Ambika Prasad Dubey vs United India Insurance Co. Ltd.
2018 Latest Caselaw 1688 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Reserved on 02.04.2018
 
Delivered on 24.07.2018
 
Court No. - 26
 

 
Case :- WRIT - A No. - 12315 of 2007
 

 
Petitioner :- Ambika Prasad Dubey
 
Respondent :- United India Insurance Co. Ltd.
 
Counsel for Petitioner :- Shesh Kumar,Sunil Dubey
 
Counsel for Respondent :- A.B. Saran,S.C.,Saurabh Srivastava
 

 
Hon'ble Ajit Kumar,J.

1. By means of this writ petition, the petitioner is challenging the orders dated 25th January, 2006 passed by the Disciplinary Authority imposing punishment in the nature of major penalty of reverting/ down grading him five steps down in time scale of pay and further ordering recovery for the excess amount he has drawn towards Leave Travel Subsidy bills (hereinafter referred to as 'LTS') and the order of Appellate Authority dated 19th October, 2006 has also been challenged in the writ petition.

2. The facts of the case are that the petitioner availed benefit of LTS between 17th May, 1997 to 31st May, 1997 for visiting Rameshwaram from Allahabad and back through M/s Pratap Travels via bus No. U.P. 65 B 3838; between 2nd May, 1998 to 16th May, 1998 for visiting Kanyakumari from Allahabad and back through M/s Pratap Travels via bus No. U.P.65 B-3839; between 18th March, 2000 to 1st April, 2000 for visiting Gandhidham from Allahabad and back through M/s Pratap Travels via bus No. U.P. 70 9381 and between 20th April, 2002 to 04th May, 2002 for visiting Vaishno Devi from Allahabad and back through M/s Pratap Travels via Bolero Jeep No. U.P. 70 T 4545 and thus, he was reimbursed in total Rs.1,08,790/- towards LTS.

3. The petitioner was placed under suspension initially vide order dated 3rd January, 2005 in contemplation of an inquiry under Rule 25 of General Insurance (Conduct, Discipline and Appeal) Rules, 1975 (hereinafter referred to as 'Rules, 1975') on the charges of misconduct.

4. The foundation laid on the charges of misconduct upon the alleged bills which according to the department, he supplied for availing the benefit of LTS. The article of charges was two fold: firstly, he committed misconduct by providing fake LTS bills in respect of LTS journey; and secondly by getting undue reimbursement of Rs.1,08,790/-, to which he was definitely not entitled, caused financial loss to the Corporation. In support of the article of charges, concerned authority provided the petitioner with details pertaining to the sanction or permit by the State Transport Authority, Lucknow to the M/s Pratap Tavels and according to which, it did not hav necessary permit beyond the year 1996. In the letter, issued by the Transport Authority, it has been mentioned that no such permit was ever given to bus bearing No.- U.P. 70 9381 of the M/s Pratap Travels. In reply to the charges, the petitioner did not question the letter issued by the Regional Transport Authority, Lucknow in respect of permit of the Travel Agency outside the U.P. and that the plea taken is that memory of the petitioner had gone too week to remember the status of travel agency at the relevant point of time. He only reiterated that he did travel and rightly availed LTS reimbursement.

5. The inquiry was conducted by the Inquiry Officer after giving full opportunity to the petitioner. After submitting the inquiry report, show cause notice was issued to the petitioner on 12th September, 2005 by the Disciplinary Authority. The petitioner submitted his reply to the show cause notice and stated that the findings of the Inquiry Officer are whimsical and based on fabricated facts. It is necessary here to quote the relevant discussion by the I.O. while evaluating the evidence:-

"(3) From MD-7, i.e. letter DT. 18.05.2004 of Secretary, State Transport Authority, Lucknow it is proved that the Bus No. UP-65-B-3839 was not issued any permit to enable it to travel between Allahabad to Rameshwaram and Allahabad to Kanyakumari. The Bus No. UP-70-9381 was not issued any permit. As per MW-2 and MW-3, the copy of permit enclosed in the LTS Bills are fake. CSE could not produce any counter-evidence in this matter. Hence I conclude the copies of permits enclosed with the 3 LTS Bills for bus no. UP-65-B-3839 and bus no. UP-70-9381 is fake.

