JUDGMENT PINAKI CHANDRA GHOSE, J.: This appeal is directed against a judgement and/or order dated 15th December, 2011 passed by the Hon'ble Single Judge on a writ petition being W.P. No. 17286 (W) of 2011 moved before the Court by the respondent, Heritage Insurance Brokers Private Limited Company and another. 2. It appears that the writ petitioner/the respondent herein moved the writ petition. The Hon'ble Single Judge was pleased to admit the writ petition and passed an interim order in the matter till the disposal of the writ petition. 3. The Hon'ble Single Judge has also made it clear that the said order shall not prevent the authority from imposing other or further conditions in addition to the ones which would have been the ordinary terms and conditions in the renewed license. The amount the petitioners are liable to pay in terms of the impugned order they shall pay within four weeks. 4. The facts of the case briefly are as follows:- 5. The appellant is a statutory authority known as Insurance Regulatory and Development Authority (hereinafter referred to as 'IRDA'). The appellant No.2 is the Chairman of IRDA and the appellant No.2, 3 and 4 are the officers of IRDA. 6. The respondent No.1 is a company which obtained composite brokers licence from IRDA in the year 2003. The said licence was issued under the Insurance Regulatory & Development Authority (Insurance Brokers) Regulations 2002. As per Regulation 9 of the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations 2002, the Authority while considering an application for grant of licence shall take into account, all matters relevant to the carrying out of the functions by the insurance broker. 7. The definition of 'Composite Broker' has been defined in Regulation 2(d) of the Insurance Regulatory & Development Authority (Insurance Brokers) Regulations 2002, means an insurance broker who for the time-being licensed by the Authority to act as such, for a remuneration, arranges insurance for his clients with insurance companies and/or reinsurance for his client or client/s. 8. As per Regulation 12 of the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations 2002, a licence once issued shall be valid for a period of three years from the date of its issue, unless the same is suspended or cancelled pursuant to these regulations. In this case the Broker License was issued on 18th February, 2003. As per Regulation 12 of the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations 2002, a licence once issued shall be valid for a period of three years from the date of its issue, unless the same is suspended or cancelled pursuant to these regulations. In this case the Broker License was issued on 18th February, 2003. Under Regulation 13 of the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations 2002, it is the duty of the broker to apply for a renewal, which reads as follows:- "13. Renewal of licence. - (1) An insurance broker may, within thirty days before the expiry of the licence, make an application in Form A to the Authority for renewal of licence: Provided however that if the application reaches the Authority later than that period but before the actual expiry of the current licence, an additional fee of rupees one hundred only shall be payable by the applicant to the Authority: Provided further that the Authority may for sufficient reasons offered in written by the applicant for a delay not covered by the previous proviso, accept an application for renewal after the date of the expiry of the licence on a payment of an additional fee of seven hundred and fifty rupees only by the applicant. (2) An insurance broker before seeking a renewal of licence, shall have completed, at least twenty-five hours of theoretical and practical training, imparted by an institution recognized by the Authority from time to time. (3) The application for a renewal, under sub-regulation (1) shall be dealt within the same manner as is specified under regulation 9. (4) The Authority, on being satisfied that the applicant fulfils all the conditions specified for a renewal of the licence, shall renew the licence in Form B for a period of three years and send an intimation that effect to the applicant. (5) An insurance broker licensed under these regulations for a specified category may also apply for the grant of a licence by the Authority for any other category by fulfilling the requirements of these regulations. However, such application shall be made only after a lapse of one year from the grant of a licence in the first instance." 9. It appears from the fact that the respondent No.1 started diversion of funds from Insurance Bank Account for investment in mutual funds in the name of the respondent No.1. 10. However, such application shall be made only after a lapse of one year from the grant of a licence in the first instance." 9. It appears from the fact that the respondent No.1 started diversion of funds from Insurance Bank Account for investment in mutual funds in the name of the respondent No.1. 10. The respondent admitted that the said diversion continued till March, 2008. On 18th February, 2006 the licence was renewed till 17th February, 2009. During 27th August, 2007 and 31st August, 2007 inspection was conducted by IRDA at the office of the respondent No.1 and on 25th January, 2008 the inspection team of IRDA found regarding diversion of Instance Bank Account to mutual funds and the matters were communicated to the respondent No.1. The IRDA asked for explanation in respect of the violation of Regulation 23, of the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations 2002, by the respondent No.1, which reads as follows:- "23. Segregation of insurance money.