The central legal point established in the judgment is the requirement of natural justice, including notice and opportunity of hearing, before terminating an insurance agency.

( 1 ) INVOKING the extraordinary jurisdiction of this Court under Art. 226/227 of the Constitution, petitioner has called in question tenability of order Annexure P/1 dated 30-7-2002, by which the agency of the petitioner as Insurance agent has been terminated.

( 2 ) PETITIONER was appointed vide Annexure p/3 as an agent in accordance with the Insurance Regulatory and Development authority (Licensing of Insurance Agents) Regulations, 2000 for a period of three years from 15-1-2002 for procuring and soliciting business of general insurers. It is the case of the petitioner that after the license was granted to him vide Annexure P/3 he had been discharging his duties effectively and sincerely to the fullest satisfaction of the competent authority. He has procured the business as required under the Rules, but in an arbitrary manner without giving him any opportunity of hearing, without issuing show cause notice and in total disregard and in violation of the principle of natural justice , his agency has been terminated, on the ground of complaint received against him with regard to collection of premium and termination of agency on the basis of enquiry conducted behind the back of the petitioner is said to be unsustainable.

( 3 ) ON notice being issued, respondent insurance company has filed its return and it is submitted by them that the petitioner is only an agent, there is no relationship of employer and employee, he was only authorised to act as an Insurance agent vide annexure P/3 and, therefore, question of his removal from services does not arise. However, in para 5. 7 of the return it is mentioned as under :'that, the contents of this paragraphs are denied. The petitioner received amount from m/s. Bharti Telent Hq. Gwaliar that the petitioner on 26-4-2001 collected amount Rs. 2100/- towards the premium of Transit Insurance of household item from Gwaliar to raipur as their officer Mr. Chandra has been transferred. But the same amount which is collected by the petitioner is not deposited with the respondent-company. The complaint was lodged and after enquiring, it is found that petitioner and Mr. Sanjay Saxena act is against the interest of respondent company, the report is submitted to the Regional manager, Indore the same is annexed herewith and marked as Annexure R-1 and the complaint is also annexed as Annexure R-2. On the basis of report Annexure R-2 Sri Jain a. O. submitted his report Annexure R-3 on 11-6-2002. Shri Sanjay Saxena Development officer also submitted the reply dated 5-6-2002 on 7-6-2002 the same is annexed annexure R-4. It is apparent the petitioner misappropriated the money and also violated mandatory provision of Section 218 of the contract Act. It is therefore, the case of the respondents that termination of the Insurance agency is as per the terms and conditions of the license granted to the petitioner and the contract can be terminated without conducting any enquiry. ( 4 ) REFERRING to the provisions of the regulations namely the Insurance Regulatory and development Authority (Licensing of Insurance Agents) Regulations, 2000, it was submitted by learned counsel for the respondents that there is no provisions in the said regulations for issuing show cause notice or conducting enquiry and cancellation of licence is permissible. Accordingly it is argued that no case for grant of relief is made out. In support of the contention learned counsel invites attention to the judgment of the supreme Court in the case of Life Insurance corporation of India v. Lalitha Devi, reported in AIR 1991 SC 1734 : (1991 Lab 1c 1606), and a judgment of the Karnataka High Court in the case of B. K. Vadiraja v. Managing Director, L. I. C. of India reported in AIR 2002 karnataka 113: (2002 AIR Kant HCR 508) to contend that no case for interference in the matter is made out. It is argued that the termination of agency is in accordance with the statutory provisions and, therefore, no interference is called for.

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