Case: Jitendranath Nayer Vs. The Oriental Insurance Company Limited, &amp; Another

1. Rule in Writ Petition No.303 of 2007. Respondents waive service. By consent, rule made returnable forthwith. Both sides agree that any order passed in this petition would cover writ petition no.44 of 2002. That petition is also placed on board for hearing by consent ofthis order the respondents imposed upon the petitioner the penalty of "Removal from service" which shall not be disqualification for future employment". This penalty is imposed in terms of Rule 23(f) of General Insurance (Conduct, Discipline and Appeal) Rules, 1975 as amended with effect from 20th January, 1995. The consequence of the punishment, according to the respondents, is that the name of the petitioner is struck off from the roll of the company with immediate effect.3. That the petitioner had earlier approached this Court by filing Writ Petition no.44 of 2002 is not in dispute. Further, by order passed on 17th June, 2002 in that petition, interim relief was denied to the petitioner. However, the petition has been admitted by this Court.The facts are very few and simple. The petitioner was employed by Respondent no.1 as a Manager. According to him, he served the Company with loyalty and full dedication. He joined the service on 19th June, 1978. The petitioner was contributory to the provident fund of the first respondent in as much as in accordance with the scheme framed under the Provident Fund Act, 8.33% of the petitioners wages were deducted as Provident Fund contribution. The petitioner states that the employer was contributing equalthis order the respondents imposed upon the petitioner the penalty of "Removal from service" which shall not be disqualification for future employment". This penalty is imposed in terms of Rule 23(f) of General Insurance (Conduct, Discipline and Appeal) Rules, 1975 as amended with effect from 20th January, 1995. The consequence of the punishment, according to the respondents, is that the name of the petitioner is struck off from the roll of the company with immediate effect.3. That the petitioner had earlier approached this Court by filing Writ Petition no.44 of 2002 is not in dispute. Further, by order passed on 17th June, 2002 in that petition, interim relief was denied to the petitioner. However, the petition has been admitted by this Court.amount.5. The submission of the petitioner is that in 1995, the Government of India, Ministry of Finance (Department of Economic Affairs) (Insurance Division) notified in the Gazette dated 28th June,1995 a scheme called "General Insurance (Employees) Pension Scheme, 1995". The scheme was notified in exercise of the power conferred by section 17A of the General Insurance Business (Nationalisation) Act, 1972. The petitioner communicated his option of joining the scheme. Para 30 of the scheme provides for voluntary retirement and readsPension on voluntaryAt any time after an employee has completed twenty years of qualifying service, he may, by giving notice of not less than ninety days, in writing to the appointing authority, retire from service:Provided that thisshall not apply to an employee who is on deputation unless after having been transferred or having returned in India he has resumed charge of the post in India and has served for a period of not less than onefurther that thisshall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking to which he is on deputation at the time of seeking voluntary retirement.(2) The notice of voluntary retirement given under(1) shall require acceptance by the appointingthat where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the saidAn employee referred to in(1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than ninety days giving reasonson receipt of request under clause (a), the appointing authority may, subject to the provisions of(2), consider such request for the curtailment of the period of notice of ninety days on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of ninety days on the condition that the employee shall not apply for communication of a part of his pension before the expiry of the notice of ninety days.(4) An employee who has elected to retire under this paragraph and has given necessary notice to that effect to the appointing authority shall be precluded from withdrawing his notice except with the specific approval of suchthat the request for such withdrawal shall be made before the intended date of hisThe qualifying service of an employee retiring voluntarily under this paragraph shall be increased by a period not exceeding five years, subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty three years and it does not take him beyond the date of retirement.(6) The pension of an employee retiring under this paragraph shall be based on the average emoluments as defined under clause (d) of paragraph 2 of this scheme and the increase, not exceeding five years in his qualifying service, shall not entitle him to any notional fixation of pay for the purpose of calculating hisFor the purpose of this paragraph, the appointing authority shall be the appointing authority specified in>6. The petitioner submitted an application dated 5th March, 2001 seeking Voluntary Retirement from service of the 1st respondent in accordance with para 30 of the scheme.7. The petitioner states that this application was received and duly acknowledged. Further, by letter dated 12th April, 2001 the petitioner requested that the notice period of 3 months may be reduced to one month as was done by respondent no.1 in other cases. The petitioner confirmed his willingness to pay 2 months salary in lieu of notice period. Though the scheme envisages 90 days notice, the petitioner sought curtailment of notice period as above.8. It is the case of the petitioner that he heard nothing from respondent no.1 in response to his application for voluntary retirement. Therefore, he presumed that respondent no.1 has no objection to the petitioner retiring voluntarily from service in terms of the application dated 5th March, 2001. He proceeded on the basis that he had voluntarily retired with effect from 16th April, 2001.9. The petitioner submitted an application for permission to accept commercial employment which was also received. This application was made in terms of para 49 of the scheme which reads thus:(49) Commercial employment after retirement:(1) If a pensioner who, immediately before his retirement was holding the post of Deputy Manager or above and wishes to accept any commercial employment before the expiry of two years from the date of his retirement, he shall obtain the previous sanction of the Corporation or a Company, as the case may be, to such acceptance : Provided that an employee who was permitted by the Corporation or a Company as the case may be take up a particular form of commercial employment during his leave preparatory to retirement or during refused leave shall not be required to obtain susbsequent permission for his continuance in such employment after retirement......