ORAL JUDGMENT Heard learned counsel for the parties. 2. The petitioner being aggrieved by cancellation of agency in terms of L.I.C. of India (Agents) Rules, 1972 and also being subjected to denial of payment of commission on discontinuance of his agency has moved this Court by filing this writ application wherein the following relief has been prayed for: “That this is an application for issuance of a writ in the nature of certiorari to quash order dated 1.10.2005, issued under the signature of the Senior Divisional Manager, whereby and whereunder the petitioner has been held to be guilty of the charges and penalty of termination of agency with forfeiture of all commissions payable to him has been imposed and the aforesaid decision has been communicated vide letter no. 523 dated 3.10.2005 and further to quash the order 4 dated 14.8.2006 issued under the signature of the zonal Manager, whereby and whereunder he has rejected the appeal of the petitioner for restoration of his agency and the same has been communicated to the petitioner on 9.9.2006, issued under the signature of the Branch Manager and also to quash the order dated 23.11.2007, issued under the signature of the Chairman, whereby and whereunder the memorial of the petitioner has been rejected and the same has been communicated to him vide letter no. 14 dated 23.11.2007 and further for issuance of a consequential writ in the nature of mandamus directing and commanding the respondent- authorities to restore the agency of the petitioner with all consequential benefits and/or for issuance of an appropriate writ(s), order(s) or direction(s), which seems just and equitable in the facts and circumstances stated hereunder.” 3. Learned counsel for the petitioner has submitted that unfortunately the wife of the petitioner became seriously ill while working of the petitioner as an agent of L.I.C. and as such, for running his business he had to depend on one of his employed staff, who actually had made certain defalcation of the amount of L.I.C. in form of premium of the policy holders. He has also tried to highlight that as soon as the petitioner came to know of this misconduct on the part of his employee, he had not only compensated the L.I.C. by depositing the amount of the policy holder but also by way of payment of interest. 4. He has also tried to highlight that as soon as the petitioner came to know of this misconduct on the part of his employee, he had not only compensated the L.I.C. by depositing the amount of the policy holder but also by way of payment of interest. 4. Learned counsel further submits that the respondent L.I.C., therefore, even if by making application of Rule 16 of the Rules could have terminated the agency of the petitioner for the lapses on the part of his staff but in no view of the matter payment of amount of the petitioner could have been withheld, inasmuch as the element of fraud which alone disentitles the L.I.C. agent from being denied payment of commission on discontinuance of agency is wholly absurd. 5. Mr. Rajeev Ranjan Prasad, learned counsel appearing on behalf of the respondent L.I.C., on the other hand, with reference to the documents on record has submitted that first of all it is not correct to say that there was a single transaction of defalcation and in fact the petitioner was found to be involved in a series of such transaction. He has also submitted that the manner in which the amount of premium of one of policy holder was being rotated and/or deposited in the funds of L.I.C. in the name of other depositor will lead to no other but only one conclusion that the petitioner’s business as an agent of L.I.C. was vitiated by fraud. 6. In the considered opinion of this Court the submission of Mr. Rajeev Ranjan Prasad has to be accepted for more than one reason. Firstly, the issue was considered in the light of the defence of the petitioner by the Zonal Manager in the impugned order dated 14.8.2006 wherein after considering the entire plea as raised by the petitioner against the show cause notice served on him on 8.9.2005 the prescribed authority had held as follows: “And whereas, after examining the case in its entirety, I found that Md. N. Farrukh, instead of depositing the three demand drafts of Rs.8132.70 each against the policy of Sri Gautam Bhattacharya, utilized those demand drafts towards some other policies in the name of Md. Kamaluddin, Md. Hasnain, Sri R.K. Jhunjhunwala and Smt. K.P.Singh. All the above policies had been procured by Md. N. Farrukh and hence he is the sole beneficiary of this fraudulent act. Kamaluddin, Md. Hasnain, Sri R.K. Jhunjhunwala and Smt. K.P.Singh. All the above policies had been procured by Md. N. Farrukh and hence he is the sole beneficiary of this fraudulent act. He has enclosed one letter of Sri Gautam Bhattacharya, dated 15.9.2005 from which it is understood that Md. N. Farrukh has handed over one draft to Sri Bhattacharya as compensation of premiums and interest on revival. This only confirms that demand drafts sent by Sri Bhattacharya to Md. N. Farrukh were misappropriated. Md. N. Farrukh also has stated in his appeal dated 6.10.2005 that his staff has misappropriated the premiums, but he has not adduced any evidence to support his statement.” 7. Let it be noted that this order being appealable in the appeal filed by the petitioner the Chairman of L.I.C. has also not only affirmed the order of the Divisional Manager but has given his independent consideration to each and every possible defence that could have been raised by the petitioner. The relevant portion of appellate order reads as follows: “A show cause notice dated 8.9.2005 was issued to Shri Nehal Farrukh, Ex-agent, Ag.Code No. 22600523 (hereinafter referred to as “The Memorialist”) previously attached to LIC of India, Bhagalpur Branch Office-I under Bhagalpur Division by the Senior Divisional Manager, Bhagalpur Division for misappropriation of premium amount due against policy No. 510118074 on the life of Shri Gautam Bhattacharya, by way of utilizing the same towards some other policies. The reply of the Memorialist not being found satisfactory, the Senior Divisional Manager, Bhagalpur Division passed an order dated 1.10.2005 terminating the agency of the Memorialist with forfeiture of renewal commission as per the relevant provisions of the LIC of India (Agents) Rules, 1972 (hereinafter referred to as “The Agents Rules”). The appeal dated 6.10.2005 submitted by the Memorialist was duly considered by the Appellate Authority, the Zonal Manager, Kolkata, who vide order dated 14.8.2006 confirmed the decision of the Sr. Divisional Manager, Bhagalpur and rejected the appeal. The Memorialist, has thereafter