# Muntazim Ali v. Zonal Manager, LIC of India & Ors

- **Citation:** (2013) 3 ILRA 1588
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2013
- **Case number:** Writ Petition No. 2707(M/S) of 2006
- **Bench:** Shri Narayan Shukla
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/muntazim-ali-v-zonal-manager-lic-of-india-ors-42810
- **Pages:** 7

## Headnote

Constitution of India, Art. 226-Service lawtermination of agency of L.I.C. whether
amenable under writ jurisdiction?-held-'No'
in absence of relationship of master and
servant service-benefits to a government
servant-not available to LIC agent-being
appointed on commission basis.

Held: Para-18
Thus, on the proposition laid down by
Hon'ble the Supreme Court as well as of this
Court, as above, it is settled that the
relation of respondent-Corporation as well
as the petitioner was of the Master and
Agent. The respondent- corporation created
an agency in favour of the petitioner and
the petitioner was engaged to work as an
agent of the Corporation. The terms of
agency are governed under the Life
Insurance Corporation of India ( Agents)
Rules, 1972, The rules speak that the
Agents are appointed on commission basis.
The nature of the engagement of the
petitioner ( Agent) does not lead to prove
an
appointment
alike
to
Government
servant. Therefore, I am of the view that
the petitioner being an Agent could not
claim the benefit of service like Civil
Servants, unless it is provided under the
Rules. The rules do not provide so.

Case Law discussed:
2011 AIR SCW 894; (2010) 11 Supreme Court
Cases 186; (1986) 1 SCC 264; AIR 2002
Karnataka 113; AIR 1991 SC 1734; W.P. No.
911 (M.B) of 1994.

## Text

1588 INDIAN LAW REPORTS ALLAHABAD SERIES
statute 2.20 of Gorakhpur University
framed in exercise of power under Section
50 of U.P. State Universities Act, 1973
provided that the senior most teacher in
each department in the University shall be
the
Head
of
Department.
State
Government
issued
a
G.O.
dated
24.7.2007 providing that the Head of
Departments in the University shall be by
rotation and for the said purpose required
Universities to take steps for amendment
of the concerned Statutes. The statute, in
fact, were not amended. The University
acting as per the decision of the
Government contained in the G.O. dated
24.7.2007 issued orders appointing Head
of Departments by roaster instead of
senior most teacher. This Court, following
an earlier Division Bench decision in
Ankur Yadav Vs. State of U.P. & others
2007 (10) ADJ 10 held that unless the
statute is amended, no action could have
been taken according to the Government
Order dated 24.7.2007. The Court quoted
the following observation of the Division
Bench in Ankur Yadav (supra) :

"...........the Statutes of the University
framed under the Act would govern the
field and so long as the Statutes are not
amended, no person can be appointed in
the University governed by the act and the
Statutes framed thereunder by ignoring
the qualification prescribed thereunder.
No amount of proposal, acceptance,
waiver, acquiescence etc. either by the
University or the State Government
would have the effect of amending the
Statutes unless the Statute as such is
amended
in
accordance
with
the
procedure prescribed under Section 50 of
the Act.............................

It is not disputed that the First Statute
of the University was not amended in the
manner provided under Section 50 of the
Act till the date the petitioner was
appointed and thus principle of estoppel,
waiver or acquiescence would not apply
against law ........"

If the contention of the learned
Counsel for the petitioner is accepted that
once the resolution has been passed by the
Board of Directors, UPSWC for making
amendment in the Regulations, the
petitioners are entitled for the benefit as
per the said resolution irrespective of the
fact whether the said resolution is
sanctioned by the State Government for
the purpose of making amendment in the
Regulations as it would amount to making
the procedure prescribed under Section 42
redundant."

6. In view of above and looking to
the facts and circumstances of the case, in
my view, retirement of petitioners in
2012,
on
attaining
the
age
of
superannuation of 58 years, according to
the then existing provision, cannot be said
to be bad and it does not warrant
interference. The change in age of
retirement in respect to employees of U.P.
Forest Corporation, pursuant to State
Government's
order
dated
8.3.2013,
would be prospective, and, shall be
applicable to the employees who would
be retiring thereafter.

7. In view above, the writ petition is
devoid of merit and is, accordingly,
dismissed.
--------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 03.12.2013

BEFORE
THE HON'BLE SHRI NARAYAN SHUKLA, J.

