IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP No. 7702 of 2003(P)
1. V.BALAKRISHNA REDDIAR,
... Petitioner
Vs
1. BRANCH MANAGER,
... Respondent
2. SENIOR DIVISIONAL MANAGER,
3. ZONAL MANAGER,
4. CHAIRMAN,
For Petitioner :SRI.A.ANTONY
For Respondent :SRI.R.S.KALKURA
The Hon'ble MR. Justice V.GIRI
Dated :05/09/2007
O R D E R
V. Giri, J.
========================
O.P.No.7702 of 2003
========================
Dated this the day of September, 2007.
JUDGMENT
Petitioner, who was an agent of the Life Insurance
Corporation, from 1980 onwards, challenges the termination of
his agency coupled with forfeiture of the renewal commission, as
ordered originally by the first respondent and affirmed by the
Appellate Authority and Chairman. The appointment of a person
as agent of the Life Insurance Corporation and consequently the
termination of his agency, with or without the forfeiture of the
renewal commission that the agent is entitled to is effected
under Statutory Regulations called as “Life Insurance Corporation
of India (Agents) Rules 1972 (hereinafter referred to as “the
Rules”). The said Rules are framed by the Central Government in
exercise of the powers conferred by Section 49 of the Life
Insurance Corporation of India Act, 1956. An interesting question
as regards the scope of Rule 19 of the Rules in the context of
forfeiture of the renewal commission that is due to the
OP 7702/2003 -: 2 :-
agent has come up for consideration in this writ petition.
2. Petitioner, who claims to have been appointed as agent
of the Corporation in the year 1980, claims that he was doing
well as an agent and had unblemished record of service for more
than 20 years. The first respondent – Branch Manager issued
Ext.P1 notice to him requiring his explanation in the wake of the
fact that as many as seven cheques were issued by the petitioner
in favour of the Corporation. Apparently, the cheques were
issued by the petitioner towards payment of renewal premium, in
relation to different policies held by different policy holders. It is
further seen that the petitioner as an agent had canvassed the
business in relation to the said policy and therefore considered it
appropriate to collect renewal premium from the policy holders
and deposit the same with the Corporation. The cheques were
dishonoured for insufficiency of funds and Ext.P1 came to be
issued in the wake of the said fact. Petitioner in Ext.P2, accepted
his mistake. In Ext.P2, he has essentially pleaded for
condonation of the lapses on his part. The fact relating to the
issuance of the cheques towards payment of premium by
different policy holders is admitted by the petitioner.
OP 7702/2003 -: 3 :-
3. The Corporation decided that the matter merited an
enquiry. Ext.P3 was issued under Rule 16 of the Rules. The
second respondent – competent authority noted that the
petitioner had admitted in Ext.P2 that he had collected premia by
cash from the policy holders, premium so collected was remitted
at the branch counter by cheques issued by the petitioner and
that some of the cheques were dishonoured. The following
allegation forming part of Ext.P3 is significant:
“By your willful misconduct, you have acted in a
manner prejudicial to the interest of the Corporation
and detrimental to the interest of the policy holders.
You have tarnished the image of the Corporation by
misappropriating the amount and have committed
fraud.”
The second respondent then intimated that it is proposed to
terminate the petitioner’s agency under Rule 16(1) with forfeiture
of the commission under Rule 19(1) of the Rules. Petitioner was
given an opportunity to show cause against the proposal. Ext.P4
explanation submitted by the petitioner also admitted a mistake
on his part. Apparently, petitioner undertook the task of issuing
his cheques for payment of premium due from different policy
OP 7702/2003 -: 4 :-
holders. According to him, the cheques were later cleared. He
assured that he will not repeat the mistake committed by him.
4. The explanation was found to be inadequate and vide
Ext.P5 order, the second respondent proceeded to terminate the
agency of the petitioner. The order further directed forfeiture of
renewal commission under Rule 19 of the Rules.
5. An appeal before the Zonal Manager and a memorial
before the Chairman also met with the same fate, vide Ext.P7
and Ext.P9 orders. The termination of the agency was coupled
with forfeiture of the renewal commission. Petitioner therefore
challenges Exts.P5, P7 and P9 orders. Petitioner also seeks a
direction to the respondents to pay the renewal commission due
to him as an LIC agent.