preferred a Memorial dated 6.11.2006 to the undersigned under Rule 24 of “the Agents Rules”. The appeal dated 6.10.2005 submitted by the Memorialist was duly considered by the Appellate Authority, the Zonal Manager, Kolkata, who vide order dated 14.8.2006 confirmed the decision of the Sr. Divisional Manager, Bhagalpur and rejected the appeal. The Memorialist, has thereafter preferred a Memorial dated 6.11.2006 to the undersigned under Rule 24 of “the Agents Rules”. I, the Competent Authority under rule 24 of the Agents Rules, have considered the memorial of the Memorialist and after having perused the relevant records of the case, proceed to dispose off the Memorial as following: The Memorialist has contended that he was in Patna for treatment of self and his wife during the period between 2003-2005. During this period, his employee (Shri Md. Irshad Hossain) was providing services to policy holders under his code. After his return he found that Mr. Irshad Hossain was not reporting on duty. He visited his house and came to know that Shri Md. Irshad Hossain had vacated his rented house. Further, after getting letter from the Branch office about misappropriation of premium, he has deposited the premium alongwith interest to keep the police in force, to safeguard the interest the interest of the policy holder and keep the image of the Corporation intact. The policy holder was satisfied by his actions and has withdrawn his complaint. However, the Senior Divisional Manager, Bhagalpur termed his action as a proof of his guilt. The Senior Divisional Manager, Bhagalpur has ignored the withdrawal of complaint by the policy holder, the very basis of action against the Memorialist. I find that these contentions of the Memorialist are not acceptable, since on investigation the genuineness of Agent?s explanation has not been confirmed. The policy holder confirmed vide his letter dated 28.7.2005 that he handed over the premium to the Memorialist. The Memorialist has further contended that there is no complaint against him in the 32 years of his career as an agent because of his sincerity, honesty and dedication and he was Chairman’s Club Member for last 16 years. I do not agree with this contention of the Memorialist as there is mention of two other complaints from policy holders viz. Mr. Hassan Naushad Ali and Mr. Rizwan Khan and nature of allegation raised against the Memorialist are same in both the complaints i.e. misappropriation of premium. I do not agree with this contention of the Memorialist as there is mention of two other complaints from policy holders viz. Mr. Hassan Naushad Ali and Mr. Rizwan Khan and nature of allegation raised against the Memorialist are same in both the complaints i.e. misappropriation of premium. Further the Memorialist being a member of the Chairman’s club, should not have acted in such a manner. Instead of being a role model for other agents, the Memorialist continued to indulge in serious misconduct, not befitting his status as a Chairman?s Club Member agent. After having carefully gone through the Memorial and the relevant records, I am convinced that the termination of his agency with forfeiture of renewal commission by the Sr. Divisional Manager, Bhagalpur and confirmed by the Zonal Manager, eastern Zone, Kolkata is justified. The Memorialist has not brought out new facts in the Memorial and the Memorial deserves to be rejected which I hereby do.” 8. A conjoint reading of the original order passed by the Divisional Manager and the appellate order of the Chairman L.I.C. will, therefore, leave nothing for speculation that the authorities have considered the case of the petitioner from all possible angles and their decision to either terminate the agency of the petitioner or to impound the amount of commission for the earlier policies of L.I.C. procured by the petitioner does not suffer from any error. 9. The element of fraud which is a condition precedent for exercise of power under Rule 19 reading as follows: “19. 9. The element of fraud which is a condition precedent for exercise of power under Rule 19 reading as follows: “19. Payment of commission on discontinuance of agency: (1) 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 shall be paid to him if such agent: (a) 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 (b) has continually worked as an agent for at least 10 years since his appointment; or (c) being an agent whose appointment has been terminated under clause (e) of sub-regulation (1) of regulation 16 has continually worked as an agent for at least two 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 such termination. Provided that in respect of an absorbed agent the provisions of clause (a) shall apply as if for the letters, figures and word “Rs.2 lakhs”, the letters and figures “Rs.50,000” had been substituted. (2) Any commission payable to an agent under sub-regulation (1) shall, notwithstanding his death, be payable to his nominee or nominees or, if no nomination is made or its subsisting to his heirs, so long as such commission would have been payable had the agent been alive. (3) In the event of the death of the agent while his agency subsists, any commission payable to him had he been alive shall be paid to his nominee, or, if no nomination is made or is subsisting, to his heirs, so long such commission would have been payable had the agent been alive, provided 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. (4) If the renewal commission payable under sub-regulation (1) or sub-regulation (2) or sub-regulation (3) falls below Rs.100/- in any financial year (hereinafter referred to as the said financial year), 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.” 10. In the present case it gets fully established from the fact that the petitioner had a set of policy holders and he was trying to rotate the money obtained from one policy holder towards premium by depositing in the name of others. It is this aspect of the matter which will make the act of the petitioner fraudulent and thus also making Rule 19 of the Rules fully applicable even for impounding the commission earlier earned by the petitioner. 11. The scope of judicial review by this Court under Article 226 of the Constitution of India is limited only to the decision making process and not to the merits of the decision. This Court upon perusal of materials on record is fully satisfied that no error has been committed by the respondents in both cancelling LIC agency of the petitioner as also depriving him from the commission that could have been earned by him as a LIC agent. 12. Thus, for the reasons indicated above, this application must fail and is, accordingly, dismissed.