Judgment 1. In this writ petition, the petitioner is aggrieved by the orders dated 20.2.2003 and 25.2.2003, contained in Annexure 4 series, whereby and whereunder his renewal commission has been forfeited. 2. In short, the relevant facts are that the petitioner was initially appointed as an agent on probation with effect from 7.11.1988 by the Branch Manager, Muzaffarpur Branch Office-1 vide letter, contained in Annexure 1, for the period 7.11.1988 to 6.11.1992. He was given Agency Code No. 04042531. Later, vide letter dated 5.12.1989 his appointment as an Insurance Agent was confirmed as per regulation 7(2) of the Life Insurance Corporation of India (Agents) Regulations, 1972 (hereinafter referred to as the Regulations). It is claimed that the petitioner continuously worked as an agent for more than 13 years and finally on 15.12.2001 he submitted his resignation to the competent authority, on receipt of which the petitioner, vide letter dated 28.1.2002 (Annexure 3), was communicated that his said resignation is under consideration before the competent authority and that, in the meanwhile, the competent authority has directed to stop his commission bill till further instructions. 3. The petitioner thereafter joined as Sale Team Manager in Allianz Bajaj Life Insurance Company Ltd., Patna Branch, where he is presently working. Finally the petitioner, vide impugned orders, passed by the Marketing Manager and communicated by the Branch Manager of the L.I.C., was intimated about the forfeiture of his renewal commission under sub-section (c) of section 44 of the Insurance Act, 1938 (hereinafter referred to as the Act). 4. It is stated by the petitioner that the respondent I.C. has been giving such benefits to many such other agents, whose agency has been terminated but still they are getting renewal commission on such premiums received by the L.I.C. of India and the prime example of such agents are those who have been promoted or absorbed as Development Officer in the L.I.C. of India and still getting their renewal commission though they have ceased to be an agent. This fact has been answered by the respondent-L.I.C. in paragraph 18 of their counter affidavit simply stating that the said submissions are misconceived and are fit to be rejected and that the petitioner has failed to cite any identical case in which renewal commission has been paid. 5. This fact has been answered by the respondent-L.I.C. in paragraph 18 of their counter affidavit simply stating that the said submissions are misconceived and are fit to be rejected and that the petitioner has failed to cite any identical case in which renewal commission has been paid. 5. In the counter affidavit filed on behalf of the respondent-L.I.C, it is stated that the petitioner resigned as an agent to join another Life Insurance Company, namely, Allianz Bajaj Life Insurance Company even without accepting of his resignation by the competent authority. However, it is admitted that in view of the provisions, as contained in regulation 17(2) of the Regulations, his agency will be deemed to have been terminated after the expiry of one month from the date of submission of his resignation. It is further stated that the petitioner purposely resigned as an agent of the Corporation to join Allianz Bajaj Life Insurance Company. As such, in accordance with the provisions of section 44 of the Act, he is not entitled to claim renewal commission. According to the respondents, the petitioner had obtained an advance of Rs. 1,06,708.40. It is alleged that he took an advance of Rs. 65,000/- just ten days before when he was already contemplating to leave the Corporation and, further, got the amount of loan adjusted at the Branch level upto December, 2002 ignoring the direction given in the letter dated 31.12.2001 of the Senior Divisional Manager to stop payment of commission leaving a sum of Rs. 10,204.88 unadjusted although in accordance with law the petitioner was/is not entitled to receive commission. It is alleged that from the letter of resignation, contained in Annexure A, it is clear that he submitted his resignation after he already obtained a. letter of appointment in the service of Allianz Bajaj Life Insurance Company. The respondents have thus stated that the competent authority, having noticed the fact of adjustment of advance against renewal commission amount, though not payable to the petitioner, is contemplating to take suitable legal action for recovery of the amount. 6. Learned counsel for the petitioner has contended that the petitioners case is governed by the provisions of the Regulations in which regulation 19 deals with payment of commission on discontinuance of agency. 6. Learned counsel for the petitioner has contended that the petitioners case is governed by the provisions of the Regulations in which regulation 19 deals with payment of commission on discontinuance of agency. According to the learned counsel, in the event of termination of the appointment of an agent, except for fraud, the commission on the premiums received in respect of the business secured by him is to be paid to him if such agent has continually worked for at least 5 years since his appointment and policies assuring a total sum of not less than Rs. 2 lakhs effected through him were in full force on a date one year before his ceasing to act as such agent; or has continually worked as an agent for at least 10 years since his appointment. He contended that the perusal of regulation 19 shows that it does not contain any such clause as has been cited in the impugned orders like the provisions of section 44(c) of the Act and, in fact, regulation 10(6) of the Regulations provides that save as provided by regulation 19, no commission shall be payable to an agent after he has ceased to be an agent. Learned counsel, thus, contended that the petitioner has admittedly continually worked as an agent for over 10 years and thus his case for grant for commission on discontinuance of agency is protected by regulation 19(1)(b) of the Regulations. 7. Mr. Singh, learned counsel for the respondent-L.I.C. contended that the present termination of agency of the petitioner has been treated to be one under regulation 16(1)(b) of the Regulations as he acted in a manner prejudicial to the interests of the Corporation by joining as Sale Team Manager in Allianz Bajaj Life Insurance Company Ltd., Patna Branch and soliciting and procuring insurance business for them which is prejudicial to the interests of the Corporation. 