Jagjit Singh J. ( 1 ) THE following questions have been REFERRED TO the Full Bench by a Division Bench of this Court:- "1. Whether rule 17h confers power on the Controller of Insuranee to cancel the registration of an insurer independently of section 3 (4) (f) of the Act? If so, whether rule 7h is ultra vires of section 110 (a) of the Act? 2. Whether section 64m (3)ofthe Act read with rule 17h is ultra vires of article 14 of the Constitution as conferring unbridled, arbitrary and discriminatory powers on the Controller of Insurance?" ( 2 ) THE facts of the case are given in detail in the reference of the Division Pench. It may, however, be mentioned that Unique Motor and General Insurance Company Limited. Bombay (hereinafter REFERRED TO as the petitioner-company), is a public limited Company registered and incorporated under the Indian Companies Act, 1913, and was carrying on the business of general insurance and more particularly of motor insurance. On November 6, 1942, the petitioner-company was registered in respect of miscellaneous insurance business under section 3 (6) of the Insurance Act, 1938 (Act IV of 1938 ). called hereafter as the Act. ( 3 ) THE Controller of Insurance, Simla, by an order, dated April 17, 1964, cancelled the certificate of registration of the petitioner-company. The order purported to have been passed under sub section (3) of section 64m of the Act read with rule 17h of the Insurance Rules, 1939 (to be REFERRED TO for facility of reference as the Rules) and was in the following terms:- "i have the honour to say that your Company has disregarded two warnings given to it under sub-section (2) of section 64m of the Insurance Act, 1938. 2 I, therefore, in pursuance of sub-section (3) of section 64m of said Act read with rule 17h of the Insurance Rules, 1939, hereby cancel the certificate of registration bearing the number 339/2 dated the 6th November 1942 in respect of Miscellaneous insurance business granted to your company under section 3 of the said Act and the cancellation will take effect on the 27th April. 1964. 1964. " ( 4 ) UNDER provisions of section 64m (2) three warnings were administered to the petitioner-company, for contravention of section 40c of the Act with respect to the expenses of manacement in miscellaneous insurance business during the years 1957 1958 and 1959 (vide letters dated 10th December, 1959, 22nd December, 1959 and 11th January, 1961 respectively ). It was after these warnings had been given that the certificate of registration of the petitioner-company was cancelled. ( 5 ) THE petitioner-company filed an appeal against the order cancelling its certificate of registration to the High Court of Bombay. On November 23,1964 R, M. Kantawala, J. dismissed the appeal after holding that section 110 of the Act, which deals with appeals, does not provide for any appeal from an older made under section 64m of the Act read with rule 17h of the Rules. The petitioner-company then filed a petition for issuing a writ of certiorari for quashing the order of the Controller, dated April 17, 1964. It was during hearing of that petitioner that the above-mentioned questions were formulated and REFERRED TO the Full Bench. ( 6 ) AT this stage some of the provisions of the Act may be noticed briefly. Sub-section (1) of section 3 of the Act provides for registration of insurence. Sub-section (2) of that section mentions the documents which are required to accompany every application for registration. Sub-section (6) authorises the Controller on being satisfied that the application has fulfilled all the requirements of the section and subject to compliance of certain other provisions to register the insurer and grant him a certificate of registration. Sub-section (3) of the same section empowers the Controller to with-hold registration or cancel a registration already made if in a country where any insurer has his principal place of business or domicile Indian nationals are debarred from carrying on the business of insurance or where any reciprocal condition imposed on such insurer is not satisfied. ( 7 ) UNDER Sub-section (4) of section 3 of the Act it is obligatory on the Controller to cancel the registration of an insurer either wholly or in so far as it relates to a particular class of insurance business if the case of the insurer falls under any clause of clauses (a) to (ee) thereof. ( 7 ) UNDER Sub-section (4) of section 3 of the Act it is obligatory on the Controller to cancel the registration of an insurer either wholly or in so far as it relates to a particular class of insurance business if the case of the insurer falls under any clause of clauses (a) to (ee) thereof. Where however, the case of an insurer falls under any clause of clauses (f) to (h) of that sub-section cancellation of registration is discretionary. Under clause (f) the Controller may cancel the registration of an insuraiif the insurer makes default in complying with, or acts in contravention of, any requirement of the Act or of any rule or order made thereunder. Sub-section (5c) enables the Controller at his discretion to receive the Registration cancelled under clause (a), clause (aa), clause (e), clause (f),clause (g) or clause (h) or sub-section (4 ). ( 8 ) SECTIONS 40a, 40b and 40c and Part IIA, containing sections 64a to 64t were inserted in the Act by the Insurance Amendment Act, 1950 (Act XLVIT of 1950 ). These sections were inserted to provide for the control of overall expenses of all insurers through the medium of statutary association of insurers and the Executive Committee of the Life Insurance council and the General Insurance Council. ( 9 ) SUB-SECTION (1) of section 40c of the Act places limitation on expenses of management in general insurance business. It, inter alia, provides that after December 31, 1949, no insurer shall, in respect of any class of general insurance business transacted by him in India, spend in any clandar year as expenses