Madhya Pradesh High Court

V.K. Siyar vs Life Insurance Corporation Ltd. on 3 May, 2024

Author: Sanjay Dwivedi

Bench: Sanjay Dwivedi

IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE SANJAY DWIVEDI
ON THE 3rd OF MAY, 2024
WRIT PETITION NO. 171 OF 2015

BETWEEN:-

V.K. SIYAR, AGED ABOUT 54 YEARS, S/O
LATE SHRI POORAN LAL SIYAR, C/O SHRI
R.C. GUPTA, MOTI NAGAR, NEAR SAI
MANDIR, NOMIA KARBAL, PARASIA,
DISTT. CHHINDWARA, M.P.

... PETITIONER
(BY MS SANA KHAN - ADVOCATE)

AND

1. LIFE INSURANCE CORPORATION LTD.,
THROUGH ITS CHAIRMAN,
YOGAKSHAEMA, JEEVAN BEEMA MARG,
MUMBAI (MAHARASHTRA).
2. MANAGING DIRECTOR (APPELLATE
AUTHORITY) CENTRAL OFFICE, LIFE
INSURANCE CORPORATION OF INDIA
YOGAKSHAEMA, JEEVAN BEEMA MARG,
MUMBAI (MAHARASHTRA).
3. ZONAL OFFICER (DISCIPLINARY
AUTHORITY), CENTRAL ZONAL OFFICE,
LIFE INSURANCE CORPORATION OF
INDIA, 60-B HOSHANGABAD ROAD,
BHOPAL, M.P.
... RESPONDENTS
2

(BY SHRI D.K. DIXIT - SENIOR ADVOCATE - ASSISTED BY
SHRI ANSHUL DIXIT - ADVOCATE)
................................................................................................................................................

Reserved on : 16.04.2024
Pronounced on : 03.05.2024
................................................................................................................................................
This petition having been heard and reserved for orders, coming on
for pronouncement this day, the court pronounced the following:

ORDER

Petitioner has filed this petition under Article 226 of the Constitution of India claiming following relief:-

"i) Both the orders passed in Annexure P/1 are liable to be quashed.

ii) The respondents be directed to suitably modified the order passed against the petitioner.

iii) Any other relief which the Hon'ble Court thinks fit and appropriate be also granted to the petitioner."

2. By order dated 26th March, 2014 (Annexure P/1) passed by the Executive Director (Personnel) (Disciplinary Authority) in a matter of regular departmental enquiry conducted against the petitioner, penalty of "reduction by two stages in the time scale of pay applicable to his cadre"

in terms of Regulation 39(1)(d) and "recovery of Rs.48,635/-" in terms of Regulation 39(1)(c) of the Life Insurance Corporation of India (Staff) Regulations, 1960 (for brevity 'Regulations, 1960') has been imposed upon the petitioner. Vide order dated 27th November, 2014 the Appellate

Authority has also dismissed the appeal affirming the order passed by the Disciplinary Authority.

3. In the present case, the challenge is made on the ground that the impugned orders have been passed in violation of principles of natural justice. The reply submitted by the petitioner to show cause notice issued to him was not considered and the enquiry conducted in violation of provisions prevailing in the respondent department.

4. The challenge is also made on the ground that it is a case of double jeopardy. The petitioner cannot be punished twice. According to the counsel for the petitioner, the punishment lowering down the petitioner two stages from the pay scale getting by him is one punishment and the second punishment is recovery and as such both the penalties cannot be inflicted upon him simultaneously. It is also submitted by the learned counsel that the loss suffered by the LIC can be recovered from the petitioner by filing a civil suit but that has not been done and as such the orders are liable to be set aside.

5. The respondents have submitted their reply denying the allegations made in the petition taking stand therein that looking to the charges levelled against the petitioner, punishment inflicted upon him is proportionate and adequate. It is submitted in the reply that there is no violation of principle of natural justice. It is also submitted that as per the charges levelled and proved by the prosecution, the misconduct alleged to have been committed by the petitioner was of serious nature. It is submitted that the prosecution has proved the charges by adducing sufficient evidence and the total loss caused to the respondent-

Corporation was of Rs. 3,34,467/- and it was divided proportionately among the persons who were found involved in such a fraud. The punishment inflicted is adequate and in consonance with the charges levelled against the petitioner. According to the respondents, the petitioner was totally negligent not only while performing duties but also at the time of facing the enquiry. It is also stated that there is nothing illegal on the part of the respondents while conducting disciplinary enquiry and inflicting punishment upon the petitioner that too after holding him guilty. The procedure prescribed to conduct the regular departmental enquiry has been followed and full opportunity has been provided to the petitioner. The Appellate Authority has passed the order rejecting the appeal of the petitioner after full application of mind. According to respondents, the petition is without any substance and is liable to be dismissed.

6. Learned counsel for the petitioner during the course of argument tried to establish that proper opportunity of hearing was not granted to the petitioner and he was not allowed to take assistance of an advocate during the course of enquiry. She has also submitted that it is a case of double jeopardy. The penalties i.e. recovery and the reduction in pay scale lowering down the petitioner by two stages cannot be imposed upon him simultaneously.