-(1) The provisions of section 64VB of the Act shall continue to determine the question of assumption of risk by an insurer. (2) In the case of reinsurance contracts, it may be agreed between the parties specifically or as part of international market practices that the licensed reinsurance broker or composite broker can collect the premium and remit to the reinsurer and/or collect the claims due from the reinsurer to be passed on to the insured. (2) In the case of reinsurance contracts, it may be agreed between the parties specifically or as part of international market practices that the licensed reinsurance broker or composite broker can collect the premium and remit to the reinsurer and/or collect the claims due from the reinsurer to be passed on to the insured. In these circumstances the money collected by the licenced insurance broker shall be dealt with in the following manner:- (a) he shall act as the trustee of the insurance money that he is required to handle in order to discharge his function as a reinsurance broker and for the purposes of this regulation it shall be deemed that a payment made to the reinsurance broker shall be considered as payment made to the reinsurer; (b) ensure that 'insurance money' is held in an 'Insurance Bank Account' with one or more of the Scheduled Banks or with such other institutions as may be approved by the Authority; (c) give written notice to, and receive written confirmation from, a bank, or other institution that he is not entitled to combine the account with any other account, or to exercise any right to set-off, charge or lien against money in that account; (d) ensure that all monies received from or on behalf of an insured is paid into the 'Insurance Bank Account' which remains in the 'Insurance Bank Account' to remain in deposit until it is transferred on to the reinsurer or to the direct insurer; (e) ensure that any refund of premium which may become due to a direct insurer on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall be paid by the reinsurer directly to the direct insurer; (f) interest on recovery/payment received shall be for the benefit of the direct insurer or reinsurer; (g) only remove from the 'Insurance Bank Account' charges, fees or commission earned and interest received from any funds comprising the account; (h) take immediate steps to restore the required position if at any time he becomes aware of any deficiency in the required "segregated amount"." 11. On 26th February, 2008 the respondent No.1 admitted the said fact and on 31st December, 2008 an application for 2nd renewal was made by the respondent No.1. On 26th February, 2008 the respondent No.1 admitted the said fact and on 31st December, 2008 an application for 2nd renewal was made by the respondent No.1. On 13th February, 2009 an intimation was given by the IRDA to the respondent No.1 to continue to perform the duties and functions of composite broker till they hear further from IRDA. Such communication was made without prejudice. Thereafter, on 18th February, 2009 the respondent No.1 was directed by IRDA to furnish further information. Subsequent thereto on 23rd April, 2009the respondent No.1 requested the IRDA for renewal of the said license. The letter was duly replied by the IRDA on 30th April, 2009 intimating that examination of renewal application was being continued and as soon as a decision was taken by the authority the same would be communicated to the respondent. 12. In these circumstances, correspondences were exchanged between the parties and on 18th September, 2009 a recommendation of officers of IRDA was made for renewal of the license in favour of the respondent No.1 imposing penalty of Rs.5,00,000. It is stated that the said fact was not known to the respondent No.1 till 14th September, 2010. 13. It is the case of the appellant/IRDA that recommendation of renewal on imposing penalty of Rs.5,00,000 was overruled by a full time member (Non-life) of IRDA with observation about seriousness of violation and the same warranted for cancellation/non-renewal of license. A draft show cause notice was put of for Chairman's approval. 14. It is further appears that 1st show cause notice was issued by IRDA on 12th October, 2009 and the extension of brokers license granted for a period of 12 months from 17th February, 2009 in order to facilitate disciplinary process. 15. On 23rd October, 2009 the respondent No.1 duly replied to the said first show cause notice and prayed for an extension of license beyond 17th February, 2010 and further prayed for personal hearing. The personal hearing as it would be evident from the minutes of the personal hearing held on 15th December, 2009 and at that point of time the respondent No.1 admitted the fact that misusing the fund in the Insurance Bank Account. The IRDA asked the respondent to furnish the Insurance Bank Account on 5th February, 2010 which was duly replied by the respondent No.1. The IRDA asked the respondent to furnish the Insurance Bank Account on 5th February, 2010 which was duly replied by the respondent No.1. Thereafter the notice was issued by the IRDA on 20th April, 2010 proposing cancellation of license and asked to file written submission in respect thereof. 