AGAINST KALYAN PRASAD SEN

OF THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY AGAINST KALYAN PRASAD SEN In the matter of Mr. Kalyan Prasad Sen, application dated 20th September 2011, seeking grant of renewal of license to act as Surveyor and Loss Assessor. 1. Mr. Kalyan Prasad Sen (herein after referred to as “Surveyor” ), residing at 211 Pocket V, Mayur Vihar Phase I, Delhi 110091 was granted license to act as Surveyor and Loss Assessor, by the then Controller of Insurance in the year 1986 and since then the license is being renewed after a period of every 5 years. The latest renewal of license bearing license no. 14633 by Insurance Regulatory and Development Authority (“IRDA” or “Authority”) in the year 2006 was valid up to 8th December 2011. 2. The renewal of license was subject to the Surveyor adhering to the code of conduct, duties and responsibilities and provisions of the Insurance Act, 1938, IRDA Act, 1999 and rules and regulations, made there under which may be applied and relevant to the activities carried out as Surveyor. 3. In the year 2009, the Authority vide its Order ref no. IRDA/ORD/SUR/34/09/2009 dated 15th September, 2009 cancelled the license no. 14633 issued to the Surveyor for the following reasons: a. Non submission of material information, about incorporation of a company under Companies Act, 1956, by name M/s Kaypsens Surveyors Pvt. Ltd. in the year 2002, along with one another surveyor Mr Dinesh C Jain. b. Undertaking survey jobs in the name of M/s Kaypsens Surveyors Pvt. Ltd., which was not licensed by the Authority to act as corporate surveyors and loss assessors and thereby violating the provisions of Section 64 UM(1)(D)(ii) of Insurance Act,1938 and IRDA Surveyor Regulations, 2000 (“Regulation”). c. Representing as corporate surveyor and loss assessor through M/s Kaypsens Surveyors Pvt. Ltd., although the said company was not licensed to act as a corporate surveyor and loss assessor. d. Failing to behave ethically and with integrity in all professional pursuits and failure in discharging duties in a satisfactory and professional manner, thereby violating the Code of Conduct laid down under the Regulations. 4. The Surveyor filed a petition before the Hon’ble High Court at Andhra challenging the said cancellation order of the Authority. The Hon’ble Court while staying the Authority’s said cancellation stated that:

“In his explanation, the surveyor/petitioner had maintained that except that letter-head of the company in which he and another licensed surveyor are directors, he has never represented to be a corporate surveyor. No acts of professional misconduct or violation of ethics are attributed”. The petitioner surveyor is hereby refrained from using letter head of the company or any other material.” On this basis the Hon’ble High Court of Andhra Pradesh was pleased to stay the said cancellation order dated 15.09.09. Thus in effect in view of the High Court order, the said license continued till its expiry on 8th December 2011. 5. The Surveyor submitted his application for renewal of his individual license no. 14633 in the prescribed format IRDA – Form 3 AF dated 20th September, 2011, which was received by the Authority on 23.09.2011. 6. Meanwhile the Authority was in receipt of information from insurers that the Surveyor had not only undertaken survey jobs in the name of the unlicensed company M/s Kaypsens Surveyors Private Limited and issued survey reports in the letter head of the company as earlier admitted by the Surveyor, but has also had received survey fee in the name of the said company.

7. The Surveyor was provided an opportunity to make his submissions by way of a personal hearing as stated under proviso to Regulation 8(4) of IRDA Surveyors Regulations, 2000. During the hearing held on 17.01.2012 the Surveyor admitted the fact that the company M/s Kaypsens Surveyors Private Limited received survey fees for survey work undertaken in the company’s name under PAN no AABCK9908M. This is duly recorded in the Minutes of hearing. 8. Copies of Form 16 A issued by the insurers (annexed to this Order) in the name of M/s Kaypsens Surveyors Private Limited under PAN No AABCK9908M for payment of the survey report clearly indicate that the Surveyor has not only utilized the letter head of the unlicensed company M/s Kaypsens Surveyors Private Limited but have also, on his own admission, received survey fees in the company’s name under PAN No AABCK9908M and thus have misrepresented by undertaking survey jobs in the name of M/s Kaypsens Surveyors Private Limited, a company not licensed to act as corporate surveyor and loss assessor. This fact puts to test the contention of the Surveyor that the unlicensed company M/s Kaypsens Surveyors Private Limited was formed only as an association of convenience and that Surveyor has never misrepresented to be corporate surveyor.

