The Oriental Insurance Company Ltd. v. Dr. K. Radhakrishnan Nair

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN WEDNESDAY, THE 24TH DAY OF JULY 2013/2ND SRAVANA, 193 ## **W.A.No.612 of 2010** ------------------------------- AGAINST THE JUDGMENT IN O.P.3036/2001, DATED 07-12-2009, OF HIGH COURT OF KERALA. ------------------ ## **APPELLANTS/** RESPONDENTS 1 TO 3:- -------------------------------------------------------- 1. THE CHAIRMAN AND MANAGING DIRECTOR, THE ORIENTAL INSURANCE COMPANY LTD., ORIENTAL HOUSE, P.B.NO.7037, A.25/27, ASAF ALI ROAD, NEW DELHI - 110 002. 2. THE GENERAL MANAGER, THE ORIENTAL INSURANCE COMPANY LTD., ORIENTAL HOUSE, P.B.NO.7037, A.25/27, ASAF ALI ROAD, NEW DELHI - 110 002. 3. THE ASST. GENERAL MANAGER AND DISCIPLINARY AUTHORITY, THE ORIENTAL INSURANCE COMPANY LTD., ORIENTAL HOUSE, P.B.NO.7037, A.25.27, ASAF ALI ROAD, NEW DELHI - 110 002. BY ADV. SRI.GEORGE CHERIAN (THIRUVALLA) ## **RESPONDENT(S)/** PETITIONER & 4TH RESPONDENT:- -------------------------------------------------------------------------------- 1. DR.K.RADHAKRISHNAN NAIR, ADMINISTRATIVE OFFICER (LEGAL), THE ORIENTAL INSURANCE COMPANY LTD., REGIONAL OFFICE, METRO PALACE, NORTH TOWN RAILWAY STATION ROAD, COCHIN - 18. - 2. B.K.NAIR, ENQUIRY OFFICER, S.D.M. D.O.II, COCHIN (DELETED) - (2ND RESPONDENT DELETED FROM THE PARTY ARRAY, VIDE ORDER DATED 14.12.2011 IN I.A.No.923 OF 2011) R1 BY ADV. SRI.P.R.VENKETESH THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 24-07-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- Manjula Chellur, C.J. & K.Vinod Chandran, J. ---------------------------------W.A.No.612 of 2010 ---------------------------------Dated this, the 24[th] day of July, 2013 ## JUDGMENT ## K.Vinod Chandran,.J. The appellants, the employers, are aggrieved by the judgment of the learned Single Judge, which set aside the entire enquiry proceedings initiated against the respondent-employee, for reason of the findings being perverse as also violation of principles of natural justice. 2. The respondent, an Administrative Officer (Legal) with the appellant, was served with a charge-sheet with a proposal to initiate disciplinary enquiry by Exhibit P1 dated 12.06.1996. The charges were under five heads, given as 1 to 5. The 1[st] charge was with respect to compromise of two Original Petitions filed before the Motor Accidents Claims Tribunal, in violation of the policy conditions and contrary to the legal opinion; and tampering of office records in one of the aforesaid two Original Petitions, which were specifically listed as (a), (b) and (c). The 2[nd] charge was with respect to misuse of his official position in settling a claim raised by himself and his wife. The 3[rd] W.A.No.612 of 2010 **- 2 -** charge related to settlement of claims exceeding the financial authority specifically stated under (a) and (b). The 4[th] charge also was one of acting in excess of his financial authority, the instances being listed as (A) to (H). The 5[th] charge also was with respect to tampering of documents and settlement of claim in excess of his financial authority. 3. After a due enquiry, the respondent was found guilty of charge No.1(a), 4(F) and (H), and 5. The disciplinary authority forwarded the report of the enquiry officer to the respondent and the respondent submitted his representation against the findings of the enquiry officer. On a consideration of the representation given by the respondent, the disciplinary authority passed final order dated 20.07.1998, wherein the disciplinary authority concurred with the findings of the enquiry officer on the charges which were found to be proved in the enquiry and with respect to the charge of the delinquent officer having exceeded his financial authority, the disciplinary authority found his guilt proved, differing from the findings of the enquiry officer. Hence, an order of imposition of penalty reducing the basic pay by four stages in the time scale of pay was issued, evidenced by Exhibit P6, which primarily was the subject of challenge before this Court. W.A.No.612 of 2010 **- 3 -** 4. We are not concerned with the further proceedings taken on Exhibit P6, since the violation of the principles of natural justice as also the findings being perverse goes to the root of the matter has to be looked at from the level of enquiry and the order of the disciplinary authority. 5. We will first refer to the findings of the learned Single Judge that the findings in the enquiry were perverse. The judgment extracts the findings of the enquiry officer in all the charges which were found to have been proved in the enquiry. Referring to charge No.1(a), the learned Single Judge found that the opinion of the delinquent officer was to settle the claim for an amount of Rs.18,000/- and eventually the case was decided on merits awarding an amount of Rs.18,800/-. It was found that a mere mistake in giving an opinion cannot form the basis of a misconduct when there is no allegation of any extraneous motive, that too with _mala fide_ intentions. However, it is brought to our notice that in the said case the offending vehicle was driven by a person with defective licence and if the matter had been settled out of Court as suggested by the delinquent officer, the settlement would have been definitely detrimental to the Insurance Company. However, on noticing it, another officer had recommended withdrawal of the W.A.No.612 of 2010 **- 4 -** proposal of settlement and though the eventual amount awarded was not too low from the settlement proposed; the Insurance Company was granted the liberty to recover the said amount from the owner of the offending vehicle. Hence, we are of the opinion that there is no perversity in the finding of the enquiry officer with respect to charge No.1(a). 