(4) MW-2 has testified and argued that CSE had not travelled alongwith his family as claimed in the 4 LTS bills. His testimony and arguments were based on the points as under:-

(a) The copies of permits enclosed with the 3 LTS bills are fake. The Bolero Jeep engaged for 4th LTS bill is actually a private vehicle and has no permit to ply as a taxi.

(b) Sh. A.P. Dubey did not have sufficient money to purchase ticket no. 537 Dated 30.03.97 for Rs.27200.00/-.

(c) Sh. A.P. Dubey also did not have sufficient money to meet the large amount of expenses of boarding and lodging during travels from Allahabad to Rameshwaram, Allahabad to Kanyakumari, Allahabad to Gandhidham and Allahabad to Vaishno Devi, for a family of 8 members.

(d) Copy of permit enclosed in the LTS bills does not bear the seal/ stamp of Inter-State-border-check-posts. As per MW-2 and MW-3, whenever any bus crosses the Inter-State-border-check-posts, a seal/ stamp of that check post is put on the permit. Non appearance of such seal/ stamp on the copy of permit (fake) clearly proves it had not travelled as claimed in the LTS bills.

(e) Receipt of Rs. 25 for vehicle entrance fee at Kanyakumari bears no Regn. No. of vehicle. Moreover the actual Vehicle Entrance Fee at Kanyakumari for a bus was Rs. 50 and not Rs.25.

(f) Sh. Dubey was unable to name the important places and spots of tourists interest en-route travel on LTS.

(5) MW-2 has presented MD-6 i.e. Investigation Report in which he has emphasized above mentioned points in additional to the discrepancy of statement of CSE (MD-5) that as per CSE, Route from Allahabad to Gandhidham goes through Nagpur.

(6) PO has argued the same points in his written arguments.

(7) During interrogation by Vigilance Officer, in MD-5 and during cross examination by undersigned on page-11 of Daily order Sheet, CSE could not give details of boarding and lodging arrangements for his family of 8 members for a journey of 16 days (in 2000 from Allahabad to Gandhidham & back), and 15 days (in 2002 from Allahabad to Vaishno Devi & back) CSE could not tell name of any place of tourist interest at Kanyakumari.

(8) All LTS bills in question are taken through the same tour operator M/s Pratap Travels only.

(9) It is inexplicably noticed that the pages of the Employees Attendance Register of BO-2, Allahabad from 10.05.97 to 20.05.97 are badly pasted together so as to prevent checking the attendance position. The investigating authorities could have consulted some forensic lab to know the truth.

(10) I have observed that the Vehicle Entrance Fee for Rs.25 is for Tourist Bus but without any date and without Regn. No. of Bus and without required signature of bill collector.

(11) The documents presented by CSE, DD-1 DD-2 and DD-3 are not relevant to the facts stated in chargesheet. CSE has not produced any counter-evidence to prove his 4 LTS claims. The CSE has continuously failed to explain about his boarding and lodging arrangements and expenses during the impugned 4 LTS travels. CSE is unable to counter the charges that CSE had no cash/ money to purchase the tickets for Rs.27,200.00/- on 30.03.97, Rs.30,560.00/- on 02.02.1998.

The fact left out to be mentioned by management, in respect of 4th LTS Bill is that Vaishno Devi is shown as one of the locations visited by Veh. No. UP-70-T-4545. It is shown that the Bolero Jeep had gone from Allahabad to Vaishno Devi. It is a fact of common knowledge that Katra is the last destination of any vehicle. No vehicle can go beyond Katra to Vaishno Devi. No Transporter of Tour Service Operator issues any receipt for Vaishno Devi who give service upto Katra. Vaishno Devi Nagar is a 13 km climb from Katra. The Bill & Receipt issued for Vaishno Devi therefore, is forged and fabricated, as neither the transporter nor CSE is aware of the fact that any vehicle can only go upto Katra and not upto Vaishno Devi."

6. In his reply, the petitioner has not disputed the findings of fact by referring to any cogent and convincing material which can be said to have got escaped from the scanning eyes of the Inquiry Officer.

7. Considering the reply/ representation of the petitioner, the Disciplinary Authority finally held the petitioner guilty of the charge of misconduct and, therefore, in exercise of power under Rule 23 (e) of General Insurance (Conduct, Discipline and Appeal) Rules, 1975 (hereinafter referred to as 'Rules, 1975') imposed a penalty of reduction in his basic pay by five times lower in time scale as applicable to his pay.

