IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.13475 of 2001 -------- In the matter of an application under Article 226 of the Constitution of India. --------- SAROJ KUMAR SRIVASTAVA, SON OF LATE THAKUR PRASAD, RESIDENT OF “NILIMA SINGH SADAN”, GANGA SINGH COLLEGE ROAD, POLICE STATION- CHAPRA TOWN, DISTRICT- SARAN. ………. Petitioner Versus 1.LIFE INSURANCE CORPORATION OF INDIA, THROUGH ITS CHAIRMAN, CENTRAL OFFICE, YOGAKSHEMA”,JEEVAN BIMA MARG, MUMBAI-400001. 2.THE MANAGING DIRECTOR, LIFE INSURANCE CORPORATION OF INDIA, CENTRAL OFFICE, “YOGAKSHEMA”, JEEVAN BIMA MARG, MUMBAI-400001 3.THE ZONAL MANAGER, LIFE INSURANCE CORPORATION OF INDIA, EASTERN ZONAL OFFICE, HINDUSTAN BUILDING, 4-CHITRANJAN AVENUE, CALCUTTA. 4.THE SENIOR DIVISIONAL MANAGER, LIFE INSURANCE CORPORATION OF INDIA, DIVISIONAL OFFICE, HAZARIBAGH. …………. Respondents --------- For the Petitioner : M/s R.N.Mukhopadhaya, Vishwanath Ram, Dhruba Mukherjee and Chandra Nawal Kishore,Adv. For the Respondents : Mr.Rajiv Ranjan Prasad,Adv. --------- P R E S E N T THE HON’BLE MR.JUSTICE JAYANANDAN SINGH J.N.Singh,J.: Petitioner has filed this writ application for quashing of Annexure-1 dated 19.08.2000, an order passed by the M.D. of the respondent-Corporation, reducing the basic pension of the petitioner by Rs.115/-, as a punishment on conclusion of a departmental proceeding. Petitioner has also prayed for quashing of Annexure-2 dated 11.6.2001, a communication of the Divisional Manager of the respondent-Corporation, intimating him that, as there was no provision for appeal under rules of the Corporation, his appeal can not be entertained. - 2 - Petitioner has prayed for consequential reliefs also pursuant to quashing of Annexure-1. 2. Case of the petitioner is that he was appointed as the Development Officer under the Life Insurance Corporation of India Ltd. (hereinafter referred to as „the Corporation‟) in March 1962 and was posted at Chapra Branch. He was later on promoted as Assistant Branch Manager in July, 1994 and posted at Bettiah Branch. Subsequently, in July 1987 he was transferred to Siwan Branch. In June 1988 he was promoted and posted as Branch Manager, Muzaffarpur No. III. Thereafter he was transferred to Siwan Branch in July 1991. While petitioner was posted at Siwan, there was some enquiry by the Chief Manager, Finance and Accounts, who submitted a report to the higher authority with regard to an incident of temporary embezzlement of LIC funds in the Branch. Simultaneously, by an order of the even date petitioner was put under suspension in contemplation of a departmental proceeding. The said order was approved by the Managing Director vide his order dated 15.12.1992 (Annexure-3) to the writ application. However, in spite of his suspension and approval of the said order by the Managing Director no proceeding was initiated against him for quite some time. Hence, petitioner filed a representation on 19.5.1994 to the authorities of the Corporation for revocation of suspension. 3. No orders were passed on the said representation and as such petitioner moved this Court through - 3 - C.W.J.C. NO. 5401 of 1994 challenging his suspension order. While the writ application was pending, the suspension of the petitioner was revoked by Annexure-4 dated 7.9.1984. After revocation of his suspension, petitioner was posted as Administrative Officer (PS) at Hazaribagh vide Annexure-5 dated 17.9.1994. Therefore, when the writ application was taken up it was noticed that as the suspension of the petitioner had been revoked, the writ application of the petitioner had become infructuous, and as such the same was disposed of with a direction to the respondents to pay the salary of the petitioner. The stand of the respondents was noticed that the respondents had referred the matter to Vigilance Department of the Corporation and the Corporation may decide in future to initiate proceeding against the petitioner if materials are available to prove the allegations. 4. After disposal of the Writ application, it appears that, the matter was examined and decision was taken to initiate proceeding against the petitioner. Hence along with the letter dated 10.10.1996 of the Senior Divisional Manager, Hazaribagh, where the petitioner was posted, he received two sets of charge- sheets dated 17.09.1996. A copy of the said letter is annexed as Annexure-7 to the Writ Application. 