IMPORTANT POINT
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.

Headnote:Service Law - L.I.C. of India (Staff) Regulations, 1960 - Regulation 39(1)(b) - Respondent employed in LIC charge - sheeted with allegations of tampering with the premium position and other records pertaining to 17 insurance policies - Order passed by Disciplinary authority imposing punishment of Recovery of loss to the Corporation of Rs.16,001.90, and reduction in Basic Pay to the lowest time scale (i.e.) Rs.1950/ - Appeal - Dismissed - Writ petition - Dismissed - Writ appeal - Division bench even though upheld the punishment of recovery of loss, set aside punishment of reduction in pay scale and substituted by punishment of withholding of one increment with cumulative effect for a period of one year - Appeal - Division bench expressed its 'complete agreement' in regard to the conclusions arrived at by authorities concerned that the charges levelled against respondent had been proved - Even for a severe charge, disciplinary authority had inflicted the penalty of reduction in basic pay to the lowest time scale - High Court not even stated as to how this penalty was bad in law and simply labelled it to be “harsh” that too with no reasons - 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, such a penalty not at all found to be shockingly disproportionate having regard to the very serious charge levelled against the respondent - High Court transgressed its limits of judicial review by itself assuming role of sitting as departmental appellate authority, which was not permissible in law –Hence that part of directions contained in para 62 of impugned judgment which modified penalty set aside and penalty imposed by disciplinary authority restored - Appeal allowed (Paras10 to 14)
       Facts of the Case -
       Appeal against order passed by Division Bench of High Court modifying the punishment imposed by disciplinary authority of appellant No.1, i.e. Life Insurance Corporation of India on the respondent employee in a departmental enquiry.
       Findings of the Court -
       The Supreme Court held that Division bench had expressed its 'complete agreement' in regard to the conclusions arrived at by authorities concerned that the charges levelled against respondent had been proved.Charges pertained 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. High Court 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 was “to secure the ends of justice”.
       B. 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, such a penalty not at all found to be shockingly disproportionate having regard to the very serious charge levelled against the respondent. High Court transgressed its limits of judicial review by itself assuming role of sitting as departmental appellate authority, which was not permissible in law .Hence that part of directions contained in para 62 of impugned judgment which modified penalty was set aside and penalty imposed by disciplinary authority was restored. Appeal was allowed.
       Result - Appeal allowed

JUDGMENT :

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 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 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 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 cha

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2014 Supreme(SC) 586

SUPREME COURT OF INDIAJ. CHELAMESWAR, A.K. SIKRI, JJ.THE LIFE INSURANCE CORPORATION OF INDIA & OTHERS – APPELLANT VERSUS S. VASANTHI – RESPONDENT CIVIL APPEAL NO. 7717 OF 2014 (arising out of Special Leave Petition (Civil) No. 39113 of 2013) Decided On : 14-08-2014

IMPORTANT POINTThe 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.

Cases Referred (3)

SUPREME COURT OF INDIA
J. CHELAMESWAR, A.K. SIKRI, JJ.
THE LIFE INSURANCE CORPORATION OF INDIA & OTHERS – APPELLANT
VERSUS
S. VASANTHI – RESPONDENT
CIVIL APPEAL NO. 7717 OF 2014
(arising out of Special Leave Petition (Civil) No. 39113 of 2013)
Decided On : 14-08-2014

IMPORTANT POINT
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.