Krishnaraj M.V v Life Insurance Corporation of India

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **WEDNESDAY, THE 23RD DAY OF MAY 2018 / 2ND JYAISHTA, 1940** **WP(C).No. 1680 of 2015 ----------------------** **PETITIONER ----------** **KRISHNARAJ M.V, S/O.V.PRABHAKARAN,KRISHNAMRUTHAM,KOLAPPA,IRIKKUR P.O., KANNUR DISTRICT,TERMINATED PROBATIONARY DEVELOPMENT OFFICER LIC OF INDIA, SATELLITE BRANCH OFFICE,RAJAPURAM, BUILDING NO. KP4/496L,MALAKALLU P.O -671 532.** ## **BY ADV.SRI.KALEESWARAM RAJ** **RESPONDENT(S):** - **--------------** **1. LIFE INSURANCE CORPORATION OF INDIA, REPRESENTED BY THE MANAGING DIRECTOR, LIFE INSURANCE CORPORATION OF INDIA CENTRAL OFFICE, NARIMAN POINT,MUMBAI - 400 021.** **2. SENIOR DIVISIONAL MANAGER, LIFE INSURANCE CORPORATION OF INDIA, KOZHIKODE DIVISIONAL OFFICE, SALES DEPARTMENT, JEEVAN PRAKASH, P.B NO. 177,KOZHIKODE - 673 001.** **3. MANAGER (SALES) LIFE INSURANCE CORPORATION OF INDIA, KOZHIKODE DIVISIONAL OFFICE, SALES DEPARTMENT, JEEVAN PRAKASH, PB NO. 177,KOZHIKODE - 673 001.** **BY ADV. SRI.T.V.AJAYAKUMAR** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23-05-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.V.** **WP(C).No. 1680 of 2015 (H) --------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS ------------------------** - **P1 TRUE COPY OF THE LETTER DT. 29.5.13 ISSUED BY THE 2ND RESPONDENT.** **P2 TRUE COPY OF THE LETTER DT. 301.11.13 ISSUED BY THE 3RD RESPONDENT.** - **P3 TRUE COPY OF THE LETTER DT. 09.6.14 ISSUED BY THE 3RD RESPONDENT.** - **P4 TRUE COPY OF THE LETTER SUBMITTED BY THE PETITIONER.** - **P5 TRUE COPY OF THE LETTER DRT. 18.10.14.** - **P6 TRUE COPY OF THE LETTER DT. 11.11.14 ISSUED BY THE SENIOR BRANCH MANAGER, BRANCH OFFICE, KANHANGAD.** - **P7 TRUE OCPY OF THE LETTER DT. 11.9.14.** - **P8 TRUE COPY OF THE LETTER DT. 06.12.14.** - **P9 TRUE COPY OF THE LETTER DT. 20.12.14.** **PETITIONERS EXHIBITS IA.NO.13164/2015 IN WPC 1680/2015 ------------------------------------------------------** ## **P9 TRUE COPY OF THE EMPLOYMENT NOTICE DOWNLOADED FROM THE OFFICIAL WEBSITE.** **RESPONDENTS EXHIBITS: NIL** **--------------------** **/TRUE COPY/** **K.V. P.S.TO JUDGE 31.5.2018** ## **P.V.ASHA J.** ## **-----------------------------------W.P.(C).No.1680 of 2015** **-------------------------------------** Dated this the 23[rd] day of May, 2018 ## **J U D G M E N T** Petitioner, who has been working as Probationary Development Officer under the respondent, Life Insurance Corporation of India, has filed this writ petition challenging Ext.P5 order by which his services have been terminated. 2. Petitioner was appointed as Apprentice Development Officer as per Ext.P1 order dated 29.05.2013 issued by the Senior Divisional Manager of LIC, Kozhikode Division. On completion of apprenticeship, petitioner was offered appointment as Probationary Development Officer as per Ext.P2 order dated 30.11.2013 with effect from 01.12.2013. The appointment was offered subject to several conditions W.P.(C).No.1680 of 2015 2 in clause 1 to 14 of Ext.P2. It was informed that in case the terms of Ext.P2 were acceptable to the petitioner, he can report for duty to the Chief Manager/Sr.Br.Manager, Satellite Office, Rajapuram on 02.12.2013. The petitioner accepted the offer. 3. While working as Probationary Development Officer, he received Ext.P3 show cause notice informing him that his performance was very poor even after six months of commencement of his probation; as per Sl.No.10 of his appointment letter providing for the minimum business to be done by him, he shall secure scheduled first year premium income of Rs.13,92,400/- which shall be spread over not less than 300 policies secured through his agents and he should recruit a minimum of 15 agents. As against 300 number of policies he could secure only 8 policies as on 31.05.2014; recruit only 4 agents and secure the minimum SFYPI for a sum of Rs.52,612/-. It W.P.(C).No.1680 of 2015 3 was stated that as per Sl.No.2 of his appointment letter, he was liable to be discharged from the services of the Corporation during the probationary period without any notice and without assigning any reason. Referring to the performance review letters issued to the petitioner from January 2014 to 13.05.2014 by the Branch Manager it was stated that there was no improvement in his performance. He was therefore, requested to furnish his explanation against the proposal to take action against him in tune with Sl.No.2 of the appointment letter within a period of 7 days. Petitioner submitted Ext.P4 letter, admitting that his performance was a little low. However, it was stated that he was working hard in the field regularly to recruit agents and to get business. Stating that he had recruited 15 agents, out of which 7 agents got license, he assured that he would be able to achieve the target of number of W.P.