HON’BLE SRI JUSTICE A.V.SESHA SAI WRIT PETITION No.25395 of 2008 Date : 20-01-2014 Between:
Smt B.Bhagyamma w/o B.Veeranna, T.S.O. aged 53 years, Occ: Household c/o Telephone Exchange, Nagarkurnool, Mahaboobnagar district.
… Petitioner and Life Insurance Corporation of India Represented by its Manaager, Wanaparthy Branch, Wanaparthy – Mahaboobnagar district.
… Respondent HON’BLE SRI JUSTICE A.V.SESHA SAI WRIT PETITION No.25395 of 2008 ORDER:
This writ petition, under Article 226 of the Constitution of India, is filed challenging the action of the respondent in refusing to pay hereditary commission to the petitioner.
2. The facts in nutshell, which are essential for resolving the controversy involved in the present writ petition, are as follows:
3. Petitioner herein is the mother of one Sri B.V.Bhaskar, who was an agent of the respondent Corporation at Wanaparthy. The said B.V.Bhaskar died unmarried on 25.06.1995. During his life time, he worked with the respondent Corporation and got enrolled 16 policy holders with a total premium of Rs.28,50,000/-.
4. The grievance precisely as per the petitioner herein is that she is entitled to the accrued hereditary commission as a dependant consequent upon the death of her son and that she made several representations to the respondent subsequent to the death of her son for payment of the said commission, but the same did not yield any result and that the respondent Corporation by virtue of letters dated 29.01.2002 and 23.07.2002, informed the petitioner that she is not entitled for hereditary commission as per rules as her son worked as an agent for a period less than two years.
5. A counter affidavit is filed on behalf of the respondent herein contending inter alia that the deceased agent Sri B.V.Bhaskar completed new business during his agency career procuring 58 policies and that the petitioner was informed vide letter dated 23.07.2002 that hereditary commission cannot be payable to the petitioner as her son did not work as an agent for two years as per Agency Rules.
6. Heard Sri V.Hanmanth Rao, learned counsel for the petitioner and Sri Battula Rajkiran, learned Standing Counsel for the respondent Corporation and perused the material available on record.
7. It is contended by the learned counsel for the petitioner that the refusal of payment of hereditary commission to the petitioner by the respondent Corporation is arbitrary and unconstitutional and that the respondent Corporation cannot withhold the commission on the pretext of any arbitrary Rule. It is further contended that Regulation 19 (3) of the Life Insurance Corporation of India (Agents) Regulations, 1972 (hereinafter called ‘the Regulations’) cannot be made applicable to the case of the petitioner herein.
8. Per contra, it is vehemently argued by the learned counsel for the respondent Corporation reiterating the averments made in the counter affidavit that the petitioner is not entitled for hereditary commission as per Regulation 19 (3) of the Regulations.
9. In the instant case, there is absolutely no dispute with regard to the fact that the son of the petitioner herein was assigned Agent Code No.1317680 and was appointed as an agent on 30.08.1983 and died on 25.06.1985. Petitioner’s son Sri B.Vijaya Bhaskar worked as an agent for a period of 1 year 9 months and 25 days. The respondent Corporation in exercise of the powers conferred under Section 49 of the Life Insurance Corporation Act, 1956 with the previous approval of the Central Government framed the Regulations. The relevant regulation for the purpose of adjudication of the present issue is regulation 19 of the Regulations, which read as under:
“19. Payment of commission on discontinuance of agency?
(1) In the event of termination of the appointment of an agent, except for fraud, the commission on the premiums received in respect of the business secured by him shall be paid to him if such an agent:
(a) has continually worked for at least 5 years since his appointment and policies assuring a total sum of not less than Rs.2 lakhs effected through him were in full force on a date one year before his ceasing to act as such an agent; or
(b) has continually worked as an agent for at least 10 years since his appointment; or
(c) being an agent whose appointment has been terminated under clause (e) of sub- regulation (I) of regulation 16 has continually worked as an agent for at least two years from the date of his appointment and policies assuring a total sum of not less than Rs.1 lakh effected through him were in full force on the date immediately prior to such termination:
Provided that in respect of an absorbed agent the provisions of clause (a) shall apply as if for the letters, figures and word “Rs.2 lakhs”, the letters and figures “Rs.50,000” had been substituted.
(2) Any commission payable to an agent under sub-regulation (1) shall, notwithstanding his death, be payable to his nominee or nominees or, if no nomination is made or is subsisting to his heirs, so long as such commission would have been payable had the agent been alive.
(3) In the event of the death of the agent while his agency subsists, any commission payable to him had he been alive, shall be paid to his nominee, or, if no nomination is made or if subsisting, to his heirs, so long as such commission would have been payable had the agent been alive, provided he had continually worked as an agent for not less than 2 years from the date of his appointment and policies assuring a total sum of not less than Rs.1 lakh effected through him were in full force on the date immediately prior to his death.
(4) If the renewal commission payable under sub-regulation (1) or sub-regulation (2) or sub-regulation (3) falls below Rs.100/- in any financial year (hereinafter referred to as the said financial year), the competent authority may, notwithstanding anything contained in the said sub-regulation, commute all commission payable in subsequent financial years for a lump sum which shall be three times the amount of renewal commission paid in the said financial year and on the payment of such lumps sum to the agent or his nominees or heirs, as the case may be, no commission on the business effected through the agent shall be payable in the financial years subsequent to the said financial year.”
10. It will be very much manifest from the reading of the above said sub-regulation (3) of Regulation 19 of the Regulations that unless the deceased agent had completed two years from the date of his appointment, the commission would not be payable. Even though, it is strenuously contended by the learned counsel for the petitioner reiterating the averments in the writ affidavit that the respondent Corporation cannot withhold the commission under the pretext of arbitrary rule, the validity of the said Regulation 19 (3) of the Regulations is not assailed in the present writ petition. In the absence of any such challenge, petitioner cannot seek any relief contrary to the said regulation. Therefore, this Court is not inclined to grant any relief in favour of the petitioner herein in the present writ petition. However, a request is made by the learned counsel for the petitioner to permit the petitioner to question the validity of Regulation 19 (3) of the Regulations.
11. For the aforesaid reasons and having regard to the Regulation 19 (3) of the Regulations, this Court deems it appropriate to dismiss the present writ petition and accordingly the writ petition is dismissed. However, the petitioner herein is at liberty to assail Regulation 19 (3) of the Regulations, if she is, so advised. As a sequel, miscellaneous petitions, if any, shall stand closed. No order as to costs.
A.V.SESHA SAI, J Date:20.01.2014 grk 252 HON’BLE SRI JUSTICE A.V.SESHA SAI WRIT PETITION No.25395 of 2008 Date : 20-01-2014 grk