5. In the present Writ Application petitioner has confined his challenge to the punishment order passed against him in respect of the proceeding held against him pursuant to the first charge-sheet. Therefore, a - 4 - copy of the first charge-sheet only, served on the petitioner along with the said letter of the Divisional Manager of Hazaribhagh dated 10.10.1996 has been annexed by the petitioner as Annexure-8 to the Writ Application. In paragraph 13 of the Writ Application it has been specifically stated that the second charge-sheet and the allegations levelled therein are not subject matter of this present Writ Application. After receipt of the first Charge-sheet along with the said letter of Senior Divisional Manager, Hazaribagh, dated 10.10.1996, petitioner sent a letter to the respondent Managing Director vide Annexure-9 dated 18.10.1996 intimating him his denial to the charges and requesting him to forward the necessary prosecution evidence upon perusal of which he would be able to call for any further documents and would furnish details of defence evidence and list of defence witnesses as sought by them. The matter remained at rest at that stage and the petitioner superannuated from service on 31.10.1996. 6. It is contended by the petitioner that no orders were issued for continuance of the proceeding after his superannuation. However by order dated 18.11.1996, one S.N.Wahi, Manager (DP) Muzaffarpur was appointed as an Inquiry Officer and by order dated 20.11.1996 one D.S. Rawat, Manager (P & IR) Muzaffarpur was appointed as Presenting Officer. These two orders were communicated to the petitioner by letter of the Presenting Officer dated 12.12.1996 vide Annexure-10. By letter dated 7.01.1997 the Inquiry Officer asked - 5 - the petitioner to furnish the name of defence assistant for his assistance in the enquiry which he proposed to start on 10.02.1997. After receipt of the said letter, by letter dated 22.01.1997, vide Annexure-11, petitioner requested for copies and list of prosecution evidence and further requested for shifting the inquiry from Muzaffarpur to Chapra as he was a heart patient. He also requested for release of his post retiral benefits. In reply, by letter dated 13.02.1997, petitioner was asked by the respondents to appear before a Medical Board. Thereafter, it appears that, upon being satisfied with regard to the health condition of the petitioner, the Regional Manager, vide order as contained in Annexure-12 dated 17.09.1997 changed the venue of the inquiry from Muzaffarpur to Chapra. During this period petitioner had filed an application for being represented by lawyer in the inquiry which was rejected by the Regional Manager vide his order dated 17.04.1997 (Annexure-13) to the Writ Application. After the inquiry was shifted to Chapra, by order dated 27.10.1997, one R. Harizan was appointed as Presenting Officer and by order dated 27.11.1997, vide Annexure– 14, the date of commencement of the inquiry was fixed as 8.12.1997 and the same was communicated to the petitioner. It is admitted by the petitioner that thereafter inquiry proceeded and was held on different dates in which petitioner participated. After conclusion of the inquiry petitioner submitted a comprehensive defence statement denying all the - 6 - charges levelled against him in the charge-sheet and dealing with the same in detail, as enclosed with Annexure-15 dated 12.05.1998 which is an order-sheet of last day of inquiry. 7. Thereafter, the Inquiry Officer submitted his report vide Annexure-16 dated 25.02.1998. The said report was a joint report in respect of proceeding connected with both the charge-sheets. In respect of first charge-sheet, which is subject matter of the present Writ, the Inquiry Officer exonerated the petitioner of charge nos. 2 and 3, but he found the petitioner guilty of charges 1 and 4. Thereafter the respondent Managing Director, vide Annexure-17 dated 20.10.1999, issued a second show cause notice to the petitioner enclosing a copy of the inquiry report and provisionally proposing a punishment of reducing basic pension of the petitioner by Rs.115/- in exercise of his powers under Rule 48(1) of the Pension Rules of the Corporation. After receipt of the second show cause, petitioner filed his detailed reply, vide Annexure-18 dated 28.02.2000. Thereafter, considering the entire matter the respondent Managing Director of the Corporation passed the impugned order, Annexure-1 dated 19.08.2000, imposing a punishment of reducing the pension of the petitioner by Rs.115/- in terms of Rules 48(1) of LIC of India (Employees) Pension Rules 1995. Petitioner filed an appeal vide Annexure-19 dated 12.03.2001. However, as there is no provision of appeal in the Rules, he was intimated by the Senior Divisional Manager, vide Annexure-2 dated 11.06.2006, - 7 - that his appeal could not be entertained. 8. While assailing the impugned order Annexure-1, learned counsel for the petitioner made two submissions namely, (i) that the Inquiry Officer while coming to the conclusion of guilt against the petitioner in respect of charge no. 1 and 4 did not consider the submissions and contentions raised by the petitioner in his reply and raised during the hearing of the proceeding and (ii) that even if the charge nos. 1 and 4 are accepted as proved, the same did not fall within the category of grave misconduct as defined in explanation (b) of Rule 46 of LIC of India (Employees) Pension Rules 1995 (hereinafter referred to as „the Pension Rules‟) and therefore, no punishment could be awarded against the petitioner after his superannuation. Therefore, learned counsel for the petitioner submitted that, the impugned order of punishment as contained in Annexure-1 was illegal, without jurisdiction and hence fit to be quashed. He also submitted that the petitioner had a legal right of an appeal against the said order of punishment and therefore, refusal of the respondents to consider his appeal was in violation of the principles of natural justice. 