Writ Petition No. 2707(M/S) of 2006
3 All] Muntazim Ali Vs. Zonal Manager, LIC of India & Ors.
1589
Muntazim Ali... Petitioner
Versus
Zonal Manager, LIC of India & Ors.
 ....Respondents

Counsel for the Petitioner:
Sri
Ghanshyam
Pathak,
Sri
Vishnu
Srivastava

Counsel for the Respondents:
Sri P.K. Khare

Constitution of India, Art. 226-Service lawtermination of agency of L.I.C. whether
amenable under writ jurisdiction?-held-'No'
in absence of relationship of master and
servant service-benefits to a government
servant-not available to LIC agent-being
appointed on commission basis.

Held: Para-18
Thus, on the proposition laid down by
Hon'ble the Supreme Court as well as of this
Court, as above, it is settled that the
relation of respondent-Corporation as well
as the petitioner was of the Master and
Agent. The respondent- corporation created
an agency in favour of the petitioner and
the petitioner was engaged to work as an
agent of the Corporation. The terms of
agency are governed under the Life
Insurance Corporation of India ( Agents)
Rules, 1972, The rules speak that the
Agents are appointed on commission basis.
The nature of the engagement of the
petitioner ( Agent) does not lead to prove
an
appointment
alike
to
Government
servant. Therefore, I am of the view that
the petitioner being an Agent could not
claim the benefit of service like Civil
Servants, unless it is provided under the
Rules. The rules do not provide so.

Case Law discussed:
2011 AIR SCW 894; (2010) 11 Supreme Court
Cases 186; (1986) 1 SCC 264; AIR 2002
Karnataka 113; AIR 1991 SC 1734; W.P. No.
911 (M.B) of 1994.

(Delivered by Hon'ble Shri Narayan
Shukla, J.)

1. Heard Mr Vishnu Srivastava,
learned counsel for the petitioner as well
as Mr P.K. Khare, learned counsel for the
respondents.

2. The petitioner has assailed the
order dated 3rd August, 2004, passed by
the Senior Divisional Manager, Life
Insurance Corporation of India, Lucknow
as also the order dated 18 th November,
2004, passed by the Zonal Manager/
Appellate Authority of the Life Insurance
Corporation of India.

3. By means of order dated 3rd
August, 2004 the Senior Divisional
Manager of Life Insurance Corporation of
India ( In short Corporation) terminated
the petitioner's agency in exercise of
power
provided
under
Section
16
(1)(a)(b)(d) which has been upheld by the
appellate authority. The petitioner claims
to be an agent of the Corporation having
agency code no.359393 and was attached
with the branch office of Corporation at
Akbarpur
district
Ambedkarnagar.
According to him, he is working as such
since 1989 to the satisfaction of the
customers as well as Corporation itself
without any complaint. It is further stated
that he insured one Hazi Nizamuddin on
policy no.213537196 for a sum of Rupee
one lakh in the month of August, 2002
after having full satisfaction about his
health as well as after getting him
medically examined by the duly approved
Medical Officer but unfortunately the
policy holder succumbed to death on
12.2.2002 on account of decease' ''Acute
Myocardial Infraction'.

4. Mr Hazi Nizamuddin earlier had
two policies of the Corporation bearing
nos. 75781137 and 210618164. The
petitioner submits that policy holder was
1590 INDIAN LAW REPORTS ALLAHABAD SERIES
known to him for a period of two months.
During this period he was looking healthy
and cheerful by appearance and he did not
mention any kind of suffering from
diseases on the proposal form/ self
declaration.

5. After the death of policy holder,
the petitioner was issued a show cause
notice by the Corporation on 9.1.2004 to
give explanation within fifteen days to
show cause why the policy was issued to
Hazi Nizamuddin by the petitioner by
concealing the material facts.

6. The petitioner submitted reply on
23 rd December, 2002. He was also
issued another show cause notice on
2.6.2003 on the same subject which was
replied by him on 29.1.2004.

7. In reply he denied charges and
submitted that there is no lapse on his part
nor concealment of facts rather his policy
is based on the medical examination
report declaring Mr Hazi Niamuddin fit
for holding policy. After considering the
petitioner's explanation the authority
concerned passed the order impugned
terminating
petitioner's
agency.
Aggrieved petitioner filed an appeal
against the order of termination of agency
before opposite party no.2, who also
rejected the same on 18.11.2004. The
petitioner also claims that he was not
given opportunity to cross-examine the
Medical Officer, who examined the policy
holder's physical status and thus also
complains the order impugned being in
violation of principles of natural justice.

