1

REPORTABLE

 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5953    OF 2018 (Arising out of SLP (C) No. 15500/2017)

UNITED INDIA INSURANCE CO. LTD.      … APPELLANT(S) VERSUS

        … RESPONDENT(S)

WITH CIVIL APPEAL NO.  5955    OF 2018

(Arising out of SLP (C) No. 15971/2017) THE NATIONAL INSURANCE COMPANY LIMITED … APPELLANT(S)

VERSUS          … RESPONDENT(S)

WITH CIVIL APPEAL NO. 5954        OF 2018

(Arising out of SLP (C) No. 15755/2017) ORIENTAL INSURANCE COMPANY LIMITED     … APPELLANT(S)

VERSUS          … RESPONDENT(S)

AND CIVIL APPEAL NO.5956    OF 2018

(Arising out of SLP (C) Diary No. 28109/2017)

2

THE NEW INDIA ASSURANCE COMPANY LIMITED …APPELLANT(S) VERSUS

        … RESPONDENT(S)

J U D G M E N T

ASHOK BHUSHAN, J.

Leave granted.

2. The  appellants,  four  insurance  companies  are

aggrieved by the judgment dated 09.12.2016 of the Punjab

&  Haryana  High  Court  passed  in  a  Public  Interest

Litigation  being  Writ  Petition  CWP  No.  6626  of  2015,

issuing certain directions regarding  payment of fee to

its empanelled advocates.    

3. Brief facts of the case resulting into the judgment

of the Division Bench are:-

A FAO No. 2604 of 2013 – Rajesh Vs. Parmod & Anr.

was filed by an injured of a motor accident, claiming

compensation.   While  hearing  the  FAO,  the  learned

Single Judge noticed that in spite of issue of notice

3

of  motion,  none  had  appeared  on  behalf  of  the

insurance  company,  i.e.  United  India  Insurance  Co.

Ltd.  Learned Single Judge in the aforesaid FAO passed

an order for treating the issue as of vital public

importance and registering a separate writ petition in

that regard. It is useful to extract the order dated

12.09.2014 passed by the learned Single Judge:-

“……………………………….26  Standing  Counsel representing four Insurance Companies (1. United India Insurance Co. Ltd.;    2. Oriental Insurance Co. Ltd.; 3. New India Assurance  Co.  Ltd.  and  4.  National Insurance Co. Ltd.) appeared before the Court  and  brought  their  plight  to  the notice of the Court of how the officers and  officials  of  these  Companies  were circumventing  the  administration  of justice  for  their  personal  ends  and gains. It has been highlighted during the course  of  hearing  that  these  General Insurance  Companies  are  for  obvious reasons  manipulating  the  guidelines/fee structures  approved  by  GIPSA  and  under that  undue  exercise  the  Counsel  were being  not  properly  assisted  and  thus, intentionally  causing  delay  in  the disposal  of  these  matters  before  the Court and invariably were causing loss to the  exchequer  of  these  Companies  which mostly  are  public  undertakings.  It  has been highlighted with much emphasis how the fees and bills of the advocates, who had  been  representing  the  Companies  in the matters, were not being paid since decades.  This  unholy  nexus  and  trend assumes greater importance as people in general, who repose faith in promises of financial  security  made  by  these

4

Companies  in  times  of  their  sufferings and injury, were left high and dry. Thus, what was invented as a social welfare has become  a  tool  of  exploitation  in  the hands of these officers of the Companies who are out and out also trying to harm the advocates who are the officers of the Court. It has often been seen that the Counsel  who  do  not  tow  the  line  are changed  in  between  the  hearings.  Thus, the sufferings are increased manifold by the inordinate intentional delay of these Companies and lack of assistance to their Counsel.  Since  these  issues  of  vital public  importance  are  being  faced  by almost all the Advocates present before the Court for these Insurance Companies, is an impediment and delaying process in the dispensation of justice.  

Thus, this Court is pleased to treat this issue as a writ petition and refer it to the Hon'ble Acting Chief Justice for constituting an appropriate Bench to look into the matter so that much relief could come about to the poor litigants."