9. In support of his above two contentions the learned counsel for the petitioner placed in detail the first charge-sheet, the inquiry report as well as his defence statement, as contained in Annexure-15, and attempted to demonstrate that the contentions of the petitioner made in respect of charge no. 1 and 4 - 8 - in his defence statement has nowhere been noticed in the inquiry report and therefore, the impugned order of punishment on the basis of findings of said inquiry report was fit to be quashed as violative of principles of natural justice. 10. Respondents appeared in the case and have filed counter affidavit. Besides general denial with regard to the challenges and submissions made by the petitioner in his writ application, it is asserted in the counter affidavit that the orders Annexure-1 and 2 are perfectly in accordance with law, there was no infirmity in the enquiry report and the impugned order was validly passed in terms of Rule 48(1). It is also asserted that since there was no provision of appeal in the Pension Rules, petitioner‟s appeal could not be entertained by the respondents. A question of territorial jurisdiction has also been pleaded by the respondents in the counter affidavit, but the same was not at all raised during the hearing of the case. In reply to the submissions of learned counsel for the petitioner that the contentions made by the petitioner in his written statement with regard to charge nos. 1 and 4 have not been noticed in the enquiry report, it was submitted by learned counsel for the respondents that from a bare reading of the written statement of the petitioner, it would be evident that petitioner had accepted the facts leading to the framing of charge nos. 1 and 4. Therefore, he submitted that, as the charge nos. 1 and 4 were found to be proved on the basis of admission of the petitioner and also on the - 9 - basis of unimpeachable documents and admitted facts, the failure on the part of the Inquiry Officer to make a mention of the defence statement of the petitioner in his inquiry report will not vitiate the inquiry. It was submitted by learned counsel for the respondents that, as all the facts in respect of charge nos. 1 and 4 were apparently admitted by the petitioner, no prejudice, in fact, was caused to him by non-mention of his contentions made in his defence statement. For this purpose, learned counsel for the respondents took this Court through the statements made by the petitioner in his defence statement in respect of charge nos. 1 and 4 and made an effort to demonstrate that in fact the petitioner had, in so many words, accepted the lapses committed by him in the matter of disbursement of advances to the Development Officers in the manner as alleged in the charge-sheet and against the practice and procedure of the Corporation. He further submitted that the punishment imposed by the respondents was in terms of Rule 48(1) of the Pension Rules on proved grave misconduct on the part of petitioner and therefore respondent Managing Director was well within his powers to order for permanently reducing the pension of the petitioner by Rs.115/-. 11. In support of his first contention, learned counsel for the respondents placed reliance on a judgment of the Hon‟ble Supreme Court passed in the case of State of U.P. Vs. Harendra Arora & Anr., reported in AIR 2001, S.C. 2319, to finally contend - 10 - that in absence of any prejudice shown to have been caused to the petitioner, this Court should not interfere with the order of punishment. 12. Considering the rival submissions and after perusal of the materials available on record, it cannot be denied that petitioner‟s written submission does not find mention in the report of the Inquiry Officer. It is also not denied that, in absence of a provision of appeal in the rules/regulations of the Corporation the appeal of the petitioner was not entertained and considered. Thus it is apparent that the contention of learned counsel for the petitioner that written submissions of the petitioner was not at all considered is correct. His contention is also correct that the appeal of petitioner for whatever worth it was also not considered by the respondents. Hence, the submissions of learned counsel for the petitioner, supported by the traditional view emanating from judicial pronouncements, was fit to be accepted by holding