An insurance agent who resigns from his agency is entitled to receive renewal commission for his agency from the other insurance company as an officer thereof, unless he directly or indirectly solicits or procures insurance business for any other person.

Kalyan Jyoti Sengupta, Actg.C.J.

1. The appellant above-named being unsuccessful before the learned Trial Judge preferred this appeal against the judgment and order dated 10th September, 2009 in the above Writ Petition by which the learned Trial Judge dismissed the Writ Petition. The short fact leading to filing the Writ Petition consequently preferring the appeal is as follows:--

2. In or about April, 1975 the appellant became the agent of the respondent-Corporation and since then he continued to remain as agent till his agency terminated. According to the writ-petitioner/appellant he resigned on 7th March, 2002 by addressing a letter to the respondent Nos. 4 and 5 and dispatched the same Under Certificate of Posting. However, it is claimed by the respondent that the said resignation letter was not received. Thus from nearly 27 years the appellant remained agent with obligation to procure and business and some times without any obligation to procure the same as he was exempted occasionally. The problem started on 18th March, 2002 when appellant was asked by the L.I.C. Branch Manager concerned to inform the name and address where the appellant has joined a private Insurance Company. On 26th March, 2002 the appellant replied to the letter dated 18th March, 2002. Before the said letter dated 18th March, 2002 was issued respondent issued a letter on 6th February, 2002 to the appellant intimating that agent license shall expire on 31st March, 2002 unless the renewal is made. On receipt of the same pay order for a sum of Rs. 250/- for renewal of license of the appellant was prepared and shortly thereafter he sent in letter of resignation as stated above. On 22nd May, 2002 the said renewal fee of Rs. 250/- was returned by the Branch Manager of the respondent-Corporation on the ground of resignation from the agency. On 22nd April, 2002 respondent No. 4 issued a show cause notice for alleged misconduct and an action for termination of agency of the appellant. The letter dated 7th May, 2002 was replied to taking the plea that Corporation had no jurisdiction as the agency stood terminated on 7th March, 2002. On 16th August, 2002 an order imposing penalty of termination of agency of the appellant was issued by the LIC Senior Divisional Manager and communicated to the appellant by letter dated 17th August, 2002. The appellant unsuccessfully preferred departmental appeal to the respondent No. 3 who upheld the said order of termination. On 13th August, 2003 the appellant filed Writ Petition (W.P. No. 1646 of 2003) challenging the order dated 16th August, 2002 and 27th May, 2003 for various other reliefs. On 6th November, 2003 the learned Single Judge of this Court set aside the order dated 27th May, 2003 namely the order of Appellate Authority and gave direction to Zonal Manager to reconsider the matter. Thereafter the Zonal Manager reconsidered the matter and on 5th March, 2004 Zonal Manager upheld the earlier order by passing a speaking order. Thereafter the above writ petition was filed challenging the said speaking order.

3. Learned counsel for the appellant by highlighting the fact, says that appellant ceased to be an agent of the Corporation on and with effect from 1st April, 2002 as licence to act as an insurance agent under the Insurance Act, 1938 expired on 31st March, 2002 and was not renewed thereafter. In spite of termination of agency on resignation show cause notice dated 22nd April, 2002 was issued, and the same is invalid and without jurisdiction as relationship of Principal and Agent comes to an end. Thereafter the provisions of section 44 of the Insurance Act, 1938 as mentioned in the show cause notice would not be applied. The domestic proceedings or enquiry should be initiated so long the aforesaid relationship exists. The respondent cannot withhold the renewal commission or give any other ground whatsoever in the facts and circumstances of this case. In any event section 44 of the Insurance Act, 1938 has been made