6. A counter affidavit has been filed on behalf of the
respondents. It is contended that the petitioner had issued
cheques apparently for discharging premium payable by different
policy holders. Petitioner, as an agent of the Corporation, has no
business to issue cheques from his bank account for discharging
premium payable by the policy holders. There were complaints
against the petitioner. Apparently, petitioner had collected
OP 7702/2003 -: 5 :-
premia from the policy holders. There is reason to think that he
had misappropriated the same. There was no obligation on the
part of the petitioner to issue cheques from his bank account.
His job, if at all, could only be to pursuade the policy holders to
pay the premium in time. “The act and conduct of the petitioner
was such that it has created in the mind of the respondent a
reasonable apprehension as to the deleterious effect of the
continuance of the agency on other agents of the respondents.
The act and conduct of the petitioner also raised considerable
doubt with regard to the faithfulness of the petitioner.” It is
further contended that the issue of his own cheques by the
petitioner, for cash collected from the policy holders tantamounts
to willful and deliberate fraud. Apparently, policies of two
customers lapsed and it tarnished the image of the Corporation.
7. Though Exts.R1(c) and and R1(d) are referred to in the
counter affidavit as complaints against the petitioner received
from the customers, the same are revealed only to be copies of
the proceedings of the Senior Divisional Manager, inter alia
relating to the termination of the agency of the petitioner. The
said proceedings already form part of the record in the Original
OP 7702/2003 -: 6 :-
Petition.
8. I heard learned counsel for the petitioner Sri.A. Antony
(Jr) and Sri.R.S.Kalkura on behalf of the Corporation.
9. Essentially, two issues arise for consideration. First is
whether termination of the agency is legal and proper. Second is
whether the direction for forfeiture of the renewal commission is
justified.
10. In so far as the first aspect is concerned, I am in
complete agreement with the contentions raised by Sri.Kalkura.
Learned counsel for the Corporation contended that the orders
terminating the agency of the petitioner are inconsonance with
the statutory Rules and really do not merit any interference at
the hands of this Court. Petitioner admitted the issuance of the
cheques, apparently, towards payment of premium by different
policy holders. The same constitutes a clear lapse on the part of
the petitioner. An agent of the Corporation appointed under the
Rules has no business to collect the premia to be paid by
different policy holders, and then proceed to issue cheques from
his own account for payment of such premium. The contract of
insurance is between the Corporation and the policy holders.
OP 7702/2003 -: 7 :-
Petitioner was an agent of the Corporation. He could not have
acted as an agent of the policy holders. The long experience the
petitioner had acquired as an agent of the Corporation from the
year 1980 onwards is not a fact which in any manner dilutes the
gravity of an act of indiscretion on the part of the petitioner. An
inexperienced agent could possibly have been excused for an act
of indiscretion resulting from a display of enthusiasm, to canvass
more and more business for the Corporation. A seasoned hand
can hardly claim such privilege. At any rate, it is perfectly
legitimate on the part of the Corporation to take serious note of
such lapses and decide to terminate the agency. I find hardly
any reason to interfere with Exts.P5, P7 and P9 in so far as it
relates to the termination of the agency of the petitioner. The
orders are issued in consonance with the statutory Rules. There
is no violation of the principles of natural justice. I reject the first
contention raised by the petitioner in this regard.
11. Learned counsel for the petitioner then contended that
assuming that the termination of the agency is proper, the
forfeiture of the renewal commission, is at any rate, illegal and
OP 7702/2003 -: 8 :-
unjustified. It is contended that the Rules contemplate forfeiture
of the renewal commission otherwise payable to the agent only
under exceptional circumstances. It is only when there is
fraudulent conduct on the part of the agent that there can be
forfeiture. Sri.Kalkura on the other hand contended that in
Ext.P3 show cause notice, the Corporation had made it clear that
the act of issuing a cheque for the discharge of the premium
payable by different policy holders amounts to fraudulent
conduct. Such fraud, as assessed by the Corporation, on the part
of the agent concerned enables the Corporation not only to
terminate the agency, but also direct forfeiture of the
commission.
12. Statutory Rules govern appointment of an agent,
conditions of his engagement/agency and the circumstances
under which such agency could be terminated. The Rules also
provide for invoking appropriate remedy and final consideration
by the Chairman of the Corporation. The above Rules are
formulated by the Central Government. Rule 3(b) defines agent,
who was appointed under Regulation 4. Rule 4 of the Rules
(Rules or Regulations as it is referred to in certain areas)
OP 7702/2003 -: 9 :-
provides that an agent may be appointed by a competent
authority after interview of the candidates. Rule 5 of the Rules
prescribes qualifications of an agent. A valid licence under
Section 42 of the Insurance Act is one of the qualifications
prescribed. Rule 6 of the Rules prescribes training and tests to
be undergone by an agent and Rule 7 of the Rules prescribes six
months probation from the date of appointment. Functions of
agents are prescribed under Rule 8 of the Rules. It prescribes
the new life insurance business and it requires an agent to take
into consideration the needs of the proposers for life insurance
and the capacity to pay premium. Rule 9 of the Rules provides
minimum amount of business to be secured by an agent. Rule 10
of the Rules provides payment of commission to an agent, which
is described as compensation and remuneration due to an agent
for the discharge of all his functions. Commission includes
renewal premium received during the continuance of his agency.
