Life Insurance Corporation of India v. Swathy Ganesh

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR** **&** **THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P. FRIDAY, THE 10[TH] DAY OF JUNE 2022 / 20TH JYAISHTA, 1944** **WA NO. 564 OF 2022** **AGAINST THE ORDER IN WP(C) 21711/2021 OF HIGH COURT OF KERALA DATED 21.03.2022** ## **APPELLANTS/RESPONDENTS IN THE WRIT PETITION:** 1 LIFE INSURANCE CORPORATION OF INDIA REPRESENTED BY ITS ZONAL MANAGER, SOUTHERN ZONE, LIC BUILDING, 153, ANNA SALAI, P.B.NO.2450, CHENNAI- 600002., PIN - 600002 2 ZONAL MANAGER LIFE INSURANCE CORPORATION OF INDIA, SOUTHERN ZONE, LIC BUILDING, 153, ANNA SALAI, P.B.NO.2450, CHENNAI-600002, PIN - 60002 3 SENIOR DIVISIONAL MANAGER LIFE INSURANCE CORPORATION OF INDIA, DIVISIONAL OFFICE, JEEVAN PRAKASH, P.B.NO.609, NAGAMPADAM, KOTTAYAM-686001, PIN - 686001 4 MANAGER LIFE INSURANCE CORPORATION OF INDIA, PALA BRANCH, PALA P.O, KOTTAYAM-686575, PIN - 686575 BY SRI.S.EASWARAN, SC, LIFE INSURANCE CORPORATION OF INDIA WA No.564 of 2022 2 ## **RESPONDENT/PETITIONER IN THE WRIT PETITION:** SWATHY GANESH AGED 30 YEARS, W/O MIDHUN.J.SINGH, DEVELOPMENT OFFICER, (NOW UNDER ORDERS OF TERMINATION), S.R.NO.578051(WRONGLY GIVEN AS 567586), LIFE INSURANCE CORPORATION OF INDIA, PALA BRANCH, PALA.P.O, 686575, KOTTAYAM DISTRICT, RESIDING AT MIDHUNAM, BSNL ROAD, KAYAMKULAM-690572, PIN - 686575 ADV SRI. BINOY VASUDEVAN THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 10.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WA No.564 of 2022 3 ## **A.K.JAYASANKARAN NAMBIAR & MOHAMMED NIAS C.P., JJ ------------------------------------------------------------------** WA No.564 of 2022 -------------------------------------------Dated this the 10[h] day of June, 2022 ## **JUDGMENT** ## A.K.Jayasankaran Nambiar., J. The Life Insurance Corporation of India (LIC of India), its Zonal Manager, Senior Divisional Manager and the Manager are the appellants before us, aggrieved by the judgment dated 21.03.2022 of the learned single Judge in WP(C)No.21711 of 2021. The brief facts necessary for the disposal of the writ appeal are as follows:- The petitioner in the writ petition was recruited as Apprentice Development Officer in the LIC of India by an order dated 26.10.2015. On completion of her probation she was appointed as Probationary Development Officer on 02.05.2016 with Pala Branch as her area of operation. She was subsequently confirmed as a Development Officer with effect from 01.02.2018. Under the Life Insurance Corporation of India Development Officers (Revision of Certain Terms and Conditions of Service) Rules, 2009, as amended in 2016 (hereinafter referred to as the 'Service Rules' for WA No.564 of 2022 4 brevity), Development Officers are required to achieve the prescribed cost ratio based on a formula that is specified therein. Briefly stated, the cost ratio is the ratio of the annual remuneration received by the Development Officer to the eligible premium received by the Corporation in respect of the business secured through the Development Officer expressed as percentage. The performance of the Development Officer under the Corporation is measured through this formula after allowing for adjustments towards incentives and disincentives. 2. By an amendment to the Rules in 2016, it was stipulated that where the annual remuneration of a Development Officers in all the preceding year exceeds 50% of the eligible premium of that year, and the aggregate of the annual remuneration in the relevant year and the two appraisal years immediately preceding the relevant year exceeds 50% of the aggregate of the eligible premium in those years, the services of the Development Officer would be liable to be terminated. In the backdrop of the aforesaid statutory provision, when the performance of the writ petitioner was assessed for the year ended 30.01.2019, 31.01.2020 and 31.01.2021, she was found to have achieved a cost ratio of 228.35%, 38.39% and 88.65% respectively for the three preceding years. Inasmuch as the aggregate cost ratio was on the wrong side of 50%, the appellants proceeded to issue Ext.P4 show cause notice dated 16.02.2021 seeking an explanation from the petitioner as WA No.564 of 2022 5 regards the high cost ratio. Although, the petitioner preferred Ext.P5 reply to the same, she was served with Ext.P6 final show cause notice dated 8.3.2021 asking her to show cause as to why the punishment of termination from services should not be imposed on her for not achieving the desired cost ratio. The petitioner preferred Ext.P7 reply to the said show cause notice but the same was not found acceptable and the Corporation proceeded to issue Ext.P8 letter of termination dated 22.04.2021 to the petitioner. The petitioner thereafter preferred Ext.P9 appeal before the Zonal Manager of the Corporation which also be came to be dismissed by Ext.P10 order dated 5.8.2021. 