Ashutosh Kr. Singh vs Life Insurance Corporation Of ...
2023 Latest Caselaw 506 Jhar

         IN THE HIGH COURT OF JHARKHAND AT RANCHI

                       W.P. (S) No. 2559 of 2010

     1. Ashutosh Kr. Singh, S/o Sri Mithilesh Kumar Singh, Resident of
        H.H. Gali-Opposite Tarunoday, Boreya, P.O. Boreya, P.S. Kanke,
        District-Ranchi
     2. Akhtar Javed, S/o Md. Sagir Ansari,
        Address-C/o Ram Charitar Sharma, Road No. 2, Aryapuri, Ratu
        Road, P.O. Hehal, P.S. Sukhdeo Nagar, District- Ranchi
     3. Sri Arbind Toppo, Son of Sri Pyaro Toppo, resident of Argora,
        Chetan Toli, Near Mukti Gas Godown, P.O. Harmu, P.S. Argora,
        District-Ranchi
     4. Sanjeet Das, Son of Sri Shanti Gopal Das, Resident of Laxami
        Nagar, P.O. Hehal, P.S. Sukhdeo Nagar, District-Ranchi
                                                 ...     ...     Petitioners
                              Versus
     1. Life Insurance Corporation of India, through Zonal Manager, East
        Central Zone, Exhibition Road, Jeevan Deep, Patna, P.O.
        Exhibition Road, P.S. Kotwali, District-Patna
     2. Sr. Divisional Manager, Life Insurance Corporation of India,
        Jeevan Prakash Building, Bistupur, Main Road, Jamshedpur, P.O.
        and P.S. Bistupur, District-East Singhbhum
     3. Sr. Divisional Manager, Life Insurance Corporation of India,
        Divisional Office, Hazaribagh, P.O. and P.S. Hazaribagh, Dist.
        Hazaribagh                          ...       ...      Respondents
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CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

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For the Petitioners : Mr. Vijoy Pratap Singh, Senior Advocate : Ms. Bandana Sinha, Advocate For the Respondents : Mr. Sachin Kumar, Advocate : Mr. Srijan, Advocate

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18/31.01.2023

1. Heard the learned counsel for the parties.

2. This writ petition has been filed for the following reliefs: -

"(a) Issuance of a writ of certiorari or in nature thereof for quashing/cancelling/rescinding the order of termination of services of the petitioners passed by the Respondent - Sr. Divisional Manager as contained in Annexure-3 (series);

(b) Issuance of a writ of mandamus or in nature thereof commanding/directing the respondents -

(i) Not to terminate the services of the petitioners,

(ii) To extend the period of probation of the petitioners for further period of one year in terms of clause 2 of the appointment letter considering the facts and circumstances of this case, and

(iii) To give all consequential benefits to the petitioners of extended period of probation, AND/OR

For issuance of any other appropriate writ(s)/order(s)/direction(s)/Rule(s) in the facts and circumstance of this case and in the interest of Justice."

Arguments of the Petitioners

3. Learned senior counsel for the petitioners has submitted that the terms and conditions of appointment of the petitioners as Probationary Development Officer has been annexed as Annexure-1 series. He submits that the petitioners were appointed initially for a probation period of twelve months and the respondent corporation in its sole discretion was entitled to extend the period of probation. The learned senior counsel submits that the petitioners were terminated vide impugned orders as contained in Annexure-3 series.

4. The learned senior counsel has also referred to the minimum business which was required to be achieved by the petitioners mentioned in clause-10 of the terms and conditions. He submits that the impugned orders of termination is stigmatic in nature in view of the fact that the same refers to alleged inefficiency of the petitioners in achieving the targets.

5. The learned senior counsel has also submitted that as per the norms of the respondents, examination/training of the agents to be nominated by the petitioners was to be done twice a month, but this schedule was not followed by the respondents and therefore, the petitioners could not induct sufficient number of agents on account of which the petitioners could not achieve the targets. The details of the agents placed and inducted by the petitioners has been given in paragraph-23 of the writ petition.

6. The learned senior counsel has also relied upon the judgment passed by the Hon'ble Supreme Court reported in (1974) 2 SCC 831 (Shamsher Singh vs. State of Punjab) and has referred to paragraph 62 to 64 thereof to submit that it has been held in para-62 of the judgment that if the termination of service is based on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and therefore the rules of natural justice is required to be followed. The learned senior counsel has submitted that in the present case, the order of termination is not a simplicitor order of termination, but it is stigmatic on account of alleged inefficiency and therefore in view of the aforesaid judgment passed by the Hon'ble Supreme Court,

the impugned orders of termination cannot be sustained in the eyes of law.

