The United India Insurance Co. Ltd. vs R. Pankajakshan Pillai

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU WEDNESDAY, THE 9TH DAY OF JULY 2014/18TH ASHADHA, 1936 WA.No. 2105 of 2009 ( ) IN WP(C).11543/2007 --------------------------------------------AGAINST THE JUDGMENT IN WP(C) 11543/2007 of HIGH COURT OF KERALA DATED 04-08-2009 APPELLANT(S)/RESPONDENTS 1 TO 4 IN THE WRIT PETITION: ----------------------------------------------------------------------------------------- 1. THE UNITED INDIA INSURANCE CO. LTD. REP.BY ITS CHAIRMAN & MANAGING DIRECTOR REGD.OFFICE:PB.NO.676, WHITES ROAD, CHENNAI-14. 2. THE CHAIRMAN CUM MANAGING DIRECTOR, THE UNITED INDIA INSURANCE COMPANY LTD. REGD.OFFICE:PB.NO.676, WHITES ROAD, CHENNAI-14. 3. THE GENERAL MANAGER, - THE UNITED INDIA INSURANCE COMPANY LTD. REGD.OFFICE:PB.NO.676, WHITES ROAD, CHENNAI-14. 4. THE ASSISTANT GENERAL MANAGER, THE UNITED INDIA INSURANCE COMPANY LTD. REGD.OFFICE:PB.NO.676, WHITES ROAD, CHENNAI-14. BY ADVS.SRI.T.J.LAKSHMANAN IYER SRI.B.UNNIKRISHNA KAIMAL ## RESPONDENT(S)/PETITIONER IN THE WRIT PETITION: ------------------------------------------------------------------------------ R. PANKAJAKSHAN PILLAI ASSISTANT MANAGER, UNITED INDIA INSURANCE COMPANY LTD., REGIONAL OFFICE, KOCHI NOW RETIRED AND RESIDING AT KUMBAZHA, GRACE GARDENS TRIKKAKARA P.O., KOCHI. BY ADV. SRI.K.JAJU BABU (SR.) R BY ADV. SMT.M.U.VIJAYALAKSHMI R BY ADV. SRI.BRIJESH MOHAN R BY ADV. SMT.DHANYA CHANDRAN R BY ADV. SRI.A.HAROON RASHEED THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 09-07-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ. ----------------------------------W.A.No.2105 of 2009 ----------------------------------Dated this the 9[th] day of July, 2014 ## JUDGMENT ## Antony Dominic, J. 1. Appellants, the respondents in W.P(C).11543/07, have filed this appeal aggrieved by the judgment of the learned single Judge allowing the writ petition filed by the respondent herein. In the writ petition, the respondent challenged the disciplinary action initiated against him, which culminated in a punishment of reduction of basic pay by 10 stages in the time scale. He also challenged Ext.P6 order passed by the appellants rejecting the application made for availing of the benefit of a scheme for voluntary retirement from service. 2. By the judgment under appeal, learned single Judge interfered with the orders passed in the disciplinary action on the grounds that the enquiry conducted against the appellants was in violation of the principles of natural justice. It is this judgment, which is under challenge before us. WA.2105/09 2 3. Heard the learned counsel for the appellants and learned senior counsel appearing for the respondent. 4. Briefly stated, facts of the case are that the respondent was Branch Manager of the first respondent company at Chalakkudy. It appears that he issued a burglary policy to one R.C.Pillai for a sum of `1,00,000/- which was valid during the period from 30.4.1999 to 3.5.2000. It is stated that on 12.8.1999, a burglary occurred in the insured premises and a claim was made by the insured. The respondent is alleged to have appointed a surveyor and investigating officer without obtaining necessary sanction from the divisional office. Finally, he approved and disbursed `30,000/- towards the claim. 5. This led to the issuance of Ext.P11 memo of charges. He submitted Ext.P17 explanation. The explanation was not satisfactory to the appellants. An enquiry officer was appointed, before whom, out of the nine witnesses cited by the management, seven were examined. There was no witness on the side of the delinquent. Enquiry culminated in Ext.P24 report WA.2105/09 3 finding the respondent guilty of the charges. On receipt of the enquiry report, the disciplinary authority issued notice dated 6.12.2004, stating that on a perusal of the enquiry report dated 16.11.2004 along with the detailed enquiry proceedings and other relevant records, he agreed with the findings of the enquiry officer and that it is appropriate that before any further action is considered and decided, the respondent is given an opportunity to make his representation, if any, against the conclusion of the enquiry authority since the same would warrant awarding of major penalty against him. 6.The respondent submitted his representation against the findings of the enquiry officer and finally, the disciplinary authority issued Ext.P27 order, imposing the punishment of reduction of basic pay by 13 stages in the time scale. The respondent filed Ext.P29 appeal which was disposed of by Ext.P30 order, modifying Ext.P27 order and reducing the punishment to reduction by 10 stages. Ext.P31 memorial to the Chairman was rejected by Ext.P32 order. WA.2105/09 4 - 7.It was in these circumstances, the writ petition was filed challenging not only the aforesaid proceedings but also Ext.P16 order rejecting the application made by the respondent for voluntary retirement from service. It is also relevant to mention that during the pendency of the writ petition, the respondent retired from service voluntarily on 3.12.2008. 