8. The petitioner further claims the
order impugned being in violation of Rule
8 of the L.I.C. Agents Rules, 1972.

9. Per contra, learned counsel for the
respondent-Corporation submitted that the
engagement and termination of agency is
governed
under
the
Life
Insurance
Corporation of India ( Agents) Rules 1972.
Agents are engaged on payment of
Commission). Thus, their engagements are
purely contractual in nature. He further
contends that the termination of agency is not
amenable to judicial review of this Court
under Article 226 of the Constitution of
India. He further submits that the petitioner
deliberately suppressed material facts by
playing fraud to the Corporation and did not
disclose the serious type of illness suffered
by the Policy-holders, who had already 2, 3
times heart attack . It came out through deep
and confidential inquiry that the policyholder was at the verge of death on the date
of commencement of policy. It is further
stated that the authority of the Corporation
has taken a decision to terminate the
petitioner's agency on being satisfied with the
facts stated above. Therefore, there was no
occasion to provide any opportunity to the
petitioner to cross-examine the Medical
Officer nor is it provided under Rules.

10. In order to understand the
controversy, I feel it appropriate to extract
the provisions of Rules 8 and 16 of the
Rules as under;

Rule 8-Functions of Agents:

(1)Every agent shall solicit and
procure new life insurance business which
shall not be less than the minimum
prescribed in these rules and shall
endeavour to conserve the business
already secured.

(2) In procuring new life insurance
business, an agent shall :
3 All] Muntazim Ali Vs. Zonal Manager, LIC of India & Ors.
1591

(a) take into consideration the needs
of the proposers for life insurance and
their capacity to pay premiums;

(b) make all reasonable inquiries in
regard to the lives to be insured before
recommending proposals for acceptance,
and bring to the notice of the corporation
any circumstances which may adversely
affect the risk to be underwritten;

(C) take all reasonable steps to ensure
that the age of the life assured is admitted at
the commencement of the policy; and

(d) not interfere with any proposal
introduced by any other agent.

(3)Every agent shall, with a view to
conserving the business already secured,
maintain contact with all persons who
have become policy-holders of the
Corporation through him and shall:

(a) advise every policy-holder to
effect nomination or assignment in
respect of his policy and offer necessary
assistance in this behalf;

(b) endeavour to ensure that every
instalment of premium is remitted by the
policy-holder to the Corporation within
the period of grace;

(C) endeavour to prevent the lapsing
of a policy or its conversion into a paid-up
policy; and

(d)render all reasonable assistance to the
claimants in filling claim forms and generally
in complying with the requirements laid down
in relation to settlement of claims.

(4) Nothing contained in these rule
shall be deemed to confer any authority
on an Agent to collect any moneys or to
accept any risk for or on behalf of the
Corporation or to bind the Corporation in
any manner whatsoever.

11. Provided that an agent may be
authorized by the Corporation to collect
and remit renewal premiums under
policies on such conditions as may be
specified.

Rule 16-Termination of agency for
certain lapses.

(1)The competent authority may, by
order, determine the appointment of an agent.

(a) if he has failed to discharge his
functions as set out in rule 8, to the
satisfaction of the competent authority;

(b) if he acts in a manner prejudicial
to the interests of the Corporation or to
the interests of its policy holders;

(C) if
evidence
comes
to its
knowledge to show that he has been
allowing or offering to allow rebate of the
whole or any part of the commission
payable to him;

(d)if it is found that any averment
contained in his agency application or in
any report furnished by him as an agent in
respect of any proposal is not true;

(e) if he becomes physically or
mentally incapacitated for carrying out his
functions as an agent;

(f) if he being an absorbed agent, on
being called upon to do so, fails to
undergo the specified training or to pass
the specified tests, within three years from
the date on which he is so called upon;
1592 INDIAN LAW REPORTS ALLAHABAD SERIES

12. Provided that the agent shall be
given a reasonable opportunity to show
cause against such termination.

(2)Every order of termination made
under sub-rule (1) shall be in writing and
communicated to the agent concerned.

(3)Where the competent authority
proposes to take action under sub-rule (1)
it may direct the agent not to solicit or
procure new life insurance business until
he is permitted by the competent authority
to do so.