Rule 11 of the Rules provides gratuity and term insurance
benefits admissible in the case of an agent. Rule 12 of the Rules
provides that the Corporation shall have a lien and charge on all
moneys payable to an agent or his heirs for recovery of all debts
OP 7702/2003 -: 10 :-
due from him to the Corporation. Rule 13 of the Rules provides
termination of agency in cases where an agent fails to bring in
the business required under Regulation 9. Rule 14 of the Rules
provides for termination of agency in circumstances where the
licence of an agent issued under Section 42 of the Insurance Act
is cancelled or is not renewed. Rules 15 and 16 of the Rules are
crucial. Therefore, they are extracted in their entirety.
“15.Termination of agency on account of
certain disqualifications:
If an agent:
(a) is found to be of unsound mind by a court of
competent jurisdiction;
(b) is found to be guilty of criminal
misappropriation or criminal breach of trust or
cheating or forgery or an abatement of or attempt to
commit any such offence by a court of competent
jurisdiction;
) in any judicial proceeding, has been found to
have knowingly participated in or connived at any
fraud, dishonesty or misrepresentation against the
Corporation or any of its subsidiaries or against any
person having official dealings with the Corporation or
any of its subsidiaries,
his appointment shall be liable to be terminated
OP 7702/2003 -: 11 :-
without notice and the competent authority shall
forthwith terminate his appointment.
16. Termination of agency for certain
lapses:
(1) The competent authority may, by order,
determine the appointment of an agent,
(a) if he has failed to discharge his functions, as
set out in regulation 8, to the satisfaction of the
competent authority;
(b) if he acts in a manner prejudicial to the
interests of the Corporation or to the interests of its
policyholders;
) if evidence comes to its knowledge to show
that he has been allowing or offering to allow rebate
of the whole or any part of the commission payable
to him;
(d) if it is found that any averment contained in
his agency application or in any report furnished by
him as an agent in respect of any proposal is not
true;
(e) if he becomes physically or mentally
incapacitated for carrying out his functions as an
agent;
(f) if he being an absorbed agent, on being
called upon to do so, fails to undergo the specified
training or to pass the specified tests, within three
OP 7702/2003 -: 12 :-
years from the date on which he is so called upon:
Provided that the agent shall be given a
reasonable opportunity to show cause against such
termination.
(2) Every order of termination made under sub-
regulation (1) shall be in writing and communicated
to the agent concerned.
(3) Where the competent authority proposes to
take action under Sub-regulation (1), it may direct
the agent not to solicit or procure new life insurance
business until he is permitted by the competent
authority to do so.”
Rule 15 of the Rules therefore contemplates termination of an
agency on what is described as a disqualification. Significantly an
agency becomes liable to be terminated for the reason of the
agent incurring a disqualification in terms of Rule 15(a)(b) or ).
It enables the Corporation to dispense with an enquiry prior to
the termination. That seems to be a good reason for dispensing
with an enquiry in cases covered by Rule 15 of the Rules. The
disqualification which is treated as warranting termination of an
agency without notice or enquiry, for the purpose of Rule 15 of
OP 7702/2003 -: 13 :-
the Rules seems to be the outcome of a proceeding in a court of
competent jurisdiction. If an agent is found to be an unsound
mind by a competent jurisdiction, his agency is liable to be
terminated. If an agent is found to be guilty of criminal
misappropriation or the offences mentioned in Rule 15 (b) of the
Rules, by a court of competent jurisdiction, the same result
follows. If an agent is found to have knowingly participated in or
connived at any fraud, dishonesty or misrepresentation against
the Corporation, again, what follows is termination of the agency
without notice. Even the case last mentioned above, the finding
as regards fraud having been purported by the agency concerned
against the Corporation or any of its subsidiaries must emanate
from a judicial proceeding. This seems to be indispensable from
Rule 15(c) of the Rules. Obviously, termination of an agency in
the circumstances covered by Rule 15(a)(b) and ) of the Rules
seems to be provided as a statutory consequence, resultant
upon the agent either suffering an adverse order from a court of
competent jurisdiction or in certain exceptional circumstances
being declared as a person of unsound mind by a court of
competent jurisdiction.