8. The Disciplinary Authority has, however, also directed for recovery of the amount reimbursed to the petitioner towards LTS i.e. Rs.1,08,790/-. The order came to be challenged before the Appellate Authority, who dismissed the appeal.

9. Against the impugned orders passed by the Appellate Authority and Disciplinary Authority, learned counsel for the petitioner has made following submissions:-

(i). Punishment imposed upon the petitioner is not proportionate or commensurate to the guilt of the petitioner;

(ii). The Circular letter dated 20th September, 2002, of the Oriental Insurance Company Limited, only provided for the penalty of censure and recovery of LTS advance to the such delinquent employee.

(iii). The respondents could have imposed only major penalty as the charge-sheet was issued in respect of the major penalty. The minor penalty of recovery and at the same time imposition of major penalty of down grading 5 times in the time scale of pay was totally without authority of law.

10. Before I deal with the submissions (supra) advanced by the learned counsel for the petitioner, it is worth mentioning that initially learned counsel for the petitioner had also argued that the findings returned by the Inquiry Officer were perverse and against the record but later on, he did not press the said argument and confined his arguments to the above legal submissions.

11. So far as the the (i) and (ii) submissions are concerned, both are inter-related and are basically based upon the Circular letter dated 20th September, 2002 issued by the Assistant General of the Oriental Insurance Company Ltd. According to the Circular letter, in those cases where employee has violated the rules and regulations and if not maintaining absolute integrity and devotion to the duty, it became necessary to provide specific penalties commensurate to the charges of the misconduct. This Circular letter number does not take away the power of the Disciplinary Authority to impose minor or major penalty provided under the Rules, 1975. It is, therefore, necessary to quote the Circular letter dated 20th September, 2002 itself to appreciate the arguments and the legal submissions advanced by the learned counsel for the petitioner on point no. (i) and (ii) :

"The Oriental Insurance Company Limited,

Regional Office, 43, Hazratganj, Lucknow.

Ref: LRO: PERS: CDA : CIR : 2002		      20.09.2002
 
DEPTT. PERS
 
CIRCULAR
 
To All Dos, BOS and All DEPTTs of RO Lucknow
 
RE: Action taken against erring employees
 

We are all public servants and our services are governed by rules and regulations as laid down by the Company. While discharging the duties we are required to work according to the rules for maintaining absolute integrity and devotion to duty.

It is very said that some of our employees have violated the rules and regulations and are found guilty of misconduct as per General Insurance (Conduct, Discipline and Appeal) Rules, 1975. In such cases we have been forced to take action in accordance with stipulated guidelines against the erring employees and the penalty has been awarded for the misconduct committed. The charges and commensurate penalties had been awarded as follows in some of the cases:

Charges in brief

Penalty imposed

01. Unauthorisedly issuing Policy format to the insured and misappropriation premium

Removal from service

02. Misappropriation of premium and misuse of office stationery

Permanent downgrading to the minimum stage in the time scale.

03. Antedating of covernote and T.P. Liability under MACT case.

Permanent downgrading to the minimum state in the pay scale.

04. Issuance of motor covernote without inspection of vehicle

Permanent downgrading by 4 steps in the time scale.

05. Non deposit of premium and misappropriation of the same.

Reduction by 4 steps in the time scale and recovery.

06. Unauthorized absence

Termination

07. Preferring false Medi-claims

Permanent downgrading by 5 steps in the time scale and recovery.

08. Preferring false LTS Claims

Censure and recovery of LTS advance and withdrawal of LTS advanced for 2 block years.

The employees who are penalized not only bring a bad name to themselves and their family but tarnish the image of then Company as well. Many a time not only the chargesheeted employee undergoes financial and mental strain but the Company is also exposed to financial risk.

All the employees are advised not only to be honest and sincere in the discharge of their duty but also to be careful in performance of their duty by not indulging in activities which do not conform to the rules and regulations of the Company. It is therefore expected that all the employees shall remain sincere and honest to the Organization so that instances where employees are penalized for their misconduct are brought to zero.

We are communicating all this to discourage all and sundry to resort to such type of mal-practices/ unfair means.

