IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN MONDAY, THE 7TH DECEMBER 2009 / 16TH AGRAHAYANA 1931 OP.No. 3036 of 2001(J) -------------------------------- PETITIONER: ------------------- DR. K. RADHAKRISHNAN NAIR, ADMINISTRATIVE OFFICER (LEGAL), THE ORIENTAL INSURANCE COMPANY LTD., REGIONAL OFFICE, METRO PALACE, NORTH TOWN RAILWAY STATION ROAD, COCHIN -18. BY ADVS. MR.P.R.VENKETESH, MR.T.R.RAJAN. RESPONDENTS: ------------------------ 1. THE CHAIRMAN AND MANAGING DIRECTOR, THE ORIENTAL INSURANCE COMPANY LTD., ORIENTAL HOUSE, P.B. NO. 7037, A. 25/27, ASAF ALI ROAD, NEW DELHI – 110 002. 2. THE GENERAL MANAGER, THE ORIENTAL INSURANCE COMPANY LTD., ORIENTAL HOUSE, P.B. NO. 7037, A 25/27 ASAF ALI ROAD, NEW DELHI – 110 002. 3. THE ASST. GENERAL MANAGER AND DISCIPLINARY AUTHORITY, THE ORIENTAL INSURANCE COMPANY LTD., ORIENTAL HOUSE, P.B. NO. 7037, A 25/27, ASAF ALI ROAD, NEW DELHI – 110 002. 4. B.K. NAIR, ENQUIRY OFFICER, S.D.M. D.O. II, COCHIN. R1 TO R4 BY MR.M.C.SEN, SENIOR ADVOCATE, ADV.MR. M.G.K.MENON. THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 07/12/2009,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: O.P. NO. 3036/2001-J: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE COMMUNICATION DT. 12/06/1996 ALONG WITH THE ARTICLES OF CHARGE AND STATEMENT OF IMPUTATION OF MIS-CONDUCT, MISBEHAVIOUR AND THE LIST OF DOCUMENTS AND WITNESSES. EXT.P.2: COPY OF THE WRITTEN STATEMENT OF DEFENCE. EXT.P.3: COPY OF THE ENQUIRY REPORT OF THE ENQUIRY OFFICER. EXT.P.4; COPY OF THE COMMUNICATION DT. 09/03/1998. EXT.P.5: COPY OF THE DETAILED REPLY SUBMITTED BY THE PETITIONER DT. 31/03/1998. EXT.P.6: COPY OF THE ORDER DT. 20/07/1998. EXT.P.7: COPY OF THE APPEAL MEMORANDUM FILED BY THE PETITIONER. EXT.P.8: COPY OF THE ORDER DT. 30/03/1999 PASSED BY THE R.2. EXT.P.9: COPY OF THE MEMORIAL FILED BY THE PETITIONER BEFORE THE R.1. EXT.P.10: COPY OF THE ORDER PASSED BY THE R.1. DT. 23/03/2000. RESPONDENTS' EXHIBITS: EXT.R1: COPY OF THE AWARD, DT. 02/08/97 OF THE MOTOR ACCIDENTS CLAIMS TRIBUNAL, EKM. IN O.P.(MV).NO.1614/92. EXT.R2: COPY OF THE POWER OF ATTORNEY GIVEN BY THE REGIONAL MANAGER OF ORIENTAL INSURANCE COMPANY, DT. 04/11/1992 TO THE PETITIONER. EXT.R3: COPY OF THE OFFICE ORDER DT. 17/02/93 WAS ISSUED SPECIFYING THE FINANCIAL POWERS OF THE PETITIONER. EXT.R4: COPY OF THE FINANCIAL AUTHORITY 1991 POWERS AND LIMITS BOOKLET EFFECTIVE FROM 01/09/91. EXT.R5: COPY OF THE LETTER DT. 31/10/1997 BY THE PETITIONER TO THE ENQUIRY OFFICER. //TRUE COPY// P.A. TO JUDGE. Prv. S.SIRI JAGAN, J. ================== O.P.No. 3036 of 2001 ================== Dated this the 7th day of December, 2009 J U D G M E N T The petitioner is an Administrative Officer (Legal) of the Oriental Insurance Company Ltd. In this original petition, he is challenging disciplinary proceedings against him, which resulted in imposition of the punishment of reduction of basic pay by four stages in the time scale on him. Disciplinary proceedings were initiated by issuing Ext.P1 memo of charges. The memo of of charges related to the settlement of claims in motor accident claims on the recommendation of the petitioner, which according to the respondents, could not have been settled. The allegation was that the petitioner did not have the financial authority to do so, since the amount was beyond the limits prescribed for the petitioner to exercise such discretion. Despite Ext.P2 written statement of defence, an enquiry was conducted and the enquiry officer submitted Ext.P3 enquiry report, in which, he found the petitioner guilty of four charges. Show cause notice was issued to the petitioner for imposition of punishment, to which also, the petitioner submitted objections. However, by Ext.P6 order, the punishment of reduction in basic pay by four stages in the time scale was imposed on the petitioner. The petitioner's appeal against that punishment was dismissed by Ext.P8. The petitioner submitted a memorial before the o.p.3036/01 2 Chairman and by Ext.P10 order that was also rejected. The petitioner has filed this original petition challenging Exts.P6, P8 and P10 orders, seeking the following reliefs: “a) To call for the records leading to Exhibits P6, P8 and P10 order and issue a writ in the nature of certiorari or any other appropriate writ order or direction. b) To declare that the petitioner is entitled to get the period during which he was placed under suspension ie. from 23.5.1996 to 30.7.1998 treated as on duty and also for consequential benefits including seniority, promotions and arrears of salary etc. c) To issue a writ in the nature of mandamus or any other appropriate writ order or direction commanding the respondents 1 to 3 to grant all consequential benefits based on the prayer (a) and (b) to the petitioner including seniority, promotions and arrears of salary etc.” 2. The petitioner does not have any case that the enquiry was conducted in violation of principles of natural justice or procedural formalities laid down by the rules. The only contention is that the findings of the enquiry officer and that of the disciplinary authority are perverse and against the evidence adduced in the enquiry. He takes me through the enquiry report, his objections to the same filed before the disciplinary authority and the order of the disciplinary authority. 