7. The learned senior counsel has further submitted that through a supplementary affidavit, he has brought on record instances of various persons for whom there was extension of probationary period, but the petitioners have been discriminated and therefore, the action of the respondents-Corporation within the meaning of Article 12 of the Constitution of India, is violative of Article 14 of the Constitution of India.

Arguments of the Respondents

8. Learned counsel appearing on behalf of the respondents, on the other hand, while opposing the prayer, has submitted that the orders of termination were passed after expiry of the initial period of probation which was for the period of twelve months. Upon overall assessment of the petitioners, it was found that the petitioners could not achieve the targets and therefore the probation period of the petitioners was not extended and their services were terminated. The learned counsel has also submitted that the impugned orders are not stigmatic and therefore, no case for interference is made out.

9. The learned counsel has also referred to the judgment passed by the Hon'ble Division Bench of this Court reported in (2005) SCC Online Jhar 413 (Life Insurance Corporation of India & Ors. vs. Haripad Rohidas) and has referred to paragraph-11 thereof. He submits that similar order of termination was involved in the said case and it was held that the same was not stigmatic merely because it indicated that the writ petitioner had failed to achieve certain targets as per the letter of appointment. The learned counsel has also relied upon the judgment passed by the Hon'ble Supreme Court reported in (1994) 2 SCC 323 (M. Venugopal vs. Divisional Manager, Life Insurance Corporation of India & Anr.) and has referred to paragraph-15 thereof to submit that even under the general law, the service of the probationer can be terminated after making an overall assessment of his performance during the period of probation and no notice is required to be given before termination of such service.

10. The learned counsel has also submitted that as per the various parameters, the petitioners could not achieve the required targets

including the number of agents who were to be involved and otherwise also the material brought on record by way of supplementary affidavit is not comparable to that of the petitioners as their performance was much below the required standards. Findings of the Court

11. The case of the petitioners as per the writ petition is that the petitioners had applied for the post of Development Officer in Life Insurance Corporation of India (LIC). Thereafter after passing the written test, interview and medical test, all the petitioners were selected as Apprentice Development Officer (ADO). After selection, all the petitioners were sent for three months training. After completion of training, all the petitioners were appointed as 'Probationary Development Officer' with effect from 28.01.2009 by the Senior Divisional Manager, Life Insurance Corporation of India, Jamshedpur Division.

12. There was certain condition in the letters of appointment. As per the terms of appointment, the petitioners had to work through LIC Agents; each petitioner was required to recruit 30 agents and achieve business of collection of LIC premium of Rs. 7.50 lakh in one year. It was also stated in the terms of appointment that period of probation will be 12 months which may be extended for 24 months at the discretion of LIC. The LIC Agents can be recruited only after getting certificate from Insurance Regulatory Development Authority which can be granted only after training and passing of examination conducted by Insurance Institute of India.

13. It is the case of the petitioners that as per the terms of appointment, examination for induction of LIC Agents normally used to be held twice in a month- but no such examination was held between Oct. 2009 to December, 2009. Each of the petitioners though inducted several persons for becoming agent, but required number of LIC agents could not be achieved. This also resulted in failure to achieve the target of premium collection by each petitioner. The petitioners requested for extension of period of probation. In spite of such requests, the respondent Sr. Divisional Manager terminated the services of the petitioners as Probationary Development Officer w.e.f. 27.01.2010 on the ground that respective petitioners have failed to

bring the stipulated business contained in the appointment letter and have also not been able to recruit the required number of LIC agents. The said order was issued on 03.03.2010, 26.02.2010, 03.03.2010 and 04.03.2010 respectively with respect to the petitioner Nos. 1 to 4.

14. Para 2,5 and 10 of the appointment letter of the petitioners as probationary development officer are quoted as under: -

2. PROBATIONARY PERIOD: You shall be on probation initially for a period of twelve months from the date of your joining duties as a probationary, but the Corporation may, in its sole discretion, extend your probationer period, provided that the total probationary period including the extended probationary period shall not exceed 24 months counted from the commencement of the probationary appointment. During the probationary period (which includes extended probationary period, if applicable) you shall be liable to be discharged from the services of the Corporation without any notice and without any cause being assigned.

5. DUTIES AND OBLIGATIONS:

(A) Your duties as a Development Officer shall be

(i) To Develop and increase the production of Life Insurance business in a planned way as far as may be practicable in the area that may be allotted to you or in which you are allowed to work from time to time through the agents placed under your supervision by the Corporation.

ii) To guide, supervise and direct the activities of the Agents placed under your supervision by the Corporation.

iii) To introduce suitable persons to the Corporation for Appointment as new Agents.

iv) To act generally in such a way as to activise existing Agents and motivate new Agents, so as to develop a stable agency force.

v) To render all such services to policyholders conducive to better policy servicing.

vi) To carry out the investigation of claims, revival of lapsed policies and liaison work in connection with the Salary Savings business.

vii) To perform such other duties as may be entrusted or assigned to you from time to time.

