Renewal commission denial invalid absent fraud finding under rules in force at misconduct time.

JUDGMENT

The petitioner challenges the punishment imposed, pursuant to disciplinary proceedings initiated against him. By the impugned order, petitioner was terminated from his employment as an insurance agent, without eligibility to receive renewal commission.

2. Petitioner was an agent of the Life Insurance Corporation (for short, ‘LIC’), having started his career in 1996. He asserts that, by his hard work and dedication, he had acquired the status of ‘Crorepathy’ in 1997, which continued till 2014 without any break. Petitioner alleges that due to an enmity against him, proceedings were initiated by ‘LIC’, alleging that he had misappropriated the premium of a policy holder and he was issued with a warning. Subsequently Ext.P2 show cause notice was issued, raising similar allegations. After completing disciplinary proceedings, his agency was terminated, without eligibility for renewal commission by an order dated 28.11.2014. Since, on appeal, the appellate authority remanded the matter, a de novo enquiry was carried out, and by report dated 19.11.2018, the petitioner was again found guilty of all the charges.

3. The competent authority thereafter issued a show cause notice, and by a final order dated 30.12.2019, imposed a punishment of termination of agency without eligibility for renewal commission, invoking the powers under the Life Insurance Corporation of India (Agents) Regulations, 2017 (for short ‘Regulations, 2017’). Challenging the said order, petitioner preferred a Memorial (Appeal) as per Regulation 24 of the Regulations, 2017, before the Chairman of the Life Insurance Corporation of India, which was dismissed as per Ext.P17 order. Aggrieved by the said order, petitioner preferred W.P.(C) No.4599/2023 and by judgment dated 12.03.2024, without going into the merits of the rival contentions, this Court directed the punishment imposed by the competent authority to be revisited.

4. Pursuant to the above judgment, the 3^rd respondent, instead of taking a decision on the punishment, directed a fresh enquiry to be conducted as per Ext.P19 order dated 24.04.2024. A fresh enquiry was later conducted, and the disciplinary authority once again imposed, as per Ext.P20, the punishment of termination of agency of the petitioner without eligibility for renewal commission. Challenging the said proceedings, petitioner preferred an appeal as Ext.P21, which was dismissed by Ext.P22 order, and hence, the present writ petition, challenging Ext.P20 and Ext.P22.

5. Though petitioner has challenged the order imposing punishment in its entirety and has also sought for reinstatement as an insurance agent, during the course of arguments, the learned counsel confined the relief to the challenge against the denial of eligibility of renewal commission only.

6. A counter affidavit, as well as an additional counter affidavit has been filed on behalf of respondents 1 to 3, pointing out that the petitioner had misappropriated the premium paid by various policy holders. It was also pointed out that, initially, when the petitioner misappropriated the premium of a single policy holder, he was issued with a warning as per Ext.P1. Subsequently, petitioner repeated the alleged misconduct and misappropriated premium of four other policyholders, and therefore, the respondent was compelled to initiate fresh proceedings and imposed the punishment of termination of agency without eligibility for renewal commission. It is also pleaded in the counter affidavit that the disciplinary proceeding taken against the petitioner was lawful and the same does not warrant any interference under Article 226 of the Constitution of India.

7. Smt.N.D.Deepa, the learned counsel for