Janardan Sahai, J. - (1.) The petitioner was appointed as a L.I.C. Agent. A show cause notice was issued to the petitioner, copy of which has been filed as Annexure 1 to the writ petition as to why his agency be not terminated as an agency of the Life Insurance Corporation of India could not given to a spouse of a Government servant and the petitioner had concealed the fact in his application form that he was married and his wife was in Government service. It was also alleged that earlier too an agency had been given to the petitioner and while applying for that too the petitioner had not disclosed the fact that his wife is in Government service. The petitioner replied to the show cause notice. The petitioner's case is that when he had first applied for appointment as an agent, he was not married and when he applied the second time, he had mentioned not only the fact that his wife was in Government service but also the fact she was holding the post of Basic Health Worker and in case any interpolation had been made in the form, the petitioner was not responsible. By the order dated 3.2.99, the agency of the petitioner was cancelled on the ground that it was against the policy of the Life Insurance Corporation of India to grant agency to a person whose spouse was in Government service. No specific finding has been given that the petitioner had made any concealment of fact or that that any fraud was played by the petitioner. The petitioner has challenged the order aforesaid terminating his agency on the ground that Regulations have been framed by the Life Insurance Corporation of India which are known as the Life Insurance Corporation Agents Regulations, 1972. Regulation 5 of the said Regulations has been quoted by the petitioner in paragraph 18 of the writ petition, which provides as follows: 5.(1) No person shall be appointed as an agent: (a) if he has not completed 18 years of agent; or (b) if he does not possess a valid licence issued under Section 42 of the Insurance Act; or (c) if he has not passed the matriculation examination, or an examination recognized as equivalent thereto by the Corporation, in case he is to be appointed in a town or a city with an ascertained population of one lakh or above, and at least 8th standard in case he is to appointed at any other place:" There is no provision in the Regulation by which the spouse of a Government servant is disqualified from being appointed as Life Insurance Corporation of India agent. It is conceded by Dr. R. G. Padia appearing for the Life Insurance Corporation that these Regulations have statutory force. However, the contention of Dr. Padia, learned Counsel for the respondents is that a circular was issued by the Life Insurance Corporation of India wherein a spouse of a Government servant is disqualified from being appointed as an agent. The copy of the circular has been annexed along with the counter-affidavit as Annexure 10. It is dated 21.7.80.
(2.) I have considered the circular. The said circular has been issued by the Managing Director of the Life Insurance Corporation and it provides that a spouse of a Government servant may not be given an agency of the Life Insurance Corporation of India. However, the said circular also provides for special permission as an exception to the rule and in such cases where special permission is granted, an agency can be given to a spouse of a Government servant. The underlying policy behind the circular is that the Central Civil Servants Conduct Rules as well as Conduct Rules of the State Government servants contain a bar to the spouse of a Government servant to be given Life Insurance Corporation of India agency and the circular is in keeping with the said bar. In the present case, admittedly, the petitioner's wife is Basic Health Worker and she is in the employment of the State of U.P. The service conditions of the petitioner's wife are governed by the U.P. Civil Government Servant Conduct Rules, 1956 framed under the proviso to Article 309 of the Constitution. Rule 17 provides that a Government servant shall not permit his wife or any other relative who is either wholly dependent on him or is residing with him to act as Insurance agent in the same district in which he is posted. The obvious purpose of the Rule is to prevent abuse of position by Government servant by exercising influence to procure business for his spouse. However, where the Government servant is not posted at the place where his spouse is given an agency, there is little chance of misuse. There may be other circumstances in which there is little chance of misuse of the official position. The special permission is contemplated for such cases. The petitioner has not challenged the validity of the circular issued by the Life Insurance Corporation, which contains a bar to the spouse of a Government servant, to be given a L.I.C. agency. The Zonal Manager who has dismissed the appeal of the petitioner has not considered the fact that under the circular a special permission could be granted by the Managing Director to the spouse of a Government servant. The fact of the matter is that the petitioner was granted an agency although it docs not appear that any special permission had been granted relaxing the bar. The wife of the petitioner is employed as a Basic Health Worker, a not very significant position. It appears that the relaxation in the circular has been provided for such cases were the Government servant may not be able to exercise influence to obtain business for the spouse. Looking into the facts of this case that the petitioner had in fact been granted an agency and there is no specific finding of fraud against him although the appellate authority has in general terms observed that finding of fraud was justified. 1 think it proper that the matter may be sent to the Managing Director of the Life Insurance Corporation to consider whether on the facts of the case, the petitioner is entitled to grant of a special permission for being engaged as an LIC agent and whether his agency was rightly cancelled. The petitioner's Counsel submits that the petitioner will make a representation to the Managing Director of the Life Insurance Corporation of India on this point.
(3.) So far as the question of payment of commission is concerned, my attention has been invited to Regulation 19(1) of the Life Insurance Corporation of India Agents' Regulations, 1972. The provision is quoted as under: "19(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 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 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 (c) of sub-regulation (1) 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." Neither the Senior Divisional Manager nor the Zonal Manager who has decided the petitioner's appeal has specifically taken into consideration the requirements of Regulation 19(1) and there is also no specific finding of fraud played by the petitioner in obtaining the agency. As the matter regarding cancellation of agency is to be considered by the Managing Director, the question as to whether the petitioner would be entitled to commission or not may also be decided by him within a period of three months frorn the date a certified copy of this order along with representation is filed by the petitioner. The petitioner may, also be given personal hearing in case he requests for the same.;