Madhya Pradesh High Court
Laxmi Narayan Sharma vs Life Insurance Corporation Of India on 6 February, 2026
Author: Anand Pathak
Bench: Anand Pathak
1 Writ Appeal No.3189/2025
IN THE HIGH COURT OF MADHYA PRADESH
AT G WA L I O R
BEFORE
HON'BLE SHRI JUSTICE ANAND PATHAK
&
HON'BLE SHRI JUSTICE PUSHPENDRA YADAV
WRIT APPEAL No. 3189 of 2025
LAXMI NARAYAN SHARMA
Versus
LIFE INSURANCE CORPORATION OF INDIA AND OTHERS
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Appearance:
Shri Ankur Mody - Advocate for the appellant.
Shri K.N.Gupta - Senior Advocate with Shri Rinku Shakya - Advocate for the
respondents.
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JUDGMENT
(Delivered on this 6th day of February 2026) Per: Justice Anand Pathak With consent heard finally.
2. Present appeal is preferred by the appellant under Section 2 (1) of The Madhya Pradesh Uchcha Nyayalaya (Khand Nyaypeeth Ko Appeal) Adhiniyam, 2005 seeking limited relief for payment of interest on the delayed payment of commission, which was granted after the order dt.06.05.2024 passed by the Writ Court in W.P.No.1037/2005.
3. Learned Writ Court vide order dt.06.05.2024 passed in W.P.No.1037/2005, allowed the writ petition filed by the appellant/petitioner Signature Not Verified thereby setting aside the order impugned therein dt.16.12.2004 with further Signed by: SANJEEV KUMAR PHANSE Signing time: 2/7/2026 3:16:42 PM 2 Writ Appeal No.3189/2025 direction to give the commission which has accrued to the petitioner.
4. For appreciating the controversy in better perspective, following list of dates and events, is important for consideration of facts of this case :-
DATE EVENTS Appellant was appointed as an Agent of LIC bearing agency code No.355-356.
10/12/94 Appellant was served with a notice that excess payment of commission is made to him qua policy No.200863388, 200863376 and 200863404. In the notice, it was disclosed that earlier on audit objection appellant was asked to deposit an amount of Rs.5950 paid in excess in regards to only one policy, but the appellant instead deposited a sum of Rs.9450/-, which was more than what was asked, therefore, when the records were rechecked it was found that there were two more policies in respect of which excess payment was made totalling to Rs.9450/- but the said amount had already been deposited by the appellant. Hence, notice was issued for the act of forgery. 26.12.1994 Appellant submitted his explanation stating therein that the aforesaid issue regarding excess payment was brought to appellant's notice through the Branch Manager, who advised him to go through his payments and confirm. Accordingly, after going through the payment received as commission, it was noticed that excess payment was made to him and accordingly same was deposited with respondent on 05.10.1994 vide voucher No.54284. 31.01.1995 Respondent issued show cause notice under Rule 16 (1) (b) of LIC Rules, 1972 asking the appellant to show cause why his agency be not terminated and renewal commission be forfeited under Rule 19 (1).
17.02.1995 Appellant submitted his reply stating therein that it is a case of error committed by the LIC staff who are responsible for checking and passing the bills. There is no alteration committed by the appellant neither is it possible to commit any alteration as the department file is with the department to which appellant has no excess. The Local Branch Manager at Morena is acting out of vengeance against the appellant as the appellant had earlier made complaint against the Manager.
Signature Not Verified Signed by: SANJEEV KUMAR PHANSE Signing time: 2/7/2026 3:16:42 PM 3 Writ Appeal No.3189/202516.04.1996 After considering the reply, the agency of the appellant was terminated under Rule 16 and renewal commission was forfeited under Rule 19.
10/06/96 Against the aforesaid action, appellant preferred departmental appeal.
22.07.1997 Appellant sought copy of the enquiry report, if any, prepared in his case.
01/08/97 The authority refused to share copy of the enquiry proceeding wit the appellant.
13.05.1999 Since the appeal was not decided, therefore, he preferred Writ Petition No.789/1999.
12/11/99 During the pendency of writ petition, appeal of the appellant was dismissed.
30.04.2000 Respondents filed reply to W.P.No.789/1999.
Appellant amended writ petition by including the averment in para 6.10 (A) that under the garb of the order, terminating agency is seeking to forfeit his renewal commission, which is Rs.10,000/- per month approximately.
