LexSHYAMAPADA CHAKRABERTTY AND OTHERS versus THE OONTROLLER OF INSURANCE, GOVERNMENT OF INDIA SIMLA AND OTHERS
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1961 Dt""'"11J, 130 SUPREME OOURT REPORTS (1962] SUPP. SHYAMAPADA CHAKRABERTTY AND OTHERS v. THE OONTROLLER OF INSURANCE, GOVERN- MENT OF INDIA SIMLA AND OTHERS (P. B. GAJENDRAOADKAR, A. K. WANCHOO, K. c. DAS GUPTA AND AYYANOAR, JJ.) SARKAR, K. N. N. RAJAOOPALA , /,..uranct-Riuiu•1r-1'ran•fer by O>V company to anotMr, when ptrmiuible-lnauranu Act, 1938 (4 of 1938). 88. 36(3), 36 (J)-/11.Mn Companiu Act, 1913 (7 of 1913), 88. IO, 12, 186H. Ju an application under Art. 226 of the Constitution, to challenge the validity of the transfer of a life insu1 ance company's business to another company under s. 36 of the Jmurance Act, 1938:- Htld, the transfer though it brought about an abandon- mrnt of the business of the company was not bad a, resulting in an alteration of the memorandum ot the company without recourse to s. 12 of the Indian Companie• Act, 1913. The Cornpany's\.mcmOrandum ofa11ociation contained a power to sell its undc!rtalr.ing and an exercise of that power does not amount to a1teration of the memorandum. ·The tran1fer wu- not a winding up of the company without following the procedure laid down in the·Companies Act and hence invalid. It was effected unde~the provisions of the Insurance Act. JJiagoaq v. Henderaona Trann'<ll lf•tafe, [1908] I Ch. 734, distinguished. An agreement by the direc1ors of a company to trarufer its undertaking 1ubject to confirmation by rhe company in ll•ntral meeting did not offend s. 86H of the Companies Act. Section 55 and the connected sections of the Comp.1nies Act do not contrmplatc reduction of sha-c capital brought about by loss of asset" and loss of assets does not amt>unt to r~<h1ction of share capital. Section 44 of the Insurance Act does not prevent an insurance company from dealing with its assets though as a result thereof no asset was left out of which the agents of the company might be paid commission to which they arc entitled under the Insurance Act. \ ., 2 S.C.R. SUPREME COURT REPORTS 131 S<ction 36 of the Insurance Act doe< not offend Art. 14 of the _Constitution. That section applies to all insurance companies which in gcner~l meeting agree to a transfer. Even if it is assumed that under s. 36 (I) of the Insu- rance A;::t only that scheme of transfer of which notice under s. 35(3) of the Act had been given could 'be sanctioned and not a modified version of it, there would be power to sanction a modified version where the scheme itself or the resolution of the co.mpany approving of it, ·gave power to the directors to accept modifications of that scheme on beh)llf of the company suggested by the controller of Insurance before finnl sanction by him. Mihirendrak1'.sliore Datta v. Brahmanbaria Loan Go., (!934) LL.R. 61 Cal. '913, referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 300 c•f 58. A. N .. Sinha, N. H. Hingorani and P. K. Mukherjee, for the appelllants. C. K Daphtar.1j, Solicitor-General <1f India, R. Ganpathy Iyer and R. H. Dhebar, for respondent No. I. C. K. Daphtary, Solicilor:General of India and K. L. Hathi, for respondent No. 3. 1961 December 13. The Judgment of the Court was delivered by SARKAR, J.-This appeal raises certain questions as to the validity of an order made under s. 36 of the Insurance Act, 1938, sanctioning the transfer of its life insurance business by one insurance company to another. The appellants had challenged that order by a petition field under Art. 226 of the Constitu- tion in the High Court of Punjab. The High Court having dismissed the petition they have come to this Court in appeal. There are three appellants, one of whom is a shareholder of the transferor company, another a policy-holder in it and the third, one of its agents who claims to have become entitled under the Insurance Act to receive from it commission on renewal premiums paid on life insurance business 1961 Shyamapada Chakrabutry v. The OontroUer of. lnsura11tt, Gove,nnunl of India, Simla. lldi SitJ<mapoJ• Claah•bttU) v. 'Illll Vonrro/l<r of ""'' '"'' Gct1c1'1fflWIJ •J 1tu1;a. s;,.i,, S•k• J. 132 SUPREME OOURT REPORTS [1962] SUPP. introduced by him. They complain that their respective rights ha'lll been adversely a.nd illegally affected by the ea.nction. Tho transferor company is tho India Equitable Insurance Company Ltd. and the transferee com- pany, the Area Insure.nee Compa.n~· Ltd. Under the transfer a.II the life insurance b
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