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SCA/3110/2001 2/ 5 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 3110 of 2001
For
Approval and Signature:
HONOURABLE
MR.JUSTICE KS JHAVERI
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1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To
be referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
KALPANABEN
N PATEL AGENCY CODE NO 2359833 - Petitioner(s)
Versus
SENIOR
DIVISIONAL MANAGER & 2 - Respondent(s)
=========================================================
Appearance :
MR
CN TRIVEDI for
Petitioner(s) : 1,
MR AK CLERK for Respondent(s) : 1,
RULE
SERVED for Respondent(s) : 2 -
3.
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE KS JHAVERI
Date : 01/02/2010
ORAL
JUDGMENT
1. By
way of this petition, the petitioner has prayed to quash and set
aside the orders dated 22.11.1994 and 06.12.1995, passed by
respondents nos. 1 and 2 respectively, whereby the
respondents-authorities have terminated the agency of the petitioner
and forfeited the commissions.
2. The
short facts of the case are that the petitioner was working as an
Agent of respondent-Corporation w.e.f March, 1989. On 11.12.1992,
the petitioner had canvassed a case of one Smt. Hiraben Dabhi, who
was allotted Policy No 850875434. However, the insured expired on
21.01.1993 due to throat cancer.
2.1. On
30.09.1994, the Sr. Divisional Manager, Gandhiangar issued charge
sheet cum show-cause notice to the petitioner to show cause as to why
appropriate action be not taken against him for committing breach of
Regulation 8(2)(b) of the LIC of India (Agents) Regulations, 1972
[ the Regulations for short]. The petitioner submitted her reply
to the said charge sheet cum show-cause notice vide reply dated
18.10.1994. However, vide order dated 22.11.1994, the Sr. Divisional
Manager, terminated the agency of the petitioner and forfeited the
commissions.
2.2. Against
the said order, the petitioner preferred an appeal before the Zonal
Manger, LIC, Mumbai vide letter dated 07.01.1995. As there was no
response to the said letter dated 07.01.1995, the petitioner sent
several reminders. On 13.11.1999, the petitioner addressed a Memorial
to the Chairman, LIC. As no decision was taken by the Chairman, LIC,
the petitioner preferred Special Civil Application No. 11695/2000
before this Court. This Court, vide order dated 20.11.2000, disposed
of the petition with a direction to the Chairman of LIC to decide the
Memorial preferred by the petitioner within a period of one month
from the date of receipt of writ of the order. Pursuant thereto, the
Chairman, LIC rejected the Memorial preferred by the petitioner vide
order dated 24.02.2001. Hence, this petition.
3. The
learned counsel for the petitioner has contended that the Sr.
Divisional Manager, Gandhinagar while issuing charge sheet cum
show-cause notice dated 18.10.1994, has not made any reference to
Regulation 19 of the Regulations. However, he has submitted that even
if the termination is on germane grounds, the same will not authorize
the respondents-authorities to forfeit the commission. While passing
the impugned order, the authorities have recorded the finding that
fraud has been committed by the petitioner, but no finding has been
arrived at regarding forfeiture of commission. Hence, the impugned
orders passed by the respondents-authorities is bad in law and
deserves to be quashed and set aside.
4. The
learned counsel for the respondent has contended that the impugned
order passed by the respondents-authorities terminating the agency of
the petitioner and forfeiting the commission is in accordance with
the Regulations and, therefore, this Court may not interfere in this
petition. He has also placed reliance on the decision of the Division
Bench of this Court rendered in Letters Patent Appeal No. 213 of 2007
dated 26.06.2009, whereby the Division Bench on the facts of the case
has held that the LIC was justified in terminating the agency and
forfeiting the commission payable to the petitioner in that case.
5. Heard
learned counsel for the parties and perused the documents on record.
From the record, it transpires that the petitioner had canvassed a
proposal of said [late] Smt. Hiraben Udesinh Dabhi on 11.12.1992.
However, the said life assured expired on account of throat cancer on
21.01.1993 that is when the duration of the policy was only 23 days.
It also appears that the deceased life assured was suffering from
cancer of throat prior to the date of proposal for insurance. The
life assured had also taken necessary treatment for the said ailment
and the said facts were know to the petitioner before canvassing a
proposal. Thus it is a finding that the petitioner had failed to
discharge the functions as set out in Regulation 8(2)(b) of the
Regulations. In view of the above findings arrived at by the
respondents-authorities, I am of the opinion that the authorities
were completely justified in terminating the agency of the
petitioner.
5.1.
However, from the record it appears that the authorities have not
specified any reasons or given any reasons with regard to forfeiture
of the commission for the earlier proposals given by the petitioner.
As per the provisions of Regulation 19 of the Regulations, when the
authority has arrived at the finding that fraud has been committed by
the petitioner, then there must also be a finding regarding the fact
that the commission for the earlier proposal is not required to be
forfeited after having taken benefit of earlier proposals canvassed
by the petitioner. In view the above facts, I am of the opinion that
it is not open for the authorities to take the aforesaid stand and
they have no right to forfeit the earlier commissions. Thus, the
petitioner is entitled for the commissions for the proposals which
were canvassed prior to the proposal in question i.e. with respect to
the deceased life assured.
6. In
view of the above, the petition is partly allowed. The impugned order
dated 22.11.1994 passed by the Sr. Divisional Manager, is modified to
the extent that order with regard to terminating the agency of the
petitioner is confirmed and the order with regard to forfeiture of
commissions is quashed and set aside. The respondents-authorities are
directed to pay the commissions towards the proposals canvassed by
the petitioner prior to the date of the proposal in question i.e.
with respect to the deceased life assured, within a period of 60 days
from today and if the said amount is not paid by the
respondent-authorities, then the petitioner will be entitled for
interest @ 11% on the outstanding amount of commission as aforesaid
from 01.01.1996. Rule is made absolute to the aforesaid extent.
[K.S.JHAVERI,
J.]
/phalguni/
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