(C).No.1680 of 2015 4 agents by the next training batch and that he was planing to give 20 'retire and enjoy' plan to achieve the number of policies and premium. He therefore requested to give him some more time to prove himself. Ext.P5 letter was issued thereafter, on 18.10.2014 by which Sr.Divisional Manager informed the petitioner that on review of his performance by the Divisional Marketing Officials it was found that the petitioner failed to achieve the target; in spite of all the support and guidance given to him, there was very little improvement in his performance. It was stated that as on 15.10.2014 he could secure only 12 policies as against the required number of 300; the first year premium income was only a sum of the premium was Rs.86,917/- as against the prescribed sum of Rs.13,92,400/- and he could recruit only 10 agents as against 15. It was stated that due to his poor performance on all the 3 parameters, his W.P.(C).No.1680 of 2015 5 services were terminated with immediate effect as outlined in Sl.No.6(A) of the appointment letter dated 29.05.2013. Petitioner was also directed to remit the liquidated damages and other dues, if any in the branch office. This was followed by Ext.P6 letter dated 11.11.2014, by which the petitioner was directed to remit a sum of Rs.6383/- in the cash counter towards the liquidated damages. In Ext.P9 letter dated 20.12.2014 also he was directed to pay the liquidated damages within 15 days. This writ petition is filed in the above circumstances challenging the orders Exts.P5, P6 and P9. 4. According to the petitioner, the respondent LIC adopted a discriminatory treatment towards petitioner by terminating his services even before he completed the period of probation which was to be over only on 30.11.2014. Petitioner has produced Ext.P8 order issued in the case of one Shri W.P.(C).No.1680 of 2015 6 Muralimohan by which he was granted extension of probation for a period of six months. The petitioner submits that in his case he was not even allowed to complete the period of probation. It is also his case that the order Ext.P5 was passed without considering his explanation in Ext.P4 in which he assured to achieve the target. He claims that there was no proper consideration or assessment of performance and hence the termination invoking Clause 6A of Ext.P1 and the direction to remit liquidated damages are unreasonable. 5. The respondents have filed counter affidavit stating that petitioner was given sufficient time to improve his performance; despite the support and guidance from all the superior officers, petitioner failed to improve himself even after the issuance of various performance review letters which were being issued from January 2014 onwards; respondents did not W.P.(C).No.1680 of 2015 7 have any other option but to discharge the petitioner during the period of probation. It is stated that petitioner's appointment was subject to the conditions mentioned in Ext.P2 order of appointment, in which clause 2 specifically provides that he would be on probation for a period of 12 months from the date of joining duty and it is upto the discretion of the respondents whether to extend his probation; it was also open to the respondents to discharge the petitioner during the period of probation without any notice and without assigning any cause. Clause 5 of Ext.P2 letter of appointment provides for the duties cast upon the petitioner which is mainly to increase the business of life insurance in a planned manner. Clause 10 of that letter provided for the target to be achieved, according to which, he has to secure a minimum of 15 agents and he has to complete life business yielding a Scheduled First Year Premium W.P.(C).No.1680 of 2015 8 Income (SFYPI) of not less than Rs.13,92,400/-. In addition to that there should have been 300 policies secured by him through agents. The number of agents to be recruited by him is 15. He is also bound by the LIC (Staff) Regulations, 1960. As per Regulation 14(4) of the Staff Regulations an employee is liable to be discharged from service during the period of probation without any notice. Petitioner joined duty as Probationary Development Officer, accepting all the conditions mentioned in Ext.P2 order. It is stated that Ext.P3 show cause notice was issued on completion of 6 months, seeing that there was no progress in the work of the petitioner, even after the performance appraisal review letters like Ext.R1(a) issued by the Marketing Manager from January onwards every month, giving him sufficient guidance for improvement. Though petitioner had submitted Ext.P4 reply, saying that he was planing to W.P.(C).No.1680 of 2015 9 achieve the target, there was no improvement; Ext.P5 order was passed after a period of 3 months. It is stated that he could employ only 7 agents and his 7 number team added only 2 polices as on 06.08.2014 and he collected a premium amount of Rs.0.09 Lakhs on 31.07.2014: as his performance continued to be poor as on 12.08.2014 and 11.09.2014, it was found necessary to discharge him. It is stated that he did not take any earnest effort to keep his performance even after sending Ext.P4 reply to fulfill the prescribed norms. It is stated that by letters dated 06.08.2014, 11.09.2014, 04.10.2014 etc., he was asked to state the details of the steps he had taken to complete the prescribed norms as provided in Clause 10 of Ext.P2; but he did not submit any reply. It is therefore stated that the second respondent was convinced that there would not be any improvement in the performance of the petitioner and in the light of W.P.