IN THE MADURAI BENCH OF MADRAS HIGH COURT
R.SUBBIAH, J.
D. Jerald Innocent Babu - Petitioner
Vs.
The Executive Director & Ors. - Respondents
W.P.(MD).No.7337 of 2014 and M.P.(MD).No.1 of 2014
Decided On : 23 .09.2015
Insurance Act, 1938 – Section 44 – Life Insurance Corporation of India (Agents) Rules, 1972 – Rules 8, 17 – Commission – Writ Petition has been filed by the petitioner praying to quash the impugned order dated 12.02.2014 passed by the 3rd respondent rejecting the request of the petitioner/agent of LIC for consideration of paying commission on policies and renewal commission, in respect of the policies which were already procured by him, after his resignation from LIC. – Held, Petitioner has joined as Junior Sales Manager in M/s.Bajaj Alliance Life Insurance Corporation Ltd. From the dictum laid down in the judgment of the Division Bench of the Calcutta High Court reported in (2013) 2 CHN 117 (Rajeev Lohia Vs. Life Insurance Corporation of India Ltd.,) it is clear that joining as an Officer in the competing Insurance Company can not disentitle the person from getting renewal commission for the policies procured by him. – Unless it is established that he is involved in soliciting and procuring customers, the said person cannot be denied commission in respect of the policies that have already been procured by him and he is entitled to the commission till the said policies get expired. – Writ Petition Allowed
The Writ Petition has been filed by the petitioner praying to quash the impugned order dated 12.02.2014 passed by the 3rd respondent rejecting the request of the petitioner/agent of LIC for consideration of paying commission on policies and renewal commission, in respect of the policies which were already procured by him, after his resignation from LIC.
2. The case of the petitioner, in brief, is as follows:-
2-1. The petitioner has completed B.Sc. Degree in Computer Science in the year 1994 and thereafter, he joined as LIC Agent with the Life Insurance Corporation of India (in short LIC) on 23.07.1997 and his Agent Code Number is 799 75B. He was attached with Kulithalai Branch in Thanjavur Division. His appointment as LIC Agent was confirmed with effect from 20.06.1998 by the letter dated 11.07.1998 issued by the Senior Branch Manager, LIC of India, Kulithalai.
2-2. It is the further case of the petitioner that owing to his strenuous and unstinted effort, he canvassed and procured 700 policy holders to the respondent-Corporation and the respondent-Corporation collected more than Rs.5 crores through him as its agent, through his service between 23.07.1997 to 27.02.2007 ie., 9 years 7 months. The approximate annual premium received by the respondent-Corporation from his customers/policy holders was Rs.30 lakhs. During the period of 9 years and 7 months, the petitioner had contributed sincere and dedicated service to the respondent-Corporation. During the said period, there was no complaint or remarks against the petitioner in discharge of his duties as LIC Agent.
2-3. The nature of employment of the petitioner as an Agent is to ascertain the persons, motivate them to be customers and policy holders of respondent-Corporation and to see that premium for the policy is paid regularly without any default or arrears to safeguard the interest of respondent-Corporation and effective running of the business of the respondent. The respondent-Corporation is liable to pay the commission for the insurance premium received from the customers procured or introduced by the LIC Agent and the LIC Agent is entitled to receive the commission for introducing a new customer as policy holder and on every payment of renewal of policy by the customers to the respondents. The respondent-Corporation is not liable to pay salary to the LIC Agent and the LIC Agent is not paid any salary or amount, except the commission to the extent of policy amount. The LIC Agent continues to discharge his work of procuring customers to the respondent-Corporation until his service is terminated by the respondent-Corporation and he ceases to work after the termination.
2-4. So far as the present case is concerned, as stated above the petitioner joined as LIC Agent on 23.07.1997. He wanted to resign from LIC and therefore, he submitted his resignation letter to the 5th respondent on 28.02.2007, who is the officer-in-charge of Kulithalai Branch, requesting to disburse his entire arrears of commission payable to him till 28.02.2007. Immediately, after receipt of his resignation letter, the respondents also stopped the payment of commission due and payable to the petitioner without notice and intimation. According to the petitioner, he is entitled to be relieved or discontinued after giving one month's notice which is automatic. But, in the instant case, the 5th respondent or any other respondents neither accepted nor rejected his resignation letter dated 28.02.2007, which in law amounts to acceptance of resignation under Rule 17(2) of the Life Insurance Corporation of India (Agents) Rules 1972. Since there was no response or reply from any of the respondents for more than 12 months, the petitioner made a request under Right to Information Act on 15.03.2008; but, the respondent-Corporation refused to pay the commission on policies and renewal commission in respect of the policy premium received from his customers and rejected his request on 25.04.2008 stating that under Sect
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