TaxTMI 
TaxTMI 
2012 (5) TMI 875
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....it obligatory for foreigners visiting Ukraine to have medical insurance; the said Resolution was passed with the object of rendering medical aid to foreign citizens temporarily in the territory of Ukraine; (ii) Ukrinmedstrakh, a Ukrainian company was granted exclusive licence by the Government of Ukraine for providing such obligatory medical insurance for foreigners temporarily staying in the territory of Ukraine; (iii) The said Ukrinmedstrakh entered into an Agreement dated 20.09.1997 with the appellant whereunder it authorized the appellant to sell the obligatory medical insurance policy of Ukrinmedstrakh to Indians intending to visit and / or travelling to Ukraine; (iv) the appellant in or about the year 1998 obtained the requisite clearance from the Reserve Bank of India for collecting insurance premium from the intending visitors to Ukraine and to remit the same to Ukrinmedstrakh / Government of Ukraine; (v) similarly, the Government of Belarus also vide Resolution dated 26.06.2000 made it mandatory for all visitors to the Republic of Belarus to purchase the medi-claim insurance policy prior to applying for the VISA at the Embassy of Belarus....
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....ion or licence from the respondent No.1 IRDA authorizing it to carry on any insurance business or to function as an agent or a broker of an insurance company, the respondent No.1 IRDA in exercise of powers under Section 14(1) of the IRDA Act directed the appellant to stop issuing, marketing or selling insurance policies, collecting money towards insurance premium or carrying on any activity related to and connected with the business of insurance; for violation, the appellant was threatened with proceedings under the Insurance Act and the IRDA Act and Regulations framed thereunder. 4. It was the case of the appellant in the writ petition that the Certificate of medi-claim being issued by the appellant had no effect on the territory of India and was active only in the territory of Ukraine or Belarus; that the provisions of IRDA Act were not applicable to the foreign insurance companies and that the activity undertaken by the appellant was not governed by the IRDA Act. 5. The learned Single Judge dismissed the writ petition finding/ observing / holding: (i) that the collection of premium and the delivery of Certificate in India by the appellant amounted to carrying on t....
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....ness / activity of the appellant has already come to an end; that the appellant in any case was not earning much from it and the commissions were meagre; that the appellant is now pursuing these proceedings more by way of public interest, for the facility of the intending visitors to the said countries. He has also argued that the appellant is not desirous of violating any law and would be happy to register with the respondent No.1 IRDA also, as it has obtained permission under the Foreign Exchange Regulation Act, 1973 and Foreign Exchange Management Act, 1999 but even that course of action is not possible. He argues that without the said foreign insurance companies being registered in India with the respondent No.1 IRDA and which they have not chosen to do and are not interested in doing, the appellant cannot be registered with the respondent No.1 IRDA as the agent of the said foreign insurance companies. He thus argues that a piquant situation has arisen where neither is there any provision in the existing laws for registration of the appellant as the agent of the foreign insurance companies nor is the appellant being permitted to carry on the said business / activity. 9. The ....
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..... It is to be thus seen on an analysis of the provisions of the Insurance Act and the IRDA Act, whether any intention of the legislature to apply insurance laws extra territorially can be found. 14. The preamble to the Insurance Act describes the same as "An Act to consolidate and amend the law relating to the business of insurance" as distinct from "the business of insurance in India‟, though the applicability of the Act under Section 1(2) is pan India. Section 2C and Section 3 of the Insurance Act, referred to by the IRDA in the impugned order prohibit any "person" from beginning to carry on any class of insurance business "in India‟ save in the manner prescribed therein and without obtaining registration thereunder. The question which next arises is as to what is "insurance business‟. 15. Section 2(6A), Section 2(11) and Section 2(13A) define fire insurance business, life insurance business and marine insurance business respectively (but with which we are not concerned). Section 2(13B) defines miscellaneous insurance business as meaning the business of effecting contracts of insurance which are not of fire insurance, life insurance or marine insurance. A ....
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....ble to find in the Insurance Act any specific provision qua medical or accident insurance for Indians while travelling abroad, while abroad. There is also nothing to show that India has made it mandatory for its citizens travelling abroad, to obtain such insurance. We are also unable to find any prohibition in the Insurance Act or the IRDA Act prohibiting Indians from dealing with foreign insurance companies. However, the Foreign Exchange Management (Insurance) Regulations, 2000 prohibit residents of India from taking general or life insurance policy issued by an insurer outside India. The said prohibition also does not extend to medical / accident insurance during the period of travel / stay abroad. The said Regulations also have been amended w.e.f. 5th June, 2003; now residents in India are permitted to hold general as also life insurance policies issued by an insurer outside India, provided the policy is held under a general or specific permission of RBI; no such permission even is required for continuing to hold such policy, if such policy was acquired while such person was resident outside India. The only restriction on such policy holder when premium due is paid by remittance....
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.... in India. Provided that nothing in this section shall apply to a policy of marine insurance." We have wondered whether the said provision is indicative of extra-territorial operation of Insurance Act. Whether owing to said provision, the foreign insurer can be sued in India. The key words again are "insurance business transacted in India‟. Moreover, the objects and reasons of the Amending Act of the Year 1944 by which proviso aforesaid was added to Section 46 show that the proviso was added to remove the defect in the said provision which was seriously interfering with the normal business of marine insurers in as much as marine insurance contracts were international in scope and affected mostly for the benefit of consignees abroad who have option of stipulating place where contracts are intended to be carried out. What applies to marine insurance equally applies to insurance policy which we are concerned with. 21. Even otherwise in exercise of our powers under Article 226 of the Constitution of India, we deem it our duty to address the inconvenience caused to the citizens of India or to other persons who travel to Ukraine and Belarus from India, by depriving t....