(C).No.1680 of 2015 10 the review letters, monthly reports and the appraisal reports in respect of the petitioner, Ext.P5 letter was issued on 18.10.2014 terminating his services, in accordance with the provisions contained in the order of appointment Ext.P2 as well as the LIC (Staff) Regulations. 6. Regarding Ext.P8 letter issued in the case of one Shri Muralimohan on 06.12.2014 granting him extension of probation for a period of 6 months, it is stated that he had achieved 77.3% in the target of number of polices, 24.80% in SFYPI and recruited 80% of the agents required. At the same time, petitioner could achieve only 2.6% of his allotted targets in the number of polices, 3.77% in SFYPI and 3.6% of agents as on 21.07.2014 when he had submitted Ext.P4 reply. In the case of Shri Vipin K. it was stated that he had recruited 12 agents, introduced 49 polices and collected 2.49 lakhs as premium as on W.P.(C).No.1680 of 2015 11 31.10.2014 which is much higher than that of the petitioner. Therefore, it is stated that the case of the petitioner as well as that of Shri Muralimohan and Vipin K. are entirely different and not comparable. Regarding the liquidated damages, it is stated that as per paragraph 6(A) of Ext.P1 order, a person who is discharged from service or who is getting relieved on resignation before the completion of 4 years of service, is liable to pay liquidated damages of Rs.25,000/-. Since petitioner was relieved during the period of probation, he was liable to pay liquidated damages and therefore, Exts.P6 and P9 letters were issued directing him to pay the liquidated damages. It is stated that the salary which was payable to petitioner from 01.10.2014 to 23.10.2014 was adjusted against the liquidated damages and the balance amount of Rs.6,383/- was subsequently paid by the petitioner in cash on W.P.(C).No.1680 of 2015 12 05.03.2015 on the basis of Exts.P6 and P9 letters. 7. Heard the learned counsel for the petitioner and the learned Standing Counsel for the respondents. 8. It is an admitted fact that the petitioner accepted the conditions in the offer of appointment before he joined duty as Probationary Development Officer. As per Clause 2 of Ext.P2, he was liable to be discharged from service of the Corporation without notice and without assigning any cause during the period of probation. Even though, the period of probation was fixed as 12 months from the date of joining, it was open for the respondents to discharge him during the period of probation. Clause 5 provides for the duties and obligations as a Probationary Development Officer. Sub Clause 1 under this Clause provides that a Development Officer has to develop and increase the production of Life Insurance business in a planned way. Clause 10 provides for W.P.(C).No.1680 of 2015 13 minimum business. As per Sub Clause 1 of Clause 10 petitioner has to secure through the agents recruited by him a minimum completed life business yielding SFYPI of not less than Rs.13,92,400/- during the period of probation and it shall be spread over not less than 300 polices, secured regularly through the agents. He was required to recruit minimum of 15 agents. The appointment of the petitioner was subject to the LIC (Staff) Regulations, 1960. Ext.P3 show cause notice was issued to petitioner in July 2014 after he was given sufficient warnings through review letters referring to his performance right from the beginning and the action to be taken against him pointing out that there was no improvement in his performance and he was yet to reach anywhere near the target. Order Ext.P5 was issued thereafter in October, 2014, after evaluating the performance of the petitioner in each and every month with reference W.P.(C).No.1680 of 2015 14 to the target fixed in Ext.P2 letter, the reply given by petitioner in Ext.P4, after taking into account the letters on review of his performance issued by the Branch Manager as well as that of the Marketing Manager since January 2014. From Ext.P5 letter it is evident that the performance review letters issued to the petitioner in each month starting from 15.01.2014 by the Br. Manager and the monthly review letters issued from January to September 2014 issued by the Marketing Manager, reviewing his performance and with reference to the report of official review meeting held at STC Kozhikode on 20.02.2014. Clause 14 of the LIC (Staff) Regulations governing the petitioner as well as Ext.P2 letter offering him appointment, provides for discharge of a probationer even without issuing any notice or assigning any reason. In this case several letters are issued to petitioner apart from Ext.P3 show cause notice. Therefore, it cannot W.P.