3. He points out that even after the enquiry officer found that there is no evidence to show that the petitioner has exceeded the financial authority, in Ext.P6 order, the disciplinary authority has found him guilty of that misconduct also, without issuing any notice to the o.p.3036/01 3 petitioner to show cause why the disciplinary authority should not differ from the findings of the enquiry officer. He would further submit that the findings in respect of the four charges were also perverse. He points out that his recommendations were approved by the manager and the manager was not preceded against. According to him, in so far as there is no allegation that his recommendations for settlement of the cases were not actuated by any other motives, the mere act of recommending for settlement of the cases would not constitute any misconduct simply because the enquiry officer and the disciplinary authority were of opinion that the cases should not have been settled. 4. A counter affidavit has been filed by the respondents. The senior counsel appearing for the respondents would oppose the contentions of the petitioner. According to him, the enquiry officer has specifically found the petitioner guilty of four misconducts. He points out that this Court cannot sit in appeal over the findings of the enquiry officer and the disciplinary authority. This Court can only look into whether the disciplinary proceedings have been conducted strictly in accordance with the procedure prescribed and the principles of natural justice. In so far as the petitioner has no case that the procedure and the principles of natural justice have not been followed, this Court cannot re-appreciate the evidence adduced before the enquiry officer o.p.3036/01 4 and come to the conclusion other than that of the enquiry officer and the disciplinary authority. He submits that the enquiry officer and the disciplinary authority have given reasons for their conclusion, which are not in any way perverse, without which finding, this Court cannot interfere with the findings of the enquiry officer or that of the disciplinary authority. 5. I have considered the rival contentions in detail. 6. The enquiry officer has narrated the articles of charges in Ext.P3 report, which are as follows: “K.Radhakrishnan Nair while functioning as Administrative Officer (Legal) MTPCO, Cochin during the years 1992-1994 committed misconduct mentioned under: 1. He with a malafide intension compromised the following Motor claims at MACT in violation of the policy conditions and contrary to the legal opinion of Panel Advocate by misusing his official position:- a) O.P.No.4036/90 - Cl.No.441702/1/B/MV/200/92 for Rs.47,500/- b) O.P.No.1614/92 - Cl.No.440205/5/MV/93/152 for Rs.18,000/- c) He had with a malafide intension changed the office file of O.P No.4036/90 - Cl.No.441702/1/B/MV/200/92 in order to camouflage his misdemeanour, hence tampered with the office record. 2. He got the Cl.No.O.P(M.V.)/2184/92 and 2188/92 compromised for Rs.47,500/- and Rs.23,000/- for the minor injuries sustained by him and his wife respectively by misusing his official position and influence at MTPCO, Cochin. 3. He compromised following claims at MACT, Clandestinely without informing the higher authority and by exceeding his financial authority:- a) O.Ps.Nos.737/93 - 743/93 at MACT, Perumbavoor for Rs.38,000/- o.p.3036/01 5 Rs.28,500/- Rs.41,500/- Rs.42,500/-, Rs.42,500/-, Rs.35,000/- and Rs.32,000/- respectively. b) O.P Nos.646/93, 647/93, 648/93, 649/93 and 661/93 at MACT Ernakulam for Rs.30,000/-, Rs.37,500/- Rs.32,500/- Rs.22,500/- and Rs.32,500/- respectively. 4. He compromised the following claims without obtaining the supporting documents/flouting the procedure/in excess of his financial authority. A- O.P(MV) 187/91 MACT, Perumbavoor Rs.68,000/- B-O.P(MV). 1168/92 -do- Rs.60,000/- C-O.P(MV). 149/92 --do- Rs.82,500/- D-O.P(MV). 107/91 -do- Rs.27,500/- E-O.P(MV). 4157/90 -do- Rs.50,000/- F-O.P(MV). 36/92 MACT, Ernakulam Rs.65,000/- G-O.P(MV). 1445/92 MACT, Perumbavoor Rs.2,90,000/- H-O.P(MV). 