LIFE CORP.OF INDIA Vs S.VASANTHI
Bench: J. CHELAMESWAR,A.K. SIKRI
Case number: C.A. No.-007717-007717 / 2014
Diary number: 36783 / 2013
Advocates: GAUTAM NARAYAN Vs
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NON - REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7717 OF 2014 (arising out of Special Leave Petition (Civil) No. 39113 of 2013)
THE LIFE INSURANCE CORPORATION OF INDIA & OTHERS .....APPELLANT(S)
VERSUS
S. VASANTHI .....RESPONDENT(S)
J U D G M E N T
A.K. SIKRI, J.
Leave granted.
2) This appeal is preferred against the final judgment and order
dated June 26, 2013 in Writ Appeal No. 1279 of 2010 passed by
the High Court of Judicature at Madras whereby the Division
Bench of the High Court has modified the punishment imposed by
the disciplinary authority of appellant No.1, i.e. Life Insurance
Corporation of India (hereinafter referred to as the 'LIC') on the
respondent employee in a departmental enquiry.
3) Insofar as facts are concerned, it is sufficient to note that a
charge-sheet was served upon the respondent with the
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allegations of tampering with the premium position and other
records pertaining to 17 insurance policies, which resulted in
settlement of surrender value payments, though these policies
had not acquired surrender value. It was alleged in the charge-
sheet that by this act of the respondent, pecuniary loss was
caused to the LIC. These charges stood proved in the enquiry
held against the respondent by the Enquiry Officer vide Report
dated December 23, 1997. Based on the said Report, the
disciplinary authority issued show-cause notice to the respondent
proposing the following punishment:
(i) Recovery of loss to the Corporation of Rs.16,001.90, and
(ii) Reduction in Basic Pay to the lowest time scale (i.e.) Rs.1950/-.
4) The respondent submitted her reply to the said show-cause
notice. After going through the same, the Divisional Manager, as
disciplinary authority, passed orders dated December 30, 1998
accepting the findings of the Enquiry Officer and imposing the
punishment as proposed in the show-cause notice. Appeal of the
respondent preferred thereagainst was dismissed by the appellate
authority. The respondent filed a Memorial before the Chairman
of the LIC, which was also rejeged vide orders dated September
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25, 2000.
5) At this stage, the respondent took recourse to judicial proceedings
by filing the writ petition in the High Court of Judicature at Madras.
This writ petition was dismissed by the learned Single Judge of
the High Court, who not only held that a proper enquiry was
conducted in consonance with the principles of natural justice as
well as the extant rules, but even the punishment imposed by the
disciplinary authority was justified and upheld the same. Being
aggrieved, the respondent preferred writ appeal, which has been
decided by the Division Bench of the High Court vide impugned
judgment dated June 26, 2013. Interestingly, the Division Bench
has concurred with the learned Single Judge regarding the guilt of
the respondent in tampering of records, which is clear from the
following:
“61. On a careful consideration of respective contentions and in view of the detailed discussions and for the reasons mentioned aforesaid, in the instant case, we hold that the conclusions arrived at by the authorities concerned are based on evidence and on available materials on record. In fact, the Enquiry Officer has submitted a Report dated 23.12.1997, inter alia, holding that the Appellant is clearly guilty of deliberately tampering with the premium position as detailed in the Report. The Divisional Manager (Disciplinary Authority) of L.I.C. of India has passed the final order on 30.12.1998 by imposing the punishment of (i) Recovery of loss to the Corporation of Rs.16,001.90 and (ii) Reduction in Basic Pay to the lowest time scale (i.e.) Rs.1950/-. The Appellate
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Authority also, on 28.10.1999, has confirmed the order of the Disciplinary Authority dated 30.12.1998. Even to the Memorial dated 09.02.2000 submitted by the Appellant/Petitioner, addressed to the 1st Respondent/Chairman of the L.I.C. of India, Mumbai, an order of rejection has been passed on 25.09.2000 finding no merit in the Memorial warranting no interference with the penalties of 'reduction in basic pay to minimum of scale' and 'recovery of financial loss of Rs.16,001.90'. As such, we are in complete agreement in regard to the conclusions arrived at by the authorities concerned that the charges levelled against the Appellant/Petitioner have been proved.”
