Karnataka High Court
Sri Nagaraj K C vs The Life Insurance Corporation Of India on 3 July, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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NC: 2024:KHC:25164
WP No. 27093 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 3RD DAY OF JULY, 2024
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 27093 OF 2023 (GM-RES)
BETWEEN:
SRI NAGARAJ K C
S/O LATE CHIKKEGOWDA,
AGED 59 YEARS,
NO 9/53, 2ND FLOOR, 'B' BLOCK,
BDA (MIG) FLAT, 2ND STAGE
DOMLUR, BENGALURU - 560 071.
...PETITIONER
(BY SRI. B V SHANKARA NARAYANA RAO, SR. COUNSEL FOR
SRI. VISWESWARAIAH K. C. AND
SRI. J. MADHUSUDHAN, ADVOCATE)
AND:
1. THE LIFE INSURANCE CORPORATION OF INDIA
REP BY THE CHAIRMAN,
"YOGAKSHEMA", JEEVAN BHIMA MARG,
CENTRAL OFFICE, P B NO.19953,
Digitally MUMBAI - 400 021.
signed by
Vandana S 2. THE ZONAL MANAGER
Location: LIFE INSURANCE CORPORATION OF INDIA,
HIGH COURT SOUTH CENTRAL ZONAL OFFICE,
OF
KARNATAKA JEEVAN BHAGYA, SAIFABAD,
HYDERABAD - 500 063.
3. THE SENIOR DIVISIONAL MANAGER
LIFE INSURANCE CORPORATION OF INDIA
DIVISIONAL OFFICE I, J C ROAD,
BENGALURU - 560 002.
...RESPONDENTS
(BY SRI. RAJESH SHETTY, ADVOCATE FOR R1 TO R3)
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NC: 2024:KHC:25164
WP No. 27093 of 2023
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO DIRECTION SETTING
ASIDE/QUASH FINAL ORDER DATED 30.10.2023 (ANNEXURE-J)
WHILE DECLARING THE SAME TO BE ARBITRARY, ILLEGAL AND
WITHOUT JURISDICTION AND ETC.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
In this petition, the petitioner seeks the following reliefs:
"a) Issue a writ of certiorari or any other writ, order or direction setting aside/quash Final Order dated 30.10.2023 (Annexure-J) while declaring the same to be arbitrary, illegal and without jurisdiction.
b) Issue a writ of Mandamus or any other writ, order or direction directing the Respondents to resume the Agency of the Petitioner along with all consequential benefits including the release of Renewal Commission amounting to approximately Rs.60 lakhs for policies issued through the Petitioner prior to the termination date i.e., 01.03.2018, in the interest of justice and equity."
2. Heard learned Senior counsel appearing on behalf of the learned counsel for the petitioner and learned counsel for respondent Nos.1 to 3 and perused the material on record.
3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invites my attention to the order dated -3- NC: 2024:KHC:25164 WP No. 27093 of 2023 31.07.2023 passed in the earlier round of litigation in W.P.No.13728/2021 in order to contend that despite this Court specifically directing respondent No.3 to conduct full/regular enquiry with the participation of the petitioner, respondent No.3 has not completed/complied with the directions issued by this Court while conducting enquiry and without providing sufficient or reasonable opportunity to the petitioner and without there being an enquiry report submitted/furnished by the Enquiry Officer, respondent No.3 has proceeded to issue the final order based on the truncated enquiry, thereby holding that the petitioner was guilty of the charges leveled against him. It is therefore submitted that the impugned order is not only contrary to the order passed by this Court, but also violative of the principles of natural justice and the same deserves to be quashed.
4. Learned Senior counsel for the petitioner submits that in the earlier round of litigation, the petitioner had relied upon the judgment of this Court in the case of SRI. SUTRAM SURESH VS. THE SENIOR DIVISIONAL MANAGER, LIFE INSURANCE CORPORATION OF INDIA AND OTHERS - W.P.NO.29459/2019 DATED 02.03.2023 and requested this Court to pay the -4- NC: 2024:KHC:25164 WP No. 27093 of 2023 accumulated commission in favour of the petitioner, the same was rejected by this Court. It is submitted that the petitioner is jobless and has absolutely no means of livelihood for himself and his family members. In the said facts and circumstances of the case, it would be necessary to direct the respondents to pay 50% of the total accumulated commission of about Rs.30 Lakhs to the petitioner. It is submitted that in order to safeguard the interest of the respondent, the petitioner is ready to furnish bank guarantee to an extent of Rs.15 Lakhs, which would act as security for release of the amount in favour of the petitioner.