Appellant submitted rejoinder to the reply in the petition. Respondent submitted additional return.
05/05/03 Writ Petition was dismissed by the Writ Court holding therein that prima facie there is material justifying termination of the agency and as such holding of detailed enquiry was not required.
10/11/25 Against the aforesaid order, appellant preferred LPA No.88/2003.
24.03.2004 LPA was allowed remanding the matter back to the authority to re-decide the case after holding an enquiry and thereafter passing appropriate order.
09/10/04 As per the directions of the court, enquiry was conducted and Enquiry Officer submitted his report.
18.11.2004 The disciplinary authority concurred with the findings of the Enquiry Officer and issued show cause notice to the appellant as to why his agency be not terminated and the original order of forfeiture of renewal commission be revived.
16.12.2004 Final order was passed terminating the agency for being guilty of charges and as such the earlier order dt.16.04.1996 Signature Not Verified Signed by: SANJEEV KUMAR PHANSE Signing time: 2/7/2026 3:16:42 PM 4 Writ Appeal No.3189/2025 regarding forfeiture of renewal commission was revived. Appellant challenged the order dt.16.12.2004 by filing W.P.No.1037/2005.
06/04/24 Writ Court passed the order dt.06.04.2024 and allowed the writ petition preferred by petitioner/appellant. 03/03/25 Writ Appeal preferred by the LIC by way of W.A.No.1863/2024 got dismissed by the Division Bench. July 2025 and In compliance of the court orders after more than one year October 2025 the commission amount was paid by the respondent to the appellant installments of Rs.2,45,000/- and Rs.6,05,618/-. 02/11/25 Due to non payment of money, appellant was in utter state of penury, therefore, could not timely file the instant appeal and the same was filed in November 2025 seeking payment of interest on the forfeited amount @ 12& p.a., which was wrongfully retained by the respondent.
5. It is the submission of learned counsel for the appellant that case has a long drawn chequered history and appellant was always at the receiving hand.
Since 1994-95, he is contesting the case. He was innocent and specifically took the stand before departmental authority as well as in different rounds of litigation filed in this regard. Ultimately, his case was considered and allowed by learned Writ Court vide order dt.06.05.2024 passed in W.P.No.1037/2025.
However, the appellant feels that interest should have been awarded by the Court below on late payment of commission because it has been withheld by the Corporation deliberately.
6. Learned counsel for the appellant/petitioner relied upon Sections 3 and 4 of the Interest Act 1974 (hereinafter shall be referred to as 'the Act of 1974') and submits that he should be given interest and if appellant did not ask it even then Court can grant it exercising the inherent/extraordinary jurisdiction Signature Not Verified Signed by: SANJEEV KUMAR PHANSE Signing time: 2/7/2026 3:16:42 PM 5 Writ Appeal No.3189/2025 vested under Article 226 of the Constitution of India. This appeal is preferred specifically for payment of interest and payment of costs because appellant/ petitioner suffered for three decades. Not only his job was taken arbitrarily because of one complaint he made against officers but also he is denied the legitimate claims of commission accrued to him because of past performance.
7. Counsel for the appellant further informs this Court that against the order dt.06.05.2024 passed in W.P.No.1037/2005 by learned Single Judge, appeal was preferred by LIC by way of Writ Appeal No.1863/2024. However, said appeal was dismissed by Division Bench of this Court vide judgment dt.03.03.2025. Therefore, said order attained finality. However, for interest and costs, this appeal is preferred.
8. Learned senior counsel for the respondents opposed the prayer and submits that it is true that appeal preferred by the LIC by way of Writ Appeal No.1863/2024 got dismissed. However, appellant never claimed interest.
Therefore, he is not entitled to receive interest on the amount towards commission. As per the submissions of respondents/LIC, appellant is being paid the due commission amount in two installments, which is being accepted by the appellant himself. Therefore, no case for interference is made out in view of the Act. Learned Senior Counsel prayed for dismissal of the appeal.