1140/92 MACT Perumbavoor Rs.27,000/- In regard to MACT, Ernakulam, Case No.O.P(MV).No.1377/91 the claim which should not have been settled out of Court was settled by him for Rs.34,000/- which is beyond his financial authority and causing wrongful loss to the Company. He tampered the remarks of the then AAO (Legal), Sri.K.Jayaram, by deleting the word 'not fit' and adding once again the word 'fit' prefixing (for settlement). He by his above acts has failed to maintain absolute integrity exhibited conduct which is unbecoming of Public Servant and acted in a manner prejudicial to the interest of the Company thereby violated Rule 3 (i)(i)(iii) and 4(1) and (5) of the General Insurance (CDA) Rules 1975.” As is clear from the same, the same relates to 25 motor accident claims. The allegation was that in all the 25 motor accident claims, the petitioner recommended settling of the cases wrongly. But the enquiry officer found the petitioner guilty only of charge Nos.1(a), 4(F), 4(H) and 5. In respect of charge No.1(a), the enquiry officer entered the following findings: “Charge No.1 (a): O.P NO.1614/92 - Claim No.440205/5/MV/93/152 o.p.3036/01 6 (Refer Statement of imputation of Misconduct etc.). File in respect of the above MACT case has been marked through PW5 as Exhibit No. P9 on 7.7.1997 while taking evidence in Chennai. As pointed out by the Charged Officer by his Question No.1 in respect of the above case in his Cross Examination of PW5 and admitted by PW5 the Learners' Licence possessed by the Rider Mr.Anilkumar M.J. Is in the file. Licence No. is 2389/87 dated 12.09.1991 is valid for the period from 12.09.1991 to 11.03.1992 and then renewed the same for the period from 13.07.1992 to 12.01.1993. it is therefore seen that there was no licence at the material time i.e. 12.07.1992 either Learners' or otherwise. Driving vehicle without possessing a valid Driving Licence is in violation to the policy conditions. The Charged Officer is a well qualified person entrusted with the duty of processing Legal files to protect the interest of the Company. For the sake of argument it could be argued that the case was settled (there is no case by the Charged officer) by the Manager Mr.C.M.Kora on the basis of the submission by PW7 & PW8, the charged Officer could not escape from the responsibility of properly guiding and assisting the Manager. There is no case by the Charged Officer that the settlement was a “Mistake of Omission”. Hence there is no other alternate but to conclude that the settlement in this case was as a result of “Mistake of Commission” committed by the Charged officer. Thus charge by the Disciplinary Authority that the Charged Officer has compromised the case in violation of the policy condition is “PROVED” beyond doubt. However, the Company's interest was protected by filing “Affidavit” and getting Compromise award cancelled.' 7. In reply to the show cause notice issued by the enquiry authority, the petitioner gave the following reply in respect of the findings on that charge: “ Charge No.1 a O.P.No.1614/92 MACT Ernakulam This is the only case in which the enquiry officer has subscribed a view that the charge is proved. However, he has also concluded that the company's interest was protected by filing affidavit and getting o.p.3036/01 7 compromise award cancelled. This case was disposed of after a regular trial on 2nd August, 1997. I was under the impression that the presenting officer would have disclosed the factum of this disposal. A photocopy of the Award is now enclosed. It can be seen that a sum of Rs.18,800/- (Eighteen thousand eight hundred) with 12% interest was awarded against the Oriental Insurance Co. Ltd. which stands duly paid without filing any appeal. Earlier compromise was for Rs.18000/- without any interest. Comparing the two awards it can be seen that compromised amount was much less only. At any stretch of imagination it is therefore unjust to brand the honest attempt of the above compromise as a misconduct. The satisfaction of the above award dated 2.8.97 will prove my contentions in my written statement dated 22nd July 96 and in my argument note dated 23rd January, 98. The finding of the Enquiry Officer is a non-speaking one. He has gone wrong in not considering and not assessing the legal evidence. He has also failed to deal with the questions of law and fact. The settlement of this case was in the year 1993. Learner's licence was then considered as a duly valid licence. As in the case of permanent licence if he had a leaner licence though expired later at the material time of the accident liability is there on the insurer and it does not amount to any violations. In the year 1996 only an authoritative decision was pronounced by the Supreme Court holding that the Learner's licence was not a duly valid licence. Please see New India Assurance Co. v. M.M.Tambe, 1996 ACJ 253. In the circumstance, is it just to ignore the case law on the subject ? A legal officer of the company either qualified or not, experienced or not, has to necessarily acknowledge consider and adopt the law declared by the courts. It is pertinent to note that, no circular was also issued to the department to disown liability in the case of learner's licence. Only after the pronouncement of the Supreme Court in the year 1996 confirming the above (1996 ACJ 253) the lower courts have started following the same. Even statutory provisions of the Motor Vehicles Act, 1988 such as S.149 (2) a (11) or section 3 does not give any positive reference that Learners Licences are not duly valid licences. Therefore the enquiry officer ought to have critically examined and found that the stand taken by me is nothing but a bonafide one. It is difficult to o.p.3036/01 8 forecast in the year 93 the development of the year 96. There is neither mistake of commission nor omission. Being fraction of his imagination your honour may be kind enough to ignore it. It is humbly submitted and prayed that I may be exonerated absolutely from the above part of his perverse finding.” 