9. The Surveyor had all along been maintaining that the company M/s Kaypsens Surveyors private Limited, was incorporated under the Companies Act along with one another licensed surveyor Mr. Dinesh Jain, as Director, for sake of convenience and to undertake survey jobs in Gujarat, wherever professional assistance of qualified CA is required. 10. Further in the written submission dated 17.01.2012, the Surveyor has stated that Mr. Dinesh Jain had taken professional assistance from the Surveyor in claims assigned to him and subsequently the company M/s Kaypsens Surveyors Private Limited was incorporated comprising of only two directors viz. Surveyor and Dinesh C. Jain. 11. Further in the said written submission the Surveyor had also stated that at no point in time he or Mr. Dinesh C. Jain have introduced or identified themselves as corporate surveyor. The Surveyor has also maintained that except using the letter head of the Company he had never represented as corporate surveyor and with the non-renewal of license of Mr. Dinesh C. Jain, in the year 2008 (license no65351expired on 25.08.2008), the company became defunct, thereby maintaining that the Surveyor had no intention to function as corporate surveyor but only as individual licensed surveyor.

12. Based on similar submissions made by the Surveyor, as stated above, in the writ petition no 22620/09 filed by the Surveyor, challenging the cancellation Order dated 15.09.2009 of the Authority, the Hon’ble High court of A.P. held that no act of violation or misconduct was attributable and granted a stay of the cancellation Order 15.09.2009 with a direction to the Surveyor refraining him from using the letter head of the company or any other material. 13. The fact that the company M/s Kaypsens Surveyors Private Limited has received survey fee payments and was thereby conducting business as surveyors and loss assessors in Gujarat was neither brought to the notice of the Authority nor pleaded in the affidavit filed by the Surveyor before Hon’ble High Court of Andhra Pradesh in the year 2009. It was only in the personal hearing on 17th January, 2012, that the Surveyor submitted before the Authority that the unlicensed company M/s Kaypsens Surveyors Private Limited has conducted survey jobs and received survey fees under the PAN No. AABCK9908M. 14. The Authority based on the above information regarding the Surveyor undertaking survey jobs for and receiving of survey fees in the name of unlicensed entity, namely, M/s Kaypsens Surveyors Private Limited decided to give the Surveyor fresh opportunity of being heard and accordingly issued a fresh Show Cause Notice dated 17.01.12 (SCN) as to why the renewal application of the Surveyor should not be rejected as provided under Regulation 8(4) of the Surveyors Regulations 2000 in the light of this new information.

15. In response to the above SCN Surveyor had requested for personal hearing which was acceded to and he was heard on 07.03.2012 at IRDA at 3 PM. He replied to the SCN vide his written submission dated 07.03.12 submitted in the hearing which states the following: a. That the allegation leveled in the SCN is a matter pending adjudication before the High Court and being sub-judice cannot be decided by IRDA. b. That M/s Kaypsens Surveyors Private Limited was formed merely as an association between the Surveyor and another individual surveyor, Mr. Dinesh C. Jain. All the survey jobs were done in individual capacity quoting individual surveyor license number only. c. That the fee received by M/s Kaypsens Surveyors Private Limited was retained by Mr. Dinesh Jain and all surveys done against the said fees were shown in the performance report of Mr. Dinesh Jain only. d. That mere copies of Form 16A are not conclusive for showing any act of misconduct against him. The above points are hereby dealt with seriatim as follows – a) It is not disputed that the matter is pending before the Hon’ble High Court of AP and the said matter relates to cancellation of this Surveyor’s license.