6) However, the Division Bench chose to tinker with the quantum of
punishment imposed by the disciplinary authority. Though it
upheld the punishment of recovery of loss, the punishment of
reduction in pay scale has been set aside and substituted by the
punishment of withholding of one increment with cumulative effect
for a period of one year as per Regulation 39(1)(b) of the L.I.C. of
India (Staff) Regulations, 1960. Discussion on this aspect can be
found in paragraph No.62 of the impugned judgment, which reads
as under:
“62. Bearing in mind an important fact that awarding of punishment must suit the offence and offender and also that the said punishment should not be either vindictive or unduly harsh, we are of the considered view that in the present case, for the proved charges against the Appellant/Petitioner (Delinquent Employee), the imposition of penalty viz., recovery of loss to the L.I.C. of India to an extent of Rs.16,001.90 in terms of Regulation 39(1) (c) of L.I.C. of India (Staff) Regulations, 1960 is just
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valid and proper one. However, to secure the ends of Justice, inasmuch as the imposition of 'punishment of reduction in basic pay to the lowest scale pay (i.e.) Rs.1950/-' imposed on the Appellant/Petitioner in terms of Regulation 39(1)(d) of the L.I.C. of India (Staff) Regulations, 1960, is on the higher side, accordingly, we set aside the same and instead we impose a penalty of withholding of one increment with cumulative effect for a period of one year as per Regulation 39(1)(b) of the L.I.C. of India (Staff) Regulations, 1960, by restoring her to the original position at the time of order of punishment dated 30.12.1998. However, we hereby direct the Respondents that the period of service put up by the Appellant/Petitioner in the lowest time scale of pay viz., Rs.1950/- be treated as service in the original post held by her prior to the award of the penalty, subject to the condition that the Appellant/Petitioner shall not be entitled to any difference of salary for and during the period of reduction to the lowest time scale of pay. Consequently, the order passed by the Learned Single Judge dated 26.04.2010,. in dismissing the Writ Petition, is set aside by this Court for the reasons assigned in this Appeal.”
7) The respondent has not filed any appeal thereby accepting the
judgment of the Division Bench. However, the appellants are
aggrieved by the decision of the Division Bench in modifying the
punishment, as mentioned above. Therefore, in the instant
appeal, we have heard the learned counsel for the parties on this
limited aspect as that is the only scope of the present appeal.
8) It was argued by the learned counsel for the appellants that it was
not open to the High Court to modify the penalty of reduction in
pay scale to the lowest scale of pay, that too without giving any
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reasons, what to talk of justifiable reasons. His submission was
that the High Court, in exercise of judicial review, had very limited
jurisdiction to interfere with the quantum of punishment imposed
by the disciplinary authority. It could be only in those cases where
penalty is found to be shockingly disproportionate to the gravity of
charge. He also submitted that it was not within the domain of the
High Court to impose a particular penalty and thereby assume to
itself the role of disciplinary authority. The leanred counsel
submitted that the aforesaid approach of the High Court was
directly in conflict with the judgment of this Court in Om Kumar v.
Union of India, (2001) 2 SCC 386, wherein this Court has held
that the question of the quantum of punishment in disciplinary
matters is primarily for the disciplinary authority and the
jurisdiction of the High Courts under Article 226 of the Constitution
or of the Admnistrative Tribunals is limited and is confined to the
applicability of one or other of the well-known principles known as
'Wednesbury principles'. This Court, while analyzing the said
principles, also observed that in case if the Court felt that the
quantum of punishment was disproportionate, then it should
remand the matter back to the disciplinary authority instead of
modifying the punishment on its own. Relevant passage from the
judgment is extracted below:
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“71. Thus, from the above principles and decided cases, it must be held that where an administrative decision relating to punishment in disciplinary cases is questioned as “arbitrary” under Article 14, the court is confined to Wednesbury principles as a secondary reviewing authority. The court will not apply proportionality as a primary reviewing court because no issue of fundamental freedoms nor of discrimination under Article 14 applies in such a context. The court while reviewing punishment and if it is satisfied that Wednesbury principles are violated, it has normally to remit the matter to the administrator for a fresh decision as to the quantum of punishment. Only in rare cases where there has been long delay in the time taken by the disciplinary proceedings and in the time taken in the courts, and such extreme or rare cases can the court substitute its own view as to the quantum of punishment.”
9) We find sufficient force in the aforesaid submission of the learned
counsel for the appellants.
10) We have already reproduced paras 61 and 62 of the impugned
judgment of the High Court. After detailed discussion of the
various contentions advanced by the respondent here (appellant
before the High Court), the High Court repelled all those
contentions and in para 61 summed up the position by holding
that the respondent herein was very much guilty of deliberately
tampering with the premium position as detailed in the report. So
much so, it expressed its 'complete agreement' in regard to the
conclusions arrived at by the authorities concerned that the
charges levelled against the respondent had been proved. As
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noticed above, charges pertain to tampering with the premium
position and other records pertaining to 17 insurance policies. It
had resulted in pecuniary loss to the LIC as well. Charge of
tampering with the record is a very serious charge and it adds to
the gravity when it is coupled with financial implications. Even for
such a severe charge, the disciplinary authority had inflicted the
penalty of reduction in basic pay to the lowest time scale. The
High Court has not even stated as to how this penalty was bad in
law and simply labelled it to be “harsh” that too with no reasons.
While intermeddling with this penalty, the only epithet used is “to
secure the ends of justice”. In the absence of any exercise
undertaken by the High Court that how it perceived such a penalty
to be “harsh”, there was no reason to interfere with the same.
Even otherwise, we do not find such a penalty at all to be
shockingly disproportionate having regard to the very serious
charge levelled against the respondent.
11) The scope and power of judicial review of the courts while dealing
with the validity of quantum of punishment imposed by the
disciplinary authority is now well settled. In the case of Deputy
Commissioner, KVS & Ors. v. J. Hussain, (2013) 10 SCC 106,
the law on this subject, is recapitulated in the following manner:
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“6. When the charge proved, as happened in the instance case, it is the disciplinary authority with whom lies the discretion to decide as to what kind of punishment is to be imposed. Of course, this discretion has to be examined objectively keeping in mind the nature and gravity of charge. The Disciplinary Authority is to decide a particular penalty specified in the relevant Rules. Host of factors go into the decision making while exercising such a discretion which include, apart from the nature and gravity of misconduct, past conduct, nature of duties assigned to the delinquent, responsibility of duties assigned to the delinquent, previous penalty, if any, and the discipline required to be maintained in department or establishment where he works, as well as extenuating circumstances, if any exist. The order of the Appellate Authority while having a re-look of the case would, obviously, examine as to whether the punishment imposed by the Disciplinary Authority is reasonable or not. If the Appellate Authority is of the opinion that the case warrants lesser penalty, it can reduce the penalty so imposed by the Disciplinary Authority. Such a power which vests with the Appellate Authority departmentally is ordinarily not available to the Court or a Tribunal. The Court while undertaking judicial review of the matter is not supposed to substitute its own opinion on reappraisal of facts.(See: Union Territory of Dadra & Nagar Haveli vs. Gulabhia M.Lad (2010) 5 SCC 775) In exercise of power of judicial review, however, the Court can interfere with the punishment imposed when it is found to be totally irrational or is outrageous in defiance of logic. This limited scope of judicial review is permissible and interference is available only when punishment is shockingly disproportionate, suggesting lack of good faith. Otherwise, merely because in the opinion of the Court lesser punishment would have been more appropriate, cannot be a ground to interfere with the discretion of the departmental authorities.
7. When the punishment is found to be outrageously disproportionate to the nature of charge, principle of proportionality comes into play. It is, however, to be borne in mind that this principle would be attracted, which is in tune with doctrine of Wednesbury Rule of reasonableness, only when in the facts and
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circumstances of the case, penalty imposed is so disproportionate to the nature of charge that it shocks the conscience of the Court and the Court is forced to believe that it is totally unreasonable and arbitrary. This principle of proportionality was propounded by Lord Diplock in Council of Civil Service Unions vs. Minister for Civil Service in the following words:
“Judicial review has I think developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads of the grounds on which administrative action is subject to control by judicial review. The first ground I would call “illegality”, the second “irrationality” and the third “procedural impropriety”. This is not to say that further development on a case by case basis may not in course of time add further grounds. I have in mind particularly the possible adoption in the future of the principle of proportionality.”
8. Imprimatur to the aforesaid principle was accorded by this Court as well, in Ranjit Thakur vs. Union of India (1987) 4 SCC 611. Speaking for the Court, Justice Venkatachaliah (as he then was) emphasizing that “all powers have legal limits” invokes the aforesaid doctrine in the following words:
“The question of the choice and quantum of punishment is within the jurisdiction and discretion of the court-martial. But the sentence has to suit the offence and the offender. It should not be vindictive or unduly harsh. It should not be so disproportionate to the offence as to shock the conscience and amount in itself to conclusive evidence of bias. The doctrine of proportionality as part of the concept of judicial review, would ensure that even on an aspect which is, otherwise within the exclusive province of the court-martial, if the decision of the court even as to sentence is an outrageous defiance of logic, then the sentence would not be immune from correction. Irrationality and perversity are recognized grounds of judicial review.”
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12) We are of the opinion that the High Court transgressed its limits of
judicial review by itself assuming the role of sitting as
departmental appellate authority, which is not permissible in law.
The principles discussed above have been summed up and
summarised as follows in the case of Lucknow Kshetriya
Gramin Bank (Now Allahabad, Uttar Pradesh Gramin Bank) &
Anr. v. Rajendra Singh, (2013) 12 SCC 372 :
a) When charge(s) of misconduct is proved in an enquiry, the
quantum of punishment to be imposed in a particular case
is essentially the domain of the departmental authorities.
b) The courts cannot assume the function of disciplinary/
departmental authorities and to decide the quantum of
punishment and nature of penalty to be awarded, as this
function is exclusively within the jurisdiction of the
competent authority.
c) Limited judicial review is available to interfere with the
punishment imposed by the disciplinary authority, only in
cases where such penalty is found to be shocking to the
conscience of the court.
d) Even in such a case when the punishment is set aside as
shockingly disproportionate to the nature of charges
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framed against the delinquent employee, the appropriate
course of action is to remit the matter back to the
disciplinary authority or the appellate authority with
direction to pass appropriate order of penalty. The court
by itself cannot mandate as to what should be the penalty
in such a case.
e) The only exception to the principle stated in para (d)
above, would be in those cases where the co-delinquent is
awarded lesser punishment by the disciplinary authoirty
even when the charges of misconduct were identical or the
co-delinquent was foisted with more serious charges. This
would be on the doctrine of equaltiy when it is found that
the employee concerned and the co-delinquent are equally
placed. However, there has to be a complete parity
between the two, not only in respect of nature of charge
but subsequent conduct as well after the service of
charge-sheet in the two cases. If the co-delinquent
accepts the charges, indicating remorse with unqualified
apology, lesser punishment to him would be justifiable.
13) Learned counsel for the respondent had no answer to the
aforesaid position in law and could not justify the stance of the
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High Court in modifying the punishment in the manner indicated
above. Therefore, sidetracking the central issue, he made a vain
attempt to argue that the charges against the respondent could
not be held to be proved as per the records. Obviously, that is
not even the issue before us. As mentioned above, there are
consistent findings, not only of the departmental authorities, but
even the Single Judge as also the Division Bench of the High
Court to the effect that charges against the respondent stood
established in the departmental enquiry. Thus, it is not
permissible for the counsel for the respondent even to argue such
a proposition, that too when the respondent did not challenge the
judgment rendered by the High Court.
14) As a result, the instant appeal is allowed. That part of the
directions contained in para 62 of the impugned judgment which
modifies the penalty are hereby set aside and the penalty
imposed by the disciplinary authority is hereby restored. There
shall, however, be no order as to costs.
.............................................J. (J. CHELAMESWAR)
New Delhi; August 14, 2014.
.............................................J. (A.K. SIKRI)
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