5. Per contra, learned counsel for the respondents fairly submits that pursuant to the order passed by this Court, no report has been submitted by the Enquiry Officer to respondent No.3. It is however submitted that there is no merit in the present petition and that the same is liable to be dismissed. Further learned counsel for the respondents submits that in the light of the rejection of the identical prayer of the petitioner in W.P.No.13728/2021, the petitioner is not entitled to any indulgence in the present petition.
6. A perusal of the material on record will indicate that respondent Nos.2 and 3 had earlier passed orders dated -5- NC: 2024:KHC:25164 WP No. 27093 of 2023 14.05.2019 and 21.03.2020 terminating the agency of the petitioner and forfeiting the commission payable to the petitioner, who challenged the same in W.P.No.13728/2021, wherein this Court passed the final order dated 31.07.2023, as under:
" 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 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 o f L if e I n su r a n c e C o r p o r a t i o n o f I n d i a ( A g e n t s) 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 -6- NC: 2024:KHC:25164 WP No. 27093 of 2023 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 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. Rule 19(2) of the 2017 Regulations provide for forfeiture of accumulated commission. Since the -7- NC: 2024:KHC:25164 WP No. 27093 of 2023 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 W rit 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."
7. As can be seen from the aforesaid order passed by this Court vide Annexure-C, this Court specifically directed respondent No.3 to conduct regular enquiry, by noticing that merely the preliminary enquiry was not sufficient and that a preliminary enquiry is held only for the purpose of deciding whether there is a prima facie case for holding departmental enquiry and that 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, detrimental to the interest of the petitioner.
8. It is an undisputed fact that despite the aforesaid directions issued by this Court, the respondents have not -8- NC: 2024:KHC:25164 WP No. 27093 of 2023 completed the enquiry and no enquiry report has been submitted/furnished by the Enquiry Officer, Sri. Subramaniam, who has merely recorded the answers given by the petitioner, as can be seen from the proceedings of the respondents. The material on record clearly establishes that the specific directions issued by this Court directing the respondents to conduct regular enquiry has not been complied with, in as much as an enquiry report is not available and respondent No.3 has not provided sufficient or reasonable opportunity to the petitioner before passing the impugned order at Annexure-J, which deserves to be set aside and the matter may be remitted back to respondent No.3 for reconsideration afresh in accordance with law.
9. While it is true that the request of the petitioner for release of accumulated commission was expressly rejected by this Court in the earlier round of litigation in W.P.No.13728/2021 in the light of the submission made on behalf of the petitioner that the petitioner would furnish bank guarantee to an extent of 50% of the accumulated commission, I am of the considered opinion that the interest of the respondent can be adequately safeguarded by directing release of Rs.15 Lakhs as a temporary measure, -9- NC: 2024:KHC:25164 WP No. 27093 of 2023 immediately upon the petitioner furnishing bank guarantee as stated supra, to the said extent and to the satisfaction of the concerned respondent, within a period of two weeks from today. It is made clear that the said release of the amount would be subject to the final outcome of the enquiry and the petitioner shall not claim any equities in this regard.
10. In the result, I pass the following:
ORDER i. The writ petition is allowed.
ii. The impugned order at annexure-J dated 30.10.2023 passed by respondent No.1 is hereby set aside.
iii. The matter is remitted back to respondent No.3 to conduct fresh enquiry in terms of the order dated 31.07.2023 passed in W.P.No.13728/2021 by providing sufficient and reasonable opportunity to the petitioner and proceed further in accordance with law.
iv. The petitioner undertakes to appear before respondent No.3 on 15.07.2024 without awaiting further notice from respondent No.3.
v. Liberty is reserved in favour of the petitioner to file additional pleadings, documents etc., before respondent No.3, who shall
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NC: 2024:KHC:25164 WP No. 27093 of 2023 provide sufficient opportunity to him and obtain report from the Enquiry Officer and pass appropriate orders in accordance with law, on or before 31.08.2024.
vi. As a temporary measure, the concerned respondent is directed to release Rs.15 Lakhs in favour of the petitioner, subject to execution of a bank guarantee to the said extent and to the satisfaction of the concerned respondents, within a period of two weeks from today.
vii. It is also made clear that this order of release of accumulated commission is passed having regard to the submission of the learned counsel for the petitioner that the petitioner has no means of livelihood and he does not have any source of income and hence, this order shall not be treated as a precedent nor shall have any precedential value, for any purpose, whatsoever. viii. All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same.
Sd/-
JUDGE BMC List No.: 1 Sl No.: 44