Calcutta High Court
Rajeev Lohia vs Life Insurance Corporation Of India & ... on 10 September, 2009
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
Present:
The Hon'ble Justice S.P. Talukdar
W.P No. 609 of 2004
Rajeev Lohia
Vs.
Life Insurance Corporation of India & Ors.
Mr. Pramit Kumar Ray ....for the writ petitioner.
Mr. Abhijit Ganguly,
Mr. Kaushik Banerjee.
Mr. Gautom Chakraborty
Mr. N. K. Mehta,
Mr. D. K. Kundu,
Mrs. Soumya Ghosh. ....for the respondents.
Judgment on: 10.09.2009 S. P. Talukdar, J.: Petitioner, Sri Rajeev Lohia, by filing the instant application under Article 226 of the Constitution, sought for quashing of the impugned order dated March 05, 2004. He further prayed for direction upon the respondent-authority for not giving effect and/or further effect to the impugned order dated March 05, 2004 and/or apply the Provisions of Rule 16(1) (b) of the L.I.C.I (Agents) Rules, 1972; Regulation 8(1) (i) (a) and Regulation 9 of the Insurance Regulatory and Development Authority (Licencing of Insurance Agents) Regulation 2000 and the Provisions of Section 42 (4) (g) and Section 44(1) (c) of the Insurance Act, 1938. The petitioner sought for direction upon the respondents to pay to the petitioner all arrears, renewal commission, gratuity or other benefits and emoluments as well as other reliefs.
Grievances of the petitioner, as ventilated in the instant application, may briefly be stated as follows: -
On the ground that the petitioner had taken up an employment and joined MetLife Insurance Company at Bangalore, the petitioner was served with a show cause notice dated 22nd April, 2002. By such notice, the L. I.C.I alleged that the petitioner by joining the new company acted in a manner prejudicial to the interest of the Corporation as per Rule 16 (1) (b) of the L.I.C. of India Agents' Rules, 1972. It was further alleged that he thereby violated the Agents' code of conduct as per Regulation 8 (1) (i) (a) of the Insurance Regulatory and Development Authority (Licensing of Insurance Agents), Regulations, 2000. In the said notice, it was further stated that the petitioner, thus, was disqualified as per Regulations 9 and became ineligible to receive renewal commission as per Section 44 (C) of the Insurance Act, 1938. The competent authority by issuing such notice proposed to terminate the agency and take further steps for the aforesaid misconduct. The petitioner by his letter dated 7th May, 2002 replied to the said show cause notice. By order dated 16th August, 2002, the concerned authority terminated his agency and ordered cancellation of licence and cessation of payment of commission. The petitioner filed a departmental appeal dated 7th October, 2002. The Appellate Authority being the Zonal Manager, L.I.C. of India, Eastern Zonal Office by order dated 27th May, 2003 upheld the order dated 16th August, 2002 and disposed of the appeal against the appellant. This was challenged by the writ petitioner by filing an application, being W.P.No.1646 of 2003. The learned Single Bench of this court by order dated 6th November, 2003 disposed of the application with a direction upon the Zonal Manager to consider the order dated 27th May, 2003 afresh, uninfluenced by the order dated 16th August, 2002 as well as the order dated 27th May, 2003 passed by the Zonal Manager.
An application was filed in connection with the said writ application, which was again disposed of by order dated 8th January, 2004 by directing the Zonal Manager to pass his reasoned and speaking order by February 15, 2004.
In response to such direction, the respondents-authority issued a letter dated February 23rd, 2004 fixing the 3rd March, 2004 as the date of hearing. On the said date i.e., 3rd March, 2004 hearing took place in which no document was disclosed and no witness was produced. The petitioner filed written note of submission on 4th February, 2004. On 5th March, 2004 a further order was passed which is under challenge in the writ application, being W.P. No.609 of 2004.
The present writ application being W.P. No.609 of 2004 is directed against the said order dated 5th March, 2004 of the Appellate Authority. The Appellate Authority after taking into consideration the relevant facts and materials held the writ petitioner guilty of violation of Rule 16 (1) (b) of L.I.C. (Agents) Regulation, 1972. The order of termination of agency and the cancellation of licence as well as cessation of payment of renewal commission was thus upheld. The Appellate Authority being the Zonal Manager further held that in view of the termination of the writ petitioner for his violating the L.I.C.I. (Agents) Regulation, 1972, he is not entitled to any gratuity either. Mr.Roy appearing as learned Counsel for the writ petitioner sought to assail the impugned order dated 5th March, 2004 on the ground that it suffers from misappreciation of the materials on record and misinterpretation of the relevant provisions of law.
