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2014 DIGILAW 1123 (CAL)

Sujit Kumar Banerjee v. National Insurance Company Limited

2014-12-02

DEBANGSU BASAK

body2014
Judgment : Debangsu Basak, J. The writ petitioner seeks recovery of a sum of Rs.1,63,32,947/-from the insurance company on account of commission. Mr. Sabyasachi Chowdhury learned Counsel for the petitioner submits that, the writ petitioner is an agent of the Respondent No. 1. The writ petitioner as an agent of the Respondent No. 1 was allotted a number being licence No. 644409 issued by the Insurance Regulatory and Development Authority. The writ petitioner was assigned an agent code being 90000310 by the Respondent No. 1. The writ petitioner worked as an agent of the Respondent No. 1 and was successful in gathering business for the Respondent No. 1. The petitioner became entitled to a sum of Rs.1,63,32,947/-on account of commission for the period from 2005 to 2009. During the substance of the writ petition, the writ petitioner received a sum of Rs.1,24,000/- from the Respondent No. 1. He submits that, the transactions for which the writ petitioner acted as the agent of the Respondent No. 1 are admitted. He points out the various paragraphs of the affidavit in opposition where the Respondent No. 1 admits the insurance transactions. He submits that, the denial of liability on account of commission by the Respondent No. 1 is without any basis. He points out that, the Respondent No. 1 relies upon and alleges oral agreement allegedly entered into between the petitioner and the Respondent No. 1 whereby petitioner allegedly waived his right to receive a commission in excess of Rs.1.63 crores allegedly for calendars and other gifts of significantly less value than the commission receivable. He contends that, the moment the Respondent No. 1 pleads waiver, at that moment, the Respondent No. 1 admits and acknowledges the liability of the Respondent No. 1 to the writ petitioner on account of commission. The alleged waiver pleaded by the Respondent No. 1 is without any basis as there was no such agreement. Mr. Aniruddha Chatterjee learned Counsel for the Respondent No. 1 submits that, the writ petitioner is not entitled to any commission in view of the Circular dated February 22, 2005. He submits that disputed questions of fact have arisen which ought not to be addressed by was of a writ petition. The oral agreement and the claim for waiver require further scrutiny than what can be done by way of a writ petition. He submits that disputed questions of fact have arisen which ought not to be addressed by was of a writ petition. The oral agreement and the claim for waiver require further scrutiny than what can be done by way of a writ petition. The entitlement of the writ petitioner is disputed and, therefore, the writ petition is not maintainable. He refers to Sections 40, 40A and 41 of the Insurance Act, 1938 and submits that, the writ petitioner is not entitled to commission at the rate of 15 per cent as claimed by him. He refers to a letter issued by the Kolkata Police and submits that, the writ petitioner was not engaged on commission basis. On the invoices and the documents annexed to the writ petition, he submits that, a glitch in the software has caused such mistake. The Respondent No. 1 is entitled to rectify such mistake. The claim of the writ petitioner cannot be founded on a glitch in the software of the Respondent No. 1. In reply Mr. Chowdhury for the petitioner submits that, Sections 40 and 40A of the Insurance Act, 1938 relates to life insurance policies. In the instance case, the nature of policies is different. The writ petition concerns commission payable in respect of group insurance. I have considered the rival contentions of the parties and the materials made available on record. The writ petitioner acted as the agent of the Respondent No. 1. This fact is not denied by the respondents. The writ petitioner obtained business for the Respondent No. 1. The fact that, the writ petitioner obtained business for the Respondent No. 1 is also not disputed. The writ petitioner claims that, he is entitled to commission at a certain rate from the Respondent No. 1 for the business that, the writ petitioner obtained for the Respondent No. 1. The Respondent No. 1 claims that, no commission is payable to the Respondent No. 1. In any event, if any commission was payable in respect of such business obtained by the writ petitioner on behalf of the Respondent No. 1 then the writ petitioner has waived such right to receive commission by accepting gifts and other things in lieu of such commission. The entitlement of the writ petitioner to the amount of commission if any is in dispute. The entitlement of the writ petitioner to the amount of commission if any is in dispute. The volume of business obtained by the writ petitioner on behalf of the Respondent No. 1 is not in dispute. The dispute, therefore, is such, in my view, that I can adjudicate upon the same on affidavit evidence in a writ petition. In such circumstances, I am not in a position to agree with the contention raised on behalf of the respondents that disputed questions of fact have arisen which cannot be adjudicated by was of a writ petition. The respondents press into service Circular dated February 22, 2005 as a circular which according to the respondents denies any commission to be payable to the writ petitioner. The circular is at page 105 of the affidavit in opposition. The circular relates to Special Discount in lieu of Agency Commission/Brokers Remuneration and Remuneration payable to Direct Insurance Brokers and Insurance Agents. The circular is issued by the Chairman of the Respondent No. 1. It would appear from the contents of the circular