that while passing an adverse order against the petitioner, the respondents had completely failed to comply with the principles of natural justice. However, arguments have been made by learned counsel for the respondents to the effect that the traditional view of breach of principle of natural justice in such circumstances has been qualified by theory of prejudice in later judgments of the Apex Court. In view of the judgments cited by learned counsel for the Corporation his submission cannot be altogether brushed aside. Hence this requires a - 11 - harmonious approach to the matter and it requires to be examined as to whether in the light of the admitted facts and the stand of the petitioner in his written statement as well as in his reply to the show cause and his memo of appeal, whether non consideration of the same in fact did cause prejudice to the petitioner or not. This is a question of fact. As acknowledged by the Apex Court it also requires examination as to whether had the stand of the petitioner in his written statement, in his reply to the show cause notice issued by disciplinary authority and his memo of appeal been taken note of by the Enquiry Officer and the superior authorities of the Corporation, whether their approach and decision in the matter would have materially altered the final decision of the disciplinary authority imposing punishment vide Annexure-1 would have changed in favour of petitioner. Petitioner has also pleaded in his writ application for consideration of his reply to the show cause notice issued by disciplinary authority and his memo of appeal as part of the writ application and to be taken into account along with the statements made by him in his writ petition. Hence in this back ground the facts of the case as appearing from the records require a little detail consideration. 13. Petitioner was posted as Branch Manager at Siwan Branch Office of the Corporation within the Jurisdiction of Muzaffarpur Division. He has accepted that there was some enquiry with regard to irregularities committed in the Branch in matters of - 12 - financial transactions and accounts during the period March 1992 to November 1992. Petitioner was earlier suspended but his suspension was later revoked, may be due to pending challenge to the same in this Court. However, respondents decided later on to initiate proceeding against him and hence, charges were framed against the petitioner and served upon him. This writ application is confined only in respect of matters connected with first charge-sheet. In the first charge sheet there were four charges out of which petitioner has been found guilty of charge nos. 1 and 4. Therefore, it is appropriate to confine the consideration of the case of the petitioner in reference to charge nos. 1 and 4 of the first charge sheet. For easy reference charge nos. 1 and 4 of the first charge sheet is being reproduced hereinbelow:- “1) That, while you were posted as Branch Manager at Siwan Branch Office in Muzaffarpur Division, you had sanctioned a total amount of Rs.15,92,500/- as advances against I.B. and A.C.A. to 12 Development Officers of Siwan Branch Office between the period from March 1992 to November 1992 as detailed in Annexure I merely on the basis of applications made by the Development Officers without making the calculations in accordance with the rules;” “4) That, out of total advances sanctioned to the Development Officers of the Siwan Branch Office as mentioned in Annexure I, it is observed that an amount of Rs.2,65,276=35 is still outstanding in the name of Development Officer, Shri S.K. Sinha, Code No. 814-546 and an amount of Rs. 1,59,047=89 is still outstanding in the name of Shri R.B. Singh, Code No. 874-546. Thus, the total amount of Rs.4,24,324.24 is still outstanding from the advances sanctioned by you during the period March 1992 to November 1992.” 14. From a bare reading of charge no. 1 it appears - 13 - that the petitioner was charged of sanctioning a total amount of Rs.50,92,500/- as advances against incentive bonus (1 B) and additional conveyance allowance (A.C.A.) to 12 Development Officers of the Branch between the period in question merely on the basis of applications. By charge no.4, petitioner was shown responsible for outstanding advances to 2 Development Officers, which were still continuing till the date of framing of the charge as detailed therein. 