6. With respect to the other charges also, found as proved by the enquiry officer, the learned Single Judge found the same to be not holding good for reason of there being no extraneous motives being attributed to the delinquent officer. We are of the opinion that the charges alleged and found to be proved cannot merely be said to be a mistake or wrong committed in giving opinion. Opinions can differ and no offence can be imputed merely on such differences. However, a responsible officer of the Insurance Company conferred with the authority to settle cases out of Court has to give opinions within the frame work of law and the guidelines prescribed, as also within the pecuniary authority conferred on such officer. The allegation in the charges relate to misconducts with respect to the specific acts and omissions of the officer in giving such opinion against the guidelines and beyond his authority and attempting effective settlement, where he was not W.A.No.612 of 2010 **- 5 -** authorized so to do. We are unable to sustain the judgment which holds the findings with respect to the proved charges as perverse on the sole premise that no _mala fides_ are imputed. 7. Then we come to the aspect of principles of violation of natural justice which, we immediately notice, cannot lead to scuttling the entire enquiry proceedings. It is trite that on violation of principles of natural justice coming to the fore, the writ Court is bound to interfere but is enjoined to remand the issue to the concerned authority for compliance with such principles of natural justice. Looking at the facts of the case, we notice that the enquiry officer has found that it cannot be said that the delinquent officer exceeded his financial limits. The disciplinary authority differed from the same and found that it was proved; but the said finding was entered in the final order referred to by us. As has been laid down by the decisions of the Supreme Court, the effect of the Forty-Second Amendment to the Constitution of India is no longer _res integra_ . The principles of natural justice engrafted in Artcle 311 of the Constitution of India applies squarely to disciplinary enquiries carried on in establishments even outside the scope of Article 311. Before the amendment, there were two opportunities provided to the delinquent officer. After the conclusion of enquiry, W.A.No.612 of 2010 ## **- 6 -** the first opportunity was to represent against the findings and the second against the penalty proposed. This has been recognized by the Court as opportunities to prove innocence and then proffer mitigating circumstances to seek reduction of the penalty proposed. After the Forty-Second Amendment, though the opportunity to make a representation against the penalty has been taken away, the Supreme Court has in _**Managing Director, ECIL v. B. Karunakar**_ **[(1993) 4 SCC 727]** held that the effect of such amendment is to fuse the two opportunities into one. Hence, the disciplinary authority, while forwarding the enquiry report, has to record its independent findings on the charges found proved by the enquiry officer; and especially so, with respect to the charges found by the enquiry officer to be not proved, but the disciplinary authority finds ample proof from the records of the enquiry to differ therefrom. 8. In the instant case, the disciplinary authority merely issued a letter listing out the charges and forwarding the enquiry report with a direction to represent, if so advised, against the findings of enquiry. On such representation, the disciplinary authority passed final order concurring with the findings of the enquiry officer with respect to the charges proved in the enquiry W.A.No.612 of 2010 **- 7 -** and differing on one aspect. Admittedly no opportunity was given to the delinquent employee before such findings were entered; nor was he notified of the difference of opinion harboured by the disciplinary authority. That would indicate a clear instance of violation of principles of natural justice; but that cannot by itself lead to scuttling of the entire enquiry proceedings. Hence, Exhibits P4 and P6 orders of the disciplinary authority as also all consequential proceedings initiated thereon are hereby set aside. The matter is remanded to the disciplinary authority, who shall recommence the proceedings from the stage of issue of show cause notice on the enquiry report, clearly listing out the findings of the disciplinary authority in such show cause notice. Such show cause notice shall be issued within three weeks of receipt of a copy of this judgment. The respondent/delinquent officer shall be permitted to make a representation within three weeks from the date of receipt of the show cause notice. On receipt of the representation of the respondent/delinquent officer, the disciplinary authority shall consider it in accordance with law and the procedure contemplated, as expeditiously as possible, at any rate, within three months from the date of receipt of such representation. W.A.No.612 of 2010 **- 8 -** The Writ Appeal is hence allowed, setting aside the impugned judgment and the matter remanded as indicated above. No costs. Sd/Manjula Chellur, Chief Justice Sd/K.Vinod Chandran, Judge. vku/ ( true copy )