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2025 Supreme(Kar) 2050

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
E.S.INDIRESH, J.
Sri. K.P. Narasimha Murthy - Appellant
Vs.
Zonal Manager Appellant Authority Life Insurance Corporation Of India, Hyderabad - Respondent
Writ Petition No. 23625 of 2023 (GM-RES)
Decided On : 10-12-2025

Advocates:
Advocate Appeared:
For the Appellant :Sri. Kiran S Javali, Senior Advocate For Sri. Prashanth P N, Advocate
For the Respondent:Sri. Rajesh Shetty, Advocate

Compliance with procedural safeguards is essential in disciplinary actions; failure to adequately inform the accused and provide a fair opportunity to defend leads to invalidation of termination.

Headnote:(A) Life Insurance Corporation of India (Agents) Regulations, 2017 - Rule 23, 8(3), 15(c), 15(d), 16(1)(b), (c), (h), (i) - Disciplinary proceedings against LIC agent - Petition filed against disciplinary action initiated for alleged involvement in financial scam - Petitioner challenged the lack of natural justice and risky procedure followed by the authority - Held that the principles of natural justice were violated as proper procedures were not followed leading to termination of agency and forfeiture of commission. (Paras 3, 4, 17)

(B) Right to defence - Violation of procedural safeguards - Termination proceedings must adhere to laid down regulations to ensure fair treatment - The absence of charge framing and opportunity to defend constitutes a denial of a fair hearing. (Paras 12, 16)

Facts of the case:
The petitioner, an LIC agent, contended that disciplinary actions were initiated against him due to involvement in a financial scam. He was not adequately informed of the charges against him nor provided a reasonable opportunity for defence, violating natural justice principles.

Findings of Court:
The court identified several procedural gaps in the disciplinary proceedings and ruled against termination without proper compliance with established regulations.

Issues: Main issues included whether the petitioner was granted a fair opportunity to defend against the allegations made and whether the procedural requirements for termination were fulfilled.

Ratio Decidendi: The court emphasized that compliance with established procedures is crucial in disciplinary actions against agents, ruling that failure to communicate charges and provide a proper hearing invalidates termination.

Result: Writ petition allowed; the termination order is set aside and mandates the release of the due commission.

Table of Content
1. disciplinary action against lic agent. (Para 2 , 3 , 4)
2. petitioner argues previous recognition negates discipline. (Para 5 , 6)
3. court addresses procedural violations. (Para 9 , 10 , 11)
4. termination must follow due process. (Para 12)
5. writ petition allowed; order set aside. (Para 13)

ORDER :

E.S.INDIRESH, J.

Heard Sri. Kiran S Javali., learned Senior Counsel appearing for Sri., Prashanth P.N., learned counsel for the petitioner and Sri. Rajesh Shetty, learned counsel for respondent Nos.1 to 3.

2. In this writ petition the petitioner is assailing the proceedings initiated by the respondent No.1 under Rule 23 of the LIC of India (Agents) Regulations, 2017 in Code No.05467611 (Annexure-A) inter-alia sought for direction to the respondent No.3 to release the commission amount due, to the petitioner as per Annexure-J of the writ petition.

Factual matrix of the case:

3. The petitioner is an LIC Agent of the respondent No.1, assailing the disciplinary action initiated against the petitioner herein by the respondent, on the ground that, the petitioner was arrayed as accused No.2 in Crime No.73/2018 registered by the Banshankari Police Station for the offences punishable under Section 34 , 403, 406, 420 of the Indian Penal Code, 1860, based on a complaint lodged by one Sri. P.R. Balaji as per Annexure R-2.

4. It is the case of the respondent, that the aforementioned complaint was lodged against the petitioner, as the complainant in the aforementioned proceedings, has instigated one P.R. Balaji to invest in the Vikram Investments. Thereby, the proceedings have been initiated against the petitioner as per Annexure R2. The said aspect was brought to the notice of the respondent-authorities as per Annexure R6 to the statement of objection, dated 13.08.2018 and thereby, the respondent-authorities have initiated a departmental enquiry against the petitioner. Ultimately, the respondent-authority passed the impugned order dated 12.09.2023 (Annexure-A) to the writ petition. Hence, this writ petition is filed.

5. Sri. Kiran S Javali, learned Senior Counsel appearing for Sri. Prashanth P.N. learned counsel for the petitioner, invited the attention of this Court to the proceedings initiated against the petitioner as per the letter dated 12.03.2018 (Annexure-C) for being involved in the repeated scam of Vikram Investments and also the relevant provisions contained under the provisions of the LIC of India (Agents) Regulations, 2017 produced at Annexure-B. It is also argued that, the service rendered by the petitioner, was taken into consideration and was honoured with being the Member of the Chairman's Club by the respondent-authorities. Thereafter, the respondents have issued a Show-cause Notice dated 18.03.2019 seeking explanation for violation of the relevant rules under the Act. The petitioner has filed reply to the Show- cause Notice stating that the FIR registered against the petitioner is only with regard to the allegation made against the petitioner under the KPAD Act and not with regard to inducing the complainant therein for investment in the said scam and therefore, the reply was made by the petitioner.

6. It is further argued that, the respondent-LIC has not considered the reply made by the petitioner and thereby passed the impugned order at Annexure-A, dated 12.09.2023, which requires to be interfered with this petition. In order to support his arguments, learned Senior Counsel appearing for the petitioner, refers the judgment of this Court in the case of Sri. Sutram Suresh Vs. The Senior Divisional Manager Life Insurance Corporation of India and Others passed in WP.No.29459/2019 disposed on 02.03.2023 and in the case of P.G.Natarajan Vs. Life Insurance Corporation of India and Others , (2016) 14 SCC 232 and argued that, the allegation made against the petitioner by the respondent-corporation is fairly covered by the decision of this Court and therefore, it is contended that, the writ petition requires to be allowe

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