15. In respect of charge no.1, it was explained by learned counsel for the respondents that the Development Officers of the Corporation were entrusted with getting business by way of new policies from the subscribers. Certain number of policies were fixed for every Development Officer to obtain in a financial year and the rules of the Corporation prescribed that for this purpose and for obtaining more business to the Corporation, Incentive Bonus and Additional Conveyance Allowance was payable to them. For obtaining the policies up to the target fixed and for getting more policies, this incentive bonus was calculated and paid to the Development Officers on the basis of actual policies and the amounts of premium income generated by them to the Corporation. The effort by the Development Officers in the matter was also compensated by payment of additional conveyance allowance to them. However, he submitted that this incentive bonus and additional conveyance allowance had to be sanctioned to a particular Development Officer only on the basis of the actual work done by - 14 - him and amount of premium involved, as appearing from the actual number of new policies opened by them and the first premium cheque received in the Corporation after calculation of the same as per the rules of the Corporation. Learned counsel for the respondents submitted that during the period in question, the petitioner did not strictly adhere to the procedure prescribed in the rules for sanction of incentive bonus and additional conveyance allowance to the 12 Development Officers of the Branch. He submitted that the development Officers merely submitted applications without giving the exact details of the policies started by them and the premium income generated to the Corporation. In the process petitioner did not insist for the details and did not make the calculations for sanctioning incentive bonus and additional conveyance allowance to them. In fact, on application of the Development Officers more amount were sanctioned to them than they were entitled for on the basis of the actual policies open by them. Petitioner actually sanctioned advances against incentive bonus and additional conveyance allowance to the 12 Development Officers beyond their entitlement and which were to be adjusted subsequently against the policies which these Development Officers were to obtain in coming months or years. He submitted that in fact charge no. 4 clearly demonstrates that advances to two Development Officers sanctioned and released during the period March 1992 to November 1992 remained outstanding up to the period 1996, as the Development - 15 - Officers could not obtain and open sufficient number of policies to get this advance adjusted against their entitlement for incentive bonus and additional conveyance allowance in subsequent years also. The details of the advances released to the Development Officers during the period were annexed as annexure-1 to the charge sheet and was duly served on the petitioner, which is part of Annexure – 8 as appearing at page 50 of the brief. 16. Petitioner filed his written statement to the charges after conclusion of the enquiry. In his written statement, in respect of charge no. 1 petitioner stated as thus:- “1. As regards sanction of Rs.15,92,500/- to 12 Development Officers of Siwan Branch Office between the period from March 92 to November 92 I am to state that the advances were never sanctioned on the strength of the applications only. Almost all the Development Officers have privately appointed one person amongst his agent or other person to work as their private Clerks. These persons were looking after their official works on behalf of themselves. These persons used to give the list of policies mentioning their table and term, mode of payment and premium amounts along with the rotational premiums deposited against each such policies. It is also an admitted fact the cent-per-sent fool proof checking of such list of policies were not done before sanctioning the advances, but random checking was always done in each and every case by the sales department. This was due to paucity of the staff in the department, and calculations were done on a separate sheet to arrive at a final figure of the amount to be sanctioned as advance. The procedure in vogue for the purpose was that such applications and relevant records were being submitted to the ABM(S) who was HOD of sales deptt. He used to pass these papers to the deptt. for processing and after the random checking, calculation etc. these papers used to come to me with due recommendation of the ABM(S) for sanction and accordingly it was being sanctioned. It will evident on perusal of the applications of the - 16 - Development Officer (Annexures 2 to 28)”. 17. From the stand of the petitioner in the written statement, it appears that the petitioner had tried to make out a case that the private clerks appointed by Development Officers used to give list of policies mentioning their table and term, mode of payment and premium amounts along with the additional premiums deposited against each such policies. However, it is significant to note that the petitioner has admitted in the written statement that “cent per cent fool proof checking of such list of policies were not done before sanctioning the advances, but random checking was always done in each and every case by sales department”. He has stated that calculations used to