9. Heard learned counsel for the parties and perused the record.
10. This is the case where appellant was appointed as an agent by LIC for district Morena having an agent code No.355356. Due to alleged commission Signature Not Verified Signed by: SANJEEV KUMAR PHANSE Signing time: 2/7/2026 3:16:42 PM 6 Writ Appeal No.3189/2025 of fraud by the appellant, his agency was terminated vide order dt.16.10.1996 and in pursuance thereof payment of commission, for which he is entitled to receive, was forfeited. Meandering throughout the litigation, ultimately, stand of the appellant stood vindicated when learned Writ Court vide order dt.06.05.2024 passed in W.P.No.1037/2005 allowed the petition preferred by petitioner.
11. So far as merits of the case is concerned, writ petition was already allowed and appeal preferred by the LIC got dismissed, therefore, question of consideration of merits does not arise in present litigation. Only issue to be decided is that whether in given set of facts interest can be awarded to the appellant, who suffered almost 30 years at the hands of LIC.
12. Scope of moulding of relief is defined by the Apex Court from time to time. Apex Court in the case of Om Prakash Gupta Vs. Ranbir B. Goyal (2002) 2 SCC 256 has held as under :-
11. The ordinary rule of civil law is that the rights of the parties stand crystalised on the date of the institution of the suit and, therefore, the decree in a suit should accord with the rights of the parties as they stood at the commencement of the lis. However, the Court has power to take note of subsequent events and mould the relief accordingly subject to the following conditions being satisfied : (i) that the relief, as claimed originally has, by reason of subsequent events, become inappropriate or cannot be granted;
(ii) that taking note of such subsequent event or changed circumstances would shorten litigation and enable complete justice being done to the parties; and (iii) that such subsequent event is brought to the notice of the Court promptly and in accordance with the rules of procedural law so that the opposite party is not taken by surprise. In Pasupuleti Venkateswarlu v. Motor & General Traders - AIR 1975 SC 1409 this Court held that a fact arising after the lis, coming to the notice of the Court Signature Not Verified Signed by: SANJEEV KUMAR PHANSE Signing time: 2/7/2026 3:16:42 PM 7 Writ Appeal No.3189/2025 and having a fundamental impact on the right to relief or the manner of moulding it and brought diligently to the notice of the Court cannot be blinked at. The Court may in such cases bend the rules of procedure if no specific provision of law or rule of fair play is violated for it would promote substantial justice provided that there is absence of other disentitling factors or just circumstances. The court speaking through Krishna Iyer, J. affirmed the proposition that court can, so long as the litigation pends, take note of updated facts to promote substantial justice.
13. Recently, Apex Court, in the case of J.Ganapatha and others Vs. N. Selvarajalou Chetty Trust Rep. By its Trustees and Others (2025 SCC OnLine SC 633) has held as under :-
20 The concept of moulding of relief refers to the ability of a court to modify or shape a relief sought by a party in a legal proceeding based on the circumstances of the case and the facts established after a full-fledged trial. The principle enables the court to grant appropriate remedies even if the relief requested in the pleading is not exact or could not be considered by the court or changed circumstances have rendered the relief obsolete. The court aims that justice is served while taking into account the evolving nature of a case. The above road map is pursued by a court based on the notion of flexibility in relief, equitable jurisdiction, and is tempered by judicial discretion. When moulding the relief, the court considers the issues and circumstances established during the full-fledged trial, looks at shortening the litigation, and then in its perspective, renders complete justice to the issue at hand. The converse of the above is that the moulded relief should not take the aggrieved party by surprise or cause prejudice. The relief is moulded as an exception and not as a matter of course.
14. Thus, it is abundantly clear that moulding of relief by way of granting interest is within the purview of jurisdiction of this Court. This Court after considering the facts and circumstances of the case if comes to the conclusion that litigant suffered enormously at the hands of the authority for a very long Signature Not Verified Signed by: SANJEEV KUMAR PHANSE Signing time: 2/7/2026 3:16:42 PM 8 Writ Appeal No.3189/2025 period like present case where three decades have been consumed, relief can be moulded in a manner that additional relief related to main relief can be granted. Here moulding of relief means grant of relief by way of interest on a transaction already considered and decided by the Court in favour of litigant/employee. Here, as submitted, earlier stand of appellant stood vindicated because he was harassed on illegal pretext. Thus, repairative justice demands that relief can be moulded and interest can be granted.