This Circular may be brought to the notice of each and every employee and displayed on the Notice Board.

Sd/-

Asstt. General Manager"

12. Thus, according to the above circular, if the charge is of false LTS claims then commensurate to that, penalty will be recovery of LTS advanced and withdrawal of LTS advanced for two block years.

13. Now coming back to the article of the charges in the present case, I find charges only related to the benefit obtained by the petitioner as LTS (Leave Travel Subsidy) only by furnishing fake LTS bills as the bus by which he travelled had no inter-state permits and thus by availing such LTS benefit, the petitioner has failed to maintain absolute integrity, devotion to duty and acted dishonestly, fraudulently and negligently and thereby his conduct was charged as prejudicial to the interest of the corporation within the meaning of Rule 3 (1) (I), (ii) read with Rule 4 (2), 5 and 9 of the Rules, 1975.

14. In the inquiry, petitioner had participated in which in the ultimate finding he was held guilty of wrongfully availing LTS reimbursement bringing home the charge no.1 and so also as a consequence, the charge no.2. On the basis of the said finding of the Inquiry report, the petitioner was held guilty of the charges of providing false LTS claim and the Disciplinary authority after considering his reply to show cause found the charges to be correctly proved by the Inquiry Officer and thus, imposed major penalty by imposing a penalty of reduction in his basic pay by five steps in time scale payable to him and also further directed for recovery of the LTS reimbursement of Rs.1,08,790/- vide order dated 25th January, 2006.

15. While Rule 3 of Rules, 1975 provides that every employee shall at all times maintain absolute integrity; maintain devotion to duty; and do nothing which is unbecoming of a public servant and that such employee shall conform to and abide by these Rules and shall observe, comply with and obey all orders and directions. Rule 4 of the Rules, 1975 defines misconduct. Rule 4 of the Rules, 1975 at the very outset states that without prejudice to the generality of the term (misconduct), the following acts of omission and/or commission shall be treated as misconduct:

"4. Misconduct

Without prejudice to the generality of the term (Misconduct), the following acts of omission and/or commission shall be treated as misconduct:-

(1) Theft, fraud or dishonesty in connection with business or property of the Corporation/ Subsidiaries or of the property of another person within the premises of the Corporation/ Subsidiaries.

(2) Taking or giving bribes or any illegal gratification.

(3) Possession of pecuniary resources or property disproportionate to the known sources of income by the employee or on his behalf by another person which the employee cannot satisfactorily account for.

(4) Furnishing false information regarding name, age, father's name, qualifications, ability or previous service or any other matter germane to the employment at the time of employment or during the course of employment.

(5) Acting in a manner prejudicial to the interest of the Corporation/ Subsidiaries.

(6) Wilful insubordination or disobedience, whether or not in combination with others, of any lawful and reasonable order of his superior.

(7) Absence without leave or over-staying the sanctions leave for more than four consecutive days without sufficient grounds or proper or satisfactory explanation.

(8) Habitual late or irregular attendance.

(9) Neglect of work or negligence in the performance of duty including malingering or slowing down of work.

(10) Damage to any property of the Corporation/ Subsidiaries.

(11) Interference or tampering with any safety devices installed in or about the premises of the Corporation/ Subsidiaries.

(12) Drunkenness or riotous or disorderly or indecent behaviour in the premises of the Corporation/ Subsidiaries or outside such premises where such behaviour is related to or connected with the employment.

(13) Gambling within the premises of the Establishment.

(14) Collection without the permission of the Competent Authority of any money within the premises of the Corporation/ Subsidiaries except as sanctioned by any law of the land for the time being in force or rules of the Corporation.

(15) Sleeping while on duty.

(16) Commission of any act which amounts to a criminal offence involving moral turpitude.

(17) Absence from the employee's appointed place of work without permission or sufficient cause.

(18) Smoking within the premises of the establishment where it is prohibited.

(19) Purchasing properties, machineries, stores etc. from or selling properties, machineries, stores, etc. to the Corporation/ Subsidiaries without express permission in writing from the Competent Authority.

(20) Commission of any act subversive or discipline or of good behaviour.

(21) Abetment of or attempt at abetment of any act which amounts to misconduct.

Note: The above instances of misconduct are illustrative in nature, and not exhaustive."

