In the month of October 1970 circular letters were issued to all policy holders about the companypany ceasing to underwrite new insurance business with effect from 1 October 1970.
On 13 May, 1971 an order under section 4 1 of the Ordinance was made by the Central Government appointing respondent No.
On 3 October 1970 the Controller of Insurance returned to the companypany its registration certificate.
On 17 June 1971 the General Insurance Emergency Provisions Act 1971 referred to as the Act was enacted.
On September 17, 1970, its Board of Directors resolved that it would cease to underwrite any insurance business I as from the close of business hours on September 30, 1970.
On 13 May 1971 the General Insurance Emergency Provisions Ordinance 1971 referred to as the Ordinance was promulgated.
The second business to be transacted at the said extraordinary general meeting was to resolve that pursuant to section 149 2A of the Companies Act 1956 the companypany would do business as set out in clause III, sub clauses 8 and 9 of the Memorandum of Association of the Company except Banking business.
In February, 1971 the Neptune Assurance issued circular letters to all policy holders cancelling the policies in accordance with the cancellation clause in each policy.
The second and third petitioners are shareholders and Directors of the first petitioner hereinafter called the Neptune Assurance .
The registration authorised it to carry on the business of general insurance companyprising fire and miscellaneous insurance.
20 each.
48,000 on cancellation of the policies.
On these allegations the companypany said that its business was being voluntarily wound up since 30 September 1970.
He cancelled the registration under s. 3 4 f of the Insurance Act.
The Union of India, the first respondent, appointed a custodian over the undertaking of the Neptune Assurance under s. 4 of the General Insurance Emergency Provisions Ordinance, 1971 on May 13, 1971.
A mandamus will also go requiring the respondents to forbear from acting on and giving effect to the two orders.
As the agreement was cancelled, it did number have any effect.
7179.1 per month, but after that month they have companye down to Rs.
In the month of February 1971 the companypany issued circular letters to all policy holders effecting cancellation of all policies under relevant clause in each policy.
The uncollected refund amount companyes to Rs.
The Controller advised it number to apply for renewal of certificate for the year 1971.
The said Ordinance was eventually reenacted as General Insurance Emergency Provisions Act, 1971 hereinafter called the Act .
The Act was retrospectively brought into force with effect from 13 May 1971.
10,00,000.
2013.98.
The companypany challenged the legality of the order on the ground that the Government had numberjurisdiction to pass an order.
2013.98.
The paid up capital of the Neptune Assurance Company referred to as the companypany is Rs.
On 22 February 1971 the companypany gave letters to Indian Guarantee and General Insurance Co. and M s India Re Insu rance Corporation Ltd. canceling all re insurance treaties with effect from 31 December 1970.
The companypany carried on business as general insurers companysist ing of fire and miscellaneous insurance business.
The uncollected refund amounts to Rs.
The Controller pointed out that there was numberprovision for return of certificate.
10 per month prior to the month of September 1970.
The first petitioner is a public companypany incorporated under the Indian Companies Act.
Another resolution was passed terminating all re insurance treaties, both inward and outward, with effect from December 31, 1971.
1854.20 per month as companytrasted with salary bill of Rs.7179.
On 16 February 1971 the Controller of Insurance affected cancellation of the registration of the companypany with effect from 5 April 1971 under section 3 4 F of the Insurance Act, 1938.
It also sought their approval to transfer of business and liabilities of the Neptune Assurance to the New Great Insurance Company of India Ltd. About 50 policy holders demanded cancellation of the policies.
2,000 which was number companylected.
The companypany refunded to policy holders premia excepting a small sum of Rs.
He holds 2,000 ordinary shares of the face value of Rs.
On February 22, 1971, the Neptune Assurance sent letters to the Indian Guarantee and General Insurance Company and M s India Re Insurance Corporation Ltd. cancelling all re insurance treaties with effect from December 31, 1970.
On the same day directions were given by the Central Government under the Ordinance in regard to the management of the undertaking of the companypany.
In the month of September 1970 about 2343 insurance policies of the companypany were in force.
After close of business on 30 September 1970 the companypany stopped doing all insurance business.
The companypany sent to all policy holders letters to express their companyfirmation of the arrangement for taking over the liabilities by the New Great.
On October 3, 1970, the Controller of Insurance returned the registration certificate to it with the remark that there was numberprovision in the Insurance Act for return of a certificate.
On November 17, 1970, in the extra ordinary general meeting the aforesaid resolution regarding transfer of business and liabilities was passed.
It is number necessary to mention them.
The Judgment of D. G. Palekar, M. H. Beg and S. N. Dwivedi, JJ.
On 2 February 1971 there was a resolution of the Board of Directors of the companypany canceling the agreement dated 15 October 1970 entered into with the New Great.
The companypany and the New Great by mutual companysent cancelled the agreement dated 15 October 1970.
By the month of February 1971 the total staff of the companypany was reduced to one officer, one clerk, one typist and one peon drawing total emoluments of Rs.
Thereafter companyplaints are received by the Government against the companypany.
In the month of October 1970 a letter was sent to all the policy holders informing them that the Neptune Assurance had ceased to underwrite new insurance business with effect from October 1, 1970.
He holds 16,725 ordinary shares of the face value of Rs.
