NITYA NAND PANDEY v. LIFE INSURANCE CORPORATION OF INDIA
2001-05-25
R.K.AGRAWAL
body2001
DigiLaw.ai
R. K. AGARWAL, J. ( 1 ) THE petitioner, Nityanand Pandey was filed this writ petition seeking a writ, order or direction in the nature of certiorari quashing the order dated 8. 5. 1995 passed by the Senior Divisional manager, Life Insurance Corporation of India, Gorakhpur, respondent No. 3, [filed as annexure-6 to the writ petition) and the order dated 23. 1. 1996 passed by the Zonal Manager, north Central Zone, L. I. C. Kanpur, [filed as Annexure-10 to the writ petition]. A further relief has been sought for reinstating the agency of the petitioner with all consequential benefits and in continuity. ( 2 ) BRIEFLY stated the facts giving rise to the present petition are as follows: ( 3 ) THE petitioner was appointed as an agent of Life Insurance Corporation by the Branch manager of Deoria Branch on 24/25. 10. 1986 and the agency Code allotted to the petitioner was 5023282. Initially, the appointment of the petitioner as an agent was for a period of 3 years, which had been subsequently renewed twice, the last renewal being done in October, 1992. As an agent the petitioner is entitled to payment of commission of the insurance policies procured by him. The terms and conditions of the appointment of an agent like the petitioner is governed by the Life Insurance Corporation [agent] Regulation, 1972 [hereinafter referred to or the Agent regulation]. According to the petitioner after getting requisite formalities completed he submits the proposal for insurance of a person to the Development Officer of the L. I. C. to whom to he had been attached and after due verification by the Development Officer, the proposal is submitted by the Development Officer to the branch office for its acceptance and completion of other requisite formalities. The Development Officer submits the moral hazard report, proof of age of the insurer and other necessary information. It is the case of the petitioner that the proposal submitted by him cannot be accepted and cannot result into a life insurance policy of the proposed insurer, unless and until the same is duly verified, authenticated and accented by the Development Officer to whom he is attached.
It is the case of the petitioner that the proposal submitted by him cannot be accepted and cannot result into a life insurance policy of the proposed insurer, unless and until the same is duly verified, authenticated and accented by the Development Officer to whom he is attached. It appears that the Manager [sales], Divisional office, Gorakhpur, sometimes in March, 1992, made some enquiry from the petitioner pertaining to an insurance policy bearing No. 820379818 to which the petitioner replied that he had no concern whatsoever with the said policy and also intimated that he had not insured it. A show cause notice on 22. 12. 93 was served upon the petitioner calling upon him to submit his reply to certain charges levelled therein. By means of the said show cause notice the petitioner was asked to submit his explanation with regard to eight insurance policies referred to in the enclosure annexure to the notice and was charged that he had resorted to bogus insurance policy and had also received the commission on such policies, by means of voucher No. 547, dated 23. 5. 91. The notice also mentioned that his agency is liable to be terminated and the recurring commission payable to him is to be forfeited. Having received of the aforesaid notice the petitioner submitted his reply on 18. 1. 1994 and denied all the charges. He also denied to have received any commission on account of the account of the said policies and further stated that the commission paid to him by means of voucher No. 547, dated 23. 5. 91 pertains to payment of commission with regard to entirely different insurance policies and had nothing to do with the eight insurance policies referred to in the show cause notice. He further stated that the proposal had neither been filled up by the petitioner nor the insurance policies had anything to do with him. He also sought for giving a copy of the proposal, agent confidential report and other related documents pertaining to the disputed policies. It has been farther claimed by the petitioner that without supplying the documents asked for and without giving opportunity of personal hearing and without making any enquiry whatsoever, the respondent No. 3 vide order dated 8. 5. 95 terminated the agency of the petitioner and forfeited all recurring commission payable to him. ( 4 ) AGGRIEVED by the order dated 8.