The above reference made by learned Single Judge

in  the  matter  was  placed  before  a  Division  Bench

treating it to be a Public Interest Litigation being

CWP  No.  6626  of  2015.   The  Division  Bench  issued

notice on 28.04.2015 to all four insurance companies,

i.e., United India Insurance Company Ltd., Oriental

Insurance Co. Ltd., New India Assurance Co. Ltd. and

National  Insurance  Co.  Ltd.   Before  the  Division

Bench,  all  the  four  insurance  companies  (who  are

5

appellants before us) have filed a joint reply dated

01.09.2015 and further a joint reply for placing on

record the fees schedule dated 05.05.2016.  Before the

Division  Bench,  Shri  Akshay  Bhan,  learned  senior

counsel appearing for the advocates, whose fee are due

and payable by the four insurance companies submitted

that the New India Assurance Co. Ltd. has committed to

pay all the fee in terms of its affidavit and they are

in the process of doing so.  It was further submitted

by the learned senior counsel appearing on behalf of

the advocates before the High Court that the advocates

representing  the  Insurance  Companies  were  never

apprised of the Schedule relating to payment of fee to

the advocates. Division Bench of the High Court after

hearing the learned senior counsel appearing for the

advocates as well as learned counsel appearing for the

insurance companies disposed of the writ petition in

the following manner:-

“The petition is accordingly disposed of and the Insurance Companies shall adhere to the three schedules framed by GIPSA i.e.  01.11.2004,  01.01.2009  and 01.04.2014 and full fee wherever payable shall  be  paid  and  balance  wherever payable shall be paid. The necessary due

6

payments  should  be  made  to  all  the advocates to whom fee is due and payable as  expeditiously  as  possible  after necessary verification and preferably by 30.06.2017 and in case the same is not paid,  the  amount  payable  shall  entail payment of simple interest at 7 per cent per  annum  from  01.07.2017  onwards  from 08.04.2015,  when  this  Court  issued notices to the Insurance Companies.

For  the  purpose  of  verification,  the counsel shall give the orders disposing of the matters and list of cases.”

All the four insurance companies - the appellants

have filed separate appeal challenging the aforesaid

judgment of Division Bench dated 09.12.2016.

4. We have heard Shri Jaideep Gupta, learned senior

counsel  appearing  for  the  appellants  and  Shri  Neeraj

Kumar Jain, learned senior counsel appearing on behalf of

some of the advocates, who were represented before the

High Court by Shri Akshay Bhan, learned senior counsel.  

5. Shri Jaideep Gupta, learned senior counsel appearing

for the appellants submits that the High Court erred in

suo moto invoking Public Interest Litigation jurisdiction

to  entertain,  adjudicate  and  determine  the  dispute

pertaining  to  payment  of  fee  by  a  client  to  his/her

7

advocate.   The  PIL  is  initiated  to  ameliorate  the

condition of a class of persons whose constitutional or

lawful rights are affected or not adequately looked into.

The  payment  of  professional  fee  by  the  insurance

companies to their advocates is purely contractual matter

between a client and his/her advocate, which ought not to

have been gone in the proceeding before the High Court.

The Public Interest Litigation does not mean settling of

disputes  between  individual  parties,  i.e.,  advocates

empanelled by the national insurance companies and the

insurance  companies.   The  High  Court  held  that  the

decision  taken  by  GIPSA  is  binding  on  the  member

insurance  companies,  and  the  fees  schedule  decided  by

GIPSA could not have been readjusted.  GIPSA being an

informal non-statutory body consisting of representatives

of national insurance companies has been formed with the

object to form and bring unanimity in their actions and

decisions.  GIPSA is only a recommendatory body, whose

recommendations  cannot  be  enforced  in  a  Court  of  Law.

The High Court has issued direction with regard to mode

and manner of payment of fee to the empanelled advocates,

which was uncalled for.  It is submitted that in the

joint reply, all the four companies having stated that

8

the fees schedule as issued by GIPSA in the year 2009 and

2014 is being followed by insurance companies,  there was

no  occasion  to  proceed  with  the  Public  Interest

Litigation and issue any directions.  The Schedule issued

by GIPSA, which was to be enforced w.e.f. 01.11.2004 was

considered  by  Inter  Company  Coordination  Committee’s

Meeting  dated  16.03.2005  of  the  Chandigarh  Regional

Officers  of  all  the  four  insurance  companies  and  the

Schedule  was  revised,  which  was  to  be  enforced  w.e.f.

01.04.2005.   The  advocates  always  accepted  the  fee  as

offered by the insurance companies without raising any

objection or protest at any point of time.  The Issue of

non-payment of fee as per Schedule issued by GIPSA w.e.f.

01.11.2004 was not required to be gone into especially

when  clear  statement  has  been  made  by  all  the  four

companies  that  Schedule  as  enforced  by  GIPSA  vide

circular dated 09.01.2009 w.e.f. 01.01.2009 and Circular

dated 18.03.2014 w.e.f. 01.04.2014 was being adhered to.

