Karnataka High Court
K P Narasimha Murthy vs The Life Insurance Corporation Of India on 19 July, 2023
Author: Krishna S Dixit
Bench: Krishna S Dixit
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NC: 2023:KHC:25137
WP No. 26179 of 2019
C/W WP No. 26180 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF JULY, 2023
BEFORE
THE HON'BLE MR JUSTICE KRISHNA S DIXIT
WRIT PETITION NO. 26179 OF 2019 (GM-RES)
C/W
WRIT PETITION NO. 26180 OF 2019(GM-RES)
IN W.P.NO.26179/2019:
BETWEEN:
K P NARASIMHA MURTHY,
S/O LATE K R PRAHALADA RAO,
AGED ABOUT 49 YEARS,
NO.101, 19TH CROSS, 20TH MAIN
SMS LAYOT, J.P. NAGAR, VTH PHASE,
BENGALURU-560 078.
...PETITIONER
(BY SRI. DR. P RAVI SHANKAR.,ADVOCATE)
Digitally signed
by CHETAN B AND:
C
Location: HIGH
COURT OF 1. THE LIFE INSURANCE CORPORATION OF INDIA
KARNATAKA REPRESENTED BY THE CHAIRMAN
"YOGAKSHEMA" JEEVAN BHIMA MARG,
CENTRAL OFFICE, PB. NO 19953
MUMBAI-400021.
2. THE MANAGING DIRECTOR,
LIC OF INDIA,
"YOGAKSHEMA" JEEVAN BHIMA MARG,
CENTRAL OFFICE, PB. NO 19953
MUMBAI-400021.
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NC: 2023:KHC:25137
WP No. 26179 of 2019
C/W WP No. 26180 of 2019
3. THE ZONAL MANAGER,
LIFE INSURANCE CORPORATION OF INDIA,
SOUTH CENTRAL ZONAL OFFICE, JEEVAN BHAGYA,
SAIFABAD, HYDERABAD-500 063.
4. THE SENIOR DIVSIIONAL MANAGER
LIC OF INDIA, DIVISIONAL OFFICER-I.
J.C. ROAD, BENGALURU-560 002.
5. THE MANAGER (P&IR)
LIC OF INDIA, DIVISIONAL OFFICE-I
J.C. ROAD, BENGALURU-560 002.
6. THE UNION OF INDIA,
THROUGH ITS SECRETARY (BANKING & INSURANCE)
MINISTRY OF FINANCE
JEEVAN DEEP, PARLIAMENT STREET
NEW DELHI 110 001.
...RESPONDENTS
(BY SRI. RAJESH SHETTY., ADVOCATE FOR R1 TO R5;
SMT. K S ANASUYADEVI.,ADVOCATE FOR R6)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
DIRECT THE R-4 TO REVOKE THE TERMINATION OF AGENCY;
HOLD THAT PART OF REGULATION 19(1) OF ANNEXURE-B
DATED 2.2.2017 WHICH DISENTITLES A TERMINATED AGENT
FROM RECEIVING RENEWAL COMMISSION, IF HE IS ENGAGED
IN THE INSURANCE BUSINESS WITH ANY OTHER COMPANY
FOR A PERIOD OF TWO YEARS AS UNCONSTITUTIONAL AND
VIOLATES THE RIGHT TO CARRY ON ANY PROFESSION OR
BUSINESS AND ETC.,
IN W.P.NO.26180/2019:
BETWEEN:
K P NARASIMHA MURTHY,
S/O LATE K R PRAHALADA RAO,
AGED ABOUT 49 YEARS,
NO.101, 19TH CROSS, 20TH MAIN,
SMS LAYOUT, J.P. NAGAR, VTH PHASE,
BENGALURU 560 078.
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NC: 2023:KHC:25137
WP No. 26179 of 2019
C/W WP No. 26180 of 2019
...PETITIONER
(BY SRI. DR. P RAVI SHANKAR.,ADVOCATE)
AND:
1. THE LIFE INSURANCE CORPORATION OF INDIA
REPRESENTED BY THE CHAIRMAN,
"YOGAKSHEMA" JEEVAN BHIMA MARG,
CENTRAL OFFICE, PB. NO 19953
MUMBAI-400021.
2. THE MANAGING DIRECTOR,
LIC OF INDIA,
"YOGAKSHEMA" JEEVAN BHIMA MARG,
CENTRAL OFFICE, PB. NO 19953
MUMBAI-400021
3. THE ZONAL MANAGER,
LIFE INSURANCE CORPORATION OF INDIA,
SOUTH CENTRAL ZONAL OFFICE, JEEVAN BHAGYA,
SAIFABAD, HYDERABAD-500 063.
4. THE SENIOR DIVSIIONAL MANAGER,
LIC OF INDIA, DIVISIONAL OFFICER-I.
J.C. ROAD, BENGALURU-560 002.