OP 7702/2003 -: 14 :-
13. Rule 16 of the Rules extracted above seems to deal with
the cases other than those comprehended by Rule 15 of the
Rules. Failure to discharge function in the manner prejudicial to
the interest of the Corporation, failure to undergo satisfactory
training or pass specified test, allowing or offering to allow rebate
of the whole or any part of the commission payable to him are all
considered as a sufficient cause of commission and omission on
the part of the agent warranting termination of his agency.
14. The crucial provision which comes up for consideration
in the context of the termination of an agency, as in the present
case is Rule 19 of the Rules which again being relevant is
extracted below.
“Payment of commission on discontinuance of
agency:
(1) In the event of termination of the appointment
of an agent, except for fraud, the commission on the
premiums received in respect of the business secured by
him shall be paid to him if such agent:
(a) has continually worked for at least 5 years
since his appointment and policies assuring a total sum
of not less than Rs.2 lakhs effected through him were in
full force on a date one year before his ceasing to act as
OP 7702/2003 -: 15 :-
such agent; or
(b) has continually worked was an agent for at
least 10 years since is appointment; or
) being an agent whose appointment has been
terminated under clause (e) of sub-regulation (1) of
regulation 16 has continually worked as an agent for at
least two years from the date of his appointment and
policies assuring a total sum of not less than Rs.1 lakh
effected through him were in full force on the date
immediately prior to such termination:”
Apparently, the statutory mandate contained in Rule 19(1) of the
Rules with regard to payment of commission due to an agent in
the case of termination of his appointment seems to be
expressed in positive terms. An agent becomes entitled to
commission on the premium received by the Corporation in
respect of the business secured by him subject to fulfillment of
the requirements mentioned in Rule 19(1)(a)(b)(c). Exception
seems to be cases where the appointment of an agency is
terminated for fraud. It is in this area where an interpretation of
the Rules seems to be required. The question that was posed for
consideration is whether “fraud” as occurring in Rule 19 of the
Rules would comprehend cases where the Corporation alleges
OP 7702/2003 -: 16 :-
and finds that the agent was guilty of fraudulent conduct or fraud
having tainted his actions of commission or omission or whether
fraud as occurring in Rule 19(1) of the Rules is confined to cases
which are comprehended by Rule 15(1) of the Rules wherein, in
any judicial proceeding the agent has been found to have
knowingly participated in or connived at any fraud. If the
Corporation is entitled to forfeit the commission payable to an
agent whose appointment has been terminated on the ground of
fraud, as found in the orders passed by the officers of the
Corporation, then Sri.Kalkura’s submission that the requirements
of the statute is satisfied in the present case would deserve to be
accepted in such circumstances. But I am unable to accept the
submission.
15. As regards the liability of the Corporation to pay the
commission due to an agent on the premium received in respect
of the business secured by him, the exception is confined to
cases of fraud as the term occurs in the statute in question.
Then it seems to be quite logical to confine such cases of fraud
having been perpetrated by the agent, and so found in any
judicial proceeding involving the Corporation or any of its
OP 7702/2003 -: 17 :-
subsidiaries or against any person having official dealing with the
Corporation (Rule 15(c) of the Rules). It is to be noted that the
Rules in question, which are obviously statutory in character
define the method of recruitment and the terms and conditions
of appointment of an agent. An agent of the Corporation is not
entitled to any salary. He is entitled to only such benefits
payable to him by way of commission in terms of Rule 10 of the
Rules and gratuity and term insurance benefits due to him under
Rule 11 of the Rules. Thus, where the statute provides for the
mode of termination and the statute itself, couched in a positive
way, mandates payment of commission on the premium received
in respect of the business secured by the agent, in the event of
termination of his appointment as an agent, the statutory
consequences will have to be given effect to. Termination of the
appointment of an agent will have to be resorted to only under
the circumstances provided under Rules 13 to to 18 of the Rules.
