1

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.7612 OF 2009

Mihir Kumar Hazara Choudhury  ….Appellant(s)

VERSUS

Life Insurance Corpn. & Anr.      …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1) This  appeal  is  directed  against  the  final

judgment  and  order  dated  04.07.2007  passed  by

the High Court at Calcutta in APO No.591 of 2003

whereby  the  Division  Bench  of  the  High  Court

allowed  the  appeal  filed  by  the  Life  Insurance

Corporation of  India (respondent No.1 herein),  set

aside the order of the Single Judge and the award of

2

the Tribunal and upheld the dismissal order passed

by respondent No.1.

2)  In order to appreciate the issues involved in

the appeal,  it  is necessary to set out the relevant

facts hereinbelow.  

3) In the year 1960, the appellant was appointed

as an Assistant in the set up of respondent No.1-

Life  Insurance  Corporation  of  India  (hereinafter

referred to as “LIC”).  At the relevant time, he was

posted in the Branch Office of LIC at a place called

Burir Bagan, PO & District Burdwan (WB).

4) During the year 1977, it came to the notice of

the  officials  of  respondent  No.1  (LIC)  that  the

appellant,  in  discharge  of  his  duties,  issued  as

many as seven receipts including special premium

receipts to the policyholders without receiving any

premium  amount  from  them.  The  details  of  the

policies  such  as  their  numbers,  names  of

3

policyholders, due date of premium and the amount

of premium are mentioned below:  

Policy No. Name Due Premium Total

i) 9764225 Sri D. Hazra July 1973 July 1974 July  1977  & January  1977 @ Rs.62.75 each

Rs. 251.00

ii) 31098245 Sri  S. Mukherjee

June,  1975 December, 1975 June, 1976 December,  1976 & June,  1977 @ Rs.147.40 each

Rs. 737.00

iii) 30982313 Sri S.K. Roy May,  1974 August,  1974 November,  1974 February,  1975 May,  1975 August,  1975 November,  1975 &  February, 1976  May,  1976 August,  1976 November,  1976 February,  1977 @ Rs.33.84 each

Rs. 406.08

iv) 31210746 Sri  T.N. Samanta

April,  1975  & April,  1977  @ Rs.410.60 each

Rs. 821.20

v) 31214187 Sri  P.K. Mallick

September,  1976 &  March,  1977 @Rs.158.40 each

Rs. 316.80

vi) 31211624 Sri  N.C. Hazra

August,  1976  & February,  1977 @  Rs.881.30 each  

Rs. 1,762.60

vii) 312111625 Sri  U.C. Hazra

February,  1975 February,  1976 August,  1976  & February,  1977 @  Rs.829.70 each  

Rs. 3,318.80

4

5) After being prima facie satisfied on verification

of the records that the appellant had committed the

alleged  misconduct,  the  LIC  placed  the  appellant

under suspension and then issued the charge-sheet

under  Regulation  39  of  the  Life  Insurance

Corporation  of  India  (Staff)  Regulations,  1960

(hereinafter referred to as “the Regulations”) to the

appellant  on  07.11.1977  (Annexure-A)  setting  out

therein the specific charges with details mentioned

above.  The appellant was asked to submit his reply.

6) On  28.11.1977,  the  appellant  replied  to  the

charges (Annexure-B).  The appellant, in substance,

admitted the issuance of receipts by him and also

admitted non-receipt of the amount against any of

these receipts from any of the policyholders.  All he

said was that he had neither any mala fide intention

nor any oblique motive behind this. According to the

appellant, it occurred due to the pressure of work

5

and  family  circumstances/worries.  The  appellant,

therefore,  prayed  respondent  No.1  to  take  lenient

view in the case against him.  

7) Dissatisfied  with  the  reply  of  the  appellant,

respondent No.1 referred the matter to the Enquiry

Officer  for  holding  regular  Departmental  Enquiry

into the charges leveled against the appellant as per

the service regulations. The Departmental Enquiry

was, accordingly, held in which the appellant fully

participated.   The  respondent  (LIC)  adduced

evidence to prove the charges.  

8) On 31.07.1981, the Enquiry Officer submitted

his report (Annexure-D).  The Enquiry Officer, in his

detailed  report  running  into  27  pages,  held  the

charges leveled against the appellant as proved. He

recorded  the  following  findings  against  the

appellant:  

“Thus I hold him guilty on the charges of  his  mala  fide  intention  of  perpetrating

6

fraud  on  the  Corporation  for  wrongful personal gains.  

Thus  it  is  proved  further  beyond  any doubt  that  Shri  M.K.  Hazra  Chowdhury willfully  indulged  in  the  acts  of  deliberate omission  and/or  commission  by  defalcating the amounts and causing temporary financial loss  to  the  Corporation  which  he  tried  to compensate by influencing the policy-holders to  deposit  the  amounts  subsequently  with interest and acted in a manner prejudicial to good conduct and failed to maintain absolute integrity and devotion to duty so as to serve the  Corporation  honestly  and  faithfully.  I have come to this  conclusion based on the evidence  on  records  and  hold  the  accused employee guilty of all the charges.”  

