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Issues involved: Interpretation of Section 44(1)(c) of the Insurance Act, 1948 regarding entitlement to commission on renewal premiums after resigning as an agent and joining a competitive company.
Summary: The petitioner, a former Life Insurance Corporation (LIC) agent, resigned and joined another life insurance agency, 'SBI Life', seeking commission on renewal premiums from LIC. LIC denied the commission citing Section 44(1)(c) of the Insurance Act. The respondent argued that under Section 44(1)(c), an agent who resigns after serving for at least 10 years and joins a competitive company is not entitled to renewal commission. The court referred to previous judgments supporting this interpretation. Proviso (c) to Section 44(1) states that an agent is not entitled to renewal commission if they have served the insurer for at least 10 years and then join a competitive company without soliciting insurance business for any other person. The court emphasized that the obligation to pay commission is statutorily recognized under Section 44(1) and is part of a statutory contract, not unconstitutional. The court held that the restriction imposed by proviso (c) is reasonable and not illegal, thus dismissing the writ petition. In conclusion, the court upheld LIC's decision to deny the petitioner commission on renewal premiums based on the provisions of Section 44(1)(c) of the Insurance Act.
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