Obviously, they deal with different circumstances. Rule 15 of the
Rules contemplates termination of agency on account of certain
disqualifications incurred by the agent concerned and Rule 16 of
the Rules deals with termination of agency for certain lapses on
OP 7702/2003 -: 18 :-
the part of the agent. The Rule Making Authority seems to have
kept in its mind different situations warranting application of Rule
15 or Rule 16 of the Rules, as the case may be. The term “fraud”
or “fraudulent” does not find a place in Rule 16. “Fraud” either
resultant upon act of commission or omission on the part of the
agent is contemplated and provided for only under Rule 15(c) of
the Rules. If that be so, it is only where the termination of
appointment of an agent is resultant upon Rule 15(c) of the
Rules, that the Corporation is given liberty to forfeit the
commission payable to an agent. Of course, such forfeiture as
provided under Rule 19(1) of the Rules need not necessarily be
resultant upon proof of any monetary loss suffered by the
Corporation.If in any judicial proceeding,it is found that the agent
concerned has knowingly participated in or connived at any fraud,
against the Corporation or any of its subsidiaries or against any
person having official dealings with the Corporation or any of its
subsidiaries, then termination of agency can be followed by or
accompanied by forfeiture of the commission in terms of Rule 19
(1).But the crucial aspect is that the finding of fraud must be in
any judicial proceeding as provided for under Rule 15(c) of the
OP 7702/2003 -: 19 :-
Rules. In other words, it is only if the termination of the agency
is under Rule 15(c) of the Rules that the Corporation is entitled to
forfeit the commission payable to the agent. Subject to this
exception, if the agent’s appointment stands terminated he is
entitled to receive the commission payable to him in terms of the
Rules.
16. There is yet another factor which persuades me to
arrive at the same conclusion. Money is payable to an agent by
way of commission for the business secured by him. No person
shall be deprived of his property except in accordance with law.
No doubt, right to property is no longer a fundamental right. But
nevertheless, the right to retain a property and receive the same
and protect it are valuable rights in the hands of a citizen.
Deprivation of such right can only be in accordance with law,
which in the given circumstances would be the statutory Rules
defining the method of appointment and provide for conditions of
service of the agents. The Rules provide for payment of
commission to an agent whose appointment has been terminated
except in a case, which is also specifically provided for under the
Rules. In such circumstances, the forfeiture must also
OP 7702/2003 -: 20 :-
be strictly in accordance with the Rules. Where fraud is
considered as sufficient to terminate the appointment of an
agent, then the circumstances so provided under the Rules alone
can form the basis of a legitimate action on the part of the
Corporation to forfeit the commission payable to an agent.
17. In short, the upshot of the discussion would be that in
cases where fraudulent conduct on the part of the agent has been
found in a judicial proceeding, the Corporation would be entitled
to terminate the agency under Rule 15(c) of the Rules and also
forfeit the commission payable to him under Rule 19(1) of the
Rules. The allegation of fraudulent conduct on the part of the
agent and finding in that regard by the officer of the Corporation,
who exercises the powers under the Rules in question is not a
substitute for the same; nor is it otherwise sufficient to justify the
forfeiture of the commission payable to an agent.
18. Learned counsel for the Corporation relied on the
judgment of a Division Bench of this Court in W.A.No.1396 of
2004, judgment of the Delhi High Court reported in Mrs.
Chandra Prabha Dogra v. LIC of India – A.I.R. 2004 Delhi
OP 7702/2003 -: 21 :-
291, as also the judgment of a Division Bench of the Madras High
Court dated 23.2.2004 in W.A.No.239 of 2003(A. Seshadri v.
The Chairman & Managing Director, LIC of India). The
Division Bench of this Court in W.A.No.1396 of 2004 posed the
question for consideration in the following manner:
“From a perusal of regulation 19 reproduced
above it is clear that in the termination of
appointment of an agent, except for fraud, the
commission on the premiums received in respect of
the business secured by him shall be paid to him.
If the agent thus might indulge in a fraudulent act,
commission on the premiums can be forfeited. The
only question thus arises in the present case is as
to whether the misconduct alleged against the
petitioner was fraudulent or not. In so far as, the
finding of the learned single Judge that the
Corporation had no case that the petitioner had
committed any fraud is concerned, the same is
contrary to the records of the case.”
The Bench essentially considered the question as to whether the
allegation of fraud was actually raised in the same case and was
duly communicated to the party. The case of the Corporation
that it was so communicated was accepted by the Bench on facts.
OP 7702/2003 -: 22 :-
The orders which were impugned in the writ petition from which
the Bench was considering the appeal contained findings by the
appropriate authorities to the effect that there was fraudulent
conduct on the part of the delinquent officer. Learned single
Judge, in the judgment leading to the appeal before the Bench
interfered with the orders forfeiting the renewal commission on
the ground that the Corporation had no case that the petitioner in
the said case has committed any fraud. The Bench disagreed
with the learned single Judge in that respect. It is therefore that
W.A.No.1396 of 2004 filed by the Corporation came to be
allowed.
