52A (1) If at any time the Authority has reason to believe that an insurer carrying on life insurance business is acting in a manner likely to be prejudicial to the interests of holders of life insurance policies, he may, after giving such opportunity to the insurer to be heard as he thinks fit, make a report thereon to the Central Government.
(2) The Central Government, if it is of opinion after considering the report that it is necessary or proper to do so, may appoint an Administrator to manage the affairs of the insurer under the direction and control of the Authority.
(3) The Administrator shall receive such remuneration as the Central Government may direct and the Central Government may at any time cancel the appointment and appoint some other person as Administrator.
(4) The management of the business of the insurer shall as on and after the date of appointment of the Administrator vest in such Administrator, but except with the leave of the Authority the Administrator shall not issue any further policies.
(5) As on and after the date of appointment of the Administrator any person vested with any such management immediately prior to that date shall be divested of that management.
(6) The Authority may issue such directions to the Administrator as to his powers and duties as he deems desirable in the circumstances of the case, and the Administrator may apply to the Authority at any time for instructions as to the manner in which he shall conduct the management of the business of the insurer or in relation to any matter arising in the course of such management.
Powers and duties of the Administrator
52B (1) The Administrator shall conduct the management of the business of the insurer with the greatest economy compatible with efficiency and shall, as soon as may be possible, file with the Authority a report stating which of the following courses is in the circumstances most advantageous to the general interests of the holders of life insurance policies, namely:-
(a) the transfer of the business of the insurer to some other insurer:
(b) the carrying on of its business by the insurer (whether with the
policies of the business continued for the original sum insured with the
addition of bonuses that attach to the policies or for reduced amounts);
(c) the winding up of the insurer; and
(d) such other course as he deems advisable.
(2) On the filing of the report with the Authority, the Authority may take such action as he thinks fit for promoting the interests of the holders of life insurance policies in general.
(3) Any order passed by the Authority under sub section (2), shall be binding on all persons concerned, and shall have effect notwithstanding anything in the memorandum or articles of association of the insurer, or a company.
Powers of Administrator respecting property liable to attachment under Section 106
52BB. (1) If the Administrator is satisfied that any person has rendered himself liable to be proceeded against under Section 106, he may, pending the institution of proceedings against such person under that section, by order in writing, prohibit him or any other person from transferring or otherwise disposing of any property which, in the opinion of the Administrator, would be liable to attachment in proceedings under that section.
(2) Any person aggrieved by an order made by the Administrator under sub section (1) may, within fourteen days from the date on which the order is served on him, appeal against such order to the Central Government, and the Central Government may pass such order thereon as it thinks fit.
(3) An order made by the Administrator under sub section (1) shall, subject to any order made by the Central Government on appeal, be in force for a period of three months from the date of the order unless, before the expiry of the said period, an application is made under sub section (1) of Sec. 106 to the Court competent to exercise jurisdiction under that sub section, and when such an application is made, the order shall, subject to any order made by that Court, continue in force as if it were an order of attachment made by that Court in proceedings under that section.
(4) An order made by the Administrator under this section shall,—
(a) in the case of an order affecting a corporation or firm, be served in
the manner provided for the service of summons in rule 2 of Order XXIX or
rule 3 of Order XXX, as the case may be, in the First Schedule to the Code of
Civil Procedure, 1908 (5 of 1908), and
(b) in the case of an order affecting a person not being a corporation or
firm, be served on such person¬ -
(i) personally, by delivering or tendering to him the order, or
(ii) by post, or
(iii) where the person cannot be found, by leaving a copy of the order with some adult male member of his family or by affixing such copy to some conspicuous part of the premises in which he is known to have last resided or carried on business or personally worked for gain.
and every such order shall also be published in the official Gazette.
(5) If any question arises whether a person was duly served with an order under sub section (4), the publication of the order in the official Gazette shall be conclusive proof that the order was so served, and a failure to comply with the provisions of Clause (a) or Clause (b) of sub section (4) shall not affect the validity of the order.
(6) Notwithstanding anything contained In this sections any property in respect of which an order has been made by the Administrator may, with the previous permission of the Administrator and subject to such terms and conditions as he may impose, be transferred or otherwise disposed of.
(7) Notwithstanding anything contained in any other law for the time being in force, the transfer or other disposition of any property in contravention of any order made by the Administrator under this section or of any terms and conditions imposed by him shall be void.
(8) For the purpose of enabling him to form an opinion as to whether any property would be liable to attachment in proceedings under Sec. 106 or for the purpose of enabling him to institute proceedings under that section, the Administrator may require any person to furnish information on such points or matters as, in the opinion of the Administrator, may be relevant for the purpose, and any person so required shall be deemed to be legally bound to furnish such information within the meaning of Sec. 176 of the Indian Penal Code (45 of 1860).
(9) The Administrator shall have all the powers of a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit in respect of the following matters, namely:
(a) summoning and enforcing the attendance of witnesses and examining them on oath;
(b) requiring the production of documents; and
(c) receiving evidence on affidavits,
and any proceeding before the Administrator under this section shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code (45 of 1860).
(10) Save as provided in this section or in Section 106, and notwithstanding anything contained in any other law for the time being in force,—
(a) no suit or other legal proceeding shall lie in any Court to set aside or modify any order of the Administrator or the Central Government made under this section, and
(b) no Court shall pass any decree, grant any injunction or make any other order which shall have the effect of nullifying or affecting in any way any such order.