15. Sections 3 and 4 of the Act of 1974 deal in respect of Power of Court to allow Interest and Interest payable under certain enactments. Both read as under:
"3. Power of Court to allow Interest.- (1) In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say,-
(a) if the proceedings relate to a debt payable by virtue of a written instrument at a certain time, then, from the date when the debt is payable to the date of institution of the proceedings;
(b) if the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings:
Provided that where the amount of the debt or damages has been repaid before the institution of the proceedings, interest shall not be allowed under this section for the period after such repayment.
(2) Where, in any such proceedings as are mentioned in sub-Signature Not Verified Signed by: SANJEEV KUMAR PHANSE Signing time: 2/7/2026 3:16:42 PM 9 Writ Appeal No.3189/2025
section (1),-
(a) judgment, order or award is given for a sum which, apart from interest on damages, exceeds four thousand rupees, and
(b) the sum represents or includes damages in respect of personal injuries to the plaintiff or any other person or in respect of a person's death, then, the power conferred by that sub-section shall be exercised so as to include in that sum interest on those damages or on such part of them as the court considers appropriate for the whole or part of the period from the date mentioned in the notice to the date of institution of the proceedings, unless the court is satisfied that there are special reasons why no interest should be given in respect of those damages.
(3) Nothing in this section,-
(a) shall apply in relation to-
(i) any debt or damages upon which interest is payable as of right, by virtue of any agreement; or
(ii) any debt or damages upon which payment of interest is barred, by virtue of an express agreement;
(b) shall affect
(i) the compensation recoverable for the dishonour of a bill of exchange, promissory note or cheque, as defined in the Negotiable Instruments Act, 1881 (26 of 1881); or
(ii) the provisions of Rule 2 of Order II of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908);
(c) shall empower the court to award interest upon interest.
4. Interest payable under certain enactments.- (1) Notwithstanding anything contained in section 3, interest shall be payable in all cases in which it is payable by virtue of any enactment or other rule of law or usage having the force of law.
(2) Notwithstanding as aforesaid, and without prejudice to the generality of the provisions of sub-section (1), the court shall, in each of the following cases, allow interest from the date specified below to the date of institution of the proceedings at such rate as Signature Not Verified Signed by: SANJEEV KUMAR PHANSE Signing time: 2/7/2026 3:16:42 PM 10 Writ Appeal No.3189/2025 the court may consider reasonable, unless the court is satisfied that there are special reasons why interest should not be allowed, namely :-
(a) where money or other property has been deposited as security for the performance of an obligation imposed by law or contract, from the date of the deposit;
(b) where the obligation to pay money or restore any property arises by virtue of a fiduciary relationship, from the date of the cause of action;
(c) where money or other property is obtained or retained by fraud, from the date of the cause of action.
(d) where the claim is for dower or maintenance, from the date of the cause of action."
16. After considering the provisions as referred above, to redeem the appellant to the place where he started, it appears that best option is to award interest. The legitimate amount for which the appellant was entitled was arbitrarily denied by the LIC. After 30 years, he is entitled to the interest at the rate of 8% p.a.
17. Sections 3 and 4 of the Act of 1974 contemplates that where a person has been denied any legitimate due, then he is liable to be awarded interest alongwith the payment.
18. Therefore, appellant is entitled to receive interest @ 8% p.a. from the date 16.12.2004, when agency of appellant was terminated and earlier order dt.16.04.1996 regarding forfeiture of renewal commission was revived. Same shall be paid by the respondent LIC after due calculation to the appellant within two months from the date of passing of this order.
Signature Not Verified Signed by: SANJEEV KUMAR PHANSE Signing time: 2/7/2026 3:16:42 PM 11 Writ Appeal No.3189/202519. So far as costs is concerned, it is a case where appellant fought for 30 years and respondent LIC did not pay his legitimate dues. Therefore, treating costs to be panacea for all the ills (See : Salem Advocate Bar Association v.
Union of India - (2005) 6 SCC 344), this Court awards cost of Rs.25,000/-
(Rupees Twentyfive Thousand only) to be imposed over the respondent/ LIC, which shall be paid by the respondent/LIC to the appellant within two months from the date of receipt of certified copy of this Court.
20. With the aforesaid directions, writ appeal stands disposed of.
(ANAND PATHAK) (PUSHPENDRA YADAV)
JUDGE JUDGE
SP
Signature Not Verified
Signed by: SANJEEV
KUMAR PHANSE
Signing time: 2/7/2026
3:16:42 PM