ORDER 1. Heard learned counsel for the parties. 2. Both the petitioners were appointed as agents of the respondent Life Corporation of India Ltd. Under Section 49 of the LIC Act 1956, a regulation was made to define the method of recruitment of agents, the terms and conditions of their appointments and work to be done by them. 3. The regulation is known as Life Insurance Corporation of India (Agents) Regulation, 1972. Appointment of agents is in terms of the regulation 4. Qualification, training and probation are governed by Regulations 5, 6 and 7 respectively. The functioning of the agents is regulated by regulation 8. There is provision for termination of agency on the ground of disqualification but we are concerned with Regulation 16 which deals with termination of agency for certain lapses. 4. Regulation 16 is reproduced hereunder for ready reference: 16: Termination of agency for certain lapses: (1) the competent authority may, by order, determine the appointment of an agent: (a) If he has failed to discharge his functions, as set out in regulation 8, to the satisfaction of the competent authority; (b) If he acts in a manner prejudicial to the interest of the Corporation or to the interest of its policy holders; (c) If evidence comes to its knowledge to show that he has been allowing or offering to allow rebate of the while or any part of the commission payable to him; (d) If it is found that any averment contained in his agency application or in any report furnished by him as an agent in respect of any proposal is not true; (e) If he becomes physically or mentally incapacitated for carrying out his functions as an agent; (f) If he being an absorbed agent on being called upon to do so, falls to undergo the specified training or to pass the specified tests, within three years from the date on which he is called upon; Provided that the agent shall be given a reasonable opportunity to show cause against such termination. (2) Every order of termination made under sub-regulation (1) shall be in writing and communicated to the agent concerned. (3) Where the competent authority proposes to take action under sub-section (1) it may direct the agent not to solicit or procure new life Insurance business until he is permitted by the competent authority to do so. 5. (2) Every order of termination made under sub-regulation (1) shall be in writing and communicated to the agent concerned. (3) Where the competent authority proposes to take action under sub-section (1) it may direct the agent not to solicit or procure new life Insurance business until he is permitted by the competent authority to do so. 5. The background to the present litigation is supposed to be some kind of incidence or bad behaviour on the part of the petitioners in the evening of 18.4.2004 within the office premises. There is allegation that the Branch Manger Incharge was threatened in front of the employees of Sasaram Branch. The matter of misconduct or threatening was treated serious enough by the respondent authority to initiate disciplinary proceeding against the petitioners. It is evident from reading of annexure-1. The heading of the letter relating to the Reference reads “Contemplated Disciplinary Proceedings for your misbehaviour with the officer in the office premises”. 6. Petitioners denied any wrong doing. A small issue according to them, has been given a serious look and in a pre determined manner termination of these petitioners’ agency was ordered. This was done under the purported exercise of power under Regulation 16(1) (b). The order in this regard is annexure-4 dated 1st December, 2008. 7. Petitioners approached the High Court against the said decision earlier but a ground was urged that the petitioners had remedy of appeal and that ought to be exhausted first as the same are statutory in nature. Appeal was filed but no decision came to be taken for quite a while. Only when the appellate authority had to be summoned by the Court that appellate order came to be passed on the same day which is annexure-7 and is appended to I.A. No. 4634 of 2010. I.A. is for amendment of pleadings and relief in view of the above development. I.A. is allowed. It is recorded that the appellate authority vide order dated 26th April, 2010 rejected the appeal of the petitioner holding that it was a case of misbehavior on the day of incidence and that warranted action under the regulation. 8. Opening submission on behalf of the petitioners is that regulation 16(1) (b) have no application to the given set of facts and the agencies could not be terminated under the said provision. The regulation is pointed and clear. 8. Opening submission on behalf of the petitioners is that regulation 16(1) (b) have no application to the given set of facts and the agencies could not be terminated under the said provision. The regulation is pointed and clear. It envisages action in a situation when the conduct of the agent is prejudicial to the interest of the Corporation or the interest of a policy holder. But even if for the sake of argument it is accepted that these petitioners abused or misbehaved with the Branch Manager whether the same amounts to conduct prejudicial to the interest of the Corporation is the question to be answered by the respondents. 9. Every act of misbehavior does not amount to a conduct prejudicial to the interest of the Corporation. It may be prejudicial to the honour of the Branch Manager of the Branch, which can be taken care of under the common law. If Regulation 16(1) (b) has been invoked for the punishment on the petitioners it has to be tested and on the touch stone of law. 10. Submission of learned Senior counsel for the petitioner is that the regulation 16(1) (b) has no application to the conduct and so called misbehaviour by the petitioners. Their conduct cannot be raised to the level of an act prejudicial to the interest of the Corporation. The respondent’s submission is fit to be rejected on the face of it on a plain reading of the regulation. 11. Other submissions have also been made but they need not be noticed or dealt with for the reason that if the Court comes to a considered opinion that the termination of agency of the petitioners are not permissible under Regulation 16(1)(b) then the entire decision will have to be interfered with. What steps the respondents would take thereafter is for them to consider and decide. 12. On a plain reading of the regulation 16(1) (b) even if the allegation made against the petitioners are accepted on the face value then the Court has certain reservation in accepting the larger interpretation which is sought to be given by the LIC specially the power of termination of agencies of these petitioners. There is a fine distinction between the Corporation and the employee of the Corporation. There is a fine distinction between the Corporation and the employee of the Corporation. No doubt, certain acts of an employee of the Corporation may be prejudicial to the interest of the Corporation but not every act or action against an officer can be said to be an act of the agent prejudicial to the Corporation. There can be many an instances but may not be enumerated in this part of the order for brevity. It is also recorded that the Corporation must understand the difference between an agent and an employee. 13. The Court is informed that officer of the LIC has instituted FIR against the petitioners. They also inform that a complaint case has been filed against the petitioners. The fate of the criminal cases will depend upon the set of facts and evidence that may be led. The law will take its course. 14. In so far as the two impugned orders contained in annexures 4 and 7 are concerned, the Court is of the considered opinion on a plain reading of regulation 16(1) (b) that it does not authorize the respondent authority to resort to termination of the agency because of the incidence or the background under which such exercise has been carried out. 15. Obviously the respondents do not understand the distinction between an agent and an employee and that is one of the reason while addressing letter to the petitioners contained in annexure-1 it talks of contemplated disciplinary proceeding and not action in terms of the Regulation. 16. In view of above, the exercise of the power under Regulation 16(1) (b) is misplaced. Annexures 4 and 7 are quashed. 17. Both the writ applications stand allowed.