8. Although various contentions were raised, learned single Judge held the enquiry to be vitiated, mainly for two reasons. The first reason assigned by the learned Judge was that there was failure on the part of the management in examining two witnesses listed by it along with the memo of charges and that the enquiry officer, without any justification, declined the request of the delinquent for examining two defence witnesses. Learned single Judge also found that the enquiry officer rejected Ext.P20 request made by the delinquent for summoning a report of the CBI which inquired into the allegations of the delinquent. These irregularities committed were held to have violated the principles of natural justice and it was on that ground that the learned Judge held WA.2105/09 5 the enquiry invalid. Learned Judge further held that since during the pendency of the writ petition, the delinquent retired from service on 3.12.2008, the enquiry cannot be continued. 9. In so far as the findings of the learned single Judge that there was violation of the principles of natural justice on account of the non-examination of two witnesses included in the chargesheet is concerned, it should be stated that those two witnesses were proposed to be examined by the management on their side. There is no law or other principle governing the disciplinary enquiry which mandates that all witnesses included in the chargesheet should necessarily be examined by the management. In the criminal trial or civil cases, it is always open to the master of the litigation to decide as to whether any particular witness included in the list of witnesses should be examined or to give up such witnesses. Similarly, in a domestic enquiry, if evidence of witnesses included in the list of the management is considered unnecessary, it is open to them to give up that witness. On the WA.2105/09 6 other hand, if it is necessary for the delinquent to examine that witness for proving the defence, even after the witness is given up by the management, it is open to the delinquent to request the enquiry officer to examine the very same witness on his side. Therefore, the fact that the management has given up its witnesses cannot be said to have resulted in violation of the principles of natural justice in so far as the delinquent is concerned. Therefore, we are unable to endorse the view taken by the learned single Judge that natural justice is violated on account of the fact that the management had given up two witnesses included in its list of witnesses. 10. However, in so far as Ext.P18 request made by the delinquent for examining two witnesses are concerned, it is seen that consideration of the request was deferred by the enquiry officer as per Ext.P19 proceedings and was finally rejected by Ext.P21. The conduct of enquiry is governed by clause 25 of Ext.P28. Note to rule 25(8) says that relevancy of the additional documents and the witnesses referred will have to be given by the employee concerned and WA.2105/09 7 the documents and the witnesses shall be summoned if the inquiring authority is satisfied about their relevance to the charges under inquiry. In Ext.P20, the delinquent had explained the relevance of examining the two witnesses thus: 2. On 9/8/04 I prayed for the inclusion of two additional witnesses viz., the insured and the then Divisional Manager of Kollam Divisional Office, Since I found that the list of witnesses annexed to the charge sheet is incomplete. By examination of the above witnesses the fact of the proposal, the fact of theft, the fact of loss due to theft and the fact that the appointment of surveyor was as per the suggestion of the then Kollam Divisional Manager can be further established. Despite the above, without explaining how the witnesses are not relevant for the enquiry in question, the enquiry officer rejected his request. This, as rightly found by the learned single Judge; has resulted in violation of the principles of natural justice and thereby vitiated the enquiry. However, in so far as the report of the CBI that was sought to be produced is concerned, in the request WA.2105/09 8 made to the Enquiry Officer, its relevance was not explained. Therefore, rejection of the request cannot be held illegal or violation of natural justice. 