5. 95 terminated the agency of the petitioner and forfeited all recurring commission payable to him. ( 4 ) AGGRIEVED by the order dated 8. 5. 95, the petitioner filed a writ before this Court being Civil misc. Writ Petition No. 14967 of 1995, which was however, dismissed on the ground of availability of Statutory remedy by way of appeal under Regulation-20 of the Agent Regulation vide judgment and order dated 21. 11. 95. The petitioner fled an appeal on 28. 11. 95 before the zonal Manager, North Central, Kanpur, respondent No. 2. However, the respondent No. 2 rejected the appeal filed by the petitioner vide order dated 23. 1. 96. ( 5 ) IT appears that enquiry was also set up against Sri Prem Shanker Singh, Development Officer, with whom the petitioner was attached as agent on the same ground i. e. the 8 disputed policies which are the subject matter of the present controversy. The Development Officer was issued a charge-sheet on 16. 9. 93 [filed as Annexure-11 to the writ petition]. Thereafter, an enquiry officer was appointed who vide report dated 1. 11. 95 had exonerated the Development Officer from all the charges levelled against him. The respondent No. 3 vide order dated 31. 1. 96 had dropped the enquiry against Sri P. S. Singh, Development Officer. Deriving strength from dropping of the proceedings against Sri P. S. Singh, the Development Officer, by the respondent No. 3, the petitioner has filed the present writ petition seeking the aforementioned reliefs. Apart from challenging he impugned orders on merits, the petitioner has also challenged the said order on the ground that on the very same set of charges which was levelled against the petitioner in the show cause notice dated 16. 9. 93, the enquiry was initiated against Sri P. S. Singh, Development officer vide charge-sheet dated 16. 9. 93 and the enquiry having been dropped by the respondent no. 3 against Sri P. S. Singh, Development Officer vide order dated 31. 1. 96. Thus, exonerating sri P. S. Singh, the agency of the petitioner could not have been terminated and the recurring commission was not liable for forfeiture. The specific averment in that behalf has been made by the petitioner in paragraphs-29 to 33 and 61 to 63 to the writ petition. ( 6 ) THIS Court while entertaining the writ petition on 29. 2.
The specific averment in that behalf has been made by the petitioner in paragraphs-29 to 33 and 61 to 63 to the writ petition. ( 6 ) THIS Court while entertaining the writ petition on 29. 2. 96 directed the respondents to file a counter affidavit and also to produce the record pertaining to the case including the enquiry report with regard to the Development Officer Sri P. S. Singh. ( 7 ) COUNTER and rejoinder affidavits have been exchanged. With the consent of the parties, the writ petition is disposed of at the admission stage itself in accordance with the Rules of the Court. ( 8 ) SRI Ashok Khare, learned Counsel for the petitioner submitted that except for giving a show cause notice by the respondent No. 3, the petitioner was not provided with the document which he had specifically asked for viz. proposal form, agent enquiry report and other documents in respect of 8 insurance policies in question while denying his involvement and further no enquiry was ever held nor the report of the alleged enquiry, if any, was given to him which vitiates the impugned order. He further submitted that he had not received any commission in respect of the 8 insurance policies in question, which fact having been found to be correct itself, shows that the said policies were not procured by him and in any event when on the same set of facts, the development Officer with whom the petitioner was attached, has been exonerated after full fledged enquiry by the respondent No. 3 himself, the agency of the petitioner could not have been terminated. ( 9 ) SRI Ashok Khare, further relied upon the enquiry report dated 30. 10. 95 submitted by Sri B. O. Singh, Enquiry Officer [filed as Annexure-1 to the rejoinder affidavit] in support of his plea that the said enquiry officer, who conducted the enquiry against Sri P. S. Singh, Development Officer had found as a fact that if Sri N. N. Pandey, Agent had really introduced and got completed these case, he might have got the commission thereof. No receipt of such commission even up to date of above inquiry and more so no efforts to get this commission for such a long time only indicate that such cases are not due to the efforts of this agent and concerned Development Officer.
No receipt of such commission even up to date of above inquiry and more so no efforts to get this commission for such a long time only indicate that such cases are not due to the efforts of this agent and concerned Development Officer. These are along the bogus cases manufactured to raise the business figure as alleged by Sri P. S. Singh, development Officer. The above fact supports the case of accused employee. ( 10 ) FROM perusal of the enquiry report it appears that one of the witnesses i. e. Sri Y. N. Srivastava, a retired employee, who was working as Asstt. in the Sales Department of the L. I. C. branch office, Deoria and doing registration of proposals, had stated that such bogus proposal have been registered under the direction of Sri Y. P. Tripathi, the then A. B. M. (S) of Deoria branch, directly by him and not by any development officer and agent. The Inquiry Officer had found that the statement of Sri Y. N. Srivastava supports the case of Sri P. S. Singh, development Officer, that heavy amount of bogus business have been done in the year 1991-92 and 1992-93 in his branch by certain officials to raise business figures. Thus, according to Sri ashok Khare, learned Counsel for the petitioner, the petitioner is an innocent person and has not indulged in securing bogus insurance policies as would be clear from the finding recorded by the inquiry Officer in proceedings against Sri P. S. Singh, Development Officer. ( 11 ) SRI Ashok Khare, further submitted that the impugned order do not give any reasons and had not at all considered the explanation given by the petitioner. Further, the authorities did not give any opportunity of personal hearing nor had supplied the documents asked for by the petitioner, and therefore, the impugned orders are even otherwise liable to be set aside on the ground of being in violation of the principles of equity, fair play and natural justice. ( 12 ) ON the other hand, Sri R. P. Goyal, Senior Advocate assisted by Sri Manish Goyal Advocate, appearing on behalf of the respondents submitted that the petitioner is not an employee of the l. I. C. and his case cannot be equated with that of the Development Officer, who is an employee of the Corporation.