of management including commission or remuneration for procuring business an amount in excess of the pros. cribed limit. There, is, however, a proviso to this sub-section which is to the effect that where an insurer has spent as such expenses in any year an amount in excess of the amount permissible under this sub-section he shall not be deemed to have contravened the provisions of the section, if the excess amount so spent is within such limits as may be fixed in respect of the year by the Controller after consultation with the executive committee of the General Insurance Council by which the actual expenses incurred may exceed expenses permissible under the sub-section. ( 10 ) SECTION 64m of the Act provides for giving of advice by the S. K. VAIYPURI Executive Committee of the General Insurance Council to the Controller in the matter of fixing, under the proviso to sub-section (1) of section 40c, the limits by which the actual expenses of management incurred by an insurer, carrying on general insurance business, in respect of such business in the preceding year, may exceed the limits prescribed by that sub-section. It also provides for administering of warnings to an insurer guilty of contravention of the provisions with respect to the expenses of management and for theController taking such action against an insurer disregarding two warnings as may be prescribed. The section reads :- "64m (1 ). It shall be the duty of the Executive Cammittee of the General Insurance Council to meet at least once before the 31st day of March every year to advice the Controller in fixing under the proviso to sub-section (1) of section 40c the limits by which the actual expenses of management incurred by an insurer carrying on general insurance business In respect of such business in the precedding year may exceed the limits prescribed under that sub-section, and in fixing any such limits the Controller shall have due regard to the conditions obtaining in general insurance business in the preceding year, and he may fix different limits for different groups of insurers. (2) Where an insurer is guilty of contravening the provisions of section 40c with respect to the expenses of management the Controller may, after giving the insurer an opportunity of being heard, administer a warning to the insurer. (3) Where in any case two warning; given to an insurer under sub-section (2) have been disregarded by him the Controller may take such action against the insurer as may be prescribed. " ( 11 ) THE expression "prescribed" has been defined in section 2 (14) of the Act to mean as prescribed by rules made under section 114. Section 114 gives power to the Central Government to make rules to carry out the purposes of the Act, including any matter which is to be or may be prescribed. " ( 11 ) THE expression "prescribed" has been defined in section 2 (14) of the Act to mean as prescribed by rules made under section 114. Section 114 gives power to the Central Government to make rules to carry out the purposes of the Act, including any matter which is to be or may be prescribed. ( 12 ) RULE 17h of the Rules, made under section 114 of the Act, prescribes the action that may be taken by the Controller under sub-section (3) of section 64 M. The rule is as follows:- "17h (1) In pursuance of sub-section (3) of section 64m of the Act the controller may:- (a) Cancel the registration of the insurer under the Act, and (b) Request the Executive Committee of the General Insurance Council to consider practical steps for the reconstruction of the insurer concerned or for transferring its business to some other insurer. (2) When such a request as is REFERRED TO in the preceding subrule is received by the Executive Committee of the General Insurance Council, it shall meet not later than one month of the receipt of such request to consider the request and within seven days of such meeting shall Communicate its decision to the Controller. (3) The Controller may, after considering the recommendations of the Executive Committee in this behalf apply to the Court for winding up of the insurer concerned if he thinks fit. " ( 13 ) THE Act also contains provisions, in section 110, regarding appeal against an order under section 3 refusing to register or cancelling the registration of an insurer. ( 14 ) SHRI S. S. Ahuja, learned counsel for the petitioner-company, was at first inclined to fate the stand that section 64m (3) of the Act read with rule 17h of the Rules docs not confer any Indepenent power on the Controller of canceling the registration of an insurer, who has disregarded two warnings given to him, and that the cancellation of the registration of an insurer in such a case has to be considered to have been made under section S (4) (f) of the Act. This line of reasoning was, however, abandoned when it was realised that the Judgment of the Bombay High Court, to which reference has been made earlier, was inter-parties. This line of reasoning was, however, abandoned when it was realised that the Judgment of the Bombay High Court, to which reference has been made earlier, was inter-parties. Shri Ahuja, therefore, on the assumption that the view taken by the learned Judge of the Bombay High Court was correct; contended that clause (a) of Rule 17h of the Rules confers power on the Controller independently of section 3 (4) (f) to cancel the registration of an insurer in pursuance of sub-section (3) of section 64m and the rule to that extent is ultra vires of section 110 (a) as there is no right of appeal against such cancellation of the registration of an insurer It was further urged that section 64 M (3) read with rule 17h is ultra vires of article 14 of the Constitution as these provisions confer unbridled, arbitrary and discriminatory power on the Controller to either proceed under these more prejudicial provisions or to take action under section 3 (4) (t) of the Act. Reliance was placed on the case of Northern