8. 8. Learned counsel for the L.I.C. submitted that in any view of the matter, clause (c) of proviso to section 44 of the insurance Act clearly provides that on termination of agreement of agency after the agent has served the insurer continually and exclusively for at least ten years, such agent cannot be refused payment of commission due to him on renewal premium except for fraud but only if after his ceasing to act as such agent he does not directly or indirectly solicit or procure insurance business for any other person. According to the learned counsel for the L.I.C., this provision has overriding effect and even if there is provision in the Regulations to the contrary, the provision contained in section 44 (c) of the Act shall prevail over the provision of the Regulations. 9. I consider it useful to quote section 44(c) of the Act hereunder : "44. Prohibition of cessation of payments of commission.(1) Notwithstanding anything to the contrary contained in any contract between any person and an insurance agent providing for the forfeiture or stoppage of payment of renewal commission to such insurance agent, no such person shall, in respect of life insurance business transacted in India, refuse payment to an insurance agent of commission due to him on renewal premium under the agreement by reason only of the termination of his agreement, except for fraud : Provided that (a) .......... (b) .,......... (c) such agent has served the insurer continually and exclusively for at least ten years and after his ceasing to act as such agent he does not directly or indirectly solicit or procure insurance business for any other person." 10. I am unable to accept the said submission of the learned counsel for the respondent-L.I.C. Section 44 of the Act does not at all deal with agents appointed by the L.I.C under the Regulations. It deals with contract service of an insurance agent under the chief agent of the insurer as per the contract between them. It is true that the explanation attached to the proviso provides that for the purpose of sub-section (1) of section 44, the service of an insurance agent under a chief agent of the insurer, whether before or after the commencement of the Insurance (Amendment) Act, 1950, shall be deemed to be service under the insurer, but it does not deal with the agents recruited under the Regulations. 11. It is not disputed that the petitioner was an agent recruited under the Recruitment (Agents) Regulations, 1972. Regulation 16, referred to by the learned counsel for the respondent-L.I.C, has no relevance to the facts of the present case as it deals with termination of agency for certain lapses, which is not the case of the respondent-L.I.C. Admittedly, the petitioner resigned from the agency and under regulation 17(2) after the expiry of the period of one month his agency stood terminated. It is not the case of the respondents that before termination of agency, the petitioner was charged with the lapses mentioned in regulation 16 of the Regulations and was given a reasonable opportunity to show cause with respect to it. 12. Learned counsel for the petitioner has rightly referred to regulation 10 of the Regulations which deals with payment of commission to agents and under its clause (6) save as provided by regulation 19, no commission shall be payable to an agent after he has ceased to be such agent. Regulation 19 does not provide for refusal of payment to an agent, who possesses the qualifying service, on the ground that after the resignation/cessation to act as an agent cannot directly or indirectly solicit or procure insurance business for any other person as is provided in clause (c) of proviso to sub-section (1) of section 44 of the Act. Regulation 19(1)(b) of the Regulations rather provides that in the event of termination of appointment of an agent, except for fraud, the commission on the premiums received in respect of business secured by him shall be paid to him if such agent has continually worked for at least 10 years since his appointment and not only that any commission payable to an agent under sub-regulation (1) shall, not-withstanding his death, be payable to his nominee or nominees or, if no nomination is made or is subsisting, to his heirs, so long as such commission would have been payable had the agent been alive under the provisions of sub-regulation (2) except that he had continually worked as an agent for not less than 2 years from the date of his appointment and policies assuring a total sum of not less than Rs. 1 lakh effected through him were in full force on the date immediately prior to his death or if the renewal commission payable falls below Rs. 1 lakh effected through him were in full force on the date immediately prior to his death or if the renewal commission payable falls below Rs. 100/- in any financial year in which case the competent authority may, notwithstanding anything contained in the said sub-regulation, commute all commission payable in subsequent financial years for a lump sum which shall be three times the amount of renewal commission paid in the said financial year, and on the payment of such lump sum to the agent or his nominees or heirs, as the case may be, no commission on the business effected through the agent shall be payable in the financial years subsequent to the said financial year. It is not the case of the respondent-L.I.C. that the termination of appointment of the petitioner as an agent is on account of commission of fraud. 13. Under such circumstances, in my opinion, the impugned forfeiture of the renewal commission purporting to be under section 44(c) of the Act is misconceived and wholly arbitrary. The case of the petitioner is governed by the provisions, contained in regulation 19(1)(b) of the Regulations, as referred to above. 14. The writ application is, thus, allowed. The impugned orders, contained in Annexures 4 series, are quashed. The respondent-LI.C. is directed to release the remaining amount of renewal commission in favour of the petitioner forthwith and shall continue to pay the same to the petitioner as per regulation 19(1)(b) of the Regulations, as referred to above.