Karnataka High Court
Sri K C Nagaraj vs Branch Manager on 31 July, 2023
Author: Krishna S Dixit
Bench: Krishna S Dixit
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NC: 2023:KHC:26531
WP No. 13728 of 2021
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF JULY, 2023
BEFORE
THE HON'BLE MR JUSTICE KRISHNA S DIXIT
WRIT PETITION NO. 13728 OF 2021 (GM-RES)
BETWEEN:
SRI. K C NAGARAJ,
AGED ABOUT 57 YEARS,
S/O LATE SRI CHIKKEGOWDA,
AGENCY CODE NO.0010861Y
R/AT NO.B9/53, BDA MIG FLATS,
II STAGE, II PHASE, DOMLUR,
BENGALURU-560 071.
...PETITIONER
(BY SRI. B N JAYADEVA.,ADVOCATE)
AND:
1. BRANCH MANAGER
LIC INSURANCE CORPORATION OF INDIA
Digitally signed SARAKKI BRANCH 24TH MAIN,
by SHARADA
VANI B J P NAGAR 1ST PHASE,
Location: BANGALORE-560 078.
HIGH COURT
OF 2. SENIOR DIVISIONAL MANAGER,
KARNATAKA
LIC INSURANCE CORPORATION OF INDIA,
MARKETING DEPARTMENT,
BANGALORE DIVISIONAL OFFICE-1,
JEEVAN PRAKASH BUILDING, J C ROAD,
BANGALORE-560 002.
3. ZONAL MANAGER,
LIC INSURANCE CORPORATION OF INDIA,
SOUTH CENTRAL ZONAL OFFICE,
JEEVAN BHAGYA, ZONAL OFFICE,
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NC: 2023:KHC:26531
WP No. 13728 of 2021
SECRETARIAT ROAD, SAIFABAD,
BANGALORE-560 063.
4. THE CHAIRMAN,
LIC INSURANCE CORPORATION OF INDIA,
HEAD QUARTERS, YOGAKSHEMA,
JEEVA BIMA MARG, MUMBAI-400 021.
...RESPONDENTS
(BY SRI. RAJESH SHETTY.,ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA, PRAYING TO DIRECT AND
QUASH THE ORDER OF THE R-2 DTD.14.5.2019 AT ANNEXURE-
G AND DIRECT AND QUASH THE ORDER OF THE R-3
DTD.21.3.2020 AT ANNEXURE-K AND ETC.,
THIS PETITION COMING ON FOR PRELIMINARY HEARING
IN B GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
Challenge is to the penalty proceedings whereby the statutory agency of the Petitioner having been terminated, the accumulated commission has been ordered to be forfeited. Learned counsel for the petitioner submits that the termination of agency & forfeiture of accumulated commission are serious in nature; when the allegation was disputed, a regular enquiry ought to have been held and only thereafter impugned orders of the kind could have been passed. He draws attention of this Court to the Show Cause Notice dated 18.03.2019 (Annexure-E), his -3- NC: 2023:KHC:26531 WP No. 13728 of 2021 clients' Reply dated 03.04.2019 (Annexure-F) thereto. Learned counsel also banks upon a Coordinate Bench decision in W.P.No.29549/2019 between SRI. SUTRAM SURESH Vs. DIVISIONAL MANAGER, & OTHERS, disposed off on 02.05.2023 in support of his case.
2. Learned Panel Counsel appearing for the respondents opposes the Petition making submission in justification of the impugned orders heavily banking upon the provisions of the Regulations engrafted in Schedule 5 of Life Insurance Corporation of India (Agents) Regulations, 2017. He contends that a preliminary enquiry preceded the issuance of Show Cause Notice and therefore, there being no challenge to the Scheme of the Rules, the Writ Petition is liable to be dismissed.
3. Having heard the learned counsel for the parties and having perused the Petition Papers, this Court is broadly in agreement with submission of learned counsel appearing for the Petitioner that the punitive orders of the kind could not have been passed sans a regular inquiry. It -4- NC: 2023:KHC:26531 WP No. 13728 of 2021 hardly needs to be stated that a Preliminary Enquiry decides the worthiness of holding a regular enquiry and nothing beyond. Therefore, a preliminary Enquiry cannot be a substitute for the regular enquiry. Late Justice Rama Jois in his Magnum Opus 'SERVICES UNDER THE STATE' 1987 Edition, N.M.Tripathi, at page 199, writes as under:
"Preliminary enquiry not sufficient: A preliminary enquiry is held only for purposes of deciding whether there is a prima facie case for holding departmental enquiry. Even during that stage some opportunity to the official concerned may have to be given. But, a regular enquiry must be held after the charges are framed. No punishment can be imposed on the basis of admission of some facts relating to the charges at the stage of preliminary enquiry. An enquiry may be unnecessary if after the charges are framed the delinquent official admits them. But when he denies the charges and asks for an oral enquiry, holding of the enquiry is mandatory.
4. Learned counsel for the Petitioner is more than justified in heavily banking upon a Coordinate Bench judgment in SUTRAM SURESH supra. However his contention that in terms of the very same judgment the accumulated commission be permitted to be taken by his client pending enquiry, is bit difficult to countenance. -5-
NC: 2023:KHC:26531 WP No. 13728 of 2021 Rule 19(2) of the 2017 Regulations provide for forfeiture of accumulated commission. Since the matter is being remanded for fresh enquiry, Petitioner is not justified in making such a prayer.
In the above circumstances, this Writ petition succeeds; a Writ of Certiorari issues quashing the impugned orders and the consequential order dated 17.01.2021.
Matter is remitted to the portals of Respondent-LIC for causing a regular enquiry with the participation of Petitioner. The enquiry proceedings shall be accomplished within an outer limit of three months. All contentions are kept open.
Now, no costs.
Sd/-
JUDGE Bsv List No.: 1 Sl No.: 51