( 12 ) ON the other hand, Sri R. P. Goyal, Senior Advocate assisted by Sri Manish Goyal Advocate, appearing on behalf of the respondents submitted that the petitioner is not an employee of the l. I. C. and his case cannot be equated with that of the Development Officer, who is an employee of the Corporation. In the present case, there has been a loss of confidence in the petitioner and, therefore, his agency has been rightly terminated. He further submitted that under Regulation-24 of the Agent Regulation, 1972, the petitioner has a right of addressing memorial to the Chairman of the Corporation against the order passed in appeal under Sub-regulation (1) of Regulation 17 and, therefore, the present writ petition is liable to be dismissed on the ground of alternative remedy. Further, the relationship of the petitioner with the corporation is a result of a contract which cannot be enforced in the present proceeding under Article 226 of the Constitution, and the remedy, if any, available to the petitioner is by way of filing a suit for claiming damages. ( 13 ) SRI Ashok Khare, learned Counsel for the petitioner, however, submitted that the Agent regulation, 1972 has been framed by the L. I. C. under Section 49 of the Life Insurance corporation Act, 1956 with the previous approval of the Central Government and has statutory force. The terms and conditions of the appointment of the agent and the work done by such agent is governed by the Agent Regulation, 1972 and the agency can only be terminated in the manner provided in Regulations 13 to 17 of the Regulations and not otherwise. The question of filing a suit for claiming damages for wrongful termination of the agency in the present case does not arise as the L. I. C. is a State within the meaning of Article 12 of the Constitution of India, which is not expected to act arbitrarily and unreasonably. He submitted that there is no dispute on facts in the present case. According to him addressing of a memorial to the Chairman of the corporation as provided under Regulation-24 is not an adequate alternative remedy as it does not provide for giving of opportunity of hearing to the petitioner in contra distinction to regulation-23 wherein reasonable opportunity of representing the case is given to the petitioner before the appellate authority.
According to him addressing of a memorial to the Chairman of the corporation as provided under Regulation-24 is not an adequate alternative remedy as it does not provide for giving of opportunity of hearing to the petitioner in contra distinction to regulation-23 wherein reasonable opportunity of representing the case is given to the petitioner before the appellate authority. He further submitted that the impugned orders have been passed in violation of the principles of natural justice and in any even in view of findings recorded by the Inquiry Officer while holding the enquiry against Sri P. S. Singh, Development Officer, with whom the petitioner was attached as an agent and who was charge-sheeted on the same set of facts, there is no factual dispute in the present writ petition and, therefore, the petitioner ought not to be relegated to avail the remedy under Rcgulation-24 at this stage. He further submitted that this Court had already entertained the present petition as for back as on 29. 2. 96 and had directed the respondents to file the counter affidavit and also to produce the relevant records in respect of the enquiry held against Sri P. S. Singh. Thus, the plea of alternative remedy is not available to the respondent. ( 14 ) HAVING, heard the learned Counsel for the parties, I find that in the present case, the impugned order dated 8. 5. 95 has been passed by the respondent No. 3 without giving the copies of the proposal, agent confidential report and other connected documents which have been specifically asked by the petitioner in his reply dated 18. 1. 94. These very proposals, agent confidential reports have been relied upon by the respondent No. 3 while passing the impugned order. Thus, the said order has been passed in gross violation of principles of natural justice. Further, I find that in the memorandum of appeal a specific grievance has been made regarding non-supply of the proposals, agent confidential report which have been made the basis of the order dated 8. 5. 95, but the appellate authority while passing the order dated 23. 1. 96 did not advert himself to the said issue at all. Further, the order dated 23. 1. 96 does not give any reason for upholding the order dated 8. 5. 95. Thus, the order dated 23. 1. 96 cannot be sustained.
