Andhra Pradesh High Court
Judges : B.V.RANGA RAJU, P.B.MISHRA, V.BHASKARA RAO
Chairman, L.I.C.of India, Bombay - Appellant
Versus
Kalangi Samuel Prabhaker - Respondent
Decided On : 05-02-97
Constitution of India, 1950 - Articles 19, 226, 304 - Insurance Act - Section 42 - Life Insurance Corporation of India Act, 1956 - Sections 49, 29, 48, 21, 17 - Life Insurance - By circular decision of not giving Life Insurance Corporation agency to any applicant whose spouse is employed in Central/state Government or in any Public Sector Undertaking was conveyed to all Zonal Managers - Divisional Managers and Officers incharge of Branches - Since common question of law is involved in all matters we are disposing of all cases by common judgment - Life Insurance Corporation requesting him to issue instructions to all of his field formations directing them not to engage spouses of employees of public sector undertakings as agents for canvassing life insurance business in future and as far as existing agents are concerned efforts should be made to gradually weed out such agents a sand when such instances come to notice - Held, We have to interpret power under Regulation as unbridled slime is arbitrary and against public policy when particularly regulation pertains to grounds of termination and there is no rule prohibition for appointment of spouses either under rules - Even if it is accepted that circulars arc issued validly ax per power conferred of Act question is whether they will have force provides that whenever regulation is framed by Life Insurance Corporation same has to be published in Gazette and placed before Parliament - It is not disputed in this case that circulars were not placed before both houses of Parliament nor published in Gazette - Therefore counsel contended that circulars have no force of law as they are not published in Gazette - When termination is not specifically mentioned it cannot be said as termination without any reasons Further this termination is not on ground that he is one of spouse of public undertakings - Order accordingly.
( 1 ) THE Writ Appeals Nos. 330 of 1995 and 331 of l995 are filed assailing the judgment of the single Judge allowing the Writ Petitions and quashing the circular s dated 13-8-1981 and 30-7-1987 of the Life Insurance Corporation of India. Writ Petition No. 6925 of 1994 is filed seeking a Writ of Mandamus declaring the order dated 7-12-1993 of the second respondent therein as confirmed by the first respondent vide his order dated 17-3-1994 as illegal, void and unconstitutional. Writ Petition No? 11490 of 1996 is filed seeking a Writ of Mandamus calling for the records of the first respondent in Ref. No. Mktg/lisu/2733 dated 22-3-1993, quash the same as arbitrary and illegal and consequently reinstate the petitioner as Life Insurance Corporation of India agent with all consequential benefits.
( 2 ) BY the circular dated 13-8-1981 the decision of not giving Life Insurance Corporation of India agency to any applicant whose spouse (wife/ husband) is employed in the Central/state Government or in any Public Sector Undertaking was conveyed to all Zonal Managers. Divisional Managers and Officers incharge of Branches. Since common question of law is involved in all the matters, we are disposing of all cases by common judgment.
( 3 ) THE facts of these eases, in brief, are that the Managing Director of the Life Insurance Corporation of India has issued the circular dated 21-7-1984) to the effect that wife or husband of an employee of the State/central Government or the employees of the above Governments shall not be appointed as agents. Again to the same effect, the Chairman of the Life Insurance Corporation of India has also issued another circular dated 13-8-1981.
( 4 ) THE above circulars direct that no spouse (husband/wife) of an employee of the Central/ State Government or any other Public Sector Undertaking will be given the agency of the Life Insurance Corporation of India. In pursuance of these two circulars, the concerned officers have issued specific instructions to their subordinates not to appoint any spouse of the employees of Central/state Government or any other Public-Sector Undertakings (hereinafter called as spouse for the sake of convenience ). Thereby, the applications II led by the spouses were rejected Writ Petition No. 6925 of 1994 is filed questioning the termination of the agency. The Government of India, Ministry of finance wrote a letter dated 6-7-1981 to the Chairman. Life Insurance Corporation of India requesting him to issue instructions to all of his field formations directing them not to engage spouses of employees of public sector undertakings, as agents for canvassing life insurance business, in future and as far as the existing agents arc concerned, efforts should be made to gradually weed out such agents a sand when such instances come to not ice.
( 5 ) IT is con tended on behalf of the petitioners that the above said two circulars arc contrary to the rules governing the appointment of Agents framed by the Life Insurance Corporation of India and Articles 19 (1) (g), 304a and 304b of Constitution of India, that the Managing Director and the Chairman of the Life Insurance Corporation of India have no jurisdiction to issue those circulars and that too without amendment to the provisions of the Life Insurance Corporation of India Act incorporating the clause not to appoint spouse as Agent of the Life Insurance Corporation, and further contended that as the above said two circulars are illegal, they arc liable to be quashed.
( 6 ) ON be half of the Life Insurance Corporation of India, it is contended that since the circulars stated above are the out-come of policy decision of the Central Government and are supplemental to the rules and regulations framed by the Life Insurance Corporation of India, therefore, they arc not amendable to challenge under Article 226 of the Constitution of India, that the Corporation has every right of control over appointment of agency in public interest
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