3. Aggrieved by the appellate order the writ petitioner preferred WP(C)No.17329 of 2021 before this Court. The learned single Judge finding that the appellate order had been passed without affording an opportunity of hearing to the petitioner, set aside Ext.P10 appellate order and directed the appellate authority to re-consider the appeal after hearing the petitioner. In the proceedings that followed Ext.P14 record of personal hearing was drawn up and thereafter Ext.P15 order dated 7.10.2021 was passed by the appellate authority once again dismissing the appeal preferred by the writ petition. It was this order of the appellate authority that was impugned by the writ petitioner in the writ petition from which this appeal arises. It is relevant to notice at this stage that the writ petitioner did not prefer any revision WA No.564 of 2022 6 petition against Ext.P15 appellate order although the statutory rules provided for such a remedy against the appellate order. 4. The learned single Judge who considered the matter found that inasmuch as the record of personal hearing drawn up by the appellate authority was in a questionnaire form and indicated that during the personal hearing the appellate authority had put cryptic questions to the writ petitioner to which the writ petitioner had supplied specific answers, this did not satisfy the requirement of a personal hearing as contemplated in the judgment in WP(C)No.17329 of 2021, pursuant to which the rehearing was conducted. The learned single Judge also found that the appellate authority had not effectively considered the question as to whether the writ petitioner would be entitled to the benefit of Exts.P11 and P12 Circulars more so, in view of the pandemic situation that prevailed in the country. The learned single Judge was of the view that the appellant – Corporation ought to have taken a lenient view in the case of the writ petitioner considering the pandemic situation that had affected the working of almost all establishments in the country. The order terminating the services of the writ petitioner was, therefore, set aside and the writ petitioner was directed to be reinstated in service forthwith and continued subject to the orders that may be passed by the competent authority. WA No.564 of 2022 7 5. Before us, it is the submission of Sri.Easwaran, the learned counsel for the appellant that the finding of the learned single Judge that there was no effective hearing granted to the petitioner before passing the appellate order, is not justified since the questions put to the writ petitioner were all relevant ones and the recording of the questions and answers was done only to ensure transparency with regard to the conduct of the personal hearing. In other words, the submission is that the record of personal hearing was maintained so as to demonstrate that only relevant matters were discussed during the personal hearing and there was no extraneous consideration for arriving at the decision. It is also pointed out that, at any rate, the writ petitioner had not disputed the figures showing the cost ratio achieved by her and in that view of the matter the non-adherence to the specified target was virtually admitted by the writ petitioner. He would further submit that the benefit of the circulars referred to by the learned single Judge would also not enure to the writ petitioner since even going by the relaxation permitted under the statutory rules, the services of the writ petitioner could not be saved and a termination of the services was the only possibility. 6. Per contra, it is the submission of the learned counsel for the writ petitioner Sri. Binoy Vasudevan that the Corporation ought to have taken a lenient view in the matter since the dismal performance of the writ WA No.564 of 2022 8 petitioner as alleged by the Corporation came about only during the Covid pandemic period when the business was generally dull and it was impossible to canvass clients and collect premiums in respect of policies up to the extent required under the Rules. He would also point out that the area where the writ petitioner was functioning was also not one that would have enable the writ petitioner to secure the extent of business that was envisaged under the rules of the Corporation. 