that the same was issued after consultation amongst various stakeholders to review the performance of the insurance industry, particularly the development of the system of brokerage and the benefits to insuring public through increased public penetration. Paragraphs 3(a) and 3(b) of the circular is highlighted during hearing on behalf of the respondents to contend that, the petitioner is not entitled to any commission. Paragraph 3(a) does not apply to non-tariff business. Paragraph 3(b) speaks of a situation where the insured was availing Special Discount in lieu of Agency Commission/Brokers Remuneration the same should be indicated on the face of the policy. In the instant case, the fact that the insured availed Special Discount in lieu of Agency Commission/Brokers Remuneration is not indicated on the face of the policy. The respondents claim that, a glitch in its software resulted in the mistake in the documents generated by the Respondent No. 1 in favour of the petitioner the documents of the respondents relied upon by the petitioner conclusively establishes that not only that commission is payable but also the quantum of it. The respondents seek to explain away such evidence of their liability on the ground of glitch in software generating the documents. This so-called glitch in the software remains unsubstantiated on record. The respondents seek to explain away such evidence of their liability on the ground of glitch in software generating the documents. This so-called glitch in the software remains unsubstantiated on record. Save and except averments made in affidavit in opposition relating to the transactions involved in the writ petition, no other instance of the alleged glitch of the software is placed on record. It is not contended that the glitch is such that it happened only in respect of the writ petitioner and none else. It is also in the case of the Respondent No. 1 that no other policies of similar nature as those involved in the writ petition was accepted by the Respondent No. 1 during the relevant period of time so as to substantiate the alleged glitch in the software. I am afraid, I am not in a position to accept the contention that the documents on record was generated due to the alleged glitch in the software. The provisions of Sections 40, 40A and 41 of the Insurance Act, 1938 requires consideration. Section 40 of the Act of 1938 prohibits payment of any remuneration or reward whether by way of commission or otherwise for soliciting of procuring insurance business to any person except an insurance agent or an intermediary or insurance intermediary. In the instant case, the writ petitioner is acknowledged to be an agent of the Respondent No. 1. Section 40A deals with limitation of expenditure on commission. Sub-Section (3) of Section 40A is particularly relied upon on behalf of the respondents to contend that the quantum of commission claimed by the petitioner is not payable. Sub-Section (3) of Section 40A of the Insurance Act, 1938 deals with commission payable on policies of fire or marine insurance or miscellaneous insurance. The nature of the policies in the present writ petition do not attract section 40A(3) of the Insurance Act, 1938. Section 41 of the Insurance Act, 1938 prohibits rebates to the insured save allowed in accordance with the published prospects. It is not the case of the respondents that the writ petitioner has offered, allowed or induced the insured to take out renew or continue any insurance upon payment of rebate. Section 40A(1) of the Insurance Act, 1938 deals with life insurance policies. The nature of policies involved in the present writ petition is personal accident claim. It is not the case of the respondents that the writ petitioner has offered, allowed or induced the insured to take out renew or continue any insurance upon payment of rebate. Section 40A(1) of the Insurance Act, 1938 deals with life insurance policies. The nature of policies involved in the present writ petition is personal accident claim. In its affidavit the Respondent No. 1 has stated that the writ petitioner is entitled to commission at the rate of 5 per cent and that he gave up that commission for calendars and other gifts. This appears from paragraph 12 of the affidavit in opposition. Therefore, the fact that the commission is payable to the writ petitioner in respect of the policies concerned is admitted. The Respondent No. 1 admits a rate of 5 per cent and not the rate as claimed by the writ petitioner. However, the respondents do not justify why the rate of commission is 5 per cent and not the rate as claimed by the writ petitioner as will appear from the documents of the Respondent No. 1. The alleged glitch in the software cannot be believed. In course of submission it is submitted on behalf of the petitioner that he has received a sum of Rs.1,24,000/- on account of commission out of the entire claim of Rs.1,63,32,947/-. The respondents as instrumentalities of the state are required to act bona fide as litigants. The respondents cannot set up any and every defence to deny a just claim of a citizen of India. The claim of the petitioner is an ascertained sum. A state instrumentality has failed to honour its commitments unjustly. Consequently, the petitioner is entitled to reliefs as prayed for in a writ petition. In such circumstances the respondents are directed to pay the sum of Rs.1,62,08,947/-to the petitioner within four weeks from the date of this order along with interest at the rate of 8 per cent per annum on and from the respective dates of the bill until full payments thereof. Such rate of interest is awarded keeping in view the commercial nature of the transaction. W.P.No. 304 of 2009 is allowed accordingly. No order as to costs.