Renewal commission embargo under insurance law applies across eligibility clauses and bars payment after breach of competing-business restriction.

Section 44(1) of the Insurance Act, as applied to LIC, was construed to mean that the embargo in the second limb of clause (c) extends across all qualifying categories in the proviso, including clauses (a), (b), (bb) and (bbb). A former agent who violates that embargo by soliciting or procuring insurance business for another person cannot secure renewal commission by relying on an alternative eligibility route, because the commission is a statutory entitlement subject to the proviso's conditions. The Article 14 challenge to the restriction also failed, as the court found the limitation reasonable and not shown to cause hostile discrimination. The claim for renewal commission was therefore rejected.

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Issues: (i) Whether the second limb of clause (c) of the proviso to Section 44(1) of the Insurance Act, 1938, as made applicable to the Life Insurance Corporation, applies only to former agents falling under clause (c) or also to former agents satisfying clauses (a), (b), (bb) and (bbb). (ii) Whether a former LIC agent who satisfies an alternative eligibility clause can still claim renewal commission despite having violated the embargo against soliciting or procuring insurance business for another person. (iii) Whether the embargo in clause (c) is unconstitutional or otherwise invalid.

Issue (i): The proviso to Section 44(1) contains distinct eligibility conditions for renewal commission, but its structure and language show that the final condition in clause (c) is not confined to that clause alone. The provision was applied to LIC through the statutory notification issued under the Life Insurance Corporation Act, and the punctuation, syntax, and purpose of the proviso indicate that the embargo was intended to operate across all the qualifying clauses.

Conclusion: The second limb of clause (c) applies to former agents falling under clauses (a), (b), (bb) and (bbb) as well.

Issue (ii): Renewal commission is a statutory entitlement subject to the conditions attached to the proviso. A former agent who falls within clause (c) but violates the embargo by joining a competitor and procuring insurance business for another person cannot bypass that disqualification by invoking another eligibility clause. Permitting such a course would render the embargo ineffective and defeat the scheme of the provision.

Conclusion: The former agent is not entitled to renewal commission if the embargo is breached, even if another eligibility clause is otherwise satisfied.

Issue (iii): The challenge based on Article 14 was not made out with the necessary specificity, and the restriction imposed by the proviso was held to be reasonable. The construction adopted also avoided hostile discrimination and preserved the effectiveness of the statutory scheme.

Conclusion: The constitutional challenge failed.

Final Conclusion: The interpretation of Section 44 was affirmed in favour of LIC, and the claim for renewal commission was rejected in both matters.

Ratio Decidendi: Where a statutory proviso governing renewal commission contains a qualifying embargo expressed as a condition attached to the entitlement scheme, that embargo operates according to the provision's text and purpose across all covered categories, and a beneficiary who breaches it cannot claim commission through an alternative eligibility route.

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