B) ..........................

10.MINIMUM BUSINESS

(i) During the probationary period you shall secure through the agents recruited at your instance competed life business of Rs.3 CRORE (S.A.) yielding a Scheduled First Year Premium Income (calculated as per policy norms) of not less that Rs.7.5 LAKH provided, however, that in case the pay and/or allowance admissible to you, under Clause 1 are increased during the period, the minimum business and the premium income which you should secure shall be increased proportionately.

(ii) The minimum business set out in (i) shall be spread over not less than 400 lives and shall be secured regularly through a network of dependable agencies.

(iii) You will be required to recruit minimum of 30 agents out of which 30 agents should have become active, 18 agents should individually have put in during that period the minimum business required of them in an agency year according to Rule (9) of the LIC of India (agents) Rules, 1972 and 12 agents should become Productive agents i.e. one who has completed either at least 20 lives or 12 lives with Scheduled First Year Premium Income of Rs. 1,00,000 in the agency year.

iv) If your probationary period is extended, you shall secure during the extended period such business as may be intimated to you.

15. As per Clause 2 of the Letters of Appointment, the period of probation was 12 months and it was in the sole discretion of the Respondent Corporation, whether to extend the probation for another 12 months or not. Clause 2 also provides that the probationer shall be discharged from the service of the corporation without any notice and without any cause being assigned. Duties and obligations of the probationary officers are provided in Clause 5 of the Letters of Appointment. As per the Clause 10, the petitioners were required to secure the minimum required business, i.e. recruiting 30 agents and achieve collection of LIC premium of Rs. 7.50 Lakhs in one year. As per clause 11 of the terms of employment, confirmation will, interalia, depend upon fulfillment of the minimum business requirement set out in para 10 and other functions performed up to the satisfaction of the competent authority. The expected performance and the minimum expectation from each probationer have been mentioned in a table in the appointment letter itself.

16. In the case of M. Venugopal v. LIC, (1994) 2 SCC 323, regulation 14 of the Life Insurance Corporation of India (Staff) Regulations, 1960 which were deemed to be Rules framed under Section 48(2)(cc) of the Life Insurance Corporation Act were considered. Clause 4 of the regulation 14 clearly provides that during the period of probation an employee shall be liable to be discharged from service without any notice. Para 9,14 and 15 of the aforesaid judgement is quoted as under: -

"9. Regulation 14 aforesaid has to be read as a statutory term of the contract of employment between the Corporation and the appellant. The order of appointment had fixed a target in respect of the performance of

the appellant which admittedly the appellant failed to achieve within the period of probation which was extended up to two years. As such the Corporation was entitled not to confirm the appellant in terms of the order of appointment and to terminate his service during the period of probation without any notice in terms of Regulation 14(4) aforesaid. Clauses 10 and 11 of the order of appointment along with Regulation 14 shall be deemed to be stipulations of the contract of employment under which the service of the appellant has been terminated............

14. ............. The termination of the service of the appellant during the period of probation is in terms of the order of appointment read with Regulation 14 of the Regulations, which shall be deemed to be now Rules under Section 48(2)(cc) of the Corporation Act.

15. Even under general law, the service of a probationer can be terminated after making an overall assessment of his performance during the period of probation and no notice is required to be given before termination of such service. This aspect has been examined by this Court in the case of The Governing Council of Kidwai Memorial Institute of Oncology, Bangalore v. Dr Pandurang Godwalkar where it has been pointed out that if the performance of the employee concerned during the period of probation is not found to be satisfactory on overall assessment, then it is open to the competent authority to terminate his service."

17. It has been clearly held by the Hon'ble Supreme Court that even under general law, the service of a probationer can be terminated after making an overall assessment of his performance during the period of probation and no notice is required to be given before termination of such service. Clause 4 of the regulation 14, which has a statutory force, clearly provides that during the period of probation an employee shall be liable to be discharged from service without any notice.

18. The nature of the orders of termination in the instant case are required to be examined.

19. The order of termination of each of the petitioners are similar. In order to appreciate the arguments of the parties the order of termination of petitioner no.1 is quoted as under: -

"Ref: Your termination from services of LIC of India Please refer to our letter Ref: JDO/Sales/DO Recruit, dated 28.01.2009, appointing you as a Development Officer on probation with effect from 28.01.2009. During the probation period ending on 27.01.2010, you have failed to bring in the stipulated business contained in your aforesaid appointment letter nor you have been able to recruit the number of agents as specified therein as per Para 10 of your appointment letter.

