Prabhat Kumar Sinha vs Life Insurance Corporation of India and Others

Satish K. Agnihotri, J.—Heard learned Counsel appearing for the parties.

Challenge in this petition is to the order dated 29-3-2010 (Annexure-P/1) passed by the Competent Authority, Life Insurance Corporation of India (for short "LIC") where-under the penalty of forfeiture of renewal commission under Regulation 19(1) read with Regulation 10(6) of the Life Insurance Corporation of India (Agents) Regulations, 1972 (for short "the Regulations, 1972") had been imposed.

The indisputable facts, in nutshell, for adjudication of the case, are that the Petitioner was an agent of LIC from 30-3-1991. The agency of the Petitioner was terminated on 23-9-2009 under the provisions of Regulation 16(1)(b) of the Regulations, 1972. Thereafter, the Petitioner filed a writ petition impugning the order dated 23-9-2009 before this Court, being W.P. (C) No. 5974 of 2009. This Court, by order dated 20-1-2010 dismissed the writ petition, as withdrawn with liberty to take recourse to alternative remedy of statutory appeal under the provisions of Regulation 20(1) of the Regulations, 1972.

Accordingly, an appeal was preferred by the Petitioner before the Appellate Authority i.e. Zonal Manager, LIC, Bhopal on 2-2-2010. The appeal against the termination order dated 23-9-2009 is still pending consideration before the Appellate Authority. During pendency of the said appeal, the Respondents passed the impugned order dated 29-3-2010 (Annexure-P/1) imposing penalty of forfeiture of renewal commission under Regulation 19(1) read with Regulation 10(6) of the Regulations, 1972. Thus, this petition.

Shri Rao, learned Counsel appearing with Shri Sinha, learned Counsel for the Petitioner, would submit that if the Petitioner succeeds in his appeal pending before the Appellate Authority against the termination order dated 23-9-2009, the present impugned order dated 29-3-2010 (Annexure-P/1) would become illegal and irregular. The Respondent authorities ought to have awaited decision of the statutory appeal, which is pending before the senior officers of the Respondent LIC. Thus, the impugned order deserves to be quashed, as it appears that the same has been passed with ulterior motive to make the appeal ineffective.

On the other hand, Shri Sharma, learned Counsel appearing for the Respondents, in support of the impugned order, would submit that the Respondent LIC has rightly passed the impugned order and the same does not warrant any interference by this Court.

Be that as it may, the show-cause notice dated 26-2-2010 (Annexure-P/4) was issued prior to the impugned order dated 29-3-2010 (Annexure-P/1) was passed. The show cause notice solely rests on the termination order dated 23-9-2009, as it is evident from 2nd para of the show cause notice. The termination order dated 23-9-2009 is subjudice before the statutory Appellate Authority i.e. senior officer of LIC. Thus, it was expected that the LIC would await decision of the Appellate Authority in case of termination order. The impugned order has been passed, it appears, hurriedly with some motive.

Since the impugned order has been passed without awaiting for the decision in the termination order of the Appellate Authority, I am not inclined to go into the merits of the case, which may prejudice the case of theparties.

Accordingly, the impugned order dated 29-3-2010 (Annexure-P/1) is not sustainable in the eye of law, at this stage. The same is accordingly suspended. After the order is passed by the Appellate Authority on the termination order dated 23-9-2009, the Respondent authorities would have full liberty to take appropriate steps, if so advised, in accordance with the above-stated provisions of law. It is also made clear that if the impugned order continues after the decision of the Appellate Authority, liberty is reserved to the Petitioner to challenge the same before the appropriate forum, if so advised.

With the aforesaid observations and directions, the writ petition stands disposed of.