As revealed from Annexure P-1 as page 88, the petitioner was given licence to act as an Insurance Agent under Part-II of the Insurance Act, 1938. It is clearly mentioned that having paid the prescribed fee and having made the necessary declaration he was authorized to act as an Insurance Agent for three (3) years from 1st April, 1999 to 31st March, 2002. By communication dated 1st December, 2000, the concerned-authority informed the petitioner that he had qualified for exemption from the minimum business guarantee. On 6th February, 2002, he was requested to take steps for renewal of his licence. Annexure P-4 is Pay Order dated 16th February, 2002 for an amount of Rs.250/-only.
Mr. Roy invited attention of the court to the letter of resignation dated 7th March, 2002 which was reportedly sent "under Certificate of Posting". Copy of such resignation letter, being Annexure P-5, was addressed to Mr. B. Banerjee, Senior Divisional Manager. An identical letter was sent to the Branch Manager, Mr. C. R. Kolay. It appears that by letter dated 18th March, 2002, the Branch Manager of L.I.C.I wanted the petitioner to inform within 7 days from the date of receipt of the letter, the name and address of the Company which he had joined and the capacity in which he had been working there. The writ petitioner by his letter dated 26th March, 2002, while acknowledging receipt of the letter dated 18th March, 2002, sought to know the context of the query.
In response to the show cause notice dated 22nd April, 2002 issued by the Senior Divisional Manager addressed to the writ petitioner, he informed that he had already resigned from the agency by his letter dated 7th March, 2002 and as such, "the question of termination has already been set at rest". He further explained that the question of cancellation of the licence became infructuous as he would no more be canvassing sale of New Policies after his resignation. He also claimed that he satisfied all the requirement of continued receipt of Renewal Commissions even after discontinuance of Agency.
Pay order for an amount of Rs.250/- was returned to the writ petitioner by letter dated 22nd May, 2002. The petitioner by letter dated 1st July, 2002 approached the concerned-authority for arranging release of the gratuity amount. Mr. Roy referring to the factual backdrop of the present case categorically submitted that the concerned-authority of the L.I.C.I. was not justified in denying the benefits as sought for in the writ application to the petitioner.
In response to this, learned Senior Counsel Mr. Chakraborty submitted that the authority-concerned was perfectly justified and there could be no illegality or impropriety in the order dated 5th March, 2004 passed by the Appellate Authority.
Regulation 16 (1) (b) of the Life Insurance Corporation of India (Agents) Rules, 1972 clearly gives the competent authority power to issue order determining the appointment of an agent if it is found that the agent acts in a manner prejudicial to the interests of the Corporation or to the interests of its policyholders.
Attention of the court was first invited to the reliefs sought for in the writ application. Mr. Chakraborty, learned Counsel for the respondents-authority referred to the reliefs as prayed for, particularly in prayer 'C'. He submitted that the writ petitioner could not be entitled to "renewal commission". Section 44 (C) of the Insurance Act relates to prohibition of cessation of payments of commission. Where an agent has served the insurer continuously and exclusively for at least 10 years and after his ceasing to act as such agent he does not directly and indirectly solicit or procure insurance business for any other person he can very well be entitled to get such renewal commission. It was categorically submitted by learned Senior Counsel, Mr. Chakraborty, that the present writ petitioner claimed to have resigned from service as an agent of the L.I.C.I. with effect from 7th March, 2002. He was asked to inform within 7 days from the receipt of the letter dated 18th March, 2002 as to the name and address of the Company where he had joined. He did not respond to the same in proper manner. His response, as revealed from Annexure P-8, is somewhat illusive. This controversy resulted in initiation of proceeding against him. Mr. Chakraborty emphatically submitted that in case of the writ petitioner, it cannot be said that he "ceased" to act as an agent. He explained that "cessation" takes effect on its own. The word "cessation" means 'formal giving up of rights.' According to Mr. Chakraborty, having regard to the nature of the exit of the writ petitioner from the service as an agent of the respondents-authority, he could not be entitled to renewal commission.
