The agent's fraudulent conduct resulted in loss of entitlement to renewal commission despite extended service, supported by applicable regulations.

JUDGMENT

Manisha Batra, J.

The present appeal has been filed by the appellant-defendant No.1 against the judgment and decree dated 26.11.2004 passed in Civil Appeal No.32 of 2003 by the Court of the then learned District Judge, Jind whereby the judgment and decree passed by learned trial Court had been modified, the appeal was partly allowed and the respondent-plaintiff was held entitled to renewal commission in respect of the policies effected through her as an agent of the appellant Corporation.

2. For the sake of convenience, the parties shall be referred to hereinafter as per the original nomenclature as given in the suit.

3. The factual matrix of the case is given as hereunder:-

The plaintiff Smt. Darshna Devi filed the aforementioned suit on the averments that she was an agent of the defendant No.1-Corporation since the year 1988 and had been performing her duties as an agent to the utmost sincerity. On 21.08.1983, a show cause notice was served upon her by the defendant-Corporation levelling false allegation to the effect that she had attempted to defraud the defendant No.1-Corporation by submitting a proposal form on 06.04.1991 bearing date 30.03.1991 for extending benefit of a life insurance policy qua a person who had infact died on 31.03.1991. The plaintiff submitted reply to the show cause notice but the defendant No.1 suspended her agency vide letter dated 16.08.1993. Then after a gap of almost about 4 years, the defendant No.3 issued an order dated 26.11.1998 thereby imposing penalty of termination of agency of the plaintiff and also for forfeiture of renewal commission payable to the plaintiff as per rules. The plaintiff firstly filed a representation before the defendant No.3 and on rejection of the same, preferred an appeal before the defendant No.2 but the said appeal was dismissed vide order dated 18.11.1999 passed by defendant No.2. The plaintiff prayed for declaring the orders passed by defendant Nos.3 and 2 On 26.11.1998 and 18.11.1999 respectively as illegal on the grounds that the same were passed without giving any opportunity of hearing to her and without conducting any inquiry and she had been condemned unheard. She alleged that no fraud had been committed upon the defendant No.1 by herself. The proposal form in dispute was dated 30.03.1991 and the same had been filled by Development Officer Sh. Bhalle Ram and the policy holder had been medically examined on 30.03.1991. She submitted that his death on 31.03.1991 did not prove any fraud on her part. It was also asserted that she deserved to receive the renewal commission and deserved to continue as agent of the defendant No.1. A prayer had been made accordingly by her.

4. The defendants filed a joint written statement raising preliminary objections as to maintainability, lack of jurisdiction and on the ground that the suit had not been properly valued for the purposes of Court fees and jurisdiction. On merits, it was submitted that the plaintiff had attempted to defraud the defendant No.1-Corporation by passing spurious business. She had submitted a proposal form dated 30.03.1991 qua the life of one Vishnu Chand Saini on 06.04.1991 whereas the said Vishnu Chand Saini died in an accident on 31.03.1991 and by doing so, the plaintiff had attempted to defraud the Corporation and acted in a manner detrimental to its interest. Consequently, she was instructed vide order dated 16.08.1993 to not to procure any new business on behalf of the defendant No.1- Corporation and a show cause notice under Life Insurance Corporation of India (Agents) Regulations, 1972 (For short "Regulations, 1972") had been issued against her