8. In respect of 4(F), the findings of the enquiry officer are as follows: IV (f) O.P (MV)No.36/92 of MACT Ernakulam The charge is that serious irregularities were committed in settling the claim by the charged Officer. It was settled without verification of Driving Licence of the accused driver in the accident. The case file in this case has been marked as Exhibit No.P-14 on 8.7.1997 through Mr.Abdul Kader (PW5). The charged officer made a comment on page No.2 of the Investigation Report that “it is difficult to prove otherwise and there is no case for not having the DL. In the particular circumstance it would be better to settle the case.” The Charged officer in his argument note writes “According to the Presenting Officer despite the case is compromised by the Manager, being legal officer a duty is vested to guide the manager with valid reason not to go in for settlements.” The views of the presenting officer is correct and acceptable. The Charged officer could not escape from his responsibility when he has encouraged the Manager to settle the claim instead of discouraging him. The charged officer has sought protection under the Circular marked as Exhibit No.D-3. Under the head verification of Driving Licence eventuality (d) reads: “Police Authorities might seize the driving licence and later on return the same to the driver without noting the particulars and also had not prosecuted the driver. The insurance company also does not get any response from the owner to produce the driving licence for verification.” In the instant case the protection sought is not available in as much as: o.p.3036/01 9 (1) Police authorities did not seize the D/L. (2) No attempt was made by the Insurance Company to verify the D/L by obtaining it from the owner or Driver except that an ordinary letter was addressed to the insured. As such the Charged Officer is wrong in recommending the claim for settlement which ultimately resulted in settlement of the claim and loss to the Company. The claim should not have been settled and atleast sought the protection available to the insurance Company under section 95 of the Motor Vehicle Act 1939. The presenting Officer submits in his argument note “But at any rate settling the case by compromise is not appropriate. Here Mr.Radhakrishnan Nair supported the decision taken by the Manager in haste. The theory adopted by Mr.K.Radhakrishnan Nair BOSE IS CORRECT is not at all appreciated and hence he has committed CONTRIBUTORY NEGLIGENCE in the disposal of this case, though FORTUNATELY the entire blame cannot be put on the Charged Officer.” The view expressed by the Presenting Officer is acceptable without doubt. The presenting officer submits that the entire blame could not be put on the Charged officer as the claim was settled by the Manager of MTPCO. However, as already explained above, the Charged officer should not have recommended settlement of the claim at all. Hence there is no other alternative but to conclude that the charges levelled against the Charged officer is “PARTLY PROVED” in as much as he has recommended a claim which otherwise should not have been recommended.” The petitioner's reply to the same before the disciplinary authority is as follows: “OP (MV) 36/92 MACT Ernakulam Findings of the enquiry officer are: (a) There is contributory negligence only on the charged officer as the claim was settled by the Manager of the MTP Co. (b) He has no other alternative but to conclude that the charges levelled against the charged officer is 'partly proved' in as much as he has recommended a claim which otherwise should not have been recommended. o.p.3036/01 10 As submitted earlier, 'partly proved' charges are nothing but 'Not proved' charges in the eye of law and facts. As admitted by the presenting officer and proved by the charged officer the claim was settled by the manager of the M.T.P. CO. Enquiry officer has also found the same. It is true that I have written my opinion on the investigation report such as it would base better to settle the case. This is generally done when a report is gone through. There is no evidence to prove by the presenting officer that the Manager who settled