9) The respondent (LIC) agreed with the findings

of the Enquiry Officer and, accordingly,  dismissed

the  appellant  from  the  service  by  order  dated

07.12.1981(Annexure-E)  as  provided  in  the

Regulations.

10) The appellant (employee), felt aggrieved of the

dismissal  order,  preferred  departmental  appeal  to

Zonal  Manager.  It  was  dismissed  by  order  dated

22.04.1982.  The appellant then sought industrial

reference  to  the  Central  Government  Industrial

7

Tribunal (hereinafter referred to as “the Tribunal”)

under  Section  10  of  the  Industrial  Disputes  Act,

1947 to decide the legality and correctness of  the

dismissal order. It was referred to the Tribunal as

Reference No. 5/1989.  

11)  The  Tribunal  then  embarked  upon  the

reference and by award dated 15.06.1998 held that

the  Departmental  Enquiry  was  defective  and,

therefore,  bad  in  law.   The  Tribunal,  therefore,

granted an opportunity to the respondent (employer)

to prove the charges leveled against the appellant on

merits by adducing evidence. The respondent(LIC),

accordingly,  adduced evidence before  the Tribunal

and  proved  the  charges.  The  Tribunal,  however,

held  that  the  evidence  adduced  by  the

respondent(LIC)  was  not  credible  and,  therefore,

charges were not proved against the appellant.

8

12)  In other words, in the opinion of the Tribunal,

the  respondent(LIC)  failed  to  prove  the  charges

against the appellant for want of adequate evidence

and, therefore, the dismissal order was liable to be

set  aside.  It  was,  accordingly,  set  aside  with  a

further direction to the respondent(LIC) to pay the

entire retiral benefits to the appellant because, in

the meantime, the appellant had attained the age of

superannuation.    

13) The  respondent,  felt  aggrieved,  filed  writ

petition (W.P. No.2578/1998) before the High Court

at  Calcutta.  The  learned  Single  Judge  stayed  the

operation of the award of the Industrial Tribunal on

condition that the respondent(LIC) would pay a sum

of Rs.50,000/- by way of ex-gratia payment to the

appellant and then disposed of the writ petition by

order dated 31.03.1999 giving liberty to the parties

to apply before the Tribunal.

9

14)  It  may here  be  mentioned that  in  between,

there were some more proceedings ensued between

the parties resulting in passing some interim orders

by the Tribunal, Single Bench, Division Bench and

this Court but eventually the matter reached back

to the Division Bench in appeal at the instance of

the respondent (LIC) against the order of the Single

Bench dated 31.03.1999.  

15) By  impugned  order,  the  Division  Bench

allowed the appeal filed by respondent No.1 (LIC),

set  aside  the  order  of  the  Single  Judge  and  the

award  of  the  Tribunal  and  upheld  the  dismissal

order passed by the respondent.

16)  It  is  against  this  order,  the  employee  felt

aggrieved  and  filed  this  appeal  by  way  of  special

leave before this Court.

10

17) Heard Mr. Swatantra Rai, learned counsel for

the  appellant  and  Mr.  Kailash  Vasudev,  learned

senior counsel for the respondents.

18) Having  heard  the  learned  counsel  for  the

parties  and  on  perusal  of  the  record  of  the  case

including  the  written  submissions  filed  by  the

learned  counsel  for  the  appellant  (employee),   we

find no merit in the appeal.

19) The  short  question  that  arises  for

consideration in this appeal is whether the charges

leveled against the appellant (employee), as set out

above, were proved in the departmental proceedings

before  the  Enquiry  Officer  or/and  before  the

Tribunal?  If  yes,  then  whether  the  punishment

imposed  by  the  respondent(employer)  on  the

appellant(employee) dismissing him from the service

is just and proper?

11

20) As mentioned above, the Division Bench held

that the charges leveled against the appellant stood

proved and, in consequence, upheld the appellant's

dismissal order holding it to be commensurate with

the gravity of the charges.  

21) We are in agreement with the reasoning and

the conclusion arrived at by the Division Bench.  In

our  considered  opinion  also,  the  respondent(LIC)

was able  to prove  the charges leveled against  the

appellant(employee).  This we say for the following

reasons:

22) Firstly,  the  charges  can  be  held  proved  by

mere reading of the appellant's reply (Annexure-B)

wherein he, in no uncertain terms, admitted that he

had issued the disputed premium/special premium

receipts to the concerned policyholders and did not

receive the amount from any of them.  Secondly, all

he had said was that such mistake occurred on his

12

part due to heavy pressure of workload on him and

some  family  circumstances/worries  that  were

troubling  him  during  those  days  which,  in  our

opinion, was hardly any defense to the charges; and

thirdly,  he  himself  requested  for  taking  action

against him with leniency.

23) As  would  be  clear,  the  Enquiry  Officer  had

recorded a finding of fact that the action on the part

of  the  appellant  was  willful  and  with  mala  fide

intention to perpetrate the fraud on the respondent

(LIC) for wrongful personal gains.