(C).No.1680 of 2015 15 be said that the termination of service of the petitioner during the period of probation is illegal. The respondents have every right to discharge the petitioner, who was on probation, in case, his performance was not found satisfactory, even without issuing a show cause notice. 9. Learned counsel for the petitioner relied on the judgment of the Apex Court in **V.P.Ahuja v. State of Punjab and Others:** [(2000) 3 SCC 239] in support of the contention that there cannot be an order of termination which casts a stigma and such orders cannot be passed without holding a regular enquiry and without giving opportunity of hearing to the employee. However, I find that the petitioner's services were not terminated on the basis of any complaint or any allegation relating to any misconduct, for which an enquiry was required. Ext.P2 order of appointment refers to the target to be W.P.(C).No.1680 of 2015 16 achieved; petitioner does not have a case that he had reached anywhere near the target or minimum requirement mentioned in Ext.P2 order. 10. Learned counsel for the petitioner also relied on the judgment of the High Court of Andhra Pradesh reported in **D. Jeevan Lal v LIC of India, Secunderabad** [(2010) SCC Online AP 765]. The said judgment was also one relating to the termination of service of a Probationary Development Officer during the period of probation. It was found that certain development officers were granted extension of probation while the petitioner therein was not granted. It was held that even though Corporation had the right to terminate the probation without assigning any reason, it cannot discriminate between the persons. The learned Judge found that the petitioner therein ought to have been accorded the very same treatment which was given to others who had W.P.(C).No.1680 of 2015 17 not achieved the target, but granted extension of probation. In the present case petitioner refers to the case of one Muralimohan and Vipin. The respondents have explained the circumstances under which their probation were extended. It is also clear from the order Ext.P8 issued in the case of Shri Muralimohan, that he had only 3 more agents to be recruited; he had secured 232 polices. In the light of the contentions raised by the respondents in the counter affidavit in paragraphs 9 and 10, which explains the difference in the performance of the persons, who were granted extension of probation, it is clear that their performance is incomparable to that of the petitioner. Therefore, it cannot be said that there was any discriminatory treatment towards petitioner just because he was not allowed to complete the period of probation or that he was not granted extension of probation. Even on completion of W.P.(C).No.1680 of 2015 18 10 months the petitioner could achieve only 2.6 of his allotted target, 3.77% of number of polices and 3.6% of the agents to be recruited. 11. The judgment dated 19.02.2015 in W.P.(C) No.8114 of 2013 of the Delhi High Court, relied on by the learned Counsel for the petitioner was in respect of termination of service of a cook who was working in CRPF during probation. The petitioner therein was arrested for offence of theft in which they were found guilty. It was therefore found that a fullfledged inquiry was necessary. The circumstances in the present case are entirely different. 12. The judgments relied on by the learned Counsel for the petitioner cannot be applied in the circumstances arising in the case. Ext.P5 order only says that his performance was poor. Therefore it cannot be said that it is stigmatic. I do not find any reason to interfere with the termination of the W.P.(C).No.1680 of 2015 19 services of petitioner. In the above circumstances, the contention regarding discrimination also is out of place. However, I find that the direction to remit the liquidated damages as well as the recovery of the same from the petitioner by adjusting his salary for October 2014 and by recovering the balance amount of a sum of Rs.6,383/- from him are illegal and unreasonable. The order of appointment of the petitioner Ext.P2 does not provide for a condition that on discharge from service, he has to remit any amount towards liquidated damages. No provision in the regulation is also pointed out which allows such a recovery. The provisions contained in Ext.P1 order cannot be applied for the purpose of realizing the liquidated damages, in the absence of any provision for the same either in Ext.P2 order or in the Regulations. I find that the recovery of liquidated W.P.(C).No.1680 of 2015 20 damages from the petitioner, who was discharged before allowing him to complete probation, is absolutely unfair and unjust. Therefore, there shall be a direction to the respondents to refund the sum of Rs.25,000/- realized from the petitioner towards liquidated damages within a period of 'two months' from the date of receipt of a copy of the judgment. The writ petition is disposed of accordingly. Sd/- **P.V.ASHA, JUDGE.** AS