6.  Shri  Neeraj  Kumar  Jain,  learned  senior  counsel

appearing for some of the advocates opposing the appeals

submits that there was no error in the High Court taking

suo moto cognizance of the matter.  It is submitted that

9

by  taking  suo  moto  cognizance,  no  constitutional  or

legislative  mandate  has  been  violated.   It  is  further

submitted that the submission that writ jurisdiction is

not  exercisable  in  the  present  case  as  it  was  purely

contractual dispute, is wholly untenable.  Administrative

decision taken by the appellants affect the relationship

between the appellants and empanelled advocates and any

arbitrary  exercise  by  the  appellants  was  subject  to

jurisdiction  of  High  Court  under  Article  226.   The

submission that decision taken by GIPSA are not binding

on  member  insurance  companies,  is  wholly  misconceived.

All insurance companies, i.e., the appellants voluntary

bind themselves to follow the various decisions taken by

GIPSA from time to time.  The appellants, which is to

adopt and implement the 2004, 2009 and 2014 GIPSA Fee

Schedules, there was no occasion to modify the Schedule

of  2004  by  the  appellants  by  taking  another  decision

dated  16.03.2005,  by  modifying  the  fees  schedule  as

enforced by GIPSA, w.e.f. 01.11.2004. The High Court has

rightly quashed the decision of the appellants to reduce

the fee from Rs.7,500/- to Rs.5,000/-.  Direction to pay

fee lumpsum and also to pay fee in the matters before the

High Court, which are settled in Mediations/Lok Adalats

10

have also been rightly issued.  Learned counsel for the

parties have also relied on judgments of this Court, in

support of their respective submissions.

7.  We have considered the submissions of the learned

counsel for the parties and have perused the records.

8. A perusal of the order passed by the learned Single

Judge  of  the  High  Court  dated  12.09.2014  as  extracted

above indicates that learned Single Judge directed for

suo moto registration of a Public Interest Litigation to

look into the matter so that much relief could come about

to the poor litigants, the reason, which mainly impelled

the learned Single Judge to direct for registration of a

Public Interest Litigation was a factum of non-appearance

of  empanelled  lawyers  of  the  insurance  companies  when

hearing of FAO No. 2604 of 2013 was fixed.  The counsel

representing  the  four  insurance  companies  before  the

learned Single Judge brought their plight to the notice

of  learned  Single  Judge.   From  the  order  of  learned

Single  Judge,  following  four  reasons  are  decipherable,

which impelled the learned Single Judge to direct for suo

moto registration of Public Interest Litigation:-

11

“(i) ………….how the officers and officials of these Companies were circumventing the administration  of  justice  for  their personal ends and gains…………….  

(ii)  …………..  these  General  Insurance Companies  are  for  obvious  reasons manipulating  the  guidelines/fee structures approved by GIPSA…………

(iii) …….. under that undue exercise the Counsel were being not properly assisted and thus, intentionally causing delay in the disposal of these matters before the Court…………….

(iv)  ………….invariably were causing loss to the exchequer of these Companies which mostly are public undertakings……………………….”

9. A  perusal  of  the  Division  Bench  judgment  of  the

Punjab  &  Haryana  High  Court  indicates  that  although

learned  Single  Judge  has  noticed  above  mentioned  four

reasons for directing for registration of Public Interest

Litigation  but  when  the  matter  was  heard  before  the

Division Bench, the only issue which was taken note and

gone  into  was  the  issue  that  “these  general  insurance

companies  are  for  obvious  reasons  manipulating  the

guidelines/fee structure approved by the GIPSA”.  Thus,

the  only  issue,  on  which  the  parties  were  heard,  was

regarding  the  guidelines/fee  structure  approved  by  the

GIPSA.                     

12

10. Learned  senior  counsel  for  the  appellants  has

strenuously urged before us that the issue pertaining to

fee structure of the empanelled advocates, its alleged

non-payment,  and  mode  of  payment  are  all  the  issues,

which ought not to have been undertaken in the Public

Interest  Litigation.   He  submits  that  there  was  no

occasion for registration of a Public Interest Litigation

and the order of the learned Single Judge directing for

registration of Public Interest Litigation itself was not

appropriate.  The High Court exercises its extraordinary

jurisdiction under Article 226 when an element of public

law  exists.   When  learned  Single  Judge  found  that

empanelled advocates are not appearing in the court, the

learned Single Judge found that the said issue involved a

public  element,  which  ultimately  affects  the

administration of justice and hence the learned Single

Judge directed for registration of the Public Interest

Litigation  for  the  reasons  as  noticed  by  the  learned

Single Judge in his order dated 12.09.2014.  We, at this

stage, are not inclined to enter into the correctness or

otherwise  of  the  order  directing  for  registration  of

Public  Interest  Litigation.  The  judgment  challenged

13

before  us  is  the  Division  Bench  judgment  of  Punjab  &

Haryana High Court dated 09.12.2016, which was passed in

the  Public  Interest  Litigation  disposing  of  the  writ

petition.  We, thus, confine our discussions only to the

said  order,  leaving  the  question  of  registration  of

Public Interest Litigation open, in facts of the present

case.