11. Yet another contention that was urged before us was that Ext.P24 show cause notice, enclosing the enquiry report, was issued by the disciplinary authority only after accepting the enquiry report. This, according to the learned senior counsel for the respondent, itself amount to violation of the principles of natural justice and vitiated the enquiry. In Managing Director, ECIL, Hyderabad v. B.Karunakar [(1993) 4 SCC 727], the Apex Court has held that in cases where the disciplinary authority is not the enquiry authority, on receipt of the report of the enquiry authority, before finding the delinquent guilty, before accepting the same, the delinquent shall be given show cause notice enabling him to file his representation against the conclusions of the enquiry authority. This itself demonstrates that show cause notice, including the enquiry report extending an opportunity of WA.2105/09 9 representation to the delinquent, is to be issued to him before the acceptance of the findings of the disciplinary authority. In so far as this case is concerned, Ext.P24 is the show cause notice and in this notice, it is inter alia stated thus: “AND WHEREAS on perusal of the inquiry report dt.16.11.2004 along with the detailed inquiry proceedings and other relevant records, I agree with the findings of the Inquiring Authority. AND WHEREAS it is appropriate that before any further action in terms of Rule 23 of the GI (CDA) Rules, 1975 is considered and decided, you are hereby given an opportunity to make your representation, if any, against the conclusion of the Inquiring Authority, since the same would warrant awarding of major penalty against you.” 12.Reading of the above itself shows that even prior to the issuance of the show cause notice, the disciplinary authority had agreed with the findings of the enquiry authority. In other words, on account of the agreement of the disciplinary authority with the findings of the enquiry authority, the entire exercise of allowing the delinquent an opportunity to WA.2105/09 10 make a representation became a futile one and that also amounted to violation of the principles of natural justice. 13.Though for the aforesaid reasons, the enquiry conducted against the respondent has to be held invalid, learned single Judge, in the impugned judgment, held that since in the mean while, the respondent has retired from service on 3.12.2008, the enquiry cannot be continued. This finding of the learned single Judge is objected to by the learned counsel for the appellants, relying on clause 47 of the General Insurance (Employees') Pension Scheme, 1995. Clause 47 of the scheme reads thus: ## “47. **Recovery of Pecuniary loss caused to the Corporation or a Company** - (1) The competent Authority may withhold or withdraw a pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provided further that departmental proceedings, if instituted while the employee was in service, shall, after the retirement of the employee, be deemed to be proceedings under this paragraph and shall be continued and concluded by the authority by which WA.2105/09 11 they were commenced in the same manner as if the employee had continued in service.” 14.A reading of the above provision of the pension scheme shows that even in spite of retirement of the employee, it is permissible to continue the disciplinary action against him for the purposes mentioned in rule 47. Therefore, there is no absolute bar for the conduct of the enquiry in a case where it is alleged that pecuniary loss has been caused to the company. It is alleged that on account of a fake claim accepted by the respondent, pecuniary loss has been caused to the company. It is not necessary for us to pronounce on the correctness or otherwise of the contention. All that we need to say is that in a case of this nature, in view of clause 47 of the pension scheme, the company cannot be prevented from continuing the enquiry even after the retirement of the employee. - 15.At this stage, learned senior counsel appearing for the respondent submitted that since the maximum loss which the company can claim in this case is only WA.2105/09 12 `30,000/-. let the company recover that amount and disburse the balance amount due to the respondent. Even going by the memo of charges, the loss caused to the company is only `30,000/-. Therefore, if `30,000/- is recovered, the pecuniary loss recoverable in terms of rule 47 is recovered and nothing further remains to be done. In such circumstances, the writ appeal is disposed of confirming the judgment of the learned single Judge and directing that the company shall release the terminal benefits due to the respondent, deducting `30,000/- towards the pecuniary loss suffered by the appellants. The balance amount due to the respondent shall be disbursed as expeditiously as possible, at any rate, within four weeks of receipt of a copy of this judgment. Sd/- **==> picture [173 x 13] intentionally omitted <==** Sd/- DAMA SESHADRI NAIDU, Judge. kkb. /True copy/ PS to Judge