5. THE MANAGER (P&IR)
LIC OF INDIA, DIVISIONAL OFFICE-I
J.C. ROAD, BENGALURU 560 002.
6. THE UNION OF INDIA,
THROUGH ITS SECRETARY (BANKING & INSURANCE)
MINISTRY OF FINANCE,
JEEVAN DEEP, PARLIAMENT STREET
NEW DELHI-110 001.
...RESPONDENTS
(BY SRI. RAJESH SHETTY, ADVOCATE FOR R1 TO R5;
SMT. K S ANASUYADEVI, ADVOCATE FOR R6)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
DIRECT THE R-4 TO REVOKE THE ORDER OF FORFEITURE OF
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NC: 2023:KHC:25137
WP No. 26179 of 2019
C/W WP No. 26180 of 2019
RENEWAL COMMISSION AND DIRECT RELEASE FORFEITED
RENEWAL COMMISSION ALONG WITH INTEREST OF 12% P.A.
FROM THE DATE OF DUE AND ETC.,
THESE PETITIONS COMING ON FOR PRELIMINARY
HEARING IN B GROUP THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
Petitioner, an LIC agent is knocking at the doors of Writ Court for assailing the penalty order dated 2.2.2017 at Annexure-B whereby, not only his agency has been terminated but even forfeiture of commission earned has been directed. Learned counsel for the petitioner submits that his client although has filed appeal against the said order, all these years the said appeal having not been disposed off, he is more than justified in knocking at the doors of Writ Court. He heavily banks upon the provisions of Life Insurance Corporation of India (Agents) Regulations, 2017, more particularly Regulations 16 & 19 read with Schedules I & V. The thrust of his argument is that there is absolutely no power for ordering forfeiture at all and therefore, at least to that extent, the impugned -5- NC: 2023:KHC:25137 WP No. 26179 of 2019 C/W WP No. 26180 of 2019 order is liable to be invalidated. Petitioner has also called in question the blacklisting.
2. After service of notice, the respondents having entered appearance through their Panel Counsel, oppose the petition contending that the petitioner's appeal is still pending and that pendency is because of the pendency of these Writ Petitions. He points out that Regulation 19(2) provides for forfeiture of the commission also. Rightly or wrongly, the impugned order having been passed, the same is being examined in appeal preferred by the petitioner and therefore, he cannot pursue plural remedies at a time. So contending, he seeks dismissal of the Writ Petitions.
3. Having heard the learned counsel for the parties and having perused the Petition Papers, this Court although declines indulgence in the prayer for quashment of the penalty order, a direction needs to be issued to the Appellate Authority to hear & dispose off the appeal, in -6- NC: 2023:KHC:25137 WP No. 26179 of 2019 C/W WP No. 26180 of 2019 accordance with law and in a time bound way. Appeal is a statutory right which the Regulations have given to the LIC Agent. Agency is governed by the Regulations promulgated under the provisions of the Life Insurance Corporation of India Act, 1956. Thus, there are trapping of public law elements. Where an aggrieved person has preferred statutory appeal, such an appeal cannot be kept pending ad infinitum, especially when right to speedy remedy is constitutionally recognized under Articles 14 & 21 by a catena of decisions of the Apex Court.
4. The vehement submission of learned counsel for the petitioner that there is absolutely no power to levy the penalty of forfeiture at all, is bit difficult to countenance since Regulation 19(2) in so many words provides for the same. However, whether such a power did avail to the authority who passed the penalty order is a matter to be examined by the Appellate Authority keeping in view the relevant provisions of Regulation i.e., 19(2) read with -7- NC: 2023:KHC:25137 WP No. 26179 of 2019 C/W WP No. 26180 of 2019 Regulation 16 and Schedules I & V. Therefore, no opinion is expressed in this regard.
5. The reliance of the counsel for petitioner on a Coordinate Bench decision in W.P.No.29459/2019 between SRI SUTRAM SURESH VS. SR. DIVISIONAL MANAGER AND OTHERS, disposed off on 2.3.2023 does not much come to his aid inasmuch as the same has been structured on the violation of principles of natural justice. Whether the forfeiture as a penalty could have been levied or not has not been discussed in the fact matrix matchable to the case of petitioner herein. It hardly needs to be stated that the scope of appeal shall include the challenge to the penalty order that immediately blacklisted the petitioner.
In view of the above, these Writ Petitions are disposed off; the Appellate Authority shall hear & dispose off petitioner's appeal and inform their outcome to the petitioner within a period of eight weeks. If delay is brooked, the impugned order shall be treated as having -8- NC: 2023:KHC:25137 WP No. 26179 of 2019 C/W WP No. 26180 of 2019 been invalidated by this court itself. All contentions are kept open.
Costs made easy.
Sd/-
JUDGE cbc List No.: 1 Sl No.: 60