16. It appears that the respondent No.1 prayed for further extension of time to give reply till end of May, 2010. In the meantime, writ petition being W.P.No.9497 (W) of 2010 was filed by the respondent No.1 challenging the notice dated 20th April, 2010. On 20th May, 2010 the Hon'ble Single Judge after hearing the submission directed not to give effect to the notice of cancellation and granted liberty to IRDA to proceed against the respondent No.1 strictly in accordance with law. 17. Subsequent thereto, on 2nd July, 2010 the writ petition being W.P.No.14227 (W) of 2010 was filed by the respondent No.1 challenging the show cause notice issued on 12th October, 2009 and prayed for renewal of license with effect from 18th February, 2009. On 2nd July, 2010 notice to show cause was issued by IRDA as to why the authority should consider the renewal application of the respondent No.1. On 28th July, 2010 the writ petition being W.P. No.16056 (w) of 2010 was filed by the respondent No.1 challenging inter alia, the notice of IRDA. The said writ petition was disposed of on 14th September, 2010 quashing that part of notice dated 2nd July, 2010 whereby IRDA called upon the petitioner to show cause why their application for renewal of license should be considered and with the direction upon IRDA to decide the respondent No.1's application for renewal in accordance with law. 18. The Writ Petition No.14227 (w) of 2010 which was the 2nd Writ Petition filed by the writ petitioner/respondent No.1 was disposed of by the Hon'ble Single Judge observing that in view of order in W.P. No.16056 (w) of 2010 directing IRDA to decide the application for renewal there was no scope for considering the question whether IRDA should be commanded to renew the respondent No.1 license. 19. On 28th December, 2010 IRDA issued a notice of hearing regarding renewal of license and on 10th January, 2011 personal hearing was given. On 24th January, 2011 additional submission of the respondent No.1 sent to IRDA. 19. On 28th December, 2010 IRDA issued a notice of hearing regarding renewal of license and on 10th January, 2011 personal hearing was given. On 24th January, 2011 additional submission of the respondent No.1 sent to IRDA. It would be evident from the written submission that the respondent No.1 admitted the violation of regulation 23. 20. It appears that on 28th March, 2011 the Writ Petition No.5828 (w) of 2011 was filed with a prayer to grant renewal of license, removal of remark from the website and prohibition from passing any adverse order pursuant to hearing held on 10th January, 2011. 21. On 31st March, 2011 the Hon'ble Single Judge in W.P. No. 5828 (w) of 2011 passed an interim order directing not to upset the decision and recommendation of the competent authority to renew the petitioner's license to payment of Rs.5,00,000/- penalty until next hearing. On 18th April, 2011 His Lordship was pleased to extend the interim order. 22. On 22nd September, 2011 the impugned order was signed by the Chairman containing reasons for refusal to grant renewal of license and after giving reason thereof it was directed as follows:- "i) Directing the petitioner to forthwith disburse estimated amount of Rs.18.88 lakhs out of investment made from insurance money from Insurance Bank Account to the identified/concerned direct insurer or reinsurer. ii) Directing that the respondent No.1 shall continue to be liable to provide services in respect of contract already entered into through it which shall continue upon the period of expiry of those current contract further directing the petitioner to disclose the detail of such contract. iii) Granting opportunity to the respondent No.1 to apply for a reconsideration of IRDA's decision." The learned Advocate of the respondent No.1 further filed 5th writ petition being W.P. No.17286 (w) of 2011 and the Hon'ble Single Judge was pleased to stay the operation of impugned order. 23. It is the case of the Mr. Advocate General appearing in support of this appeal contended that the interim order should be vacated on the ground that the said interim order is in violation of the provisions of Regulation 15 of Insurance Brokers Regulation. The Regulation 15 of the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations 2002, reads as follows:- "15. Effect of refusal to grant licence. The Regulation 15 of the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations 2002, reads as follows:- "15. Effect of refusal to grant licence. - Any applicant, whose application for grant of a licence under regulation 6 or of a renewal thereof under regulation13 has been refused by the Authority, shall, on and from the date of the receipt of the communication under regulation 13(2) cease to act as an insurance broker. He, however, shall continue to be liable to provide services in respect of contracts already entered into through him. Such a service shall continue only upto the period of expiry of those current contracts, details of which shall be disclosed to the Authority on receipt of the communication under regulation 13." 24. According to Mr. Advocate General that the allowing the prayer of the respondent No.1 at the ad interim stage the Hon'ble Single Judge has validly allowed the writ petition which is not permissible under the provisions of law. Hence, he submitted that the order should be vacated. The said order further is contrary to the Insurance Regulatory and Development Authority (Insurance Brokers) Regulation 2002. He further contended that the extension which was granted by the authority for a period of 12 months from 17th February, 2009 only to facilitate the completion of the disciplinary process against the respondent No.1. It is to be understood and should be taken into account that after 17th February, 2010 the respondent No.1 does not have any license to carry on their business as a composite broker. 