New India Assurance Company Ltd. vs Harish Kumar Arya
2009 Latest Caselaw 2131 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI
2.

+      LPA 41/2009


       NEW INDIA ASSURANCE COMPANY LTD.            ..... Appellant
                      Through: Mr. Jayant Bhushan, Sr. Adv. with
                      Mr. Saurabh Prakash, Mr. Vikash Bhatnagar, Advs.

                        versus


       HARISH KUMAR ARYA                             ..... Respondent
                     Through: Mr. Sandeep Sharma, Adv.

       CORAM:
       HON'BLE THE CHIEF JUSTICE
       HON'BLE MR. JUSTICE NEERAJ KISHAN KAUL


                              ORDER

% 19.05.2009

This appeal is directed against the impugned order dated 28.11.2008.

The respondent (original petitioner in the writ petition) had applied for

voluntary retirement under the Special Voluntary Retirement Scheme

initiated by the appellant (original respondent in the writ petition) on

1.1.2004. The request was rejected vide letter dated 25.5.2006.

Consequently, the respondent was constrained to file the writ petition, out of

which the present appeal arises challenging the rejection order. It would be

relevant to reproduce hereinbelow Clause 3(ii) of the Special Voluntary

Retirement Scheme:

"Any officer who is under suspension or against whom disciplinary proceedings are pending or contemplated shall not be eligible to opt for the scheme.

Provided that the case of an officer who is under suspension or against whom disciplinary proceedings is pending or contemplated may be considered by the Board of the Company concerned having regard to the facts and circumstances of each case and the decision taken by the Board shall be final."

2. The case of the appellant before the learned single Judge was that the

respondent was not entitled to voluntary retirement with all benefits since a

vigilance case was pending against the respondent and thus, his request

could not be accepted in terms of the policy formulated by the appellant. It

was also the case of the appellant that the respondent was not agreeable for

recovery of the amount outstanding against him from his terminal benefits

and for that reason, he was not eligible for voluntary retirement in terms of

Special Voluntary Retirement Scheme, 2004. However, it was contended on

behalf of the respondent that while making an application for voluntary

retirement, it had authorized the appellant to recover and adjust all

loans/dues etc. payable by him to them from his terminal benefits including

ex gratia. It was also contended on behalf of the respondent that there was

no disciplinary proceedings or vigilance case pending against him on the

date he made the application for voluntary retirement. It was further pointed

out by the counsel for the respondent that appellants had allowed voluntary

retirement to many of their employees against whom large recoveries were

to be made in terms of audit objection and also to those against whom

vigilance cases were pending. It was submitted that the appellants had

allowed voluntary retirement under the Scheme even to those who were

placed under suspension at one or the other point of time. The respondent

gave the details of such persons in his rejoinder. Further, the counsel for the

respondent also made a statement before the learned single Judge that the

appellant was free to recover whatever amount was legally recoverable from

the petitioner (respondent herein) from his terminal benefits including ex

gratia. The learned single Judge took note of the fact that the Officer-in-

Charge Branch/Division of the appellant had appended a Certificate along

with the application of the respondent certifying that no disciplinary action

was either pending or contemplated against the respondent on the date he

made his application for voluntary retirement. The learned single Judge also

took note of the fact that there was no averment in the counter affidavit to

show and explain the circumstances in which such a certificate was issued.

The learned single Judge also observed in the impugned order that it was

borne out from the counter affidavit of the appellant that the respondent was

granted promotion subsequent to his making the application for voluntary

retirement. The learned single Judge rightly expressed his anguish to the

fact that though almost five years had expired since the respondent had

applied for voluntary retirement, there was nothing on record to show what

disciplinary action, if at all, has been taken by the appellants against the

respondent. Apparently, as it appears from the impugned order during the

course of the hearing, the counsel for the appellant took repeated

adjournments from the court to inform the court about the outcome of the

disciplinary proceedings and submitted that Inquiry Officer had submitted his

report to the disciplinary authority. However, despite repeated opportunities

given to the appellant, the required information was not furnished to the

Court by the appellant. The learned single Judge rightly held that the

appellants were acting arbitrarily in the matter in allowing the benefits of the

Scheme to some and rejecting the request of others including the

respondent at their whims and fancy.

3. The appellants have filed an additional affidavit with some documents

to substantiate their case that a vigilance enquiry was actually in

contemplation when the respondent made his application under the Scheme.

We are unable to agree with this submission. The documents produced do

not bring out the picture clearly and it cannot be established on the basis of

the same that an enquiry was in contemplation at the relevant time.