13. Learned counsel for the parties
also laid before this Court some decisions
on the point which are discussed
hereunder;

Gondavari Sugar Mills Ltd. V.
State of Maharastra and others reported
in 2011 AIR SCW 894 in support of his
submission on the maintainability of the
writ petition. Clauses (ii), (iii) and (iv) of
paragraph 6 are extracted below:-

(ii)if a right has been infringed-
whether a fundamental right or a statutory
right- and the aggrieved party comes to
the court for enforcement of the right, it
will not be giving complete relief if the
court merely declares the existence of
such right or the fact that existing right
has been infringed. The High Court, while
enforcing fundamental or statutory rights,
has the power to give consequential relief
by ordering payment of money realised by
the Government without the authority of
law (vide State of Madhya Pradesh v.
Bhailal Bhai AIR 1964 SC 1006).

(iii)A petition for issuance of writ of
mandamus will not normally be entertained
for the purpose of merely ordering a refund
of money, to the return of which the
petitioner claims a right. The aggrieved party
seeking refund has to approach the civil or
for claiming the amount, though the High
Courts have the power to pass appropriate
orders in the exercise of the power conferred
under Article 226 for payment of money.
(vide Suganmal Vs. State of Madhya
Pradesh AIR 1965 SC 1740.)

(iv) There is a distinction between
cases where a claimant approaches the
High Court seeking the relief of obtaining
only refund and those where refund is
sought as a consequential relief after
striking down the order of assessment etc.
While a petition praying for mere issue of
a writ of mandamus to the State to refund
the money alleged to have been illegally
collected is not ordinarily maintainable, if
the allegation is that the assessment was
without a jurisdiction and the taxes
collected was without authority of law
and, therefore, the respondents had no
authority to retain the money collected
without any authority of law, the High
Court has the power to direct refund in a
writ petition ( vide Salonah Tea Co. Ltd.
Superintendent of Taxes, Nangaon (
1968) 1 SCC 401) : AIR 1990 SC 772).

14. The next judgment is of of
Hon'ble Supreme Court of the case of
Zonal Manager, Central Bank of India Vs.
Devi Ispat Limited and others (2010) 11
Supreme Court Cases 186.

15. In the aforesaid judgment
Hon'ble Supreme Court referred the
judgment of LIC Vs. Escorts Ltd. ( 1986)
1 SCC 264. Relevant paragraph 13 is
reproduced hereunder;

"We do not thing this Court in the
above case has, in any manner, departed
from the view expressed in the earlier
3 All] Muntazim Ali Vs. Zonal Manager, LIC of India & Ors.
1593
judgments in the case cited herein above.
This Court in LIC( Supra) proceeded on the
facts of that case and held that a relief by way
of a writ petition may not ordinarily be an
appropriate remedy. This judgment does not
lay down that as a rule in matters of contract
the court's jurisdiction under Article 226 of
the Constitution is ousted. On the contrary,
the use of the words" Court may not
ordinarily examine it unless the action has
some public law character attached to it"
itself indicates that in a given case, on the
existence of the required factual matrix a
remedy under Article 226 of the Constitution
will be available. The learned counsel then
relied on another judgment of this Court in
State of U.P. Vs. Bridge and Roof Co.( India
Ltd. (1996) 6 SCC 22."

16. On the other hand, learned
counsel for the respondent placed reliance
on the following decisions:-

B.K. Vadiraja and another Vs.
Managing Director L.I.C. of India and
others, reported in AIR 2002 Karnataka
113. Relevant paragraphs 9 and 13 are
reproduced hereunder,

"9. The Life Insurance Corporation
of India has framed Regulations defining
the method of recruitment of agents of the
Life Insurance Corporation of India and
the
terms
and
conditions
of their
appointment and work in exercise of their
powers under Section 49 of the Life
Insurance Corporation Act, 1956. In the
dictionary clause of the Regulations, the
meaning of the expression '' agent' is
defined. It means, a person, who has been
appointed under Regulation 4 of the
Regulations and includes an absorbed
agent. The appointment of an agent is
made by the Corporation for the purpose
of soliciting or procuring life insurance
business for the Corporation. Regulation
16 of the Regulations provides for
termination of agency for certain lapses.
Regulation 17 of the Regulations provides
for termination of agency by notice."