As such, we are constrained to terminate you from the services of LIC of India with effect from 28.01.2010, as per Para 2 of your appointment letter."

20. The specific case of the petitioners is that the impugned orders of termination are stigmatic in nature in view of the fact that the same refers to alleged inefficiency of the petitioners in achieving the targets. the Hon'ble Supreme Court in the case reported in (1974) 2 SCC 831 (Shamsher Singh vs. State of Punjab) has referred to paragraph 62 to 64 thereof to submit that it has been held in para-62 of the judgment that if the termination of service is based on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and therefore the rules of natural justice is required to be followed.

21. Date of completion of initial period of probation of 12 months period of probation was 27.01.2010. The petitioners' services were terminated vide orders dated 26.02.2010, 03.03.2010 and 04.03.2010 because they failed to achieve and secure the minimum required business or recruiting of agents w.e.f. 27.01.2010. Admittedly, there has been no extension of the period of probation. This court is of the considered view that Grant of extension of probation is within the domain of the respondents and extension of period of probation cannot be claimed as a matter of right by the petitioners.

22. It is important to note that all the letters of termination were issued after expiry of initial period of probation of 12 months and the respondents did not extend the period of probation for further period of 12 months and terminated the services of the petitioners citing reasons of non-fulfillment of the terms and conditions of employment.

23. It is not a disputed fact that the petitioners failed to achieve the targets, as set out by the Letters of Appointment. Regulation 14 of the LIC of India (Staff) Regulations, 1961 read with Clause 2 of the Letters of Appointment provide that during the period of probation an employee shall be liable to be discharged from service without any notice. The Senior Divisional Manager, after proper application of mind and keeping in view the performance of the petitioners through the probation period, decided to terminate the petitioners' services in terms of the Letters of Appointment.

24. In the judgement passed by the Hon'ble Division Bench of this court reported in 2005 SCC Online Jhar 413 (Life Insurance Corporation of India, Jamshedpur and Ors. versus Haripad Rohidas , it has been held that question of stigma does not arise when it has

been indicated in the termination letter that the incumbent had failed to achieve certain targets as indicated in the appointment letter. Para 11 of the said judgement is quoted as under: -

"11. We also agree with Mr. Prasad's submission that the question of stigma does not arise in the instant case because what had merely been indicated in the termination letter was that the writ petitioner had failed to achieve certain targets as indicated in the appointment letter."

25. In the present case also, the order of termination simply refers to non-achievement of certain targets as indicated in the appointment letter itself. The termination letter mentions that during the probation period ending on 27.01.2010, the petitioners have failed to bring in the stipulated business contained in their appointment letters and have not been able to recruit the number of agents as specified in Para 10 of the appointment letters. Consequently, the competent authority exercised power in terms of para 2 of the letters of appointment to terminate the appointment with effect from 28.01.2010. The termination of appointment is exactly upon expiry of initial 12 months of appointment as probationer and thereby the period of probation has not been extended. The extension of period of probation was not automatic, but upon satisfactory performance. The competent authority has applied mind on the performance of the petitioners and having not achieved the target by the petitioners, the authority terminated the services of the petitioners and thereby did not extend the period of probation. This court is of the considered view that non achievement of targets, which is the basis of termination of services of the petitioners (on probation), upon completion of initial period of probation of 12 months, and thereby not extending the period of probation, is not at all stigmatic in nature. Accordingly, such termination in terms of clause 2 of the appointment letters, does not require any compliance of principles of natural justice. Clause 2 of the letters of appointment on probation clearly provides that during the period of probation, an employee shall be liable to be discharged from service without any notice. Considering the fact that the orders of termination is not stigmatic, the aforesaid judgement relied upon by the learned counsel for the petitioner reported in (1974) 2 SCC 831 (Shamsher Singh vs. State of Punjab), does not apply to the facts and

circumstances of this case and does not help the petitioners in any manner whatsoever.

26. As a cumulative effect of the aforesaid findings, this court does not find any illegality or perversity in the impugned orders of termination. The impugned orders of termination are not stigmatic. The termination orders have been passed in terms of the letters of appointment of the petitioners upon expiry of the initial period of probation of 12 months, on account of non-achievement of certain targets as indicated in the appointment letters. Termination of a probationer on account of non-achievement of certain targets is not stigmatic.

27. Consequently, the writ petition is dismissed.

28. Interim order if any, is vacated.

29. Pending Interlocutory application, if any, is closed.

(Anubha Rawat Choudhary, J.) Binit AFR