the case solely relied on my writing. In the absence of such a positive reference any where or atleast in the note for satisfaction of the award it is unjust and baseless to find that I have encouraged settlement. I do not think that it is possible also. PW5 Abdul Kader had clearly confirmed that Manager Mr.Korah himself has settled mostly big cases (See his Cross -QA- 67). Finding that protection under the circular Ext.No.D3 is not available is also baseless and incorrect. Circular envisages that it will be advisable to presume that the driver was holding valid licence as normally courts have been deciding the cases based on such presumption in the following eventualities. (1) When the police had not prosecuted the driver. (2) When the Insurance Company also does not get any response from the owner or the driver to produce the DL for verification. In the instant case both eventualities have been there. It is an undisputed fact that the police had not prosecuted the driver and Enquiry officer himself has found that a letter was addressed to the insured asking for DL verification. Disregarding the same he found that no attempt was made by the insurer. Therefore the above finding is without any valid reason and is against the truth. As provided in the last para of Ext.D3, it will be extremely difficult for the Insurers to prove the contention, particularly when the police does not prosecute the driver on this count of not holding valid licence. Presenting officer had no case that the insurance company is in no way liable for compensation. o.p.3036/01 11 In the circumstances, the finding that an innocent but valid personal remark was aimed to encourage the manger is a mere suspicion and presumption. A bonafide expression of a dealing officer can never be branded as as misconduct. When the main charge is held as not proved the individual existence of those alleged partly proved facts are absolutely questionable in any sense.” 9. In respect of charge No.4(H), the findings is of the enquiry officer are as follows: “ IV(h) O.P(M.V).No.1140/92 - MACT Perumbavoor Charges: 1. Mr.Radhakrishnan Nair compromised the case without obtaining supporting documents/flouting the procedure/in excess of his Financial Authority. 2. The insured vehicle was a Private car. On verification of police records it was found that the vehicle was registered as a Taxi and not a private car. As there was violation of policy condition this case was not fit for settlement but case was compromised for Rs.27,000/- and Shri.Radhakrishnan Nair prepared the NOTE. The case file has been marked as Exhibit No.P15 on 8.7.1997 through PW5. With regard to the first charge a lot of discussions were held in various cases. In the light of the discussions:- PW7 and PW8 admits that the Charged officer was invariably accomprnled (sic) by the Manager and almost all the case are settled by the manager. The statement of DW-1 is not on confident terms. He being a raw hand (joined services of the Company in August 1993, and the case was settled in September 1993) his evidence could be ignored in this case. With regard to documents, FIR, Wound Certificate, Medical Bills etc. are in the file. Hence it is concluded that Charge (1) under IV(h) O.P(M.V.)1140/92 MACT Perumbavoor is “NOT PROVED”. Now coming to the other charges Copy of the policy is in the file which shows that the vehicle is covered under the policy as a PRIVATE CAR. The police documents are in the file which proves that the vehicle was a o.p.3036/01 12 Tourist Car right at the time of insurance. As such the plea that there is a misrepresentation of material facts and besides savings on premium could be accepted. Since the policy is not taken for the purpose for which the vehicle is registered it could be considered that the claim is not fit for compromise settlement. The Charged officer states that he has not prepared the NOTE and that somebody else has prepared it. Even if the plea is accepted he could not escape from the responsibility for recommending the case for satisfaction of the Award. The Arguments raised by the Charged officer otherwise are irrelevant as far as the charges referred to above are concerned. Hence it is held that the charges referred to in IV(h)(2) as above are “PROVED'. It is therefore finally concluded that the charges are “PARTLY PROVED”. The petitioner's answer to the same before the disciplinary authority is as follows: “ IV(h) O.P (MV) 1140/92 MACT Perumbavoor The main charge was held 'not proved.' It has been found that this case was settled by the manager alone with the required documents. Despite, the enquiry officer wrongly finds that a minor responsibility lies up on me to guide properly an higher authority. Your honour can see that it is not at all an acceptable proposition. It is alleged, that I have initialled the Note which is branded as recommending as well. The enquiry