"13. The Apex Court in the case of
Life Insurance Corporation of India Vs.
Smt. Lalithadevi, AIR 1991 SC 1734 was
pleased to state:

"The respondent was an absorbed
agent in the Life Insurance Corporation of
India. Since, her husband was in service
of the appellant, the respondent's agency
was rightly terminated in accordance with
Regn. 17 (1) of the Agent's Regulations
1972. Before terminating the respondent's
agency, the appellant had taken care to
serve notice on her. We are of the opinion
that
the
order
of
termination
of
respondent's agency did not suffer from
any legal infirmity and the High Court
committed error in quashing the same.
We accordingly, allow the appeal and set
aside the order of the High Court."

17. In the case of Jai Narain Verma
Vs. Life Insurance Corporation of India
and another W.P.No.911 (M.B) of 1994 a
Division Bench of this Court held that the
relationship between Corporation and its
agent was of the Principal and agent and
the petitioner, who was agent of the
corporation was not an employee of the
Corporation. The terms and conditions of
agency
are
regulated
by
statutory
regulations framed by the Corporation,
known as Life Insurance corporation of
India ( Agents Regulation 1972 which are
framed under Section 49 of the L.I.C. Act
1956."

18. Thus, on the proposition laid
down by Hon'ble the Supreme Court as
well as of this Court, as above, it is settled
1594 INDIAN LAW REPORTS ALLAHABAD SERIES
that
the
relation
of
respondentCorporation as well as the petitioner was
of the Master and Agent. The respondent-
corporation created an agency in favour of
the petitioner and the petitioner was
engaged to work as an agent of the
Corporation. The terms of agency are
governed
under
the
Life
Insurance
Corporation of India ( Agents) Rules,
1972, The rules speak that the Agents are
appointed on commission basis. The
nature of the engagement of the petitioner
( Agent) does not lead to prove an
appointment alike to Government servant.
Therefore, I am of the view that the
petitioner being an Agent could not claim
the benefit of service like Civil Servants,
unless it is provided under the Rules. The
rules do not provide so.

19. Upon perusal of the record, I
find that the conditions for termination of
agency were followed. The proviso of the
Rule 16 (1) of the Rules provides that the
Agent
shall
be
given
reasonable
opportunity
to
show
against
such
termination.
He
was
provided
so.
Therefore, the order impugned cannot be
held to be suffered from error.

20. In the result, the writ petition
stands dismissed.
--------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 13.12.2013

BEFORE
THE HON'BLE RAJIV SHARMA, J.
THE HON'BLE SURENDRA VIKRAM SINGH
RATHORE, J.

Writ Petition No.2965 (S/S) of 1993

Dr. A.P. Bajpai... Petitioner
Versus
State of U.P. and Ors.... Respondents
Counsel for the Petitioner:
Sri S.M.K. Chaudhary, Sri Vikas Singh

Counsel for the Respondents:
C.S.C.

(A)Constitution of India, Art.-226 read with
U.P. Recruitment benefits Rule 1961-Rule7-Family
pension-entitlement-petitioner
being grand son of deceased employee put
claim after the death of widow and son of
the employee-admittedly when deceased
government employee-died-the father of
petitioner already crossed age of 25 yearsheld-not entitled for family pension.

Held: Para-14
Learned counsel for the petitioner has
also
filed
Government
Order
No.
lk&3&115@nl&3@82
dated
24.2.1998
(Annexure
No.
5
to
the
amended
petition), which provides for maximum
age limit for entitlement of family
pension and this maximum age limit was
enhanced from 21 years to 25 years in
case of sons. In case of daughter, it was
enhanced from 24 years to 25 years.
Meaning thereby after attaining age of
25 years the son of a government
servant shall not be entitled for the
payment of family pension provided he
remain unemployed till attaining the age
of 25 years. Even if the son of the
deceased
petitioner
Dr.
A.P.
Bajpai
would have survived even then he was
not entitled for the family pension
because he has crossed the maximum
age limit of 25 years much earlier. The
sons of Sameer Bajpai could not inherit
better
right
then
his
own
father.
Therefore, in the facts of this case, in our
considered opinion, family pension is not
payable to the present petitioners. Order
dated
22.12.2010
rejecting
the
representation of the petitioner for grant
of family pension need not to be
interfered with.

(B)Constitution of India, Art.-226-Payment
of interest-at rate of 12%-for period
payment delayed claim based upon G.O.
06.12.94-entitled for interest @ 12%.