Moreover, it is pointed out by the learned counsel for the respondent that a

number of documents now sought to be filed by the appellants were

procured documents written at the behest of the appellant. Further, as per

him, even the signatures of the signatory to some of these letters do not

match. For instance the signature of Sh. Dalip Singh at Pg.205 is totally

different from his signature at Pg.221. As per the respondent, this raises

serious doubts about the veracity of these documents. We do not propose to

enter into this controversy in the present proceedings.

4. As regards the allegation of discrimination and selective permission

being given to some and not to others under the Scheme, it is sought to be

explained on behalf of the appellants that persons whose cases have been

relied on by the respondent to allege discrimination actually pertained to

cases where the audit queries had been raised and audit queries could not

be a reason for withholding permission for voluntary retirement under the

Scheme. It was the contention of the respondent that though some officers

had been granted voluntary retirement despite pendency of audit recoveries

and suspension against them, the respondent had not been given the same

benefit. It was the case of the respondent that if the appellants could allow

SVRS to persons who had misappropriated funds, then it could not

discriminate against the respondent and make unfounded allegations. As

per the respondent, the audit clearance certificate (Pg.146-147 of paper

book) showed that the total outstanding amount against him was

approximately Rs.71,000/- whereas the persons who had been granted SVRS

despite audits queries and suspension had much larger amounts pending

against them which were owed to the appellant as was evident from the

tabulation at Pg.59/60 of the paper book.

5. The explanation sought to be given by the appellants to meet the

argument of discrimination is unsatisfactory. It is admitted that audit

queries for large sums were pending against these persons, yet they were

granted voluntary retirement. Further, there is no explanation as to how and

why the person who was under suspension due to misconduct had been

granted SVRS. No doubt the proviso to clause 3(ii) of the Scheme grants

discretion to the Board of the appellants to consider extending the benefit of

the Scheme even to an officer under suspension or against whom

disciplinary proceedings is pending or contemplated having regard to the

facts and circumstances of each case. However, this discretion has to be

exercised reasonably, fairly and in a non-discriminatory manner. We fail to

understand how persons against whom audit queries with regard to large

sums owed by them were pending as also person under suspension had

been given the benefit of voluntary retirement and yet the respondent's

request was rejected. Further, even the documents now sought to be relied

on do not clearly establish that vigilance enquiry was actually in

contemplation at the time when the respondent applied for voluntary

retirement under the Scheme.

6. As held by the Supreme Court in Bangalore Medical Trust v. B.S.

Muddappa (1991) 4 SCC 54, discretion is an effective tool in

administration. It provides an option to the authority concerned to adopt

one or the other alternative. When a statute either provides guidance or

rules or regulations are framed for exercise of discretion then the action

should be in accordance with it. Even where statutes are silent and only

power is conferred to act in one or the other manner, the Authority cannot

act whimsically or arbitrarily. It should be guided by reasonableness and

fairness. The legislature never intends its authorities to abuse the law or use

it unfairly. Where the law requires an authority to act or decide, 'if it appears

to it necessary' or if he is 'of opinion that a particular act should be done'

then it is implicit that it should be done objectively, fairly and reasonably. In

a democratic set up, the people or community being sovereign the exercise

of discretion must be guided by the inherent philosophy that the exerciser of

discretion is accountable for his action. It is to be tested on anvil of rule of

law and fairness or justice particularly if competing interests of members of

society is involved. The action or decision must not only be reached

reasonably and intelligibly but it must be related to the purpose for which

power is exercised. No one howsoever high can arrogate to himself or

assume without any authorization express or implied in law a discretion to

ignore the rules and deviate from rationality by adopting a strained or

distorted interpretation as it renders the action ultra vires and bad in law.

5. Further, it may also be relevant to refer to the decision of the Supreme

Court in Union of India v. Kuldeep Singh (2004) 2 SCC 590, wherein the

Supreme Court held that discretion is to discern between right and wrong;

and therefore, whoever hath power to act at discretion, is bound by the rule

of reason and law. When it is said that something is to be done within the

discretion of the authorities, that something is to be done according to the

rules of reason and justice, not according to private opinion; according to law

and not humor. It is to be not arbitrary, vague, and fanciful, but legal and

regular.

6. Clearly in the present case, the action of the appellant was unfair,

unreasonable and discriminatory. The learned single Judge has rightly

directed the appellants to accept the request of the respondent for voluntary

retirement and in case any recovery is made from him then such recovery

may be made by the appellant from the terminal benefits, to which the

respondent may be entitled as per rules. The appellants have also been

permitted by the learned single Judge to keep the issue of vigilance enquiry

against the respondent pending for adjudication in accordance with the

policy on the subject.

7. We are in complete agreement with the findings of the learned single

Judge. The appeal is accordingly dismissed. All applications stand disposed

of as well.

CHIEF JUSTICE

NEERAJ KISHAN KAUL, J MAY 19, 2009 pk