The submission of the Surveyor that he was merely using the letter head of the unlicensed company viz. M/s. Kaypsens Surveyors Pvt. Ltd was accepted by the court and on this basis the Court was pleased to stay the Order of the Authority dated 15.09.2009 cancelling the Surveyor’s license. , s By the Surveyor’s own admission, the fees were also being collected in the name of the said unlicensed company. This admission has further been corroborated by Form 16 issued by the insurer, a copy of which was also given to the Surveyor. This being a new fact and since the license of the Surveyor expired on 8.12.11, the Authority is empowered to consider renewal application in the light of such fresh facts which have not yet been brought to the attention of the Hon’ble Court by the Surveyor. b) The Surveyor has stated that the unlicensed company, M/s. Kaypsens Surveyors Pvt Ltd was a firm which has an association with another surveyor, Mr. Dinesh Jain and the surveyors jobs were done in the individual capacities under individual license number only. The Authority has processed the renewal application based on the fact that the unlicensed firm has been collecting the fees for undertaking the survey work where the Surveyor and Mr. Dinesh Jain have been directors and thus as director, the Surveyor is responsible for collecting the fees in the name of an unlicensed entity. c) The Surveyor has stated that the fees received by M/s. Kaypsens Surveyor Pvt Ltd were retained by Mr.

Dinesh Jain and all surveys done against the said fees were shown in the name of Mr. Dinesh Jain only as reflected in Mr. Dinesh Jain’s performance report. d) In this regard, the Authority notes that it would have been impossible for the Surveyor to show the performance report of an unlicensed entity and such performance report only in the name of licensed individual surveyors have been received by the Authority. e) Lastly, the Surveyor has stated that mere copies of form 16A are not conclusive to show any misconduct. Form 16A being legal document throws light on the recipient of the fees which in this case is of an unlicensed company under the PAN number registered in the company’s name. The Surveyor being one of the directors of the said company cannot absolve himself from the fact that he had floated the unlicensed company for the purpose of carrying out the survey works in breach of the applicable Regulations. 16. The Authority therefore comes to the conclusion that the contention of the Surveyor that the company M/s Kaypsens Surveyors Private Limited was incorporated along with one another licensed surveyor for sake of convenience and mutual assistance and advise is not borne out by facts on record.

On the contrary the intent to form the company M/s Kaypsens Surveyor Private Limited to conduct business as surveyors and loss assessors in the name of the company itself is clearly evident from the submission and admissions of the Surveyor and from the copies of Form 16A issued by insurers in the name of M/s Kaypsens Surveyors Private Limited under PAN No: AABCK9908M. 17. Reference is drawn to Regulation 15(6) of Surveyors Regulation, 2000 which states that “Every Surveyor and loss assessor ….”shall not accept or perform work which he is not competent to undertake unless he obtains some advice and assistance, as will enable him to carry out the work competently”. 18. Though there is a provision in the Regulation to take assistance and advise wherever required to carry out the work of survey and loss assessment competently such assistance is not envisaged in the form of doing business of corporate surveyor through an unlicensed entity. 19. Thus, from the information provided by the Surveyor and available in our records, it is clear that the Surveyor was conducting business as surveyor and loss assessor, both in the individual capacity and also as director of M/s Kaypsens Surveyors Pvt. Ltd. (an unlicensed entity) under different PAN numbers i.e. in the name of Mr Kalyan Prasad Sen under PAN No AATPS 5134Q and in the name of M/s Kaypsens Surveyors Private Limited under PAN No AABCK9908M.

20. Thus, by conducting business in the name of M/s Kaypsens Surveyors Private Limited (an unlicensed entity), the Surveyor has failed to behave ethically and with integrity in his professional pursuits and has s violated the provisions of Regulation (15)(1) relating to Code of conduct for licensed surveyors and loss assessor. Therefore the under the provisions of Section 42 D of Insurance Act, 1938 the Surveyor is disqualified to act as surveyor and loss assessor. In view of the fact that the Surveyor has violated the provision of Regulation 15(1) Code of conduct, the Authority in terms of Regulation 8(4)(ii) of IRDA Surveyors Regulations, 2000, refuses to grant the renewal of the license no.14633 to Mr. Kalyan Prasad Sen, to act as Surveyor and Loss Assessor.

Place: Hyderabad J. Hari Narayan Date: 27th March, 2012 Chairman, IRDA