M.H. ABIDI vs STATE LIFE INSURANCE CORPORATION

' WAJIHUDDIN AHMED, J.--The petitioner herein, an Insurance Agent, questions the order of the respondent State Life Insurance Corporation, whereby the latter declined to pay commission to the petitioner on the Group Insurance Policies, for the staff and Officers of Pakistan Steel Mills Corporation (PASMIC), obtained by the petitioner in the years 1973 and 1975.

2. It is pleaded that the respondent Insurance Corporation is obliged to pay such commission under Rule 39-A of the Insurance Rules, 1958, framed under section 114 of the Insurance Act, 1938. It is urged that due commissions on such policies were paid up to 1976 when the same were suddenly stopped giving rise to petitioner's representation dated 3-3-1976, in response to which the Insurance Corporation replied on 11-3-1976, saying that policy No, 1403 was finalized as from 1-7- 1973, when the Corporation had already issued directives not to pay commission on Group Business emanating from government semi Government and autonomous bodies. Since PASMIC is a semi Government Organization commission in relation to the said policy was stopped soon after the effective date of policy was discovered. The claimed commission was, therefore, declined to be released. This occasioned a further representation from the petitioner which, ultimately, was turned down, after it had remained under consideration, on 20-1-1980, giving rise to this petition, which was filed on 4-6-1980.

3. Mr. Khalid M. Ishaq, for the petitioner, contends that under section 44 of the Insurance Act premium is payable to an agent even after the termination of his agency and upon his death, to his legal heirs or nominee and can be discontinued only on the ground of fraud. It is further urged that the conduct of the Corporation is inconsistent and discriminatory as it is paying similar commissions, on similar. Group Insurance Policies pertaining to other Government, semi- government or autonomous bodies, out of which at least thirteen instances of that class, known to the petitioner, are quoted and cited.

4. On the other hand, Mr. Mansoor Ahmed Khan, for the Insurance Corporation, argues that the petition suffers from laches, seeks enforcement of a contract not enforceable in constitutional jurisdiction and, even otherwise, is non-maintainable on facts, as Group Insurance Policies are, by practice, operative only for one year, at a time, and new policies are issued from year to year, providing no accruing right to claim premia for any indefinite period.

5. As to the plea of laches, which was only, routinely, urged it is no 'doubt correct that the release of the commission was clearly declined by the Corporation, vide their letter dated 11-3-1976, but the petitioner again represented and it was, subsequently, acknowledged that such representation was pending and was, finally, rejected pursuant to letter dated 20-1-1980. Laches is not the same thing as limitation. It is not every grievance, which requires to be promptly ventilated and pursued in a legal forum. Litigation is to be avoided rather than invited. Whether or not limitation is provided, before recourse to law is taken, an aggrieved person has to be sure that a point of no return has reached and that redress must be sought. However, where limitation is inviolable he must act within the prescribed period. But no period, as may constitute laches, can be quantified. In the absence of a bar of limitation, the period within which remedy is to be sought has, however, invariably to be a reasonable one. Element of due diligence is also to be reconciled. What is more, delay should never be such as to generate a belief or situation of abandonment of the right because, then, vested rights come into operation and cannot be deviated from. Still, whether or not lathes is involved in a particular case depends on the facts of such case. But, it is only when a right is firmly and finally repudiated, leaving no legitimate scope for retraction that, in the absence of a bar of limitation, a person is obliged to resort to legal proceedings. In the instant case, even though the petitioner was refused accommodation, he considered the matter to be worth a further try, at the level of the State-run enterprise itself, resorted to a repeat representation, which he promptly made, which was acknowledged to be pending all the time and which was, finally, turned down on 20-1-1980. This, therefore, is not a case of laches.

6.On principle, as urged, it is correct that contractual rights and obligations have to be enforced through Courts of ordinary jurisdiction. However, where rights are based on statute law or rules framed thereunder or when an obligation or duty vests in a public functionary or a statutory body, performing functions in relation to the affairs of the federation or a province or a local authority, constitutional jurisdiction can be attracted. In such and allied situations even contractual rights and obligations may be enforced in constitutional jurisdiction. This, however, is subject to the important rider of corresponding absence of an adequate remedy. In point are the decisions in Estate Officer v. Tahir Hussain, PLD 1962 SC 75), Anjuman-e-Ahmadiya v. Deputy Commissioner, Sargodha (PLD 1966 SC 639), Muniruddin Kidwai v. K.DA. (PLD 1972 Kar. 521), Rashid A. Khan v. W.P.

Railway Board (PLD 1973 Lah. 733) and Masjid-iIntizamia Jama Masjid v. Secretary Government of West Pakistan ( PLD 1975 SC 335). Thus merely, because a contract is involved in a constitution petition is not by itself sufficient to oust the constitutional jurisdiction under Article 199 of the Constitution . In this case the Pakistan Insurance Corporation is creature of a statute namely, the Life Insurance (Nationalization) Order, 1972, and the petitioner is arrayed against it for seeking statutory rights, arcing under the Insurance Act, 1938 and the Insurance Rules, 1958. Clearly, therefore, all things being otherwise equal, such a money or contractual claim, as here, can be pursued in the constitutional jurisdiction of superior Courts.

7. This brings us to the merits of the controversy. Section 44 of the Insurance Act, 1938, as seen, envisages a guarantee of continuity of payment of premia, on renewals, to insurance agents.