7. On a consideration of the rival submissions and on a perusal of the rules of the Corporation, we find that while there is force in the submission of the learned counsel for the appellant as regards the propriety of the personal hearing afforded to the writ petitioner as also with regard to the action taken against the writ petitioner based on the statutory provisions by which the Corporation was bound, the pandemic situation that affected the country as a whole cannot be ignored while assessing the performance of the writ petitioner. No doubt, the writ petitioner did not achieve the cost ratio even in the year ended 31.01.219, which was well before the pandemic, but we note that in the year ended 31.01.2020 she had brought down the figure to 38.39%, which was well below the stipulated 50%. It was between 31.01.2020 and 31.01.2021 that her efforts again proved futile and her cost ratio went up to 88.65. The last mentioned year was the pandemic year and we feel that the low performance in that year should not be the reason for a WA No.564 of 2022 9 termination of her services. 8. While making these observations, we are conscious that while taking the decision to terminate the services of the writ petitioner the Corporation had its limitations in view of the statutory provisions by which it was governed. We felt, however, that the peculiar facts presented to us in the instant case, in the wake of the pandemic situation in the country, would justify providing the writ petitioner with one more opportunity to prove herself. Rather than relegating the matter to the Corporation to take a fresh decision based on the past service of the writ petitioner, we felt that allowing the writ petitioner to work for a year so as to improve her overall performance would also benefit the Corporation through the benefits that it would get through the efforts of the writ petitioner. 9. Pursuant to our discussion with the learned counsel for the appellant - Corporation, we feel it would be in the interest of justice that the writ petitioner be engaged as a Development Officer by treating her as a fresh appointment with immediate effect subject to the condition that during the period of one year from the date of her fresh engagement she achieves a cost ratio of 35%. We are informed that as a fresh engagement the writ petitioner would draw remuneration at the revised rates that are now in force in the Corporation. Taking note of the said submission, we dispose this WA No.564 of 2022 10 writ appeal with the following directions:- i. The impugned judgment of the learned single Judge is modified. ii. The appellant shall forthwith appoint the respondent as Development Officer at the Pala Branch treating it as a fresh appointment as Development Officer. iii. The respondent shall on the completion of one year from the date of fixation of her salary as Development Officer pursuant to the fresh appointment directed above, achieve a cost ratio of 35%. iv. It is made clear that if the writ petitioner fails to achieve the cost ratio of 35% then she will forfeit her right to continue as a Development Officer under the Corporation and shall be forthwith terminated from service as Development Officer v. If on the other hand she succeeds in achieving the cost ratio of 35% by the year end, then the Corporation shall permit her to continue in service as Development Officer subject to the condition that she attains the cost ratio of 35% in the second year also. vi. If she does not achieve the cost ratio of 35% in the second year then she will forfeit her right to continue in the WA No.564 of 2022 11 Corporation beyond the second year. vii. If on the other hand she attains the cost ratio of 35% even at the end of the second year, then she will be permitted to continue in service under the Corporation in accordance with the Life Insurance Corporation of India Development Officers (Revision of Certain Terms and Conditions of Service) Rules, 2009, as amended in 2016. Before parting with this case, we make it clear that the above directions have been issued taking note of the peculiar facts and circumstances presented in the instant case and are not to be treated as precedents in future cases involving the appellant – Corporation. The writ appeal is allowed as above. Sd/- **A.K.JAYASANKARAN NAMBIAR JUDGE** Sd/- **MOHAMMED NIAS C.P. JUDGE** dlk 13.6.2022