  11. Insurance companies have filed a joint reply placing

on record the fees schedule, copy of which joint reply

dated 05.05.2016 is filed as Annexure P-8.  In the reply,

it is useful to refer to Paragraph 1 to 6 of the reply,

which is to the following effect:-

“1. That the applicants have placed on record 3 fee schedules. That insofar as the fee schedules at Ann A-2 (2009) and A-3  (2014)  are  concerned,  the  same  as proposed by GIPSA have been adopted in its  entirety  by  the  4  Public  General Insurance  companies  and  the  fees  are being raised by the respected lawyers and the payments are being made in accordance with them. However in certain cases where the  matters  are  referred  to  the  Lok Adalat and the lawyer so assigned is not present  to  conduct  the  proceedings thereof  and  to  assist  the  company,  no further fees may have been released to the assigned lawyers.  

2. That in respect of the fees schedule annexed at Annexure it is submitted that

14

the  same  (like  at  A-2  and  A-3),  were proposed  fees  as  suggested  by  GIPSA, however unlike the complete adoption of the proposed fee structures as suggested by GIPSA in the year 2009/2014, the fee schedule as suggested by GIPSA in 2005 was not adopted in toto by the companies and  based  on  a  ICC  (Inter  Company Coordination  Committee)  meeting  dated 16.3.2015  of  the  Chandigarh  Regional Officers  of  all  the  4  public  sector insurance companies, held at the regional level  Chandigarh,  the  revised  fees schedule  as  discussed  were  made applicable.  That  there  was  increase  in the  existing  fees  schedule  as  was prevalent, however the complete fees as suggested in the GIPSA schedule were not adopted.  

3. That GIPSA is a non statutory body. That,  in  the  year  2000  the  insurance sector was completely deregulated. That, after opening of the insurance sector and &linking from the GIC General Insurance Corporation of India, in the year 2000, the  4  state-run,  general  insurance companies  namely  National  Insurance Company Ltd, New India Assurance company limited, Oriental Insurance Company Ltd, and United India Insurance Company Ltd, started functioning independently.  

4  That  the  said  insurance  companies formed an informal association known as the  General  Insurers'  (Public  Sector) Association of India, with headquarters at Delhi.  

5. GIPSA was set up simply as a forum for facilitating  consultations  and deliberations  amongst  its  member companies on matters of common interest mandated to it by them without having any administrative,  supervisory,  controlling

15

or  statutory  authority  over  the  public sector insurance companies.

6.  That  the  GIPSA  is  not  a  public authority  and  neither  is  the  same statutory authority/body.”

12. The  High  Court  in  its  judgment  has  noticed  three

schedules  of  fee  issued  by  GIPSA,  they  are:

(i)  Circular  dated  21.02.2005  noticing  that  GIPSA  had

approved  the  revised  fees  schedule  of

advocates/investigators  w.e.f.  01.11.2004;

(ii)  Circular  dated  09.01.2009  issued  in  pursuance  of

approved  and  revised  fees  schedule  by  GIPSA  w.e.f.

01.01.2009; and (iii) Circular dated 18.03.2014 issued by

GIPSA  approving  the  advocates/investigators  fee  w.e.f.

01.04.2014.   

The High Court itself has noticed that there are no

issues with regard to Circulars issued with regard to fee

structure enforced from 2009 and 2014.  The High Court

noticed that the only issue is with regard to Circular

dated  21.02.2005  of  GIPSA  regarding  the  revised  fees

schedule  of  advocates/investigators  w.e.f.  01.11.2004.

It has come on the record that w.e.f. 01.11.2004, the fee

was fixed as Rs.7,500/-, which was not adopted in toto by

the  companies  and  based  on  Inter  Company  Coordination

16

Committee  meeting  dated  16.03.2005  of  the  Chandigarh

Regional  Officers,  fee  was  revised  reducing  from

Rs.7,500/- to Rs.5,000/- for appeals filed by claimants

against the MACT awards and Rs. 6,000/- for appeals filed

on  behalf  of  companies  against  MACT,  which  was  to  be

enforced w.e.f. 01.04.2005.  The High Court has noticed

the said fact in Page 15 of the judgment.  The High Court

itself at Page 16 noticed following:-  

“The  dispute,  therefore,  that  now survives  is  with  respect  to  the  first Circular that was issued and according to the advocates, they are liable to be paid Rs.7500/- for each case irrespective of the  fact  whether  the  appeal  had  been filed  by  the  claimants  or  by  the companies; besides, there is no concept of half fee being paid at the time of filing the appeal and the balance fee at the time of disposal of the appeal even as  per  the  Schedule  of  the  Insurance Companies. Moreover, fee is also liable to be paid to the advocates who put in appearances  before  the  Lok Adalats/Mediation  Centers  as  also  in cases where notices are accepted on the asking of the Court.”