India Caterers (Private) Ltd. and another v. State of Punjab. ( 15 ) SHRI B. R. L. Iyengar, who appeared for the Controller of Insurance and the Attorney General of India, submitted that section 64m of the Act read with rule 17h of the Rules forms a separate scheme which is only applicable to that class of insurers who have been extravagant in the matter of expenses of management and have also disregarded two warnings given to them by the Controller. According to the learned counsel notion against such an insurer can only be taken under section 64m (3) read with rule 17h and as such there is no question of the Controller having arbitrary discretion either to proceed under those provisions or to take action under section 3 (4) (f ). It was urged that the Legislature has Intentionally with-held the right of appeal from this class of insurers as under the proviso to section 40c the Controller has to fix for each year, after considering the advice of the Executive Committee of the General Insurance Council and having regard to the conditions obtaining in general insurance business in the preceding year, the limits within which the expenses of management may exceed the prescribed limits. Eight representatives of the members of the Insurance Association of India also being members of the Executive Committee of the General Insurance Councll, it was stated the advice tendered by the said Committee is based on the actual needs and difficulties of insurers carrying on general insurance business. As action for cancellation of the registration is only taken after two warnings have been disregarded, it was contended the insurer concerned can have, under the circumstances no grievance that right of appeal has been denied to him. ( 16 ) IN clause (a) of rule l7h of the Rules the words used are "cancel the registration of the insurer under the Act. " It is true that the rule is somewhat unhappily worded and possbily a construction can be put on it that In pursuance of sub section (3) of section 64m of the Act the Controller may cancel the registration of the insurer granted under the Act. The other interpretation would be that the registration of an insurer may be cancelled by the Controller under the provisions of the Act relating to cancellation of registration. The learned Judge of the Bombay High Court, on the appeal of the petitioner-company, had adobted the first interpretation. ( 17 ) THE only provisions in the Act relating to cancellation of registration are to be found in sub-sections (3) and (4) of section 3. Sub-sections (1) and (6) of that section provide for registration. In sub-section (3) of section 3 the expression used is "cancel a regisration already made" while in sub-section (4) the registration which can be cancelled is not described as "the registration of the insurer under the Act", but merely as registration of an insurer". Sub-section (5) of section 3 requires that when the Controller with-holds or cancels any "registration under sub-section (3) or clause (a), clause (aa), clause (e), clause(ee), clause (f), clause (g) or clause (b) of subsection (4)", a notice in writing shall be given to the insurer of his decision, and the decision shall take effect on such date as may be specified in that behalf in the notice, such date being not less than one month nor more than two months from the date of the receipt of the notice in the oidinaiy course of transmission. The regisiration refened to is not granted under sub-section (3) or the clauses mentioned alter the wolds "uner sub-section (3)", but those clauses have refererce to the provisions under which registration is can- called. It appears that in rule 17h the same form of construction was used and the voids "under Act" do not qualify the expression "registration of the insurer" but go with the word "cancel. " The rule, therefore, dees not confer an independent power of cancellation on the Controller. Besides prescribing for certain other matters it seems to provide 11 at the registiation of the insurer may be cancelled under the Act, which in the context should mean the provisions of section 3 (4) (f) of the Act. ( 18 ) IT is not possible to accept the contention that the intendment of the Legislature was to treat extravagant insurers carrying on general insurance business, in the matter of cancellation of their registration differently from the other insurers by depriving them of the right of appeal. Against warnings to be given by the Controller under section 64 M (3) of the Act no appeal is provided. It connot, therefore, be said that as action for cancellation of the registration is taken only after two warnings have been disregarded tie right to appeal should by necessary implication be deemed to have been taken away. The right of appeal to a Court of law is a most valuable right and deprivation of that right is not to be lightly assumed. If the intention was to take away that right in the case of insurers whose registration is cancelled after their disregard of two warnings by the Controller some specific provision would have been made, No such provision was made and there are no provisions in the Act which may by necessary implication lead to any such inference. ( 19 ) ANOTHER submission of Shri Iyengar was that if cancellation of registration by the Controller in pursuance of section 64m (3) of the Act read with rule 17h of the Pules was intended to fall under section 3 (4) (f) then all the provisions of section 3, including sub-section (5c) relating lo revivirg of legistration within six months from the date on which the cancellation took effect. should have applied to such cancellation of the registration. should have applied to such cancellation of the registration. Elaborating his arugument the learned counsel urged that as the excess in expenses of managment would already have taken place it would not be possible for an insurer to rectify that defect tor the past years and, therefore, the