JUDGMENT V.M. Sahai and R.N. Misra, JJ.
1. We have heard Sri A.K. Malviya, learned Counsel for the petitioner and Sri Prakash Padia, learned Counsel for the respondents.
2. The petitioner has challenged the order dated 18.11.2004, passed by respondent No. 2 and orders dated 21.4.2004 and 24.7.2004, passed by respondent No. 3 respectively, by which, his membership of Chairman's Club has been withdrawn on the ground that he had performed business of less than Rs. 25 lacs in the financial year 2001-02. He has also been directed by the respondents to refund fringe benefits availed by him in the financial year 2002-03.
3. It is pertinent to mention here that while acting as Agent in the Life Insurance Corporation of India ( hereinafter referred to as the Corporation), the petitioner performed business of Rs. 1,34,86,000/in the financial year 2000-01 and on the basis of said performance, he was granted membership of Chairman's Club (hereinafter referred to as Club). He availed the facilities of club. In the subsequent year 2001-02, it was detected that 140 policies had lapsed and there was loss of income amounting to Rs. 69,35,000/to the Corporation. In the year 2001-02, the petitioner performed business of Rs. 89,05,000/. The said loss amounting to Rs. 69,35,000/was deducted from the total business of Rs. 89,05,000/. Thus, total insurance amount earned by the Corporation was Rs. 19,70,000/. The petitioner also availed benefits of Club in the year 2002-03, whereas total business performed by him in the said year was Rs. 14.99 lacs. The requirement for membership of Club was minimum business of Rs. 25 lacs, therefore, membership of the petitioner for the year 2001-02 was withdrawn and the benefits availed by him in the year 2002-03 were directed to be refunded by him. The main contention of learned Counsel for the petitioner is that only Rs. 15 lacs per year was required for membership of Club and the office of the Corporation had communicated him the business performed by him accordingly. He has further contended that since the petitioner had performed business of more than Rs. 15 lacs in said financial year, therefore, his membership of Club could not be withdrawn. As against this, learned Counsel for the Corporation has contended that the minimum business of Rs. 25 lacs per year was required for membership of Club and it was not Rs. 15 lacs as contended by learned Counsel for the petitioner. He has filed Annexure-1 to the counter affidavit, which is circular letter dated 30.6.2001, showing that business of Rs. 25 lacs was required for membership of Club. Para 7 of the circular letter dated 30.6.2001 is quoted below:
7. Fulfilment of Minimum Net Business during years of failure:
An agent aspiring to enter into or continue membership of any club must bring in the following net minimum business in the year of failure and keep the agency in force. This will be operative from Financial Year 2001-2002.
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The provision of 52 concession for aged Club Member Agents as stated in para 3 above is meant only in respect of based criteria for continuation of membership under 'condition A and B only and it is not meant to be granted to the eligible members in the prescribed 'Minimum Net Business' viz Rs. 25 lacs, Rs. 15 lacs, Rs. 10 lacs and Rs. 5 lacs for Chairman's, Zonal Manager's Divisional Manager's and Branch Manager's clubs respectively. They will have to comply with the requirement of 'Minimum Not Business' in full on par with other agents.
4. Thus, it is clear that contention of learned Counsel for the petitioner has no force that the petitioner had to perform business of Rs. 15 lacs only for said membership. It appears that due to mistake on the part of office of the corporation, some wrong data was provided, which was later on corrected.
5. Learned Counsel for the petitioner has further contended that when any or many policies relating to the year 2000-01 had lapsed, the lapsed amount should have been deducted from said year and not from succeeding year. But this contention is also against the rules. Para 4 of aforesaid circular letter has clarified the posit]on, which runs as under:
4. 'Net Sum Assured' and 'Net number of Lives' under Condition 'A' and Number of lives in force, under condition 'B'.
These three terms have been amply clarified before and yet we have been receiving requests for clarification. We, therefore, repeat that:-(i) 'Net Sum Assured' in each qualifying financial year will be arrived at by deducting from the total completed business in that financial year, such amount of sum assured out of the business completed by the agent in the financial year preceding the qualifying year as is treated as pucca lapsed as on 31st March of the ; said qualifying financial year".
ii) Net Number of Lives, are distinct lives insured( not number of policies) during the qualifying financial year reduced by the Number of lives who had been insured in the financial year preceding the qualifying financial year whose policies are lapsed as on 31st March of the said qualifying financial year.
Credit for revived policies;
Effective from the (jualifying financial year 2001 2002, any agent, who has revived policies in respect of business completed by him/her during the preceding financial year i.". allowed to claim credit to the extent of 'Sum assured' lives revived' in arriving at 'Net Sum Assured1 and 'Net Number of lives', if such policies are in force as on 31" March of the qualifying financial year. However, the agent must submit the full details of such policies revived by him/her in the annexed Performa (Annexure VI) and make a representation to the Branch Office for allowing such credit within a period of of 2 months from the close of the qualifying financial year. The Branch Office after due verification of the particulars, shall grant credit in arriving at 'Net. Sum Assured' and 'Net Number of Lives' under Condition 'A', only if the agent is falling short or the required norm.
iii Number of Lives in Force:
'Number of lives in force' are the number of lives In force at the end of each relevant year out of the total business completed by the agent from the inception of the agency to the end of each such financial year. The same life if it takes more than one insurance in the same financial year will be counted as one life only.
6. In view of aforesaid clarifications, the Corporation was justified in deducting the lapsed amount of the year 2000-01 from the income shown by the petitioner in the year 2001-02. Since the petitioner had already availed all the benefits of Club in the year 2000-01, therefore, on the basis of less income of Rs. 25 lacs, his membership for the year 2001-02 was withdrawn in the subsequent year. Since in the year 200 2- 3, total business performed by him was Rs. 14.99 lacs, therefore, in view of aforesaid circular, he was not entitled for membership of Club. On the basis of wrong date, if he availed benefits, he was bound to refund it. The respondents have given details of account in Annexure-1 to the supplementary counter affidavit. In para 14 of said supplementary counter affidavit, the position has been clarified in respect of financial year 2000-01, 2001-02 and 2002-03.
7. For the aforesaid reasons, we do not find any merit in this petition and it is accordingly dismissed.