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IN THE HIGH COURT OF DELHI
Rajiv Shakdher, Talwant Singh, JJ.
National Insurance Company Limited - Appellant
Versus
Devender Malhotra - Respondent
LPA 485 of 2021 and CM No. 45966 of 2021
Decided On : 23-05-2022




Reemployment does not constitute a break in service under Rule 22, asserting the need for proper consideration of emoluments and all entitlements upon reinstatement.

Headnote:(A) General Insurance (Conduct, Discipline and Appeal) Rules, 1975 - Rule 22 - Reinstatement of employee - Order modifying penalty from removal to reemployment held as not constituting a break in service - Discretion under Rule 22 requires consideration of entitlements and restoration aspects - Remanded for decision on emoluments and treatment of intervening period. (Paras 6.1, 16, 17, 18)

(B) Disciplinary proceedings - Nature of penalties - Reemployment as a penalty not prescribed under Rule 23 - MA's interpretation not upheld; duty to consider all aspects upon reinstatement stressed. (Paras 5.2, 7.5)

Facts of the case:
The respondent was removed from service after being charged with negligence and misappropriation; the MA modified the penalty to reemployment but deemed the removal period a break in service, leading to legal challenge.

Findings of Court:
The court supported the single judge's view that the MA's order contravened Rule 22, emphasizing the necessity to assess the employee's entitlements due to reinstatement.

Issues: Whether the period of removal constituted a break in service and the implications for emoluments and type of punishment.

Ratio Decidendi: The court ruled that reinstatement should not be construed as a break in service per Rule 22 contributions and conditions for emolument decisions should be revisited.

Result: Appeal dismissed.

JUDGMENT

Rajiv Shakdher, J. This writ petition is directed against the judgement of the learned single judge dated 10.11.2021, passed in W.P.(C) No.6318/2013. The learned single judge via the impugned judgment has partially allowed the writ petition filed by respondent no.1. The learned single judge has quashed the order dated 10.10.2012, passed by the Memorial Authority [hereafter referred to as "MA"], to the extent it held that the period for which order of removal from service qua respondent no.1 remained in force, it would constitute a break in service.

2. Besides this, the learned single judge has also directed the MA to reconsider the case insofar as it failed to examine the issues concerning payment of emoluments and treatment to be accorded to the intervening period for which respondent no.1 remained out of service i.e., till the time he was reinstated in service. The MA was, thus, required to examine these aspects in the backdrop of Rule 22 of the General Insurance (Conduct, Discipline and Appeal) Rules, 1975 [in short "CDA Rules"].

3. The appellant is aggrieved by the directions issued by the learned single judge insofar as he has set aside the order of MA concerning break in service and remanded the matter for reconsideration under Rule 22, keeping in mind the interpretation accorded by him.

4. The challenge laid before the learned single judge arises inthe backdrop of the following brief facts:

(i) Respondent no.1 was inducted into service of the appellant in and about September 1985 in the post of Inspector.

(ii) By dint of his work, he was promoted to the cadre of Administrative Officer.

(iii) However, on 02.01.2007, after having spent nearly 22 years in service, respondent no.1 was served with a charge sheetconcerning misappropriation of premium and negligence displayed towards his duty to regulate and monitor the issuance of cover notes by the agents. In this connection, four charges were framed against respondent no.1.

(iv) The Inquiry Officer [in short "IO"] via report dated 15.01.2010 concluded that all charges were proved against respondent no.1. Upon an opportunity being given to respondent no.1 by the disciplinary authority, a reply was filed by him which is dated 20.02.2010. The disciplinary authority, after considering the reply, concurredwith the findings returned by the IO and went on to impose upon respondent no.1 a major penalty of removal from service. The order of the disciplinary authority is dated 28.04.2010.

(v) Respondent no.1 preferred an appeal, on 12.05.2010, with the Appellate Authority. The Appellate Authority rejected the appeal, via its order dated 08.09.2010.

(vi) Being dissatisfied, respondent no.1 preferred a memorial dated 10.11.2010 with the Chairman-cum-Managing Director of the appellant i.e., MA. Even while the matter was under consideration before the MA, respondent no.1 had moved this court by way of a writ petition i.e., W.P.(C) No.2597/2012. This writ petition was disposed of on 27.09.2012, with a direction that the MA would dispose of the pending memorial, within 6 weeks, albeit in accordance with the law.

(vii) The record shows that on 10.10.2012, the MA disposed of the memorial preferred by respondent no.1. In short, the MA held that respondent no.1 was negligent in discharging his duties. Having arrived at this conclusion, the MA modified the penalty from "removal of service" to "re-employment" placing him at the initial basic scale of Administrative Officer. The MA, as noted above, went on to hold that the period between the removal of service and reemployment of respondent no.1 shall be treated as a period not spent on duty; which, in effect, constitutes a break in service.

(viii) Respondent no.1, thus, approached this court once again under Article 226 of the Constitution and assailed the inquiry report dated 15.01.2010, the order of the disciplinary authority dated 28.04.2010, the order of the Appellate Authority dated 08.09.2010 as also the order of MA dated 10

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