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2022 Supreme(SC) 1456
SUPREME COURT OF INDIA
Ajay Rastogi, Sanjiv Khanna, JJ.
National Insurance Company Limited & Ors. – Appellants
Versus
N.K. Mehrotra – Respondent
Civil Appeal No(s). 3683 of 2022 (Arising Out of SLP(Civil) No(s). 3121 of 2021)
Decided On : 05-05-2022
Mr. Jaideep Gupta, Sr. Advocate, Mr. Hetu Arora Sethi, Advocate, Mr. Rahul Jain, Advocate, For the Appellant / Dr. Menaka Guruswamy, Sr. Advocate, Mr. Fuzail Ahmad Ayyubi, Advocate, Mr. Yash S. Vijay, Advocate, Mr. Utkarsh Pratap, Advocate, Mr. Ibad Mushtaq, Advocate, Ms. Akanksha Rai, Advocate, Ms. Kanishka Prasad, Advocate, For the Respondent.
Punishment for misconduct must be supported by evidence and comply with the prescribed procedure under the relevant rules.
Headnote:
Disciplinary Authority - Misconduct - General Insurance (Conduct, Discipline and Appeal) Rules, 1975 - Rule 25, Rule 26
Fact of the Case:
The respondent was punished with the reduction of basic pay to a minimum of Senior Assistant Grade for alleged misconduct during his tenure as an Assistant. The High Court set aside the punishment, citing lack of evidence and non-sustainability in law.
Finding of the Court:
The Court upheld the High Court's decision, clarifying that the punishment inflicted by the disciplinary authority was not sustainable in law. The respondent was allowed to proceed with the domestic inquiry from the stage where the defect was pointed out.
Issues: Validity of punishment for alleged misconduct, sufficiency of evidence, compliance with General Insurance Rules
Ratio Decidendi: The Court found the punishment to be non-speaking and not sustainable in law due to lack of evidence and non-compliance with the procedure prescribed under Rule 25 of the General Insurance (Conduct, Discipline and Appeal) Rules, 1975.
Final Decision: The appeal was disposed of, upholding the High Court's decision and allowing the respondent to proceed with the domestic inquiry. The respondent was granted the liberty to challenge any future orders by the disciplinary authority.
Key Points: - Punishment must be supported by evidence and comply with prescribed procedure under relevant rules (!) . - The punishment was reduced due to lack of evidence and non-compliance with Rule 25 procedures (!) (!) . - The order imposing punishment was declared non-speaking and unsustainable in law (!) (!) . - The respondent is allowed to proceed with domestic inquiry from the stage where defect was pointed out (!) (!) . - The inquiry officer must prepare a report under Rule 25(19)(i) after conclusion of inquiry (!) . - The competent authority must record findings and reasons for each charge as per Rule 25 (!) (!) . - The respondent retains liberty to challenge any future orders by the disciplinary authority (!) . - The appeal is disposed of while upholding the High Court’s decision (!) . - The process must be concluded expeditiously in accordance with law (!) .
What are the validity conditions for punishment in disciplinary proceedings under General Insurance rules?
How to ensure compliance with procedure prescribed under Rule 25 of General Insurance (Conduct, Discipline and Appeal) Rules, 1975?
What are the rights of a respondent when punishment is imposed based on non-speaking order and lack of evidence?
ORDER
1. Leave granted.
2. The instant appeal is directed against the impugned judgment and order passed by the High Court dated 27th August, 2019 setting aside the punishment of 'reduction of basic pay to a minimum of Senior Assistant Grade' by the disciplinary authority dated 5th December, 2007 and also further orders passed by the appellate authority.
3. While posted in the capacity of Assistant, Branch Office-(1) Bareilly, during the years 1997-98, for the alleged misconduct committed in the discharge of his duties under Rule 25 of the General Insurance (Conduct, Discipline and Appeal) Rules, 1975, a Memorandum along with Article of Charge was served upon the respondent dated 13th May 2002.
4. After holding the domestic inquiry as per the procedure prescribed under the scheme of Rules 1975, the Inquiry Officer submitted his report dated 25th September 2006. Based on the report of inquiry, the disciplinary authority under its Order dated 5th December, 2007 held the respondent guilty and punished him with the penalty of 'reduction of basic pay to the minimum of Senior Assistant Grade'.
5. The appeals which were preferred by the respondent employee before the appellate authority came to be dismissed by Orders dated 24th April, 2008 and 30th December, 2008 that became the subject matter of challenge by filing of a writ petition at the instance of the respondent under Article 226 of the Constitution.
6. The learned Single Judge of the High Court, after going through the report of inquiry followed with the order of disciplinary authority in particular, arrived to a conclusion that the findings which the inquiry officer has recorded in the report of inquiry are not supported by any evidence on record and no reasons have been assigned by the inquiry officer in arriving to a conclusion in recording the finding of guilt which was also not considered by the disciplinary authority while inflicting penalty upon the respondent under order dated 5th December, 2007 and follow up error being committed by the appellate authority while dismissing the appeal preferred by the respondent by orders dated 24th April, 2008 and 30th December, 2008 and proceeding on the premise that the report of inquiry was laconic and was not according to the procedure prescribed under the Rules, 1975 further held the order passed by the disciplinary authority being a non-speaking order and allowed the writ petition filed at the instance of the respondent by a judgment dated 27th August, 2019 and set aside the order of punishment dated 5th December, 2007 followed with the orders of the appellate authority dated 24th April, 2008 and 30th December 2008.
7. It has been informed that the respondent employee has superannuated in the year 2013. Under the scheme of Rules 1975, procedure for imposing major penalties has been provided under Rule 25 and the inquiry officer is under an obligation that after the procedure been followed at the stage of conclusion of inquiry, he has to prepare a report in terms of Rule 25(19)(i) and that has to be placed along with the record of inquiry for action to be taken by the competent authority as provided under Rule 26 of the scheme of Rules 1975. Rules 25(19)(i) and 26 of the Rules, 1975 are reproduced hereinbelow:
25. Procedure for imposing Major Penalties
(1) to (18) xxx xxx xxx
(19)(i) After the conclusion of the inquiry, report shall be prepared and it shall contain :-
(a) a list of the articles of charge and the statement of the imputations of misconduct or misbehaviour;
(b) a gist of the defence of the employee in respect of each article of charge;
(c) an assessment of the evidence in respect of each article of charge;
(d) the findings on each article of charge and the reasons therefor.
Explanation :-
If in the opinion of the inquiry authority the proceedings of the enquiry establish any article of charge different from the original articles of charge, it may record its findings on such article of charge.
Provided that the findings on such artic