19. The question as to whether there can be forfeiture of
the commission payable to an agent, under Rule 19(1) of the
Rules, on the ground of fraud even in the absence of a finding of
fraudulent conduct on the part of the delinquent official in any
judicial proceeding as contemplated by Rule 15(c) of the Rules
did not come up for consideration by the Bench. Apparently, the
said issue was not urged and therefore not considered. The
decision of the Bench cited by Sri.Kalkura turned on the facts
and the issue which is being considered in the
OP 7702/2003 -: 23 :-
present case involving an interpretation of Rule 19 of the Rules
was not posed for consideration before their Lordships in the
said case.
20. Sri. Kalkura then relied on the judgment of the Delhi
High Court, referred supra, reported in Mrs. Chandra Prabha
Dogra v. LIC of India – A.I.R. 2004 Delhi 291. The said
judgment supports the stand taken by him. Learned Judge of the
Delhi High Court found on a composite reading of the Regulations
that Regulation 15 merely sets out the disabilities upon the
attainment of which the agency was liable to be terminated.
Learned Judge found that a fraudulent act outside the judicial
proceeding would also be actionable under Rule 16(b) and it
would be open for the Corporation to treat the case as a case of
fraud for the purpose of Regulation 19. With great respect, I am
afraid, I am unable to agree with the said proposition. In my
opinion, fraud as a basis for forfeiting the commission payable to
an agent in terms of Rule 19 of the Rules should have been found
as a fact against an agent in a judicial proceeding, in the manner
indicated in Rule 15(c) of the Rules. The termination of the
agency should have been under Rule 15(c) of the Rules, on the
OP 7702/2003 -: 24 :-
ground of fraud, to justify the forfeiture of the commission
otherwise payable to the agent in terms of Rule 19 of the Rules.
21. Sri. Kalkura then referred to the judgment of the
Bench of the Madras High Court in (A.Seshadri v. The
Chairman & Managing Director, LIC of India) W.A.No.239 of
2003. I have gone through the said judgment as well as the
judgment of the learned single Judge affirmed by the Division
Bench. The case turns purely on facts. The said judgment has
no application to the present case.
22. Learned counsel for the petitioner contends very
vehemently that the forfeiture of the renewal commission was
illegal and the Corporation ought to be directed to pay to the
petitioner the agency commission he is otherwise entitled to.
There is a dispute between the petitioner and the respondent as
to what would be the commission that is payable. Petitioner
contends that the commission relating to the premium payable
in relation to all policies secured by the petitioner would be due.
The Corporation maintains that at any rate, only such premia due
prior to the termination of the agency would become payable. I
do not think that it is necessary to go into that question in the
OP 7702/2003 -: 25 :-
light of the directions which I propose to issue. I hasten to
make it clear that the entitlement of an agent for commission in
terms of Rule 19 of the Rules cannot be in derogation of the right
of the Corporation to exercise its lien in terms of Rule 12 of the
Rules, which provides that the Corporation shall have the first
lien and charge on all moneys payable to an agent and may apply
any such moneys directly towards realisation of any debts due
from an agent. Thus, if any loss has been caused to the
Corporation by the petitioner, then it is obviously open to the
Corporation to compensate itself for such loss. A settlement of
accounts cannot be undertaken in the present case.
23. In the result, the Original Petition is allowed in part.
Exts.P5, P7 and P9 are quashed to the extent to which they
provide that the renewal commission payable to the petitioner
shall be forfeited. The second respondent is directed to compute
the agency commission payable to the petitioner in terms of the
Rules. If any amounts are due to the Corporation from the
petitioner as an agent, then it is open to the Corporation to
exercise its lien in terms of Rule 12 of the Rules. Once the
exercise is over, the amount which is due to the petitioner by
OP 7702/2003 -: 26 :-
way of renewal commission shall be paid to him. Orders in this
regard and payment will be effected by the second respondent
within a period of three months from the date of receipt of a copy
of this judgment. To enable the Corporation to do so, it is open
to the petitioner to file a statement before the second
respondent, which he may do so within a period of two weeks
from the date of receipt of a copy of this judgment. Exts.P5, P7
and P9 are upheld in so far as they relate to the termination of
the petitioner’s appointment as an agent.
Original Petition is allowed in part. No order as to costs.
V.Giri,
Judge.
ess 24/8