Cancellation of contracts and agreements
52C. The Administrator may, at any time during the continuance of his appointment with respect to an insurer and after giving an opportunity to the persons concerned to be heard, cancel or vary (either unconditionally or subject to such conditions as he thinks fit to impose) any contract or agreement (other than a policy) between the insurer and any other person which the Administrator is satisfied is prejudicial to the interest of holders of life insurance policies.
Termination of appointment of Administrator
52D. If at any time, on a report made by the Authority in this behalf, it appears to the Central Government that the purpose of the order appointing the Administrator has been fulfilled or that for any reason it is undesirable that the order of appointment should remain in force, the Central Government may cancel the order and thereupon the Administrator shall be divested of the management of the insurance business which shall, unless otherwise directed by the Central Government, again vest in the person in whom it was vested immediately prior to the date of appointment of the Administrator.
Finality of decision appointing Administrator
52E. Any order or decision of the Central Government made in pursuance of Section 52 A or Section 52 D shad be final and shall not be called in question in any Court.
Penalty for withholding documents of property from Administrator
52 F If any director or officer of the insurer or any other person fails to deliver to the Administrator any books of account, registers, or any other documents in his custody relating to the business of the insurer the management of which has vested in the Administrator, or retains any property of such insurer, he shall be punishable with imprisonment which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
Protection of action taken under Sections 52 A to 52 D
52G No suit, prosecution or other legal proceeding shall lie against an Administrator for anything which is in good faith done or intended to be done in pursuance of Section 52 A, Section 52 B, Section 52 BB or Section 52 C.
(2) No suit or other legal proceeding shall lie against the Central Government or the Authority for any damage caused or likely to be caused by anything which is in good faith done or intended to be done under Section 52 A, Section 52 B, or Section 52 D.
Acquisition of the Undertakings of Insurers in Certain Cases
Power of Central Government to acquire undertakings of insurers in certain cases
52H (1) If, upon receipt of a report from the Authority, the Central Government is satisfied that an insurer,¬
(a) has persistently failed to comply with—
(i) any direction given to him under Section 34, Section 34 F or Section 34G,or
(ii) any order made under Sec. 34 E; or
(b) is being managed in a manner detrimental to the public interest or to the interests of his policy holders, or share holders,
and that¬
I. in the public interest, or
II. in the interest of the policy holders or share holders of such insurer,
it is necessary to acquire the undertaking of such insurer, the Central Government may, by notified order, acquire the undertaking of such insurer (hereafter in this section and in Sections 52 I, 52 J and 52 N and in the Eighth Schedule referred to as the acquired insurer) with effect from such date as maybe specified in the order (hereinafter in this section and in Sections 52 1 and 52J and in the Eighth Schedule referred to as the appointed day):
Provided that no undertaking off an insurer shall be so acquired unless such insurer has been given a reasonable opportunity of showing cause against the proposed action
Explanation~.—For the purposes of this section and of Sections 52 1 to 52N—
(a) "notified order" means an order published in the official Gazette;
(b) "undertaking", in relation to an insurer incorporated outside India, means the undertaking of the insurer in India,
(2) Subject to the other provisions contained in this section and in Sections 52¬-I to 52M, on the appointed day, all the assets and liabilities of the undertaking of the acquired insurer shall stand transferred to, and vest in, the Central Government.
(3) The assets and liabilities of the undertaking of the acquired insurer shall be deemed to include all rights, powers, authorities and privileges and all property, whether movable or immovable, including, in particular, cash balances, reserve funds, investments, deposits and all other interests and rights in, or arising out of, such property' as may be in the possession of or held by, the acquired insurer immediately before the appointed day and all books, accounts and documents relating thereto, and shall also be deemed to include all debts, liabilities and obligations of whatever kind, then existing of the acquired insurer.
(4) Notwithstanding anything contained in sub section (2), the Central Government may, if it is satisfied that all the assets and liabilities of the undertaking of the acquired insurer should, instead of vesting in the Central Government, or continuing to so vest, vest in a corporation or company, whether established under the scheme made under Sec. 52 I or not (hereafter In this section and in Section 52 1 to 52 N and in the Eighth Schedule referred to as the acquired insurer), by order, direct that the assets and liabilities of the said undertaking, shall vest in the acquiring insurer, either on the publication of the notified order or no such other date as may be specified in this behalf in the direction.
(5) Where the undertaking of the acquired insurer vests in an acquiring insurer under sub section (4), the acquiring insurer shall, on and from the date of such vesting, be deemed to have become the transferee of the acquired insurer and all the rights and liabilities in relation to the acquired insurer shall, on and from the date of such vesting, be deemed to have been the rights and liabilities of such acquiring insurer.
(6) Unless otherwise expressly provided by or under this section or Sections 52 I to 52M, all contracts, deeds, bonds, agreements, powers of attorney, grants of legal representation and other instruments of whatever nature subsisting, having effect immediately before the appointed day and to which the acquired insurer is a party or which are in favour of the acquired insurer shall be of as full force and effect against or in favour, of the Central Government or, as the case may be, the acquiring insurer, and may be enforced or acted upon as fully and effectually as of in the place of the acquired insurer the Central Government or the acquiring insurer had been a party thereto or as if they had been issued in favour of the Central Government or the acquiring insurer, as the case may be.
(7) If, on the appointed day, any suit, appeal or other proceeding, of whatever nature, is pending by or against the acquired insurer the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertaking of the acquired insurer or of anything contained in this section or in Sections 52 I to 52M, but the suit, appeal or other proceeding may be continued, prosecuted and enforced by or against the Central Government or the acquiring insurer, as the case may be.
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