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2015 Supreme(Del) 265
High Court of Delhi
VALMIKI J. MEHTA, J.
Dr. R. Kannan – Appellant
Vs.
Union of India & Another – Respondent
W.P.(C) No. 3876 of 2013
Decided On : 11-02-2015
For the Petitioner:Subhash Mishra, Advocate.
For the Respondents:R1, Rajesh Gogna, R2, D.K. Nag, Advocates.
The absence of statutory provision for a specific allowance, the illegality of payments conflicting with statutory provisions, and the inability to invoke Article 14 of the Constitution of India to enforce an illegality.
Headnote:
Actuarial Allowance - Statutory Appointment - Insurance Regulatory and Development Authority of India Act, 1999, Section 4; Insurance Regulatory and Development Authority (Salary and Allowance payable to, and other Terms and Conditions of Service of Chairperson and other Members) Rules, 2000 - The court discussed the statutory provisions governing the appointment and remunerations of Whole Time Members, emphasizing the absence of provision for actuarial allowance. It highlighted the illegality of the actuarial allowance payment and its conflict with statutory provisions, as well as the petitioner's inability to invoke Article 14 of the Constitution of India to enforce an illegality.
Fact of the Case:
The petitioner, a Whole Time Member (Actuary) of the Insurance Regulatory and Development Authority, sought quashing of a demand/recovery notice for actuarial allowance. The petitioner claimed entitlement based on past practice and a circular, while the respondent argued the absence of statutory provision for the allowance.
Finding of the Court:
The court found that the petitioner was not entitled to the actuarial allowance, emphasizing the absence of statutory provision and the illegality of the payment. It also rejected the petitioner's reliance on past practice and circular, highlighting the conflict with statutory provisions and the inability to invoke Article 14 of the Constitution of India to enforce an illegality.
Issues: The issues revolved around the entitlement of the petitioner to actuarial allowance, the conflict with statutory provisions, and the invocation of past practice and circular in seeking the allowance.
Ratio Decidendi: The court's decision was based on the absence of statutory provision for actuarial allowance, the illegality of the payment, and the inability to invoke Article 14 of the Constitution of India to enforce an illegality.
Final Decision: The petition was dismissed, and the court held that the petitioner was not entitled to the actuarial allowance. The respondent was deemed entitled to recover the excess unauthorized payment from the petitioner.
1. By this writ petition filed under Article 226 of the Constitution of India, the petitioner who was a Whole Time Member (Actuary) of the respondent no.2/Insurance Regulatory and Development Authority, seeks quashing of the demand/recovery notice dated 18.2.2012 issued by the respondent no.2 for an amount of Rs.30,84,355/-. The demand/recovery notice was issued because as per the respondent no.2 the petitioner was not entitled to actuarial allowance of Rs.65,000/- per month from the date of his appointment on 18.12.2006 till it was paid for October 2010, and thus the total amount of Rs.30,84,355/- should not have been paid/granted to the petitioner as actuarial allowance.
2. The petitioner argues before this Court that the petitioner was being paid in terms of the past practice whereby actuarial allowance was being paid to the Whole Time Members (Actuary) of the respondent no.2. Example is given of one Mr. P.A. Balasubramanian who was given such allowance as stated in the letter dated 26.2.2004 of the respondent no.2. The petitioner also relies upon the general circular dated 13.12.2005 issued by the respondent no.2 whereby the actuarial allowance was increased from a sum of Rs.10,000/- to a sum of Rs.65,000/- per month. It is further claimed that the petitioner having not stated any wrong facts and the petitioner having received the actuarial allowance in terms of the past precedent and the circular of the respondent no.2 dated 13.12.2005, the demand/recovery which is now sought to be made from the petitioner of the sum of Rs.30,84,355/- in terms of the impugned notice dated 18.2.2012 is illegal and liable to be quashed.
3. It is undisputed that the appointment of the petitioner is a statutory appointment which is made in terms of Section 4 of the Insurance Regulatory and Development Authority of India Act, 1999 (hereinafter referred to as ‘the Act’). Section 4 of the Act talks of appointment of the Whole Time Members including a Whole Time Member of Actuarial Science. The remunerations which are payable under the Act are subject to statutory provisions inasmuch as there is applicable the Insurance Regulatory and Development Authority (Salary and Allowance payable to, and other Terms and Conditions of Service of Chairperson and other Members) Rules, 2000 (hereinafter referred to as ‘2000 Rules’), and as amended w.e.f 01.12.2008 whereby the new Rule 3 was substituted in place of the old rule and thereby monthly lump-sum payment to be made to the Whole Time Member was increased to 2.50 lacs per month. There are other provisions also as per the amended Rules dealing with the position of payment of dearness allowance and other allowances in terms of Rule 5 when the Whole Time Member does not opt for the higher pay package as per Rule 3. Therefore, the appointment of the petitioner is a statutory appointment under the Act and payment of salary and other allowances are governed by the statutory provisions being the 2000 Rules as amended w.e.f 01.12.2008. In the said Act and the 2000 Rules, there is no provision for payment of monthly actuarial allowance to a Whole Time Member (Actuary) of the respondent no.2, much less of a huge amount of Rs.65,000/- per month. Therefore, the petitioner cannot take in aid any statutory provision for seeking payment of the actuarial allowance of Rs.65,000/- per month, although the petitioner’s appointment is a statutory appointment and governed by the said Act and the 2000 Rules.
4. Even the appointment letter of the petitioner gives the petitioner a consolidated salary and this becomes clear from the office order of the respondent no.2 dated 09.1.2007, and which reads as under:-
“OFFICE ORDER/110/2006-07
Consequent to appointment of Sh. R. Kannan as a Manager of the Authority and on assumption of his charge on 18th December, 2006, Sh. R. Kannan’s pay has been fixed at Rs.24500 in the pay scale of Rs. 22400-525-24500 with effect from the date of assumption of his charge.
This issues with th