provisions for reviving the registration cannot ever apply to an insurer whose registration has b en cancelled under section 64m (3) read with rule 17h. The contention however has no force. In many cases of revival of registration covered by sub section (5c) of section 3 it is not possible to undo the past default. The directions to be complied with by the insurer in connection with revival if the registration may be, therefore, for the future. There is no reason why registration of an insurer cancelled in pursuance of section 64m (3) of the Act may not in a suitable case be revived at the discretion of the Controller. ( 20 ) IT therefore, appears that rule 17h. of the Rules does not con fer on the Controller of Insurance the power to cancel the registration of an insurer independently of section 3 (4) (f) of the Act. The correct interpretation of clause (a) of that rule seems to be that the certificate of registration granted to an insurer may be cancelled by the Controller in pursuance of sub-section (3) of section 64m under the Act, from which it follows that cancellation of the registration of the insurer is to be effected under the provisions relating to cancellation of registration as embodied in the Act. ( 21 ) AS cancellation of the registration in pursuance of section 64m (3) read with rule 17h cannot be made independently of section 3 (4) ft) it cannot be said that the Act provides two separate and independent procedures for cancellation of registration and that one of the procedures is more prejudicial than the other. The question of any discrimination or arbitrary discretion on the part of the Controller does not arise. ( 22 ) THE questions REFERRED TO the Full Bench are, therefore, answered as follows: (1) First part : No. (2) Second Part : the question does not arise. (3) No. ( 23 ) THE case shall now be laid before a Division Bench for being disposed of in the light of the above answers. ( 22 ) THE questions REFERRED TO the Full Bench are, therefore, answered as follows: (1) First part : No. (2) Second Part : the question does not arise. (3) No. ( 23 ) THE case shall now be laid before a Division Bench for being disposed of in the light of the above answers. I. D. Dua C. J.-I have read the judgment prepared by may leprned brother Jagjit Singh, J. and I agree with him I would, however,and a few words on one aspect. Rule 17-H of the Insurance Rules framed under section 114 of the Insurance Act by the Central Government deals with the action to be taken against Extravagant General Insurers. These Rules were required by section 114 to be made for carrying out the purposes of the Act. Sub-section (3) of this section is designed to retain legislative control over the rules to be so framed. This seems to be inspired by the recognition of the doctrine of separation of power contained in our Constitution, the problem of delegation of powers being to an extent arefinement of the broader doctrine of separation ofpowers. The constant increase of social and economic regulation has necessitated as inevitable, for practical reasons, delegation of rule-making power provided either the broad guide lines are stated within which the rule is to be made and is to operate, or legis legislatve Control is retained by the Parliament over the rule-making power. This sub-section is an illustration of the latter course of retention of legislative Control. According to it, every rule made under section 114 is to be laid, as soon as may be, belore the Legilature, while it is in session for the period prescribed therein. If t he Legislature agrees in making a modification in the rule, or if it agrees that the rule should not be made, the rule is thereafter to have effect only in such modified form or will have no effect, as the case may be. If t he Legislature agrees in making a modification in the rule, or if it agrees that the rule should not be made, the rule is thereafter to have effect only in such modified form or will have no effect, as the case may be. This provision thus clearly suggests that the Legislature has been given an opportunity of scrutinising the rules made under section 114 of the Act end it may be assumed that in the case in hand, the opportunity was utilised as intended Rule 17-H which must therefore be deemed to have the implied sanction of the legislature after it was made deserves to be read as a part of the Act itself. Considerations which weigh in construing a rule made by the executive wing of the Government, pursuant to vahdiy delegated power, but which has not been laid before the Legislature, as envisaged in section 114 of the Act may not apply with full rigour to a rule which has been so laid and which may, therefore, appropriately be deemed to have the approval of the Legislature itself. A rule of this type being a part of the statute, has to be construed along with the other provision", of the statute and every effort should be made to fit it in with the general statutory scheme which is discernible from the Act read as a whole. The language used in Rule 17-H may be capable of two meanings, but if reasonably permissible, the Court should adopt the one which would render it valid rather than invalid. The Court may more readily be inclined to assume-if necessary a mistake indrafting rather than to impute to the Legislature an intention to place on the statute book or approve under section 114 (3) an invalid or unconstitutional provision. From this point of view, the impugned rule must be so read as to make it law-ful, constitutional and consistent with the smooth working of the system which the statute, purports to regulate, and there does not seem to be any insurmountable obstacle in so reading it. Article 14 of the Constitution also does not postulate an absolute equality of men before the law. The view taken by my learned brother Jagjit Singh J. of the statutory provisions would obviously exclude the challenge on the ground of inequality as well.