Karnataka High Court
R Venkatanarayana vs The Deputy General Manager on 4 April, 2024
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF APRIL, 2024
BEFORE
THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
WRIT PETITION NO.24146 OF 2012 (S-DIS)
BETWEEN:
R. VENKATANARAYANA
S/O R. VENKATARAMANAPPA,
AGED ABOUT 51 YEARS,
R/AT C/O B.JAGADISH NAIDU,
NO.14-A, MUNESHWARA LAYOUT,
MANORAYANA PALAYA,
NEAR KAVERY SERVICE STATION,
R T NAGAR POST,
BANGALORE-560 032.
...PETITIONER
(BY SRI SAPPANNAVAR, ADVOCATE)
AND:
1. THE DEPUTY GENERAL MANAGER
DISCIPLINARY AUTHORITY,
THE NEW INDIA ASSURANCE CO. LTD.,
REGISTERED & HEAD OFFICE,
NEW INDIA ASSURANCE BUILDING,
NO. 87, M G ROAD FORT,
MUMBAI-400 001.
2. THE GENERAL MANAGER
APPELLATE AUTHORITY,
2
THE NEW INDIA ASSURANCE CO. LTD.,
REGISTERED AND HEAD OFFICE,
NEW INDIA ASSURANCE BUILDING,
NO.87, M G ROAD FORT.
MUMBAI-400001.
3. THE CHAIRMAN-CUM-MANAGING DIRECTOR
THE NEW INDIA ASSURANCE CO. LTD.,
REGISTERED & HEAD OFFICE,
NEW INDIA ASSURANCE BUILDING,
NO. 87, M G ROAD FORT,
MUMBAI-400 001.
4. SRI K GURUSWAMY
INQUIRY OFFICER/THE THEN
DIVISIONAL MANAGER,
LAST RETD., AS DEPUTY MANAGER AT
REGIONAL OFFICE, PUNE,
CARE OF THE NEW INDIA ASSURANCE
COMPANY LIMITED, REGIONAL OFFICE
P. KALIMGA RAO (MISSION ROAD) ROAD
BANGALORE-560 027.
(AMENDMENT CARRIED OUT AS PER
ORDER DT:13/7/2018)
...RESPONDENTS
(BY SRI B.C. SEETHARAMA RAO, ADVOCATE FOR R1-R3
R4 SERVED & UNREPRESENTED)
THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE
CONSTITUTION OF INDIA, PRAYING TO
QUASH THE ORDER DT.16.7.08 PASSED BY THE R1 VIDE
ANNEXURE-C THE ORDER DT. 04.12.2008, PASSED BY THE R2,
VIDE ANNEXURE-D, THE ORDER DT. 30.03.2009, PASSED BY
THE R3, VIDE ANNEXURE-E, BY ISSUE OF WRIT OF CERTIORARI.
3
THIS PETITION HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON 02.04.2024, COMING ON FOR PRONOUNCEMENT OF
ORDER THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
Petitioner is an Assistant Administrative Officer of
respondent No.3-New India Assurance Company Limited
who is assailing the dismissal of service by respondent
No.1-Disciplinary Authority and confirmed by respondent
No.2-Appellate Authority.
2. The facts leading to the case are as under:
One M/s. Mullangie Spintex Private Limited engaged in
the business of manufacturing cotton yarn obtained 7
insurance policies covering stock of cotton and yarn,
machinery and stores. A fire broke out on 09.04.1998 and
the insured alleged that it has suffered Rs.2 Crores worth of
cotton bales and damage is also caused to the machinery to
the tune of Rs.50,00,000/-. The respondent No.3-
Assurance company settled the claim by paying
Rs.33,00,000/- to the said company. Feeling aggrieved by
the claim determined by the respondent No.3/Assurance
Company, said M/s. Mullangie Spintex Private Limited
approached National Consumer Disputes Redressal Forum,
New Delhi.
3. The petitioner who is an employee of respondent
No.3-Assurance Company supports the insured and filed
two affidavits before the Commission. The National
Commission has enhanced the compensation to the tune of
Rs.1,49,44,000/-. The petitioner's unilateral filing of
affidavit led to initiation of departmental enquiry against
the petitioner herein. The dispute revolves around the
action of petitioner who was an employee of respondent
No.3-Assurance Company in supporting the insured party in
a litigation against the company. The respondent No.1-
Disciplinary Authority, after receipt of report, has inflicted
penalty of dismissal of service and the same is confirmed by
the Appellate Authority.
4. Heard learned counsel for the petitioner and
learned counsel appearing for the respondents.
5. The petitioner's stand while assailing the penalty
of dismissal before the Appellate Authority would be
relevant and would clinch the entire controversy between
the parties. The main ground urged in the appeal memo at
ground Nos.1 to 3 would be relevant and the same are
extracted as follows:
"1. The affidavits were meant for submitting
the same to Board for Industrial and Financial
Reconstruction as a document for sick industry but it
was misused by submitting to the National Forum.
