Considering serious nature of allegations, opportunity of enquiry, which is another facet of principles of natural justice, has to be given.

ChallaKodanda Ram, J.

1. The writ appeal is filed aggrieved by the order dated 05.09.2013 passed in W.P. No.23672 of 2004 by the learned single Judge in setting aside the Proceedings dated 25.07.2003 whereunder and whereby the agency of the petitioner was terminated on account of certain alleged irregularities.

2. The case of the writ petitioner is that he is an accredited agent of Life Insurance Corporation of India and is governed by Life Insurance Corporation Agents Regulations, 1972.

3. The writ petitioner was alleged to have committed certain irregularities, which were more specifically set out in the show cause notice dated 03.07.2003. Allegations pertain to briefly; that availing of loans on agent’s own policy bearing No.640711246; erased the previous loan endorsement on the policy bond by removing the previous loan papers etc. Similar notice was made with regard to Policy bearing Nos.640758519 and 640756196 of Mrs. Hemalatha agent’s wife apart from Policy bearing No.640739187 of one R.Vijaya Lakshmi. Show cause notice was replied by the petitioner on 21.07.2003 and thereafter, the impugned order came to be passed in exercise of the powers conferred on the 1st respondent in terms of the Regulations. The petitioner filed an appeal before the 2nd respondent, which also came to be dismissed.

4. The principal ground that has been urged by the writ petitioner is to the effect that no enquiry as such was conducted by the Corporation before passing the impugned order and the same is in gross violation of principles of natural justice.

5. On the other hand, the Corporation had contended that a proper reading and interpretation of the Regulation 16 would leave no doubt that no such detailed enquiry is contemplated under the Regulations and what all the Regulations contemplated is issuance of show cause notice and passing of an order, after considering explanation, if any, submitted by the agent. On the other hand, the learned counsel for the respondent/writ petitioner would support the order of the learned single Judge.

6. The learned single Judge allowed the writ petition by setting aside the proceedings dated 25.07.2003 issued by the appellants-Corporation. The appellants were further directed to reinstate the petitioner as an Agent with all benefits to which he would be due as an agent.

7. To appreciate the controversy in issue, we may refer to the Regulation Nos.16 and 17 of Life Insurance Corporation of India (Agents) Regulations, 1972 (for short, “the Regulations”), which are dealing with the termination of agency.

“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 competent authority;

(b) if he acts in a manner prejudicial to the interests of the Corporation or to the interests of its policy holders;

(c) 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 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 au