The termination of an agent's agency under Rule 16 of the Life Insurance Corporation of India (Agents) Regulations, 1972, requires that the agent be given a reasonable opportunity to show cause against such termination and that the principles of natural justice be complied with.

The Order of the Court was as follows :

The prayer in the above writ petition is as follows :

".....to issue a writ of certiorarified mandamus or any other appropriate writ, Order or direction, calling for the records of the respondent in Proceedings No. MD/Sect 1/SDM dated 24-3-1992, quash the same and direct the respondent to pay the renewal and other commissions to the petitioner and pass such further or other orders....."

2. The petitioner took up an Agency with the Life Insurance Corportion of India in May, 1983. The payment and termination of the services of LIC Agents are governed by statutory Rules which have been framed under Section 49 of the Life Insurance Corporation of India Act, 1956 and these Rules are known as the Life Insurance Corportion of India (Agents) Regulations, 1972. According to the petitioner ever since he was appointed as an Agent of the Life Insurance Corportion, he has done exceedingly well. He had also the unique distinction of being the only Agent to get the IMM - Campa Cola - Marketing Award for being the best Salesman in the country. The petitioner has also received Outstanding Young Person Award from Jaycees. The petitioner has been interviewed by National Magazines like Business India and India To-day and also figured in the Insurance Sales Magazine of the U.S.A.

3. By an order dated 27-5-1991, in exercise of the powers conferred by Rule 16(3) of the Rules, the respondent directed the petitioner not to solicit or procure new life insurance business since certain material facts had been brought to his notice causing reasonable grounds on which termination of the Agency was contemplated. On 28-5-1991, a show cause notice was issued to the petitioner under Rule 16 (1) (a) and (b) of the Rules read with Rule 19(1) of the Rules proposing to terminate the Agency of the petitioner with forfeiture of renewal commission. The gravamen of the charge was that in the case of three persons who wanted to avail of a Housing Loan from the Life Insurance Housing Finance Limited, a totally independent entity which is a subsidiary of the Life Insurance Corportion of India, a false employer Certificate had been produced for the purpose of the loan. It was further alleged that the said three persons had stated that the petitioner herein had given a forged employer certificate and prompted them to mention that they were employed in the concern. Apart from the three instances mentioned above, the show cause notice further alleged that in the case of one Smt. Prema Balasubramanian, certain payments had been made to the credit of a loan taken from the LIC Housing Finance Limited and that the said Smt. Prema Balasubramanian had requested for refund out of the amount paid towards initial deposit, etc., and that on investigation it had been found that the amount meant to be paid to the credit of the account was not actually remitted into the Office. On the basis of the said allegations, it was stated that the petitioner had misappropriated the amount from Smt. Prema Balasubramanian. The petitioner submitted a reply to the show cause notice on 12-6-1991 in which the petitioner stated that even without an enquiry the respondent had come to the conclusion that the acts of the petitioner are deliberate, intentional, fraudulent and prejudicial and detrimental to the interests of the Life Insurance Corportion of India, the insurance Public and the public at large and that the proposal to terminate the agency with forfeiture of renewal commission was in gross violation of the principles of natural justice. The petitioner submitted that there was a violation of the principles of natural justice and also submitted that the conclusions reached by the respondent were not based on any valid evidence and that the respondent had failed to make a clear distinction between the Life Insurance Corportion of India and the Life Insurance Corportion Housing Finance Limited.

4. On 6-9-1991, another show cause notice was issued in whi