2. According to Mr.R.Venkatanarayana, he
never committed that the assessed loss or loss was
payable but only mentioned the stocks available as
per the Register maintained by the client. The
entries in the Register were also initiated as on date
of loss by the then Divl. Manager, Mr. A.S.Natesh
and Dev. Officer Mr.R.Venugopal. While issuing the
Affidavits, Mr. Venkatanarayana was not aware that
the same could be produced before the Consumer
Forum for wrongful benefit. However, according to
him, while giving the judgment the Hon'ble Forum
has also taken into consideration other documents
submitted and not exclusively the affidavit submitted
by Mr. R.Venkatanarayana.
3. According to Mr. R. Venkatanarayana, he
visited the client only with good intention to retain
the business in Company's books."
6. On reading the above said grounds, it is clearly
evident that petitioner has not disputed the filing of two
affidavits in support of insurer's claim stating that the said
company has suffered loss to the tune of Rs.2,50,00,000/-
on account of fire. It is interesting to note that petitioner
while preferring an appeal before the Appellate Authority
has argued that his actions were motivated by good faith.
M/s. Mullangie Spintex Private Limited, an insured entity
challenging the claim settled by the respondent No.3-
Assurance Company has approached the National
Commission alleging that it has suffered significant loss due
to fire incident on 09.04.1998. The insured claimed loss
amounting to Rs.2 Crores. On the contrary, respondent
No.3 asserted that the company has suffered
Rs.33,00,000/- loss and the claim is accordingly settled and
therefore, the petitioner before the National Commission is
not maintainable.
7. It is quite shocking to note that during the
course of proceedings before the National Commission,
petitioner, an employee of respondent No.3-Assurance
Company filed two affidavits in support of the insurer's
claim. These affidavits asserted that the company has
incurred loss and in the affidavit, petitioner indicates that
he has verified the stock by way of personal visit to the
factory site.
8. The fundamental issue at hand is whether the
petitioner's actions constituted violation of professional
ethics and fiduciary duties owed to the employer. As an
employee of New India Assurance Company, the petitioner
had a duty to act in the best interest of the company and
uphold its interests particularly in disputed claims. By
supporting the insured party in the litigation against the
respondent No.3-Assurance company, the petitioner
breached this duty and compromised the integrity of
insurer-insured relationship. The petitioner's assertion of
acting in good faith is untenable given the clear conflict of
interest and breach of trust involved.
9. Employees are often privy to sensitive
information about their company's operations and clients.
Testifying against one's employer in a legal dispute creates
a clear conflict of interest. The employee's obligation
should be to represent and defend the interests of the
company, not to provide evidence that could potentially
harm it. The act of petitioner fundamentally appearing in a
claim dispute case without authorization and deposition
against its own company is not only highly irregular but also
constitutes a serious breach of loyalty, confidentiality and
professional ethics. The said action of the petitioner also is
found to be troubling on multiple fronts. Firstly, it
represents a profound breach of loyalty, a cornerstone of
the employer-employee relationship. Employees are
expected to act in the best interests of their employer and
willingly testifying against the company undermines this
fundamental trust. The petitioner's conduct also gives rise
to a blatant conflict of interest. Additionally, petitioner's
action of traveling all the way to New Delhi and filing two
affidavits to support an insured also constitutes a flagrant
breach of confidentiality. This conduct also violates the
professional ethics expected in insurance industry.
10. Referring to these significant details, respondent
No.1-Disciplinary Authority was justified in inflicting penalty
of dismissal of service. The Disciplinary Authority deemed
this action as egregious behavior. The appellate authority
has also taken cognizance of the ramifications of the
petitioner filing affidavits before the National Commission
which led to enhancement of compensation.
11. The petitioner's grievance is that he was not
heard in the matter and the Disciplinary Authority has not
taken cognizance of absence of credible evidence and there
is no proper assessment of material by the Disciplinary
Authority and Appellate Authority is not supported by any
valid grounds and materials. The Appellate Authority on
meticulous examination has observed that petitioner was
provided ample time to summon defense witnesses and was
afforded sufficient opportunity to present his defense in
accordance with the principles of natural justice.
Furthermore, since no new material facts were presented in
the appeal that warranted revising the penalty imposed by
the Disciplinary Authority, the Appellate Authority deemed
the imposition of penalty as just and reasonable,
considering the severity of the charges. The order of
Appellate Authority exhibits no malafides or arbitrariness,
indicating its fairness and lawfulness. Consequently, in the
absence of any apparent legal infirmity or procedural
irregularity, this Court is precluded from undertaking a
review of the Appellate Authority's order.
12. Therefore, this Court is of the view that dismissal
was justified and lawful. Given the facts and circumstances
of the case and having taken cognizance of the grave
misconduct and actions of petitioner, this Court is not
inclined to grant any indulgence and there is no material
which would compel this Court to review the penalty
inflicted by the Disciplinary Authority and confirmed by the
Appellate Authority.
13. In view of the above observations, the writ
petition stands dismissed.
Pending I.As.', if any, do not survive for consideration
and stand disposed of accordingly.
Sd/-
JUDGE
CA