13. From the above, it is clear that in so far as the

payment of fee as per Circular issued of 2009 and 2014 is

concerned,  there  was  no  issue  raised.   The  companies

themselves in the reply had stated that they are adhering

17

to  the  said  circulars  and  there  was  no  complaint  on

behalf  of  the  empanelled  advocates  regarding

non-adherence of Circulars of 2009 and 2014. The Public

Interest Litigation was registered suo moto by the High

Court in 2015.  At the time of registration of the Public

Interest  Litigation  or  when  the  order  passed  by  the

learned Single Judge on 12.09.2014, the fees schedule as

enforced from circulars of 2009 and 2014 was very much in

vogue and being adhered to.  At that point of time, there

was  no  occasion  for  the  High  Court  to  entertain  the

dispute as to whether the fee structure as enforced by

GIPSA  w.e.f.  01.11.2004  should  have  been  followed  and

advocates should have been paid accordingly or advocates

were rightly paid the fee as per the modified decision

dated 16.03.2005, which decision was taken in the meeting

of all the four insurance companies at regional level.

The issue relating to non-payment of fee of empanelled

advocates as per Circular dated 01.11.2004 could not have

been undertaken in the Public Interest Litigation, more

so, when the same was replaced by subsequent circulars of

2009 and 2014, which circulars were adhered to by the

insurance companies.  Adjudicating the said issue by the

High Court was wholly uncalled for in the suo moto Public

18

Interest Litigation, which cannot be in any manner held

to be affecting the case of the “poor litigants”, which

was  the  main  reason  for  the  learned  Single  Judge  to

direct  for  suo  moto  registration  of  Public  Interest

Litigation.  

14. We, thus, are of the view that entertainment of the

issue  regarding  payment  of  fee  as  per  circular  dated

21.02.2005  by  GIPSA  or  subsequently  modified  by

proceeding dated 16.03.2005 w.e.f. 01.04.2005 ought not

to have been gone in the writ petition and directions by

the learned Single Judge in the above regard deserves to

be set aside.   

15. We may notice that although various issues relating

to  entertainability  of  the  suo  moto  Public  Interest

Litigation by the High Court, enforceable by circulars

issued  by  GIPSA,  the  issue  of  payment  of  fee  to  the

empanelled advocates, has been raised before us.  Learned

counsel for the parties have also in support of their

submissions relied on various judgments of this Court,

but for the purpose of this case, we need not go into the

above issues and we leave the said questions open to be

19

considered  in  appropriate  case.   As  we  have  observed

above that the writ petition, which was entertained as a

Public  Interest  Litigation,  the  stand  taken  by  the

insurance companies that they are adhering with the fee

structure enforced from 2009 and 2014, which was not even

objected  by  the  learned  counsel,  who  was  appearing  on

behalf of the advocates, was sufficient enough to close

the  writ  petition  without  entering  into  the  issue

pertaining to the earlier circular issued regarding fee

structure  w.e.f.  01.11.2004.   We  have  decided  these

appeals on its own facts, which may not be referred to

and relied as a precedent since, we have expressly left

questions open.

16. In result, the appeals are partly allowed and the

judgment of the High Court dated 09.12.2016 is modified

in the following manner:-

(i) The  direction  of  High  Court

directing  insurance  companies  to

adhere to fees schedule issued by

GIPSA  dated  21.02.2005  w.e.f.

01.11.2004 is set aside.   

We, however, make it clear that any payment of

20

fee made as per said Circular dated 21.02.2005

shall  be  treated  as  final  and  not  to  be

re-opened.  

(ii) The  insurance  companies  shall

adhere to the schedule framed by

GIPSA,  i.e.  01.01.2009  and

01.04.2014  and  fee  wherever

payable shall be paid and balance

wherever payable shall be paid as

admitted  by  insurance  companies

themselves before the High Court.  

(iii) The direction issued by the High

Court    regarding  payment  of

interest is set aside.  

..........................J. ( A.K. SIKRI )

..........................J.     ( ASHOK BHUSHAN )

NEW DELHI, JULY 02, 2018.