Delhi High Court
Rajesh Kumar vs Sbi Life Indurance Company ... on 8 December, 2017
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: December 08, 2017
+ W.P.(C) 10935/2017
RAJESH KUMAR ..... Petitioner
Through: In person.
Versus
SBI LIFE INDURANCE COMPANY LIMITED ..... Respondent
Through: Mr. Rakesh Malhotra & Mr.
Aditya, Advocates
CORAM:
HON'BLE MR. JUSTICE SUNIL GAUR
JUDGMENT
ORAL
1. Petitioner is aggrieved by termination of his insurance agency by
respondent and seeks its restoration with direction to respondents to pay
the renewal commission from the date of termination, till the date of
payment with interest. Petitioner claims that he was appointed as
respondent's Insurance Agent and was issued license of 27th October,
2010 (Annexure P-1) by Insurance Regulatory and Development
Authority of India. It is pertinent to note that this license was valid up to
26th October, 2013. Petitioner, who appears in person, has chosen to
argue this petition by submitting that the requisite fee to renew the license
was deposited in October, 2013 only and when he sought further renewal
of license, it was not renewed and he was informed by respondent that
petitioner's insurance agency stands terminated.
2. The grievance of petitioner is that prior to termination of the
insurance agency, no Show Cause Notice was issued to him and he
received the termination letter of 24th June, 2015 (Annexure P-4) only in
January, 2016 and that petitioner had preferred an appeal, which stood
dismissed vide order of 10th February, 2016 (Annexure P-7), in which it
was disclosed that petitioner had issued a fake premium receipt to the
client. Petitioner further claims that he had approached the Insurance
Regulatory and Development Authority of India (IRDA) and with its
intervention, petitioner's second appeal was entertained by respondents,
which also stands dismissed vide order of 28 th December, 2016
(Annexure P-10) holding that petitioner had provided fake premium
receipt to customers and had indulged in sourcing business through
telemarketing. Thereafter, petitioner had sent an e-mail on 3rd August,
2012, which has been responded to by respondents on 16th August, 2017
(Annexure P-11) reiterating the order in appeal.
3. Petitioner submits that the reason put forth in the impugned
termination order of 24th June, 2015 (Annexure P-4) is of petitioner
misguiding customers regarding policy benefits and that the said policy
was used with the help of unauthorized party whereas in the appellate
order, the reason given for cancellation is different i.e. providing fake
premium receipt to customer and sourcing business through
telemarketing.
4. It is pointed out by respondent's counsel that allegations of
petitioner providing fake premium receipt to customer also finds
mentioned in the termination order of 24th June, 2015 (Annexure P-4) and
so, there is no anomaly between termination order of 24 th June, 2015
(Annexure P-4) and appellate order of 16th August, 2017 (Annexure P-
11). During the course of hearing, respondent's counsel raised the plea of
this petition being not maintainable, as it is submitted by petitioner's
counsel that on the website of Ministry of Corporate Affairs, it is
indicated that SBI's Life Insurance is a non-government company. It is
also pointed out by respondent's counsel that this plea is sub-judice
before Supreme Court.
5. Be that as it may. Respondent's counsel is unable to rebut that
State Bank of India owns 74% of the total capital in respondent-Company
and in turn Government of India holds 62.31% equity shares in State
Bank of India and in such a situation, plea of respondent being not
amenable to the writ jurisdiction, cannot be entertained.
6. Upon hearing and on perusal of impugned termination order of 24 th
June, 2015 (Annexure P-4) and appellate order of 16th August, 2017
(Annexure P-11), I find that the "Guidelines on Appointment of Insurance
Agents, 2015" categorically provides that before appointment of an agent
is cancelled, prior notice is to be given and thereafter, a reasonable
opportunity of hearing is to be provided. The order of 28th December,
2016 (Annexure P-10) and even the second order of 16th August, 2017
(Annexure P-11) in appeal, does not spell out if any notice prior to
termination of petitioner's agency was given to him or not. However, an
opportunity of hearing was provided to petitioner.
7. Since guidelines under the "Guidelines on Appointment of
Insurance Agents, 2015" require that a Show Cause Notice has to be
given to an agent before terminating the insurance agency, but Appellate
Order of 16th August, 2017 (Annexure P-11) does not deal with this vital
aspect, thereby vitiating, appellate order of 16th August, 2017 (Annexure
P-11). Consequently, appellate order (Annexure P-11) is set aside with
direction to Appellate Authority to pass a speaking order on the aspect of
giving Show Cause Notice prior to termination of petitioner's Insurance
Agency. Let it be so done within a period of twelve weeks and its fate be
communicated to petitioner within two weeks thereafter, so that petitioner
may avail of the remedy, as available in law, if need be.
8. With aforesaid directions, this petition is disposed of.
SUNIL GAUR
(JUDGE)
DECEMBER 08, 2017
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