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2010 Supreme(Del) 383

DELHI HIGH COURT
Dr. S. Muralidhar, J.
P.K. SINGH -Petitioner
Versus
LIFE INSURANCE CORPORATION OF INDIA –Respondent
W.P. (C) 10426 of 2006 with W.P. (C) 10442/2006, W.P. (C) 10443/2006 and W.P.(C) 3277 of 2007
Decided on 21.4.2010

Counsel for the Parties:
For the Petitioner:Mr. R.K. Saini, Advocate.
For the Respondent:Mr. Ravinder Sethi, Senior Adv. With Mr. Kamal Metta and Mr. Puneet Sharma, Advocates.

Headnote:Life Insurance Corporation of India (Agents) Rules, 1972—Rules 16(l)(a), (b), (d), 19(1) r/w Rule 10(6), Rules 8(2)(b) and 17(1)—Right to Information Act, 2005—Termination of Agency and forfeiture of renewal commission for alleged irregularities in policies under Salary Savings Scheme—Order of termination of agency cannot be sustained when beneficiaries of such irregularities were not LIC Agents but policy holders—No criminal case filed against agents—Story of fraud loses ground when no action was taken again erring policy holders—Besides, order of termination agency was passed in violation of provisions of Rule 16(1) of Agents Rules—Impugned orders set aside—Petitions allowed. [Paras 44, 55, 56, 57, 63, 64, 66 to 70]

JUDGMENT

Dr. S. Muralidhar, J.-The facts in these four writ petitions are more or less similar and are accordingly disposed of by this common judgment.

2. Each of these Petitioners was an agent with the Life Insurance Corporation of India (LIC), the Respondent herein. By separate orders dated 24th November, 2005, the agency of each of the Petitioners was terminated and forfeiture of renewal commission was also ordered in terms of the Life Insurance Corporation of India (Agents) Rules, 1972 [hereinafter the" Agents Rules"].

3. Each of the Petitioners preferred an appeal to the Zonal Manager against the terminations and each of the appeals was rejected by separate orders dated 30th May, 2006. The orders dated 24th November, 2005, terminating the agency and the orders dated 30th May, 2006 dismissing the appeal have been challenged by each of them by way of the present writ petitions. They were agents attached to Branch Unit 11-C.

4. The Petitioner in W.P. (C) No. 10426 of 2006, Mr. P.K. Singh, was appointed as an LIC agent in 1990. Since then, he has been conferred with several awards for his work in generating business for the LIC for several years. A long list of such achievements is set out in para 3(B) of the writ petition. He was awarded membership of the Chairmans Club for 2000-01 and 2001-02. Ms. Nandini Sundriyal the Petitioner in W.P(C) No. 10442 of 2006 became an LIC agent in the year 1990 and has had an unblemished record. Mr. Man Singh Kushwaha the Petitioner in W.P. (C) No.10443 of 2006 became an agent way back in the 1970s and has also been awarded merit certificates and honours. Similarly, Mr. RK. Mahajan, the Petitioner in W.P. (C) No. 3277 of 2007 became an LIC agent on 22nd October 1990. He achieved top rankings in agents listings and was awarded membership of the Chairmans Club for 1997-98. On 19th September 2003 Mr. R.K. Mahajan made certain complaints to the Senior Divisional Manager, LIC regarding malfunctioning of the SSS.

5. It is stated that on 15th July, 2004, a notice was issued by the LIC to each of the petitioners stating that irregularities had been observed in various policies under the Salary Savings Scheme (hereinafter the "SSS") under the Petitioners agencies at Branch Unit-II C and that the said irregularities "were resorted to with a view to defraud the corporation". It was stated that the "entire matter is under investigation and disciplinary action was contemplated" pending investigation and action in accordance with the Agents Rules. The Petitioners Were directed "not to procure or solicit any new LIC insurance business unless permitted to do so". By a separate order dated 15th July, 2004, the Senior Divisional Manager directed each of them" not to enter any office under the jurisdiction of the LIC without taking his prior permission".

6. On 17th July, 2004, Mr. P.K. Singh and Ms. Nandini Sundriyal wrote to the Senior Divisional Manager expressing surprise at the aforementioned letters denying having committed any irregularity. Mr. Man Singh Kushwaha wrote letters to the Senior Divisional Manager, LIC to the same effect on 22nd July, 21st August and 6th September, 2004. Mr. R K. Mahajan wrote a similar letter on 20th July, 2004.

7. By a common order dated 30th September, 2004, the Branch Manager of Branch Unit No. 11-C stated that consequent upon the conclusion of investigation, the order dated 15th July, 2004 prohibiting the agents from entering any office under the jurisdiction of the LIC of India, Delhi, stood withdrawn. The order dated 30th September 2004 was applicable to the three Petitioners other than Mr. R.K.Mahajan.

8. Mr. P.K. Singh, wrote a letter dated 6th December, 2004 requesting LIC to take a decision in the matter and permit him to resume business as an LIC agent in view of conclusion of the investigation by LIC and the consequent order of 30th September, 2004. This was followed by a common letter by three of them (other than Mr. RK. Mahajan) delivered to the Respondent LIC on 13th









































































































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