( 1. ) IN this appeal filed under Section 96 of the Civil Procedure Code, the appellants/defendants have called in question the judgment and decree dated 18-7-1995 passed by the III Additional District Judge, Satna in Civil Suit No. 2-A/90.

( 2. ) AS per the appellants, on 5-2-1968 the respondent was appointed as their agent under Section 4 of the Life Insurance Corporation of India (Agents) Regulations, 1972 (hereinafter referred to as regulations ). During the existence of his agency, on 21-3-1984 he submitted a proposal form to insure life of Prakash Chandra Agrawal. Alongwith the proposal form dated 21-3-1984 the respondent submitted his report about the proposer. In the said proposal form and report, the respondent suppressed the information regarding previous hospitalization of the proposer due to accident and also about his ailment. As per the appellants, before the proposal could be accepted, proposer Prakash Chandra Agrawal, died on 29-3-84 due to renal failure. For the aforesaid suppression of fact, invoking provisions contained in Regulation 16 of the Regulations, a show-cause notice dated 11-10-1985 was issued to the respondent proposing termination of agency under Regulation 16

(b) of the Regulations. The respondent filed his reply on 26-10-85 denying the allegations. On 19-4-1986 yet another show-cause notice was issued by the appellant proposing forfeiture of his renewal commission under Regulation 19

(i) of the Regulations.

( 3. ) SINCE the reply filed by the respondent was not found to be satisfactory, therefore, his agency was terminated and his premium commission was forfeited vide order dated 1-6-87. The respondent preferred an appeal to the Zonal Manager. The same was rejected vide order dated 25-1-89.

( 4. ) THE plaintiff/respondent filed a suit challenging the order dated 1-6-87 by which of his agency was terminated and his renewal commission was forfeited. The plaintiffs case was that he was working diligently and honestly and put in about twenty years service to the appellants as their agent. It was further averred in the plaint that to his best efforts he made all the possible enquiries and threshed out all the details pertaining to the proposer. The proposer never informed him about his alleged accident or about his ailment nor the plaintiff was knowing this. He made the enquiries under the guidance of K. P. Shrivastava, Field Officer and A. K. Shukla, Senior Branch Manager. The medical health report of the proposer was not given by him but by the Development Officer. Dr. R. B. Patel authorized medical practitioner clinically examined the proposer and found the proposer to be fit. The plaintiff discharged his duties diligently, honestly and to the best interest of the Corporation. The plaintiff, accordingly, prayed for declaration of order dated 1-6-87 to be illegal.

( 5. ) THE appellants/defendants filed their written statement and justified the order dated 1-6-87 on the ground that the plaintiff in his report dated 21-3-84 had stated that proposer was known and related to him. He also stated that the proposer is maintaining good health and had not suffered from any illness or disease and he has not met with any accident in the past. It has also been averred in the written statement that the plaintiff suppressed the material facts and thus involved himself in the conspiracy of defrauding the Life Insurance Corporation. Subsequent, investigation revealed that the proposer had met with a motorcycle accident in March, 1983. It was also revealed that the proposer was suffering from renal disease and was admitted in the nursing home at Rewa, and was also treated in Jaslok Hospital, Bombay.

( 6. ) ON the basis of the aforesaid pleadings the learned Trial Court framed eight issues and recorded evidence of the parties. After hearing the arguments decreed the suit of the plaintiff and set aside the order dated 1-6-87 holding the same to be illegal.

( 7. ) HEARD Shri R. P. Agrawal, learned Senior Counsel with