7. However, I am not satisfied with the submission made by the learned counsel for the petitioner as she has failed to demonstrate as to when and at what stages the principles of natural justice have been violated. On the contrary, the respondents have very categorically stated in their reply that their is no violation of principles of natural justice and

the prescribed procedure for conducting the disciplinary proceeding has been followed. From the reply and the documents annexed therewith, it reveals that one Shri Deepak Sharma impersonating himself as Shri Dinesh Mishra, Agent, received some of the loan cheques from the Branch Office, Chhindwara and it was the petitioner who without obtaining authorization letter from the policy holders handed over the cheques to Shri Deepak Sharma. The petitioner failed to verify the signature of the policy holders. Thereafter, a complaint was made to the police, which was registered vide FIR No. 676 under Section 420 of the Indian Penal Code at Kotwali, Police Station Chhindwara. Consequently, a charge sheet was issued to the petitioner on 08.02.2012 alleging misconduct but he denied the charge and as such enquiry was conducted against him. The Enquiry Officer and the Presenting Officer were appointed and after concluding the enquiry, report was submitted on 27.11.2012 giving finding of proving charge of misconduct against the petitioner. The euquiry report was served upon the petitioner inviting his response and petitioner submitted his reply vide letter dated 08.01.2013. The Disciplinary Authority, after considering the enquiry report and reply of the petitioner, issued show cause notice to him on 17.01.2014 proposing punishment of reduction by two stages in the time scale applicable to his cadre in terms of Regulation 39(i)(d) and recovery of Rs. 48,635/- in terms of Regulation 39(1)(c) of Regulations, 1960. The recovery of the said amount was against the loss suffered by the respondents that has been established during the course of enquiry. It is not a case of double jeopardy. The loss suffered by the respondent- Corporation was to be adjusted by recovering the amount defrauded from the erring officers and the total loss was divided proportionately

among the officers found involved in such fraud and accordingly recovery of an amount of Rs. 48,635/- was initiated against the petitioner.

8. Thus, from the above, I do not find any substance in the submission made by the learned counsel for the petitioner that the decision making process suffers from violation of principles of natural justice.

9. The respondents have placed reliance upon a decision rendered in the case of State of U.P. v. Nand Kishore Shukla & Anr reported in AIR 1996 SC 1561 in which the Supreme Court has observed that the nature of punishment inflicted by the Disciplinary Authority upon a delinquent against whom charge found proved, interference by the Court is not permissible, unless punishment of removal cast stigma on the delinquent. In the said case, five charges proved against the delinquent employee and punishment of removal was imposed upon him. The Court declined to interfere in the punishment saying that it is not the job of the Court as the Court is not sitting as an Appellate Authority.

10. The respondents have further placed reliance in the cases of State Bank of Patiala and others v. S. K. Sharma reported in AIR 1996 SC 1669 and Indian Oil Corporation Ltd. and another v. Ashok Kumar Arora reported in (1997) 3 SCC 72.

11. In State Bank of Patiala (supra) the Supreme Court has explained the scope of interference in the matter of disciplinary proceeding and observed as under:-

"32. We may summarise the principles emerging from the above discussion. (These are by no means intended to be exhaustive and are evolved keeping in view the context of disciplinary enquiries and orders of punishment imposed by an employer upon the employee):

(1) An order passed imposing a punishment on an employee consequent upon a disciplinary/departmental enquiry in violation of the rules/regulations/statutory provisions governing such enquiries should not be set aside automatically. The Court or the Tribunal should enquire whether (a) the provision violated is of a substantive nature or (b) whether it is procedural in character.

(2) A substantive provision has normally to be complied with as explained hereinbefore and the theory of substantial compliance or the test of prejudice would not be applicable in such a case.

(3) In the case of violation of a procedural provision, the position is this: procedural provisions are generally meant for affording a reasonable and adequate opportunity to the delinquent officer/employee. They are, generally speaking, conceived in his interest. Violation of any and every procedural provision cannot be said to automatically vitiate the enquiry held or order passed. Except cases falling under -- "no notice", "no opportunity" and "no hearing" categories, the complaint of violation of procedural provision should be examined from the point of view of prejudice, viz., whether such violation has prejudiced the delinquent officer/employee in defending himself properly and effectively. If it is found that he has been so prejudiced, appropriate orders have to be made to repair and remedy the prejudice including setting aside the enquiry and/or the order of punishment. If no prejudice is established to have resulted therefrom, it is obvious, no interference is called for. In this connection, it may be remembered that there may be certain procedural provisions which are of a fundamental character, whose violation is by itself proof of prejudice. The Court may not insist on proof of prejudice in such cases. As explained in the body of the judgment, take a case where there is a

provision expressly providing that after the evidence of the employer/government is over, the employee shall be given an opportunity to lead defence in his evidence, and in a given case, the enquiry officer does not give that opportunity in spite of the delinquent officer/employee asking for it. The prejudice is self-

evident. No proof of prejudice as such need be called for in such a case. To repeat, the test is one of prejudice, i.e., whether the person has received a fair hearing considering all things. Now, this very aspect can also be looked at from the point of view of directory and mandatory provisions, if one is so inclined. The principle stated under (4) hereinbelow is only another way of looking at the same aspect as is dealt with herein and not a different or distinct principle.

