IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Ashutosh J. Shastri, J.
R M Shah - Appellant
Vs.
United India Insurance Co. Ltd. THRO' Chairman Cum M.D. & others - Respondent
Special Civil Application No. 10783 of 2008
Decided On : 22-04-2022
Article 226 - Challenge to order dated 02.06.2008 - General Insurance (Conduct, Discipline and Appeal) Rules, 1975 - The court quashed the order of penalty imposed on the petitioner, finding it to be outside the purview of Rule 23(e) of the Rules.
Fact of the Case:
The petitioner, a Development Inspector with United India Insurance Company Limited, was suspended in 1991 due to a CBI investigation. After a prolonged departmental inquiry, a penalty of reduction in pay and treating the suspension period as 'period not spent on duty' was imposed in 2000. The petitioner's appeal and review were rejected, but a subsequent writ petition was allowed by the court in 2004, directing the respondents to pay all consequential benefits. The respondent company filed an appeal, which was partly allowed in 2008, leading to the impugned order of penalty in the present petition.
Finding of the Court:
The court found that the penalty imposed on the petitioner was outside the purview of Rule 23(e) of the General Insurance (Conduct, Discipline and Appeal) Rules, 1975, and quashed the order. The court directed the respondent authority to pass an appropriate order afresh after considering the true effect of Rule 23 of the Rules.
Issues: The issues involved in the case were the legality and validity of the order dated 02.06.2008, the imposition of penalty outside the purview of Rule 23(e) of the Rules, and the need for a fresh decision by the respondent authority.
Ratio Decidendi: The court held that the penalty imposed on the petitioner was not sustainable as it was outside the purview of Rule 23(e) of the Rules. The court also emphasized that the quantum of punishment to be imposed in a particular case is essentially the domain of the departmental authorities, and the courts cannot assume the function of disciplinary authorities in deciding the quantum of punishment and nature of penalty to be awarded.
Final Decision: The court partly allowed the petition, quashing the impugned order dated 02.06.2008 and directing the respondent authority to pass an appropriate order afresh after considering the true effect of Rule 23 of the Rules. The court left it open for the authorities to take an appropriate decision in consonance with the Rules.
JUDGMENT :
1. By way of this petition under Article 226 of the Constitution of India, the petitioner has challenged the legality and validity of an order dated 02.06.2008 passed by respondent authority and sought a consequential reliefs for granting appropriate pay scale, grade and other ancillary benefits. The payers clause contained in the petition are reproduced hereunder:
“7.(A). Allow this Petition.
(B). Quash and set aside the order dated 2/06/2008 as being illegal, arbitrary, violative of principles of natural justice, unconstitutional and violative of Article 14 of the Constitution of India.
(C). Declare that the petitioner is entitled to be placed in the scale of pay and grade on the date of superannuation of 29/02/2004, as if the impugned order of penalty has not been passed.
(D). Direct the Respondents to compute and pay pensionary benefits to the petitioner on the basis of last pay drawn as if the impugned order of penalty dated 2/06/2008 has not been passed.
(E). Pending admission and final hearing of the petition, suspend the implementation, execution and enforcement of the order dated 2/06/2008.
(F). Pass such other or further orders as may be deemed necessary and proper in the facts and circumstances of the case.
(FF) The quash and set aside the penalty order dated 2.06.2008 on the ground that it has no bearing of authority based on the Rules of the Respondent Insurance Company and allow the petitioner to be placed in the scale of pay and grade on the date of 29.02.2004 and allow him to retire with all consequential benefits.”
2. The case of the petitioner is that the petitioner was appointed as a Development Inspector with respondent No.2 i.e. United India Insurance Company Limited on 01.03.1974 and superannuated on 29.02.2004. It is the case of the petitioner that the respondent No.2 placed the petitioner under suspension vide order dated 04.04.1991 and the said order of suspension was passed on account of the investigation being conducted by the Central Bureau of Investigation against petitioner in response to the First Information Report dated 02.04.1991 under the provisions of the Prevention of Corruption Act. According to petitioner, two criminal cases were lodged against the petitioner one was dropped in the month of June 1992 on an application made by the CBI to drop the proceedings on the ground that there was no sufficient evidence to prove the charges and accordingly, RC 11/1991 and RC 16/1991, RC 11/1991 were dropped by the agency and RC 16/1991 did not progress further. It is the case of the petitioner that by that time the charge-sheet was issued on 20.02.1992 for contemplating the departmental proceedings against the petitioner and main charge was that petitioner in discharge of his duties as Development Officer had demanded and accepted bribe for settlement of an insurance claim of the claimant. Of-course the said charge leveled against the petitioner was denied by the petitioner vide a letter dated 24.02.199. On 14.05.1992, an Enquiry Officer was appointed to conduct the departmental proceedings against the petitioner and the department appointed a Police Sub-Inspector working with CBI, who had carried out the investigation to prosecute the petitioner, as a Presenting Officer to the case of department. On 19.05.1993, the petitioner made a request in the form of application to Enquiry Officer seeking permission to engage a lawyer as a defense assistance and the said request was made in view of the fact that Police Inspector who was connected with the investigation of the whole incident was appointed as Presenting Officer. However, the said request of engaging a lawyer came to be rejected by the Enquiry Officer.
2.1 According to the petitioner, the departmental proceedings remained pending for more than seven years after issuance of charge-sheet as a result of this, on 20.02.1998 a representation was made to expedite the proceedings since the petitioner was under suspension. In pursuance to the said reques
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