Termination of agreement or even death of the agent, in which case agent's legal heirs or nominee would be entitled, or even a contract to the contrary would be no answer to withholding of such payments. However, in order that a right may mature it is essential that premia are relatable to the period assured or to renewals. Premia claimed on fresh policies, obviously, cannot be equated with premia on renewals.

8. Pursuant to section 114 of the Act, Rules have been framed, termed as the Insurance Rules, 1958, Rule 39-A whereof provides for the maximum and the minumum of agents' Life Insurance Commission. In relation to Group Insurance Business, agent's commission for the first policy year and second and later policy year is, separately, mentioned in the same way as in the context of normal Life Insurance Policies though, of course, quantum is different. Based on this statutory premises, Mr. Khalid M. Ishaque contends that once a Group Insurance Policy is contracted agent's commission would continue so long as the policy lasts. In answer, State Life Insurance Corporation pleads and Mr. Mansoor Ahmed Khan for them urges that Group Life Insurance contracts are only for 1 year to which petitioner's reply is that Rule 39-A aforesaid, itself postulates such policies to be for more than 1 year and in no less than thirteen separate instances the Corporation continues to pay agents' renewal commissions for similar policies. It is also urged that under Standing Order 10- B of the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, an employer is to provide compulsory Group Insurance for the workmen and continuity is, therefore, guaranteed and assured.

9. More elaborately, the case of the Corporation is that, as from July, 1973, they had in their Board Meeting decided that agents' commission would not be payable and that the Corporation would, directly, insure groups pertaining to Government, semi-Government and autonomous bodies. They maintain that the above referred thirteen cases/instances of group insurance pertained to the preceding period. The matter of the petitioner's, being a subsequent one, based on error, was, at first over-looked but, later, on due discovery, the Board decision was applied and agent's commission was discontinued. We are unable to find anything in the Insurance Act, 1938, or in the Rules framed thereunder, nor has any provision therein been cited to the effect that an insurance company is precluded from concluding direct insurance contracts in preference to routine contractors through insurance agents. As such, there can be little dispute if the respondent Corporation was to decide to conclude specific contracts without the intervention of agency and directly. However, on the other hand, except in specified circumstances, what they are prohibited to do is to refuse to pay agents' renewal commissions in respect of concluded and continuing contracts.

10. Now, as regards Rule 39-A of the Insurance Rules, 1958, that Rule does not seem to provide, as a compulsive proposition, that a group insurance contract has to be for more than 1 year. All that such Rule envisages is that such group insurance contracts can be for more than 1 year. However, where such a contract is for more than one year, and is concluded through an agent, agent's commission is to be paid as provided in such Rule. Not only that but renewal premia would be payable as assured and guaranteed under section 44 of the Insurance Act, as above discussed.

11. But, petitioner's case is that Group Insurance Contracts and, particularly, the one in dispute is for more than one year and the proposition is supported on the basis of continuing benefits to other insurance agents, in relation to the above said instances, even though, those contracts were, apparently, entered into prior to 1973. As regards such cited instances of continuing benefits on renewals, it is undisputed that these payments are being made on accruing basis. Such payments if they pertain to single year policies only would be equally covered and hit on the basis of the above decision of the Board of Directors of the Insurance Corporation. However, the question, which is one of fact, still is as to what is the precise periodicity of these contracts. If such transactions are meant for single year duration, the same would come to an end upon efflux of that year. There would thus be no element of renewal and no accruing premia payable to anybody. If, however, the contracts are for periods exceeding one year, renewal premia for the duration would stand guaranteed. Standing Order 10-B of the Standing Orders Ordinance is not of much help as it does not preclude period contracts of yearly duration. Likewise, the element of a contract being prior or subsequent to July, 1973 when direct contracts with Government, semi-Government or autonomous bodies were precluded would have no bearing, for then the relevant circumstance would only be whether in actuality the contract was concluded directly and not through agency.

'But these all are questions of fact and controversial at that. Neither of the parties has produced any of the Group Insurance Contracts, not even the one in dispute here. We can neither enter into disputed question of fact involving minute details nor can we decide facts of which no foundation is laid. These are the limitations of constitutional jurisdiction.

12. On the question of premia being continued to be paid in relation to the above said contracts alleged to be preceding July, 1973, we re-emphasize that if they were operative in continuity payments thereunder are lawful but if otherwise those cannot be treated differently with that of the petitioner. But if payments under such contracts suffer from illegality no benefit of like nature can be claimed by the petitioner. An illegality cannot be a precedent. The case of the petitioner, as to continuity, appears to be further weakened, on the basis of his own version in the petition that in relation to PASMTC itself, his claim is based on two insurance policies bearing Nos. SGL-1870/1403 for the year 1973 and SGL/1891/1409 for the year 1975. The very fact that separate policies were contracted for 1973 and 1975, on these averments, may show that such policies could well be single year policies. This again, also, establishes that the facts in this petition are seriously disputed.

13. Subject to above, we need hardly say that if the petitioner had established that the group insurance policy(s) was for an indefinite period and that it was he who had introduced such business, agent's commission could not be by-passed, solely, in token of the decision or the Board of the Insurance Corporation, since such a decision could not override either the Insurance Act, 1938, or the Insurance Rules, 1958, and the petitioner would have been entitled to the grant of relief in this petition. This he is unable to get because of disputed facts.

14. Accordingly, while this petition must fail the petitioner may, if so advised, for the determination of his rights, file a civil suit where facts can be more closely examined and a positive finding as to petitioner's entitlement or otherwise can be given.

' Dismissed but with no order as to costs.