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TMI Blog2016 (7) TMI 1534X X X X Extracts X X X X X X X X Extracts X X X X ..... 44(1) of the Act is one which would apply to the other different clauses thereunder applicable to LIC viz., clauses (a), (b), (bb) and (bbb) introduced to that proviso so as to import the said embargo even in respect of persons falling under clauses (a) to (bbb). Whether we should finally decide the appeal as also the review petition or return them to the Division Bench? - HELD THAT:- Since the appellant is a person who falls under clause (c) of the proviso to section 44(1) and became disentitled to renewal commission owing to the violation of the condition therein it has to act as a disqualification disentitling him from claiming renewal commission under any of the heads, going by the way we answered the referred question - there is no illegality or error in the judgment of the learned Single Judge warranting an appellate interference especially in view of the manner in which we answered the reference and also taking note of the fact that we have dismissed the review petition filed against W.A. No. 2712 of 2009 - the writ appeal is liable to fail. Appeal dismissed. - W.A. No. 461 of 2013 in WP(C) 30018/2009 and R.P. No. 1211 of 2012 in W.A. No. 2712 of 2009 - - - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 44(1) of the Act is one which would also apply to the other different clauses thereunder viz., clauses (a), (b), (bb) and (bbb) introduced to that proviso for application to LIC so as to import the said embargo even in respect of persons falling under clauses (a) to (bbb). 2. Essentially, the bone of contention in these matters is regarding the entitlement of a former agent of LIC to get renewal commission viz., commission on the renewal premium on the policies effected through him. Evidently, the said question of entitlement came up for consideration in W.P.(C) No. 26791 of 2008 when the petitioner therein, a former LIC agent, was deprived of his renewal commission on the ground that after the termination of agency of the LIC, he became an agent of another competitor insurance company in the private sector. Virtually, the renewal commission was denied to him, on the aforesaid ground, in the light of Section 44(c) of the Act which is applicable to the LIC. The learned Single Judge upheld the action of the LIC and consequently, dismissed the writ petition which led to the filing of W.A. No. 2712 of 2009. The Division Bench as per judgment dated 31.7.2012 held that clause (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t --- (a) Such agent ceases to act for the insurer concerned after the Central Government has notified in the Official Gazette that it is satisfied that the circumstances in which the said insurer is placed are such as to justify the agent's ceasing to act for him; or (b) Such agent has served the insurer continually and exclusively in respect of life insurance business for at least five years and policies assuring a total sum of not less than fifty thousand rupees effected through him for the insurer were in force on a date one year before his ceasing to act as such agent for the insurer, and that the commission on renewal premiums due to him does not exceed four per cent in any case; or (c) Such agent has served the insurer continually and exclusively for at least ten years and after his ceasing to act as such agent he does not directly or indirectly solicit or procure insurance business for any other person. Explanation.--For the purposes of this sub-section, service of an insurance agent under a chief agent of the insurer, whether before or after the commencement of the Insurance (Amendment) Act, 1950, shall be deemed to be service under the insurer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insurer solely on the ground of his having been physically or mentally incapacitated and policies assuring a total sum of not less than one lakh of rupees effected through him were in force on the date immediately prior to such termination; or (c) Such agent has served the insurer continually and exclusively for at least ten years and after his ceasing to act as such an agent he does not directly or indirectly solicit or procure insurance business for any other person. Explanation.--For the purpose of this sub-section.--(i) termination of his agreement , in relation to an insurance agent, includes termination by reason of his death; and (ii) service of an insurance agent under a chief agent of, or under, an insurer whose life insurance business has been transferred to and vested in the Life Insurance Corporation of India shall be deemed to be service under the Corporation. (2) Any commission payable to an insurance agent under the provisions of [clause (b), (bb), (bbb) and (c)] of the proviso to sub-section (1) shall notwithstanding the death of the agent, continue to be payable to his heirs for so long as such commission would have been payable had such in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived. The common contention raised on behalf of the appellant and the review petitioner, in regard to the aforesaid question of law is that the embargo under clause (c) of the proviso to section 44 of the Act in respect of persons who cease to act as LIC agents to the effect that they shall not directly or indirectly solicit or procure insurance business for any other person, is confined only to the category of former LIC agents falling under clause (c) and it is absolutely inapplicable to persons eligible for renewal commission under clauses (a), (b), (bb) and (bbb) of the proviso to Section 44(1). It is contended that all such clauses which prescribe eligibility for getting renewal commission are mutually exclusive and are given as alternative eligibilities. Per contra, the learned Counsel appearing for the LIC contended that the said contentions are bereft of any basis and merit and such contentions, if accepted, would defeat the very soul of the proviso to Section 44 of the Act. It is their contention that clauses (a) to (bbb) and the first limb of clause (c) of the proviso to Section 44(1) of the Act are all carry eligibility criteria or, in otherwords, they are the five eligi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to (bbb). Therefore, we are of the considered view that the issue requires a deeper probe to answer the question under consideration. A careful scanning of clauses (a) to (bbb) and clause (c), of Section 44(1) of the Act, as extracted above, would leave no room for any doubt regarding the position that they carry different eligibility criteria for renewal commission on cessation of being an LIC agent. A bare perusal of Section 44(1) and (2) of the Act would reveal that clauses (a) to (c) of the proviso to sub-section (1) deal with renewal commission. In fact, section 44 deals with prohibition of cessation of payments of commission. An analytical approach would undoubtedly reveal that the second limb of clause (c) is a condition partaking the character of an embargo on the entitlement to receive renewal commission. Obviously, the conjunction 'and' joins its first limb with the second limb. But, what is more relevant and crucial for the purpose of deciding the issue is that each of the earlier clauses viz., (a) to (bbb) ends up with semicolon. It is to be noted that semicolon (;) is a punctuation mark indicating a greater degree of separation than the 'comma' and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o