Kumar, holder of a life insurance policy for a sum assured of ₹10 lakh, died in an accident. The accident was widely reported in the press. Mrs. Sheela Kumar, his wife, was the nominee under the policy. Nayar, the agent

Kumar, holder of a life insurance policy for a sum assured of ₹10 lakh, died in an accident. The accident was widely reported in the press. Mrs. Sheela Kumar, his wife, was the nominee under the policy. Nayar, the agent who had canvassed the insurance, met Tandon, the Regional Vice-President of the insurance company and requested for a prompt settlement of the claim assuring that he will get the documentation completed by Mrs. Kumar. Nayar was a leading agent of the company. Tandon took an intimation letter from Nayar and instructed the accounts department to handover the receipted voucher and claim cheque to Nayar. Tandon, however, forgot to inform his action to Sharma the claims officer of the insurance company. Nayar handed over the cheque, voucher and claim form to Mrs. Kumar stating that he will collect the documents next day. Since he did not turn up the next day, she mailed the claim form, discharged voucher and the policy bond to the insurance company. Sharma, who received the documents, not knowing the earlier action of Tandon, approved the claim and arranged for a cheque for ₹10 lakh to be mailed to Mrs. Kumar. The insurance company wrote to Nayar intimating that the amount of ₹10 lakh will be recovered in installments from his agency commission. Nayar replied that such an action will be in violation of the agency law and agreement. Answer the following questions stating reasons: Can the company legally recover the money from Mrs. Kumar ?