Life Insurance Corporation of India v. Nandini Sundriyal

RAJIV SAHAI ENDLAW, J NOVEMBER 27, 2015 kks

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Pronounced on: 27.11.2015 + LPA 531/2010 LIFE INSURANCE CORPORATION OF INDIA ..... Appellant Versus R K MAHAJAN ..... Respondent + LPA 534/2010 LIFE INSURANCE CORPORATION OF INDIA THR ITS CHAIRMAN & ANR. ..... Appellants Versus MAN SINGH KHUSHWAHA ..... Respondent + LPA 535/2010 LIFE INSURANCE CORPORATION OF INDIA ..... Appellant Versus NANDINI SUNDRIYAL ..... Respondent + LPA 537/2010 LIFE INSURANCE CORPORATION OF INDIA & ANR. ..... Appellants Versus P K SINGH ..... Respondent Present:- Mr.Kamal Mehta, Advocate with Mr.Sudeep Singh, Adv. for the appellants/LIC. Mr. R. K. Saini, Adv. for the respondents in LPA 534/2010, 535/2010, 537/2010 Mr. Ajay Sharma, Ms. Rupali Sharma, Adv. for the respondent in LPA 531/2010 CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW COMMON JUDGMENT : G.ROHINI, CHIEF JUSTICE 1. By common order dated 21.04.2010, the learned Single Judge allowed W.P.(C) Nos.10426, 10442, 10443 of 2006 and W.P.(C) 3277 of 2007. Aggrieved by the same, the Life Insurance Corporation of India/the sole respondent therein preferred these four appeals under Clause 10 of the Letters Patent. 2. The Respondents/Writ petitioners are the agents with the Life Insurance Corporation of India (for short "LIC"). By separate orders dated 24.11.2005, their agency was terminated by the LIC and renewal commission was forfeited in terms of Life Insurance Corporation of India (Agents) Regulations, 1972 (hereinafter referred to as "the Regulations"). Against the said orders of termination though the writ petitioners preferred appeals to the Zonal Manager, the same were rejected by orders dated 30.05.2006. Aggrieved by the same, they filed W.P.(C) Nos.10426, 10442, 10443 of 2006 and W.P.(C) No.3277 of 2007 contending inter alia that the orders of termination as well as the orders of the Appellate Authority dismissing the appeals were in violation of the principles of natural justice. Accepting the said contention, the learned Single Judge allowed all the writ petitions. Accordingly, while setting aside the impugned orders dated 24.11.2005 and 30.05.2006, the learned Single Judge directed restoration of the agency of the writ petitioners from the date of their respective termination. The learned Single Judge also directed payment of renewal commission and the arrears together with simple interest @ 6% per annum from the date of forfeiture to the date of payment. The said order is under challenge in these appeals preferred by the LIC. 3. We have heard the learned counsel for both the parties. Since the facts have been set out in detail by the learned Single Judge in the order under appeal, we are not repeating the same. However, it is necessary to notice the relevant statutory provisions. 4. In exercise of the powers conferred in it under Section 49 of the Life Insurance Corporation Act, 1956 and with the previous approval of the Central Government, the LIC made the Regulations called the Life Insurance Corporation of India (Agents) Regulations, 1972 which shall apply to all agents appointed by LIC for the purpose of soliciting or procuring life insurance business for LIC. The Regulations contain specific provisions prescribing the qualifications for appointment as agents, the training and tests they have to undergo, the period of probation, their functions and also commission and remuneration payable for the discharge of their functions. The agency is liable to be terminated on different grounds specified in the Regulations and as per Regulation 16, the appointment of an agent may be terminated by the competent authority for any of the lapses mentioned therein. Since the impugned orders of termination were passed in terms of Regulation 16(1), the same may be reproduced hereunder for ready reference:- "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