lies in the second limb as one applicable only to those former LIC agents falling under its first limb it would be an arbitrary, hostile discrimination against those former agents who toiled and moiled for LIC much more years than those who fall under the other clauses viz., (a) to (bbb). At the same time, if it is taken as an embargo applicable to all former LIC agents otherwise eligible for renewal commission in terms of the clauses to the proviso to section 44 of the Act, it would act as a condition applicable to all similar persons under similar circumstances, embracing the salutary principles of equality before law and equal protection of law. Yet another danger is hidden in the contra contention and that cannot go unnoticed while constructing the said provision. If clause (c) is treated as an independent clause, former LIC agents who satisfy all the eligibility criteria under the first limb of clause (c) and became disqualified solely due to the embargo under the second limb, could shed their disqualification if they could successfully contend that despite such disqualification they are still eligible to get renewal commission on satisfying the eligibility criteria under an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olve a question of law, they may order that the matter or question of law be referred to a Full Bench. Such matters also include an appeal from any original judgment, order or decree passed by a Single Judge and all matters not expressly provided in the High Court Act or in any other law for the time being in force. Section 7 deals with the procedures on reference to Full Bench. Going by the same, when a question of law is referred to a Full Bench, the Full Bench may finally decide the case or return it with an expression of its opinion upon the question referred for final adjudication by the Bench which referred the question or, in the absence of either or both of the referring Judges, by another Bench. Thus, in the light of the specific provision under section 7, the Full Bench could finally decide the case or it could be returned. We will now look into the order of reference. As noticed hereinbefore, a common order of reference was passed by the Division Bench on 28.10.2014 in W.A. No. 461 of 2013 and R.P. No. 1211 of 2012 in W.A. No. 2712 of 2009. The operative portion of the order of reference reads thus:-- Having regard to the disagreement and the requirement to resolve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is an error apparent on the face of the judgment, a careful scanning of grounds 1 to 6 would reveal that it is nothing but an appeal in disguise. Virtually, the appellant is assailing the correctness of the findings of the Division Bench in the appeal. Mainly it is contended that the Division Bench had wrongly recorded that the appellant had admitted that he was doing business for the Reliance Insurance Company. It is contended that the original appellant viz., Baby John had not admitted that he was working with Reliance Insurance Company. But, paragraph 9 of the appeal memorandum itself would reveal that Baby John had specifically admitted the fact that he had joined Reliance Insurance Company Ltd., as Channel Development Agent. True that it is stated therein that subsequently he resigned the same. The Division Bench held that his action in joining a competitor insurance company in the private sector would incur disqualification in terms of proviso (c) to section 44(1) of the Act. There is no case and in fact, not established that functions as CDA had not involved soliciting or procuring of insurance business. It is too late for the petitioner to raise the contention th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that liability to pay commission is a statutory contract and it itself fixes condition for payment viz., the condition in proviso (c) to section 44(1) of the Act. The learned Single Judge further found that the liability to pay compensation statutorily recognised under section 44(1) of the Act is in the realm of a contract between the parties or in other words, it is a statutory contract. It was held that when a statutory contract fixes an obligation to pay renewal commission and also stipulates the condition under which it is to be paid, non fulfilment of the condition or its violation would make such a person disentitled to any future commission. In such circumstances, it cannot be treated as unconstitutional or in any way, one which is affecting the fundamental rights of the persons involved, it is held. It is also held that even under normal circumstances, when an agency is terminated, an agent is not entitled to any future commission. In short, it was held that the restriction imposed by the statute by virtue of proviso (c) referred hereinbefore is only reasonable and could not be termed as illegal. Consequently, the writ petition has been dismissed. 11. In the appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any basis. A bare perusal of section 44(1) and its proviso carrying different clauses would reveal that the entitlement to renewal commission depends upon the satisfaction of the eligibility criteria under each clause thereunder. Since in the light of the answer which we gave to the referred question, the contentions that all the five alternative conditions carrying the eligibility are independent of each other and the second limb of clause (c) is inapplicable to all the other clauses under the proviso to section 44(1) are devoid of merit. When by virtue of the position that the case of the appellant falls under clause (c) and owing to his violation of the second limb of clause (c), by joining in a competitor insurance company, he became ineligible to get renewal commission the contention of the appellant to get over the same is that even if by virtue of the said provision he is ineligible to get renewal commission as he satisfies the eligibility criteria under clause (bb) of the proviso, he is entitled to get renewal commission. We are afraid the said contention cannot be countenanced. Being a person who falls squarely under clause (c) but disentitled to get renewal commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another [(2004) 12 SCC 673)]. No other contentions have been taken up by the appellant to challenge the proviso and therefore, we see no reason to grant the declaration as sought for. In such circumstances, the finding of the learned Single Judge that restriction imposed on clause (c) is only a reasonable restriction could not be termed as illegal. In the light of our finding since the embargo under second limb of clause (c) is applicable to all clauses the appellant who joined another competitive insurance company and thereby violated the condition contained in the second limb of clause (c) is disentitled to renewal commission even if he satisfies eligibility criteria under any other clause. If it is held that the embargo under clause (c) is applicable to first part of clause (c) alone and therefore anyone who satisfies the eligibility criteria under any other clause would become eligible to get renewal commission, clause (c), more particularly its second limb would become absolutely meaningless and inoperative. What cannot be done directly cannot be achieved by indirect method. As held by the learned Single Judge since the appellant is a person who falls under clause (c) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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