5. 95, but the appellate authority while passing the order dated 23. 1. 96 did not advert himself to the said issue at all. Further, the order dated 23. 1. 96 does not give any reason for upholding the order dated 8. 5. 95. Thus, the order dated 23. 1. 96 cannot be sustained. ( 15 ) MOREOVER, it is not disputed that the petitioner was attached with Sri P. S. Singh, development Office, Sri P. S. Singh, Development Officer was issued a charge-sheet containing the same charges which was the subject matter of the show cause notice dated 16. 9. 93 issued to the petitioner. A full-fledged enquiry was held in the case of Sri P. S. Singh and the inquiry officer vide report submitted on 30. 10. 95 had exonerated Sri P. S. Singh of the charges levelled against him by holding that such cases are not due to the efforts of this agent (the petitioner) and concerned development officer. Thus, the respondents were not at all justified in cancelling the agency of the petitioner as in the full-fledged enquiry held against the development officer concerned, a finding has been recorded by the inquiry officer on the basis of material on record that the petitioner was not at all involved securing these policies. The petitioner is also entitled for the same treatment which the respondents have given to Sri P. S. Singh, Development officer. So far as the objection regarding maintainability of the writ petition is concerned, I am of the opinion that the L. I. C. is a Statutory Corporation constituted under a Central enactment namely, Life Insurance Corporation Act, 1956. It is a State within the meaning of Article 12 of the Constitution of India. The Agent Regulation, 1972 has been framed under Section 49 of the aforesaid Act, which governed the terms and conditions of appointment of an agent. The agency can be terminated only in the manner prescribed under Regulations 13 and 17 of the Agents regulation, 1972 and not otherwise. None of the conditions mentioned in Regulations, 13 to 17 of the said Act is fulfilled in the present case and, therefore, the termination of the petitioners agency is contrary to the Agent Regulation, 1972.
The agency can be terminated only in the manner prescribed under Regulations 13 and 17 of the Agents regulation, 1972 and not otherwise. None of the conditions mentioned in Regulations, 13 to 17 of the said Act is fulfilled in the present case and, therefore, the termination of the petitioners agency is contrary to the Agent Regulation, 1972. The respondents while cancelling the agency of the petitioner and forfeiting the recurring corn-mission had acted contrary to the Agent regulation, 1972 and, thus, the plea of the learned Counsel for the respondents that at best a suit for damages may be filed by the petitioner and the petitioner is not entitled to invoke the jurisdiction of this Court under Article 226 of the Constitution of India, cannot be accepted. Further, the writ petition has been entertained by this Court on 29. 2. 96 and the respondents were directed to file counter affidavit taking into consideration the averment made by the petitioner that against similar set of charges, the Development Officer has been exonerated and in the enquiry it has been found that such cases are not due to the efforts of the agent and concerned development officer. I agree with the submissions made by the learned Counsel for the petitioner that relegating the petitioner to address memorial to the Chairman of the Corporation under agent Regulation 24 will not in the interest of justice at this stage. ( 16 ) THUS, I do not find any force in the argument raised by the learned Counsel for the respondents regarding the maintainability of the present petition. ( 17 ) IN view of the aforesaid discussion, the impugned orders dated 8. 5. 95 (filed as Annexure-6)and the order dated 23. 1. 96 (filed as Annexure-10) cannot be sustained and are hereby quashed. The petitioner shall be entitled for all consequential benefits. ( 18 ) BEFORE parting with the case I would like to observe that in the enquiry report dated 30. 10. 95 submitted by Sri B. O. Singh (a copy of which has been fifed as Annexure-1 to the rejoinder affidavit), it has been mentioned that these are the bogus cases manufactured to raise the business figure as alleged by Sri P. S. Singh, Development Officer, and the above facts supports the case of accused employee.
10. 95 submitted by Sri B. O. Singh (a copy of which has been fifed as Annexure-1 to the rejoinder affidavit), it has been mentioned that these are the bogus cases manufactured to raise the business figure as alleged by Sri P. S. Singh, Development Officer, and the above facts supports the case of accused employee. He had further found the statement of Sri Y. N. Srivastava, who was working in March, 1991 as an Assistant in Sales Department, in Deoria Branch Office and doing registration of proposals have been registered under the directions of Sri Y. P. Tripathi, the then A. B. M. (S) of Deoria Branch and were directly given to him by Sri Y. P. Tripathi and not by any Development Officer or agent. It that be so, then an enquiry should be instituted against sri Y. P. Tripathi, A. B. M. (S) as he was the main person to have submitted bogus proposal directly in order to achieve the target fixed by the Corporation. It appears that the present petitioner and the Development Officer have been made scope goat at the first instance and the corporation had subsequently exonerated its own employees whereas acting against the petitioner by forfeiting his recurring commission and terminating his agency. ( 19 ) IN the result, the writ petition is allowed with costs. .