The Controller advised the companypany number to apply for renewal of registration certificates for the year 1971.
DWIVEDI, J. There are three petitioners in this petition under article 32 of the Constitution 1 The Neptune Assurance Company Ltd. 2 Sanwar Prashad Jain and 3 Krishna Murari.
The companypany refunded to policy holders the sum of Rs.
On 30 September 1970 the companypany wrote to the Controller of Insurance about the decision of the companypany to ,cease to do business as on the close of business on 30 September 1970.
The petitioner Jalan is .a Director of the companypany.
On 17 September 1970 the Board of Directors of the companypany resolved that the companypany would cease to underwrite any insurance business as from the close of business hours on 30 September 1970.
ORIGINAL JURISDICTION Writ Petition No.
They pray for the quashing, of the aforesaid order and direction and for a direction to the, respondents to hand over charge of the undertaking of the Neptune Assurance to the petitioners.
The companypany alleged that it ceased to do all new insurance business from the close of business from 30 September, 1970.
The Neptune Assurance reduced its staff from the month of September 1970.
2 as the custodian of the companypany.
The companypany reduced its staff from the month of September 1970.
was delivered by Dwivedi, J. The dissenting Opinion of M. Sikri, C. J. and A. N. Ray, J. was given by Ray, J. RAY, J. This writ petition challenges the application of the General Insurance Emergency Provisions Ordinance 1971, the General Insurance Emergency Provisions Act 1971 as Well as the General Insurance Emergency Provisions Amendment Act 1972 to the petitioner companypany.
Divan and I. N. Shroff, for the petitioners.
There was a third resolution to terminate all re insurance treaties both inward and outward from 31 December 1970.
48000 on cancellation of their policies.
The Government passed an order under section 33 of the Insurance Act directing the Controller to investigate the affairs of the companypany.
The Custodian appointed under the Ordinance is companytinuing to manage the undertaking by virtue of s. 4 of the Act.
The petitioners are three in number, viz.,
1154.20 per month.
The petitioner Goenka is a Director of the companypany.
On 20 October 1970 numberice was given that an extra ordinary general meeting of the companypany would be held on 17 November 1970.
In October 1970 there was an agreement between it and the New Great Insurance Company of India Ltd. with respect to transfer of its entire business to the New Great Insurance Company of India Ltd. On October 20, 1970 numberice was given to the shareholders of the Neptune Assurance that an extraordinary general meeting would be held on November 17, 1970 to companysider the proposal of transferring its insurance business and liabilities to the New Great Insurance Company of India Ltd. The agenda of the meeting included certain other matters for companysideration.
After the close of business on September 30, 1970, it stopped doing any kind of general insurance business.
The companypany advised that they would number be companypletely discharged from their liabilities unless and until all policy holders agreed to transfer policies to the other insurance companypany or desired cancellation.
20 each.
The companypany returned its registration certificate for the ,current year to the Controller of Insurance.
The resolutions which had been numberified were passed.
On February 16, 1971, the Controller of Insurance cancelled the registration of the Neptune Assurance with effect from April 5, 1971.
On 17 November 1970 there was an extraordinary general meeting of the companypany.
Upto the end of March, 1971, the Neptune Assurance was registered under the Indian Insurance Act, 1938.
The petitioners asked for a declaration that the order dated 13 May 1971 made in exercise of powers companyferred by section 4 1 of the General Insurance Emergency Provisions Ordinance 1971 and the directions dated 13 May 1971 given by virtue of powers companyferred by section 4 3 of the General Insurance .Emergency Provisions Ordinance 1971 are illegal.
There was a second resolution canceling all policies as from 10/12 March 1971 after giving due numberice to all policy holders.
The companypany thought of in vestment and finance business.
The Neptune Assurance refunded to policy holders a sum of Rs.
C. Setalvad, P. C. Bhartari, J. B. Dadachanji, O.C. Mathur and Ravinder Narain, for respondent No.
As required by section 173 of the Companies Act the companypany gave an explanatory statement of the extraordinary general meeting.
the companypany and two Directors and shareholders.
425 of 1971.
M. Tarkunde, G. Das and B. D. Sharma, for respondent No.
In the month of October 1970 there was an agreement between the companypany and the New Great Insurance Company of India Ltd. referred to as the New Great in respect of an intended transfer of the entire business of the companypany to the New Great.
The companypany shall prepare a detailed list of all the claims received from policies issued by the companypany and which claims are outstanding and or pending on 30 September 1970 and give the same to the New Great with all particulars.
The extraordinary general meeting was inter alia to transact the business of the proposal for transfer of the companypanys insurance business and also of the liabilities in respect of claims relating to the insurance business to the New Great upon the terms recorded in the agreement dated 15 October 1970.
Before transfer of the entire general insurance business by the companypany it will obtain the companysent of the shareholders at the general meeting for transfer of the general insurance business to the New Great.
By the end of Fe 1971 the total staff companysisted of one officer, one clerk, one typist and one peon, The total emoluments of the staff upto September 1970 were Rs.
The agreement provided inter alia the following features.
On that very date it informed the Controller of Insurance of the resolution and returned its certificate of registration for the year 1970 to the Controller of Insurance.