(4)(a) In the case of a procedural provision which is not of a mandatory character, the complaint of violation has to be examined from the standpoint of substantial compliance. Be that as it may, the order passed in violation of such a provision can be set aside only where such violation has occasioned prejudice to the delinquent employee.

(b) In the case of violation of a procedural provision, which is of a mandatory character, it has to be ascertained whether the provision is conceived in the interest of the person proceeded against or in public interest. If it is found to be the former, then it must be seen whether the delinquent officer has waived the said requirement, either expressly or by his conduct. If he is found to have waived it, then the order of punishment cannot be set aside on the ground of the said violation. If, on the other hand, it is found that the delinquent officer/employee has not waived it or that the provision could not be waived by him, then the Court or Tribunal should make appropriate directions (include the setting aside of the order of punishment), keeping in mind the approach adopted by the Constitution Bench in B. Karunakar [(1993) 4 SCC 727 : 1993 SCC (L&S) 1184 : (1993) 25 ATC 704] .

The ultimate test is always the same, viz., test of prejudice or the test of fair hearing, as it may be called.

(5) Where the enquiry is not governed by any rules/regulations/statutory provisions and the only obligation is to observe the principles of natural justice

-- or, for that matter, wherever such principles are held to be implied by the very nature and impact of the order/action -- the Court or the Tribunal should make a distinction between a total violation of natural justice (rule of audi alteram partem) and violation of a facet of the said rule, as explained in the body of the judgment. In other words, a distinction must be made between "no opportunity" and no adequate opportunity, i.e., between "no notice"/"no hearing" and "no fair hearing". (a) In the case of former, the order passed would undoubtedly be invalid (one may call it 'void' or a nullity if one chooses to). In such cases, normally, liberty will be reserved for the Authority to take proceedings afresh according to law, i.e., in accordance with the said rule (audi alteram partem). (b) But in the latter case, the effect of violation (of a facet of the rule of audi alteram partem) has to be examined from the standpoint of prejudice; in other words, what the Court or Tribunal has to see is whether in the totality of the circumstances, the delinquent officer/employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query. [It is made clear that this principle (No. 5) does not apply in the case of rule against bias, the test in which behalf are laid down elsewhere.] (6) While applying the rule of audi alteram partem (the primary principle of natural justice) the Court/Tribunal/Authority must always bear in mind the ultimate and overriding objective underlying the said rule, viz., to ensure a fair hearing and to ensure that there is no failure of justice. It is this objective which should guide them in applying the rule to varying situations that arise before them.

(7) There may be situations where the interests of State or public interest may call for a curtailing of the rule of audi alteram partem. In such situations, the Court may have to balance public/State interest with the requirement of natural justice and arrive at an appropriate decision.'

12. In Indian Oil Corporation Ltd. (supra) the Supreme Court dealt with the scope of judicial review by the High Court under Article 226 of the Constitution in the matter of departmental enquiry and the finding recorded therein. The Supreme Court observed as under:

"20. At the outset, it needs to be mentioned that the High Court in such cases of departmental enquiries and the findings recorded therein does not exercise the powers of appellate court/authority. The jurisdiction of the High Court in such cases is very limited for instance where it is found that the domestic enquiry is vitiated because of non-observance of principles of natural justice, denial of reasonable opportunity; findings are based on no evidence, and/or the punishment is totally disproportionate to the proved misconduct of an employee. There is a catena of judgments of this Court which had settled the law on this topic and it is not necessary to refer to all these decisions. Suffice it to refer to a few decisions of this Court on this topic viz. State of A.P. v. S. Sree Rama Rao [(1964) 3 SCR 25 : AIR 1963 SC 1723 : (1964) 2 LLJ 150] , State of A.P. v. Chitra Venkata Rao [(1975) 2 SCC 557 : 1975 SCC (L&S) 349 : (1976) 1 SCR 521] , Corpn. of the City of Nagpur v. Ramchandra [(1981) 2 SCC 714 : 1981 SCC (L&S) 455 : (1981) 3 SCR 22] and Nelson Motis v. Union of India [(1992) 4 SCC 711 : 1993 SCC (L&S) 13 : (1993) 23 ATC 382 :

AIR 1992 SC 1981] ."

13. Thus, in view of the observation made by the Supreme Court in the cases referred hereinabove explaining the scope of judicial review by the High Court under Article 226 of the Constitution in the matter of departmental enquiry and the finding recorded therein and also considering the finding recorded by the Disciplinary Authority and the Appellate Authority inflicting punishment upon the petitioner that too on the basis of charges levelled against him, I do not find that there is any scope of interference in the said finding. Looking to the charges

levelled, the punishment cannot be considered to be inadequate. There is no violation of principles of natural justice in a decision making process. Thus, no interference in the matter is called for.

14. The petition fails and is hereby dismissed accordingly.

(SANJAY DWIVEDI) JUDGE

Raghvendra

RAGHVENDRA SHARAN SHUKLA 2024.05.04 12:21:44 +05'30'