EASTERN AGENCY Vs. LIFE INSURANCE CORPORATION OF INDIA

JUDGEMENT

(1.) This is a suit by the Plaintiff firm against the Life Insurance Corporation of India for arrears of remuneration or in the alternative for damages in respect of an agreement between the Plaintiff firm and Aryya Insurance Company Limited. The case for the Plaintiff is that on or about June 1, 1954, Aryya Insurance Company Limited appointed the Plaintiff firm as its special representative for the purpose - of introducing persons willing to act as insurance agents of the company. It was further agreed that on the acceptance by the company and appointment of any such persons as its agents the Plaintiff guaranteed that insurance business worth at least Rupees five lakhs annually would be procured by such agents yielding a premium collection of about Rs. 20,000, and in consideration thereof the Plaintiff firm would be entitled to an allowance of Rs. 200 per month and in addition a flat rate of commission of 65 per cent on the first year's premium collection including agency commission and special agent's commission. It is further claimed that pursuant to the said agreement the Plaintiff firm acted as such special representative of the insurance company till January 1966 and was duly paid its remuneration and commission by the insurance company. The Life Insurance (Emergency Provisions) Ordinance, 1956, was promulgated in January 1956 and in pursuance thereof a Custodian was appointed in respect of the company's life insurance business and the management of such business vested in the said Custodian. The Custodian wrongfully and illegally denied the validity of the said agreement between the Plaintiff and the said insurance company and stopped payment of any further remuneration or commission agreed upon by the insurance company. Thereafter, on coming into effect of the Life Insurance Corporation Act (XXXI of 1956), on and from September 1, 1956, the Corporation also refused to recognise the agreement entered into between the Plaintiff firm and the insurance company and rejected the Plaintiff firm's claim for remuneration and commission. In the premises, the Plaintiff claims Rs. 36,500 as damages in respect of the monthly remuneration upto August 1957 and commission as provided for in the said agreement or in the alternative damages for Rs. 48,000 on the basis of monthly allowance of Rs. 200 for 20 years.

(2.) The defence of the Corporation in the written statement is, inter alia, that the alleged agreement of June 1, 1954, between the Plaintiff firm and Aryya Insurance Company Limited was void, inoperative and invalid in law being in violation of the provisions of the Insurance Act, 1938, and as the Plaintiff was never employed as the chief agent or special agent or principal agent or an insurance agent of the said insurance company it was not entitled to payment of any remuneration under the aforesaid agreement.

(3.) The correspondence contained in the brief of documents in this suit was admitted in evidence without formal proof by consent of learned Counsel for the parties and the brief is marked Ex. A. It would be necessary to set out the purported agreement between the Plaintiff firm and Aryya Insurance Company Limited dated June 1, 1954, in some detail. The said agreement, provided that the insurance company did thereby appoint the Plaintiff firm as its special representative on, inter alia, the following terms and conditions, namely: