CHAIRMAN LIC OF INDIA Vs A MASILAMANI
Bench: B.S. CHAUHAN,JAGDISH SINGH KHEHAR
Case number: C.A. No.-008263-008263 / 2012
Diary number: 17552 / 2011
Advocates: INDRA SAWHNEY Vs
V. RAMASUBRAMANIAN
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REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 8263 OF 2012
(Arising out of SLP (C) No. 16667/2011)
Chairman, LIC of India & Ors. …Appellants
Versus
A. Masilamani …Respondent
J U D G M E N T
Dr. B.S. CHAUHAN, J.
Leave granted.
This appeal has been preferred against the impugned judgment
and order dated 10.1.2011, passed by the High Court of Judicature at
Madras in Writ Appeal No. 7 of 2011, by way of which, the Division
Bench affirmed the judgment and order dated 17.2.2010, passed by
the learned Single Judge in Writ Petition No.11152 of 2002, by way
of which, the disciplinary proceedings initiated by the appellants
against the respondent have been quashed.
2. Facts and circumstances giving rise to this appeal are as under:
A. The respondent was working with the appellant-Corporation as
a Higher Grade Assistant at its Namakkal Branch. He had applied for,
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and obtained, a housing loan on 20.6.1991 from the India Housing
Finance & Development Ltd., Salem, for the purpose of construction
of his house to the extent of 1095 sq.ft., and had also applied to the
appellant-Corporation for a housing loan, under the Corporation’s
Individual Employees Housing Scheme for the purpose of completing
construction of the said house. An amount to the tune of Rs.1,30,000/-
was outstanding, against the loan availed by the respondent from the
India Housing Finance & Development Ltd., as also a sum of
Rs.48,000/- required for completion of the said construction. The said
loan was sanctioned after completing all requisite formalities.
However, it came to the notice of the appellant-Corporation that there
had been certain irregularities and deviations with respect to the
construction of the said house, and that the loan had been obtained
upon non-disclosure of facts in entirety. Thus, a charge sheet dated
6.1.1998 was issued to the respondent, for violating the provisions of
Regulations 20, 21, 27 and 39(1) of the Life Insurance Corporation of
India (Staff) Regulations, 1960 (hereinafter referred to as, the
‘Regulations 1960’).
B. The respondent submitted his reply to the said charges, denying
all of them, vide reply dated 30.1.1998. The Disciplinary Authority,
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however, was not satisfied with the explanation furnished by the
respondent and therefore, proceeded to conduct an enquiry, in relation
to which, the Enquiry Officer submitted enquiry report dated
27.1.1999. The Disciplinary Authority served upon the respondent, a
copy of the said enquiry report, alongwith a show-cause notice dated
26.4.1999 giving him a period of 15 days to reply, to which the
respondent furnished his reply dated 17.5.1999.
C. The Disciplinary Authority, after considering the reply and the
enquiry report, imposed a penalty of reduction in the basic pay of the
respondent, to the minimum amount specified in the time scale
applicable to him, in terms of Regulation 39(1)(d) of the Regulations,
1960, as had been proposed by it in the aforementioned show cause
notice, vide order dated 31.5.1999.
D. Aggrieved, the respondent preferred an appeal under
Regulation 40 of the Regulations, 1960, which was dismissed by the
Appellate Authority, vide order dated 11.4.2000. Thereafter, the
respondent preferred a Memorial to the Chairman, Life Insurance
Corporation of India, in Bombay, which was dismissed vide order
dated 20.9.2001.
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E. Aggrieved, the respondent preferred a writ petition for the
purpose of quashing of enquiry proceedings, the imposition of
penalty, and also for re-imbursement of the amount that had been
deducted from his salary, including all attendant benefits. The said
writ petition was allowed by the learned Single Judge of the High
Court, vide order dated 17.2.2010, observing that the witnesses to the
case, in the process of Departmental Enquiry, had been examined in
violation of the statutory rules applicable herein, as well as in
violation of the principles of natural justice. The delinquent was not
accorded adequate opportunity to cross-examine the witnesses. The
Appellate Authority also failed to consider whether the procedure
followed by the Enquiry Officer, as well as that followed by the
Disciplinary Authority, satisfied the requirements of Regulation 46(2)
(a) of the Regulations, 1960. This is because, mere concurrence of the
Appellate Authority, with the findings recorded by the Enquiry
Officer, without provision of adequate reasoning, cannot be said to
amount to adequate application of judicial mind by the Appellate
Authority, for the purpose of imposing the said punishment.
F. Aggrieved, the appellant-Corporation filed an appeal, which
was dismissed by the Division Bench.
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Hence, this appeal.
3. Mr. Kailash Vasudev, learned senior counsel, alongwith Ms.
Indra Sawhney, Adv. appearing for the appellants, has submitted that
the High Court has exceeded its jurisdiction by quashing the
disciplinary proceedings, as well as the punishment imposed, stating
that the same does not fall within the scope of judicial review.
Moreover, the decision to not remand the case for reconsideration at
such a belated stage, could also not be justified. Therefore, the
judgment and order of the High Court, are liable to be set aside.
4. Per contra, Mr. V. Ramasubramanian, learned counsel
appearing for the respondent, has opposed the appeal, contending that
the High Court had taken note of every fact, and if after doing so, the
court had come to the conclusion that the said disciplinary
proceedings, had in fact, been conducted in violation of the principles
of natural justice and applicable statutory rules, then no interference is
warranted. The fact that the appellant was refused an opportunity, to
complete the said enquiry de novo, on the ground of delay, is fully
justified in law. Thus, no interference is called for, and the said appeal
is liable to be dismissed.
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5. We have considered the rival submissions made by the learned
counsel for the parties, and perused the record.
It may be pertinent to refer to the relevant statutory provisions
involved herein:
Regulation 39(1) of the Regulations 1960 reads as under:
“39(1). Without prejudice to the provisions of other
regulations, (any one or more of) “the following penalties
for good and sufficient reasons, and as hereinafter
provided, be imposed (by the disciplinary authority
specified in Schedule-I)” on the employee who commits
a breach of regulations of the Corporation, or who
display negligence, inefficiency or indolence or who
knowingly does anything detrimental to the interest of
the Corporation, or conflicting with the instructions or
who commits a breach of discipline, or is guilty of any
other act prejudicial to good conduct -
(a) ………….
(b) ………….
(c) ………….
(d) reduction to a lower service, or post, or to a lower
time scale, or to a lower stage in a time-scale.”
Regulation 46(2) of the Regulations 1960 read as under:
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“In case of an appeal against the order imposing
any of the penalties specified in Regulation 39, the
appellate authority shall consider-
(a) Whether the procedure prescribed in these
Regulations has been complied with, and if not,
whether such non-compliance has resulted in
failure of justice;
(b) Whether the findings are justified; and
(c) Whether the penalty imposed is excessive,
adequate or inadequate, and pass orders ……
xxxx xxxx xxxx ”
6. The charges framed against the respondent are as under:
(i) That in your letter dated 13.5.1994 requesting for
release of Rs.26,000/- as second instalment of
housing loan under M.L. No. 7803003 you had
willfully omitted to bring to the notice of the
Corporation that you had constructed the rear side
of the house (comprising of kitchen, store, toilet
and reading room) measuring 385 sq.ft.
(ii) That your above action tantamounts to breach of
agreement.
(iii) That you submitted a letter dated 20.6.1994 giving
false information that you had completed the house
in all aspects whereas by your letters dated
10.11.94 and 29.11.94 you had informed us that
the rear side of the house was not constructed. It
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was found that even as on 2.9.1997 the work to
complete the construction was not commenced.
(iv) That you had drawn housing loan in excess by
giving false statement as mentioned above.
(v) That you are putting the premises to commercial
use without the knowledge and approval of the
Corporation.
(vi) That you are carrying on manufacturing of Jute
bags and Cotton floor mats business in the said
premises without the knowledge of the
Corporation.
7. In the present case, the High Court after reappreciating the
entire evidence available on record, came to the conclusion that in the
course of enquiry proceedings, certain witnesses had not been
examined in the presence of the delinquent respondent, and that
hence, no proper opportunity was given to him to cross-examine such
witnesses. Moreover, the documents relied upon by the Enquiry
Officer, were not properly proved by any witness and ultimately, it
was held that the findings of the Enquiry Officer stood vitiated, for
non-compliance with mandatory requirements of the regulations
applicable herein, as well as for violating of the principles of natural
justice. The court further held that the Appellate Authority had not
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applied its mind to the case, and had failed to consider the case as
required under Regulation 46(2), of the Regulations, 1960. Thus, in
light of the aforementioned observations, the court set aside the
punishment imposed upon the respondent, and also refused to give the
appellant any opportunity, to continue the enquiry from the point that
it stood vitiated, consequently therefore, denying any opportunity to
prove the documents relied upon, as also denying the respondent
adequate opportunity to cross-examine the concerned witnesses etc.,
only on the ground that a long time had now passed.
8. In view of the issues raised by the learned counsel for the
parties, the following questions arise for our consideration:
i) When a court/tribunal sets aside the order of
punishment imposed in a disciplinary proceeding on
technical grounds, i.e., non-observance of statutory
provisions, or for violation of the principles of natural
justice, then whether the superior court, must provide
opportunity to the disciplinary authority, to take up and
complete the proceedings, from the point that they
stood vitiated and;
ii) If the answer to question no.1 is, that such fresh
opportunity should be given, then whether the same
may be denied on the ground of delay in initiation, or in
conclusion of the said disciplinary proceedings.
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9. It is a settled legal proposition, that once the Court sets aside an
order of punishment, on the ground that the enquiry was not properly
conducted, the Court cannot reinstate the employee. It must remit the
concerned case to the disciplinary authority, for it to conduct the
enquiry from the point that it stood vitiated, and conclude the same.
(Vide: Managing Director, ECIL, Hyderabad etc.etc. v. B.
Karunakar etc.etc. AIR 1994 SC 1074; Hiran Mayee
Bhattacharyya v. Secretary, S.M. School for Girls & Ors., (2002)
10 SCC 293; U.P. State Spinning C. Ltd. v. R.S. Pandey & Anr.,
(2005) 8 SCC 264; and Union of India v. Y.S. Sandhu, Ex-
Inspector AIR 2009 SC 161).
10. The second question involved herein, is also no longer res
integra.
Whether or not the disciplinary authority should be given an
opportunity, to complete the enquiry afresh from the point that it stood
vitiated, depends upon the gravity of delinquency involved. Thus, the
court must examine, the magnitude of misconduct alleged against the
delinquent employee. It is in view of this, that courts/tribunals, are not
competent to quash the charge-sheet and related disciplinary
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proceedings, before the same are concluded, on the aforementioned
grounds.
The court/tribunal should not generally set aside the
departmental enquiry, and quash the charges on the ground of delay in
initiation of disciplinary proceedings, as such a power is de hors the
limitation of judicial review. In the event that, the court/tribunal
exercises such power, it exceeds its power of judicial review at the
very threshold. Therefore, a charge-sheet or show cause notice, issued
in the course of disciplinary proceedings, cannot ordinarily be
quashed by court. The same principle is applicable, in relation to
there being a delay in conclusion of disciplinary proceedings. The
facts and circumstances of the case in question, have to be examined,
taking into consideration the gravity/magnitude of charges involved
therein. The essence of the matter is that the court must take into
consideration, all relevant facts and to balance and weigh the same, so
as to determine, if it is infact in the interest of clean and honest
administration, that the judicial proceedings are allowed to be
terminated, only on the ground of delay in their conclusion. (Vide:
State of U.P. v. Brahm Datt Sharma & Anr., AIR 1987 SC 943;
State of Madhya Pradesh v. Bani Singh & Anr., AIR 1990 SC
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1308; Union of India & Anr. v. Ashok Kacker, 1995 Supp (1) SCC
180; Secretary to Government, Prohibition & Excise Department
v. L. Srinivasan, (1996) 3 SCC 157; State of Andhra Pradesh v. N.
Radhakishan, AIR 1998 SC 1833; M.V. Bijlani v. Union of India &
Ors., AIR 2006 SC 3475; Union of India & Anr. v. Kunisetty
Satyanarayana, AIR 2007 SC 906; and The Secretary, Ministry of
Defence & Ors. v. Prabash Chandra Mirdha, AIR 2012 SC 2250).
11. The word “consider”, is of great significance. Its dictionary
meaning of the same is, “to think over”, “to regard as”, or “deem to
be”.
Hence, there is a clear connotation to the effect that, there must
be active application of mind. In other words, the term “consider”
postulates consideration of all relevant aspects of a matter. Thus,
formation of opinion by the statutory authority, should reflect intense
application of mind with reference to the material available on record.
The order of the authority itself, should reveal such application of
mind. The appellate authority cannot simply adopt the language
employed by the disciplinary authority, and proceed to affirm its
order. (Vide: Director, Marketing, Indian Oil Corpn. Ltd. & Anr.
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v. Santosh Kumar, (2006) 11 SCC 147; and Bhikhubhai Vithlabhai
Patel & Ors. v. State of Gujarat & Anr., AIR 2008 SC 1771).
12. The instant case requires to be considered in the light of the
aforesaid settled legal propositions.
After hearing the counsel for the parties, we are of the view that
the impugned judgment and order dated 10.1.2011, in Writ Appeal
No. 7 of 2011, as well as the order of the learned Single Judge dated
17.2.2010, passed in Writ Petition No. 11152 of 2002, cannot be
sustained in the eyes of law and are therefore hereby, set aside. The
present appeal is allowed. The matter is remitted to the disciplinary
authority to enable it to take a fresh decision, taking into consideration
the gravity of the charges involved, as with respect to whether it may
still be required to hold a de novo enquiry, from the stage that it stood
vitiated, i.e., after issuance of charge-sheet.
The disciplinary authority while taking such a decision must
bear in mind that charges are merely technical as the loan was taken
for construction of a residential premises and the said loan was used
effectually to construct the premises as per sanctioned plan and only
then the premises was put to commercial use.
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In the event the authority takes a view, that the facts and
circumstances of the case require a fresh enquiry, it may proceed
accordingly and conclude the said enquiry, most expeditiously.
………………………………..J. (Dr. B.S. CHAUHAN)
………………………………..J. (JAGDISH SINGH KHEHAR)
New Delhi, November 23, 2012
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