16. The petitioner's case is to be covered under sub-Rule (5) of Rule 4 of Rules, 1975, which reads as under:-

"(5) Acting in a manner prejudicial to the interest of the Corporation/ Subsidiaries."

17. Once it is admitted to the petitioner as he has not further questioned the findings returned by the Inquiry Officer that he had produced fake bills of LTS journey and fake permits of the relevant buses involved in the journey, the petitioner has rightly been held guilty of misconduct by producing fake bills and fake permits and that he has illegally drawn the benefits of LTS reimbursement. Thus, there is no occasion to interfere with the findings returned by the Inquiry Officer.

18. Rule 23 of the Rules, 1975 provides for major penalties which includes the penalty imposed here in this case against the petitioner. The question, therefore, is that in the event, the petitioner had been held guilty of only availing LTS reimbursement illegally whether major penalty could have been imposed or not. The argument is that while it is open for the authority to impose penalty for the act of misconduct, if proved, the Corporation has further decided to provide for specific penalties commensurate to the charges in each of the cases. The argument is that the Circular letter in this regard shall have a binding effect upon the Disciplinary authority and the Disciplinary authority was not justified in ignoring the same. Thus, according to the petitioner, the Disciplinary authority was not justified in imposing the major penalty in terms of lowering down five steps in time scale and it could have only imposed an entry of censure besides recovery of LTS advanced and withdrawal of LTS advanced for two block years.

19. Per contra, the argument advanced by the learned counsel for the Insurance Company is that Rules, 1975 are the rules which have not been amended in terms of penalties. He further argued that the Circular letter dated 20th September, 2002 is only guidelines and cannot amount to the amendments of the Rules as provided for under Rule 43 of Rules, 1975, to have binding effect.

20. From careful reading of Circular letter dated 20th September, 2002, there is nothing discernible that it is bringing any amendment to the Rules, 1975 nor, do I find that by providing such penalties specific and commensurate to the charges, the Circular letter in any manner overrides the Rules. It only facilitates the Disciplinary authority to impose specific penalty in matters of specific charges. The Rule defining misconduct under the Rules, 1975 clearly provides that it is not exhaustive in nature meaning thereby there can be many more grounds of misconduct which disciplinary authority may find to be proved and to provide penalties commensurate to the charges in respect of which disciplinary proceedings could be instituted. So, there can be many more acts and conduct, facts and omission on the part of an employee which in the eyes of the Corporation can be misconduct calling for a disciplinary proceedings and so Corporation in its wisdom proceeded to further specify actions if in case a particular misconduct reduced to a charge, comes to be proved. I do not think such wisdom of Corporation is open to judicial scrutiny more particularly when it is not questioned either by the employer or by the employee. Corporation is, therefore, hide-bound in law to honour its own circular in its true spirit.

21. False LTS claim as specifically provided in Circular letter dated 20th September, 2002 is not a specific charge of misconduct as could be said to be defined under Rule 4 of Rules, 1975 and, therefore, I am of this considered opinion that there is nothing wrong with the Corporation if issued circular defining the specific charges and specific penalties commensurate to the said respective charges. From the article of charge (supra) as leveled against the petitioner, the petitioner was held guilty of misconduct not in terms of not maintaining integrity for any grave misconduct or any act of utter defiance to the order of his superiors as defined under Rule 3 of Rules, 1975, but for the charge of getting unduly benefited for fake LTS only. Further, major penalty of reversion to a lower post or steps down in time scale, is not elaborated further under the rules. The Circular provides for specific punishment for such a charge and to that extent it must be imposed. It is not a case of the respondents that Circular letter dated 20th September, 2002 has been superseded and I, therefore, consider this circular as an aid to the Rules, 1975 to facilitate the authority to impose specific penalty.

22. Further, I do not find any error for want of any authority at the end of the employer, if it is provided that there will be specific penalty for specific charge prescribing under the Circular. It is a condition of service under a contract of employment and, therefore, benefit conferred in terms of minor penalty for the employee, in the wisdom of employer as the only penalty as a must for the given charge, be given to such an employee. Under the circumstances, I hold that the Disciplinary authority was not justified in imposing major penalty by not complying Circular letter dated 20th September, 2002 issued by his Corporation. In my considered opinion, penalty commensurate to the charge should have been the one as provided for under the Circular.

