Insura....
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....the Act of 1868 would be applicable to the said Acts in both of which 'person' has been defined as including any company or association or body of individuals whether incorporated or not. It is of course contended that this definition does not apply to a firm which is not a natural person and has no legal existence, as such clauses (3), ( 8) and (37) of section 167 of the Sea Customs Act are inapplicable to the appellant firm. In our view, the Explanation to section 23C clearly negatives this contention, in that a company for the purposes of that section is defined to mean any body corporate and includes a firm or other association of individuals and a director in relation to a firm means a partner in the firm. The High Court was clearly right in holding that once it is found that there has been a contravention of any of the provisions of the Foreign Exchange Regulation Act read with Sea Customs Act by a firm, the partners of it who are incharge of its business or are responsible for the conduct of the same, cannot escape liability, unless it is proved by them that the contravention took place without their knowledge or they exercised all due diligence to prevent such contravention....
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....persons. 23. Under Order 33, the petitioner who files an application has to present the application in person. Rule 3 states that the person who is presenting the application shall be in a position to answer all material questions relating to the application and he may also be examined by the Court. 24. The counsel for the appellant argued that in view of this provision, the word "person" has to be understood to mean a natural person, otherwise the company would not be in a position to present the application. We do not think that such a view is correct. A company being a juristic person, it would be represented by a person competent to represent it. It is enough that a person competent to represent a company need present the application under Rule 3 Order 33. Minors, lunatics or persons under any disability are also entitled to file suit either represented through a guardian or next friend. They can also maintain an application under Order 33. Under such circumstances, the real petitioner is not the person to present the application, but the guardian or the next friend who is competent to represent such petitioner to present the application under Rule 3 Order 33. Therefore, ....
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....ill is presented to Parliament, the reports of Committees which preceded the Bill and the reports of Parliamentary Committees. Occasional excursions into the debates of Parliament are permitted. Internal aids are the preamble, the scheme and the provisions of the Act. Having discovered the reason for the statute and so having set the sail to the wind, the interpreter may proceed ahead. No provision in the statute and no word of the statute may be construed in isolation. Every provision and every word must be looked at generally before any provision or word is attempted to be construed. The setting and the pattern are important. It is again important to remember that Parliament does not waste its breath unnecessarily. Just as Parliament, is not expected to use unnecessary expressions, Parliament is also not expected to express itself unnecessarily. Even as Parliament does not use any word without meaning something, Parliament does not legislate where no legislation is called for. Parliament cannot be assumed to legislate for the sake of legislation; nor can it be assumed to make pointless legislation. Parliament does not indulge in legislation merely to state what it is unnecessary ....
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....Act." It was further observed : "8. Legislature as a rule-making authority makes several rules from the experience gathered from the past and may design to use the words to deal with certain classes of persons. This rule firmly establishes that the intention of the Legislature must be found by reading the statute as a whole. In order to examine the nature of the power conferred on the Ombudsman we are guided by Rule 13, read with rule 4(1)(k) which places emphasis on the words "individual", "personal lines", "himself or through his legal heirs". There is nothing to show that incorporated company would fall under any of those expressions. We may in this connection refer to the definition of the expression "insurer" in section 2(9) which states that any individual or unincorporated body of individuals or body corporate incorporated under the law of any country. If the Legislature wanted the incorporated company also to come within the definition clause of "insured person" or "any person" within the meaning of rule 13 the same could have been incorporated in the Rules. Having not been attributed by the rule-making authority to the expression "any person" since the context clearl....