24)  Though,  this  report  was  set  aside  by  the

Tribunal but the Division Bench set aside the award

of the Tribunal and upheld the dismissal order.  It is

for this reason, the report of the Enquiry Officer can

now be looked into.   Though, learned counsel  for

the  appellant  made  sincere  attempt  to  attack  to

13

challenge the departmental proceedings but we find

no merit in the same.  

25) We  find  that  the  principle  of  natural  justice

was  fully  observed  in  departmental  proceedings

wherein the appellant throughout participated.  We

have not been able to notice any kind of prejudice

having  been  caused  to  the  appellant  while

participating  in  the  Enquiry  proceedings.  That

apart, despite the appellant virtually admitting the

charges,  the  respondent  had  also  adduced  the

evidence before the Enquiry officer and then before

the  Tribunal  to  prove  the  charges  independently,

which found acceptance to the Division Bench and,

in our opinion, rightly.

26)  In  our  opinion,  keeping  in  view  the  three

reasons set out above coupled with the findings of

the  Enquiry  Officer,  which  Division  Bench  has

rightly upheld, we have no hesitation in holding that

14

the charges against the appellant were proved not

only  on  the  strength  of  the  admission  of  the

appellant in his reply but also independently with

the aid of the evidence led by the LIC (respondent

No.1) before the Enquiry Officer and later before the

Industrial Tribunal.

27) An  employee,  in  discharge  of  his  duties,  is

required to exercise higher standard of honesty and

integrity.  In a case where he deals with the money

of the depositors and customers, it is all the more

necessary for him to be more cautious in his duties

because he deals with the money transactions for

and  on  behalf  of  his  employer.  Every  such

employee/officer  is,  therefore,  required to  take  all

possible  steps  to  protect  the  interest  of  his

employer.  He must, therefore, discharge his duties

with  utmost  sense  of  integrity,  honesty,  devotion

and  diligence  and  must  ensure  that  he  does

15

nothing,  which  is  unbecoming  of  an

employee/officer.  Indeed,  good  conduct  and

discipline  are  inseparable  from the  functioning  of

every employee/officer of any Institution and more

when  the  institution  deals  with  money  of  the

customers.  Any  dereliction  in  discharge  of  duties

whether  by  way  of  negligence  or  with  deliberate

intention or with casualness constitutes misconduct

on  the  part  of  such  employee/officer.  (See  some

observations  in  Damoh  Panna  Sagar  Rural

Regional Bank & Anr. v.  Munna Lal Jain,  (2005)

10 SCC 84)

28)      There  is  no  defense  available  to  a

delinquent to say that there was no loss or profit

resulting in a case when officer/employee is found

to have acted without authority.  The very discipline

of  an  organization  and  especially  financial

institution  where  money  is  deposited  of  several

16

depositors for their benefit is dependent upon each

of  its  employee,  who  acts/operates  within  the

allotted sphere as custodian of such deposit. Acting

beyond  one's  authority  by  itself  is  a  breach  of

discipline  and  thus  constitutes  a  misconduct

rendering  the  delinquent  to  suffer  the  adverse

orders  (see  some  observations  in  Disciplinary

Authority-cum-Regional  Manager  &  Ors.  Vs.

Nikunja Bihari Patnaik, 1996(9) SCC 69).  

29) In  our  opinion,  having  regard  to  the

seriousness of the charges coupled with virtually no

defense  taken  by  the  appellant  in  answer  to  the

charges  and  lastly,  the  findings  of  the  Enquiry

Officer,  the  punishment  of  dismissal  was

appropriate  as provided in the  service  regulations

and hence does not call for any leniency in awarding

such punishment.

17

30) Learned counsel  for  the  appellant  (employee)

made sincere attempt in his oral as well as written

submissions to find fault in the conducting of the

departmental  proceedings  and  also  urging  from

interfering  in  the  quantum  of  punishment  by

imposing lesser punishment but we are afraid we

can interfere in either.  

31) As held supra,  the departmental  proceedings

were conducted strictly in accordance with law by

following the  principle  of  natural  justice  in  which

the  appellant  duly  participated.  The  appellant

neither set up any defense nor denied the factum of

charges, yet the respondent proved the charges with

the  aid  of  relevant  evidence,  which  found

acceptance  to  the  Division  Bench and  this  Court

too.  As an Appellate Court, neither we can sit over

the findings of the Enquiry Officer and find fault in

18

it  nor  can  we  re-appreciate  the  evidence  of

witnesses examined in departmental Enquiry.

32) In the light of foregoing discussion, we find no

merit in the appeal.  The appeal thus fails and is,

accordingly, dismissed.  

33) It was, however, brought to our notice that the

learned Single  Judge during pendency of  the  writ

petition  by  an  interim  order  had  directed  the

respondent (LIC)  to  pay a sum of  Rs.50,000/- by

way  of  ex-gratia  payment  to  the  appellant.  The

respondent  accordingly  paid  this  amount  to  the

appellant.  Let  this  amount  be  remained  with  the

appellant.

                   ………...................................J.

[R.K. AGRAWAL]             

                        …... ……..................................J.

        [ABHAY MANOHAR SAPRE] New Delhi; September 11, 2017