25. Mr. Advocate General further submitted that in writ petition No. 14227 (w) of 2010 the Hon'ble Single Judge did not pass any order and, in fact, disposed of the said writ petition on 14th September, 2010 against which no appeal was preferred by the writ petitioner. Hence, he submitted that the said order dated 14th September, 2010 has reached its finality and thus no order having the effect of renewal of licence cannot be passed by the learned Judge at this stage. 26. Mr. Advocate General further contended that it is admittedly the writ petitioner acted illegally and with material irregularity. He further contended that by passing the impugned order staying the order passed by the Chairman of Insurance Regulatory and Development Authority dated 22nd September, 2011 the Hon'ble Judge has converted itself into a licensing authority. 27. 26. Mr. Advocate General further contended that it is admittedly the writ petitioner acted illegally and with material irregularity. He further contended that by passing the impugned order staying the order passed by the Chairman of Insurance Regulatory and Development Authority dated 22nd September, 2011 the Hon'ble Judge has converted itself into a licensing authority. 27. He further submitted that by the said order the public at large would be adversely affected and dishonest brokers would play havoc with the public funds. 28. Mr. Advocate General also contended that the respondent No.1 admittedly violated the Regulation 23 of the Insurance Brokers' Regulations by deliberately and surreptitiously diverting the insurance money of the public at large. He also contended that the respondent No.1 failed in his duties in functioning as a honest trustee of the funds of the insured. 29. He also submitted that a detailed hearing was given to the respondent No.1, which would be evident from the minutes of the submissions made in the proceedings and further the facts would say that there is no question of violation of natural justice in the matter. Furthermore, the respondent No.1 had admitted all the facts and also its defaults on which a decision could be given against him. Therefore, it cannot be said that the order of the appellate authority has been passed in violation of principles of natural justice. 30. Mr. Advocate General further submitted that the respondent No.1 could have approached the appellant No.2 for reconsideration of its decision. It is further submitted that while passing the impugned order the learned Judge totally ignored the mandatory provisions of Regulation 15. It is submitted that the hearing was given by the persons who did not given their decision, on the contrary, it was given by the Chairman. 31. It is further submitted that the hearing if prayed before the Chairman who is the appellate authority would be a futile exercise of the provisions. In view of that further opportunity of hearing before the Chairman of the IRDA is nothing but an empty formality. 32. It is further submitted that to show bona fide the respondent duly refunded the amount as directed and further our attention has been drawn to the material annexed to the said petition. In view of that further opportunity of hearing before the Chairman of the IRDA is nothing but an empty formality. 32. It is further submitted that to show bona fide the respondent duly refunded the amount as directed and further our attention has been drawn to the material annexed to the said petition. It would be evidence that the Member Non-life was not present in respect of the matter in question, in fact, it appears from the said document the following recommendation was made:- "In view of the above violations, we recommend that A. Compounding penalty of Rs.5 lakhs may be imposed and B. A warning that any repetition of such instance in future will attract more stringent action may be issued. C. The broking entity may be advised to furnish a certificate from CA that all the money taken out from Regulation 23 has been kept in the bank account. The renewal application will be processed after completion of penalty proceedings." 33. It is further submitted that on the said occasion member of Non-life was not present and the Chairman and all other members duly signed the said document on 23rd September, 2009. It further appears from the document that after the said signature the Joint Director further signed the said note with a direction which is stated as follows:- "As instructed a draft of SCN is enclosed for approval please." 34. He further pointed out that the Executive Director also signed on the said minutes on 25th September, 2009 subsequently and the same was further signed on subsequent dates by others. 35. It appears from the fact that the show cause notice was issued thereafter which is appearing at page 59 of the paper book where the Chairman written as follows:- "The SCN needs to be speaking. Pl. redraft." 36. Mr. Mukherjee also drew our attention to the other documents where it appears that the minutes of the personal hearing was given by Mr. Suresh Mathur, Joint Director and Mr. K. Mahipal Reddy, Deputy Director representing IRDA(Authority) but not by the Chairman. Therefore, he submitted that the Chairman cannot pass an order in the matter. He further drew our attention to the document and it would be evident that although hearing is not given by the Chairman but the Chairman was pleased to pass the impugned order. 37. K. Mahipal Reddy, Deputy Director representing IRDA(Authority) but not by the Chairman. Therefore, he submitted that the Chairman cannot pass an order in the matter. He further drew our attention to the document and it would be evident that although hearing is not given by the Chairman but the Chairman was pleased to pass the impugned order. 