23. Interestingly, while petitioner preferred an appeal before the Appellate authority on 13th March, 2006, he had appended the Circular letter also along with the memo of the appeal but the Appellate authority has completely ignored the said Circular letter also. In its final order, it has rejected the appeal on 19th October, 2006. The Appellate authority has simply confirmed the order of Disciplinary authority on the ground that the charge of misconduct has been proved. It has not considered the Circular letter which was appended along with the appeal and there is no whisper about the same.

24. In view of the above, the imposition of the major penalty in the nature of down grading five steps in time scale of pay only for the charge of production of fake LTS bills is definitely not commensurate to the charge keeping in view of the Circular letter dated 20th September, 2002.

25. The second charge of misconduct is only based upon the first charge. It has not come in the Inquiry report that the petitioner has been previously guilty of any such misconduct of any misbehaviour or in any manner guilty of dereliction in duty or that he on any previous occasion did not maintain absolute integrity. The entire inquiry is held basically in respect of first charge of getting LTS reimbursement by producing fake LTS bills of bus having no requisite permits. Therefore, the penalty to the extent of recovery of the amount of reimbursement towards LTS bills could have been imposed along with the entry of censure. Thus, the orders impugned are not sustainable on this count also.

26. So far as the third submission is concerned, in my opinion the imposition of major penalty and minor penalty at the same time seems to be inconceivable under the Rules, 1975. Learned counsel for the petitioner has relied upon the judgment of Supreme Court in the case of Union of India and another vs. S.C. Parashar reported in 2006 (3) SCC 167, wherein Court has hold such course to be illegal and bad. Paragraph 10 of the judgment (supra) reads as under:-

"10. The penalty imposed upon the respondent is an amalgam of minor penalty and major penalty. The respondent has been inflicted with three penalties: (1) reduction to the minimum of the time-scale of pay for a period of three years with cumulative effect; (2) loss of seniority; and (3) recovery of 25% of the loss incurred by the Government to the tune of Rs. 74,341.89p., i.e., Rs. 18,585.47p. on account of damage to the Gypsy in 18 (eighteen) equal monthly installments. Whereas reduction of time-scale of pay with cumulative effect is a major penalty within the meaning of Clause (v) of Rule 11 of the CCS Rules, loss of seniority and recovery of amount would come within the purview of minor penalty, as envisaged by Clause (iii) and (iii) (a) thereof. The Disciplinary Authority, therefore, in our opinion acted illegally and without jurisdiction in imposing both minor and major penalties by the same order. Such a course of action could not have been taken in law."

27. Now the question remains to be considered and answered is that even as per Circular (supra) if petitioner is liable to be inflicted upon with the punishment of 'censure' and then the same to be entered in his service record. The fact is that the petitioner has already attained the age of superannuation and very purpose of punishment of 'censure' is to give an entry in service record as an entry in character roll has come to end. No more promotional avenues are available to the petitioner nor, the department has any opportunity to block any such benefits that could have been availed by the petitioner while in service. It is not the case of the Corporation that the petitioner would otherwise become entitled to be given any such benefit if entry of 'censure' is not awarded. Therefore, no useful purpose would be served by imposing penalty of 'censure' in terms of entry of censure as prescribed under the Circular letter dated 20th September, 2002 and so also it will be an empty formality to remit the matter on above counts.

28. Further, since it is not a case where quantum of punishment is in issue but the issue in fact is that the penalty of down grading in basic pay by five steps in time scale is not the one prescribed under the Circular for the charges taken against the petitioner and proved and only that part of the order impugned is being set aside, it will be useless exercise to remit the matter to the Disciplinary Authority more especially when petitioner has already attained the age of superannuation.

29. In view of the above, the writ petition succeeds to the extent indicated hereinabove and is, accordingly, partly allowed. The order dated 25th January, 2006 passed by the Disciplinary authority is hereby quashed to the extent it imposes major penalty (down grading in basic pay by five steps in time scale applicable to him) and the order dated 19th October, 2006 confirming the said penalty is also quashed. The petitioner shall be entitled to all consequential benefits. Necessary orders, in this regard, shall be passed by the competent authority within a period of three months from the date of production of certified copy of this order.

Order Date :- 24.7.2018

Atmesh