It was then submitted that there had been termination of agency since the petitioner acted in a manner prejudicial to the interests of the Corporation or to the interests of its policyholders. The question that arises as to whether in such circumstances, he could be entitled to claim gratuity. Attention of the court was invited to Clause 11 of the L.I.C.I. (Agents) Regulations, 1972 in this regard. It follows therefrom that the gratuity and terms insurance benefits admissible in the case of an agent have been set out in Schedule VI. His claim of gratuity was rejected by the Appellate Authority on the ground that he was terminated under Rule 16(1) (b) of the L.I.C.I. (Agents) Regulations, 1972 which is an "excepted reason". In Sub-clause (2) of Schedule VI "excepted reason" has been defined and it includes Clause (a) or Clause (b) or Clause (c) of Sub Regulation (1) of Regulation 16. It follows therefrom that an agent shall be eligible for gratuity if he has worked continually and for fifteen or more qualifying years, and (a) he is not below sixty years of age; (b) his agency ceases or stands terminated under any of the provisions of these regulations for any reason other than an excepted reason. What is "excepted reason" finds answer in the note to the Schedule VI. It covers Clause (a), Clause (b) or Clause (c) of Sub Regulation (1) of Regulation 16. It cannot be disputed that the agency of the writ petitioner was terminated under Rule 16 (1) (b) of the L.I.C.I. (Agents) Regulations, 1972 and licence was cancelled consequent thereto. Thus, he cannot be entitled to get any gratuity either.
While assailing the order passed by the Appellate Authority dated 5th March, 2004, it was submitted on behalf of the writ petitioner that such an order cannot stand the test of judicial scrutiny. It is perhaps needless to mention that the scope of judicial review is rather limited. This court would not ordinary interfere, unless there is manifest impropriety or illegality. Reappreciation of evidence or reappraisal of materials is beyond the scope of an application for judicial review. But, nothing worth mentioning could be placed before this court at the time of hearing of the application so as to indicate that the authority- concerned acted in violation of rules and regulations or with bias. There is nothing satisfactory before this court so as to justify quashing of the Appellate Authority order dated 5th March, 2004. There is no material to the satisfaction of the judicial conscience of the court so as to hold that there had been any violation of the principles of natural justice.
On behalf of the writ petitioner, reference was made to the Division Bench decision of the Allahabad High Court in the case of Smt. Jaswanti Negi vs. Life Insurance Corporation of India, Dehradun & Ors., as reported in AIR 1997 Allahabad 152. The subject matter of controversy in the said case was, however, significantly different and the decision therein does not seem to have much relevance. The decision of the Apex Court in the case between Life Insurance Corporation of India vs. Lalitha Devi., as reported in AIR 1991 Supreme Court 1734 does not lend any support to the petitioner's claim.
The controversy in this case arose out of the discovery that the writ petitioner had joined Metlife Insurance Company at Bangalore. The earlier communication, requesting him to give address and name of the Company where he joined, did not receive the care and attention it deserved. As earlier said, the response was far from convincing, if not illusive. There remained controversy as to the nature or manner of exit of the petitioner from his service as an agent of the L.I.C.I. Unfortunately for the petitioner, the materials on record do not satisfactorily support his claim. Moreover, this court is not expected to get into factual disputes. In course of submission, learned Counsel could not produce any material so as to even remotely suggest that the respondents-authority acted in an inappropriate manner. There had been proper and effective compliance of the various provisions of the regulation. Nothing could be placed to indicate that there had been any violation of statutory rules or any disregard to the principles of natural justice.
The materials on record clearly reveal that the writ petitioner is the architect of his own misfortune. Even before his exit from the respondent- Company/L.I.C.I., he joined another organization, which was again a competitor of the respondents-authority. This prompted the respondents-authority to initiate a disciplinary proceeding. The petitioner was given ample opportunity to represent himself in connection with the said proceeding. There appears to be no impropriety or illegality in the order passed in the said disciplinary proceeding or in the impugned order dated 5th March, 2004. Consequently, the petitioner could not be entitled to get renewal commission, nor even the gratuity for the reasons as discussed earlier.
As such, the present application being W.P. No.609 of 2004 fails and be dismissed accordingly. There is no order as to costs.
Xerox certified copy of this judgment, if applied for, be supplied to the parties expeditiously upon due compliance of the legal formalities.
(S.P.Talukdar, J.) Later.
10.09.2009.
Immediately after the said order is passed, Mr. Roy, learned Advocate, appearing for the writ petitioner has prayed for stay of operation of this order for some period.
Though opposed, I find no reason for standing in the way. The operation of the judgment and order be stayed till 31st October, 2009.
(S.P.Talukdar, J.)