37. He further contended that none of the member has right in the matter to decide the question. He further submitted that the renewal should be done by the Chairman himself and there is no question of delegation of power or to decide the question by the non member. 38. The following judgements are cited at bar:- (i) Ashok Kumar Sonkar Vs. Union of India & Ors. reported in (2007) 4 SCC 54 ; (ii) Ossein and Gelatine Manufacturers' Association of India Vs. Modi Alkalies & Chemicals Ltd and Anr. reported in (1989) 4 SCC 264 ; (iii) M/s Raj Restaurant and Anr. Vs. Municipal Corporation of Delhi reported in AIR 1982 SC 1550 ; (iv) S.L, Kapoor Vs. Jagmohan & Ors. reported in AIR 1981 SC 136 ; 39. Mr. Mukherjee relied on the decision of S.L. Kapoor Vs. Jagmohan & Ors. reported in AIR 1981 SC 136 where the Supreme Court held as follows:- "19. Megarry J. Discussed the question in John v. Rees, (1970) 1 Ch 345. He said (at p. 402): "It may be that there are some who would decry the importance which the courts attach to the observance of the rules of natural justice. 'When something is obvious', they may say, 'why force everybody to go through the tiresome waste of time involved in framing charges and giving an opportunity to be heard? The result is obvious from the start'. Those who take this view do not think, do themselves justice. As everybody who has anything to do with the law well knows the path of the law is strewn with examples of open and shut cases which, somehow, were not of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change. As everybody who has anything to do with the law well knows the path of the law is strewn with examples of open and shut cases which, somehow, were not of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change. Nor at those with any knowledge of human nature who pause to think for a moment likely to underestimate the feelings of resentment of those who find that a decision against them has been made without their being afforded any opportunity to influence the course of events." 40. The Supreme Court further held that merely because facts are admitted or are indisputable it does not follow that natural justice need not be observed. But as it appears in the instant case that the respondent No.1 violated the Regulation and the respondent No.1 has already got the hearing. 41. Then, in our opinion, that should be decided at the time of the hearing of the writ petition not at the ad interim stage. The ad-interim order is passed by the Hon'ble Single Judge virtually allowing them to carry on business and to bring more business which is in violation of Regulation 15. Therefore, in our opinion, this judgment cannot be a help to the respondent/writ petitioner No.1. 42. Mr. Mukherjee further questioned that the procedure followed in this case is that the hearing was given by a committee and the order was passed by the Chairman without hearing the matters in question. In our opinion, we refrain ourselves from expressing our opinion on this question. In our opinion, such question should be decided at the time of the hearing of the main writ petition not at the ad interim stage. 43. In the case of Ashok Kumar Sonkar Vs. Union of India & Ors. reported in (2007) 4 SCC 54 the Supreme Court held that the principles of natural justice may not be applicable in a given case unless a prejudice is shown. In the instant case, as it appears that the respondent/writ petitioner No.1 has violated the Regulation. If such Regulation has been violated, in that case the rules are applicable in the facts and circumstances of the case and if such rules are applied, in our opinion, the petitioner cannot be prejudiced. 44. In the instant case, as it appears that the respondent/writ petitioner No.1 has violated the Regulation. If such Regulation has been violated, in that case the rules are applicable in the facts and circumstances of the case and if such rules are applied, in our opinion, the petitioner cannot be prejudiced. 44. We have considered the facts of the case cautiously and it appears to us that admittedly the respondent violated the rule, which they had to follow in the matter. It appears to us that on admission the regulation 15 is a mandatory provision to be followed by a broker when he performing as a broker on behalf of the insurance company. In our opinion, a person who comes before the Court of equity must come with clean hands. Therefore, in our opinion, the order so passed by the Trial Court in this matter cannot be sustained in the eye of law since the respondent No.1 admitted the violation of Regulation 23 and if there is a violation of Regulation 23 then steps to be taken under Regulation 15. It appears to us that, the order so passed by the Hon'ble Single Judge dehors the said regulation. Therefore, we vacate the interim order passed by the Trial Court and allow this appeal. We grant liberty to respondent to continue to provide services in terms of the Regulation 15 of the said Regulation. 45. Hence, this appeal is allowed. 46. Since the appeal is allowed, the connected application being CAN No. 1037 of 2012 has become infructuous and the same is disposed of. 47. Photostat certified copy of this judgment, if applied for, be supplied to the parties on usual undertakings. (PINAKI CHANDRA GHOSE, J.)I agree. (DR. MRINAL KANTI CHAUDHURI, J.) LATER Stay has been asked for by Mr. Amitesh Banerjee, learned advocate for the State. The same is considered and refused. (PINAKI CHANDRA GHOSE, J.)I agree. (DR. MRINAL KANTI CHAUDHURI, J.)