(8) In this paragraph,(a) The expression "commercial employment" means:(i) an employment in any capacity including that of an agent, under a company,society, firm or individual engaged in trading, commercial, industrial, financial or professional business and includes also a directorship of such company and partnership of such firm, but does not include employment under a body corporate, wholly or substantially owned or controlled by the Central Government or a State Government;(ii) setting up practice, either independently or as a partner of a firm, as adviser or consultant in matters in respect of which thehas no professional qualifications and the matters in respect of which the practice is to be set up or is carried on or relatable to his official knowledge or experience, or;(B) has professional qualifications but the matters in respect of which such practice is to be set up are such as are likely to give his clients an unfair advantage by reason of his previous official position, or;(C) has to undertake work involving liaison or contract with the offices or officers of the Corporation or a company as the case maythe purpose of this clause, theive society" includes the holding of any office, whether elective or otherwise, such as that of President, Chairman, Manager, Secretary, Treasurer and the like, by whatever name called in such society."The petitioner has thereafter joined M/s Bajaj Allianz General Insurance Company. He was in touch with respondent no.1 for the purposes of collecting his retrial dues. He was, however, shocked and surprised to receive a letter dated 1st October, 2001 addressed by the then General Manager of the first respondent informing him that the petitioners twin requests, as above, have been rejected for want of vigilance clearance. It was pointed out that the petitioner has unilaterally stayed away from duty which act would be termed as "unauthorised absence" from service and that is how he would be dealt with.Upon receipt of this letter, the petitioner moved the first petition being Writ Petition No.44 of 2002 in this Court.11 On account of interim relief being refused, the petitioner received a show cause notice dated 20th September, 2002 alleging abandonment of service. The petitioner filed two replies thereto. His case was clear in as much as he contended that the EmployerEmployee relationship does not subsist the moment period of 90 days prescribed in para 30 of the scheme has come to an end. Since the company refused to communicate anything to the petitioner with regard to his voluntary retirement application within a period of 90 days, then, after the said period the petitioner ceases to be in employment and stands retired in terms of para 30 of the Scheme.This stand of the petitioner was not acceptable to the first respondent and it proceeded to pass the impugned order holding therein that on account of admitted facts there is abandonment of the service by the petitioner which act is also punishable and, therefore, in the peculiar case of the petitioner it is permissible to impose penalty without holding any enquiry.The action initiating the Enquiry and imposing penalty is subject matter of challenge in this petition.

Court's reasoning:
20. In that application, the petitioner prayed that he should be permitted to retire voluntarily so also to take up commercial employment. He requested that the notice period be reduced from 90 days to 30 days. He has given an undertaking that he would not apply for commutation of part of the pension before expiry of notice period of 90 days. A separate application was being made by him for permission to engage in commercial employment.On perusal of this application, it is not possible to agree with Shri Kothari that para 30 of the Pension Scheme of 1995 is not being invoked by the petitioner. The first contention of Shri Kothari must, therefore, fail.It is in the facts peculiar to this case and considering the clear language of the scheme that it is not necessary to deal with any larger issue and controversy. The petitioner could not have been proceeded with for abandoning his services when the conduct of the respondent is contrary to the scheme. The scheme and the para under consideration will have to be read in its entirety. Nothing can be seen in isolation and torn from context. If all sub clauses/paras of para 30 are read together it is clear that obligation of the employer has not been discharged by the respondents in this case. This is a case where fraud or ulterior motives are not alleged by the respondents. It is not their case that the petitioner is in any way responsible or instrumental in the respodnents not responding to his letters dated 5th March, 2001 and 12th April, 2001. In a case of fraud being alleged and proved the situation is bound to be viewed differently. Fraud vitiates every thing.In the result all proceedings which have been commenced pursuant to the communication/letter dated 1st October, 2001 including the charge sheet and enquiry so also the subsequent punishment are vitiated and, therefore, deserve to be quashed and set aside.The conduct of the petitioner and the order passed by this Court refusing interim relief in the earlier petition and permitting the employer to hold an enquiry could not in any manner be considered as diluting the rigour of para 30 of the scheme. In any event, the order is an interim order. Any observation or finding or direction which takes away the right conferred upon the employee by para 30 of the scheme cannot be given effect to or else the scheme would be rendered nugatory. We cannot lose sight of the fact that the scheme is framed in exercise of the powers conferred by Sec.17A of the Act of 1972. Nothing is pointed out from the scheme and the Act which would take away the benefit under the scheme available to the petitioner merely bercause some case is pending in a criminal court. It may be that the order passed by this Court on 17th June, 2002 makes a reference to the proceedings culminating in the order of the Special Judge, C.B.I.dated 8th June, 2001. However, nothing prevented the respondents from initiating appropriate proceedings and refusing permission to retire in the face of this order within the period prescribed or the notice period i.e. 90 days. Far from assisting the respondents, the fact of the order dated 8th June, 2001 of the Special Judge in the CBI Special case being known to them much earlier militates against their stand. The permission to retire could have been refused by the respondents within 90 days from 16th April, 2001. That having not been done, the CBI case or the conduct of the petitioner is wholly irrelevant in the facts of this case. For identical reasons, the observations in the interim order of this Court in Writ Petition No.44 of 2002 would not be of any assistance. In the light of the conclusions drawn by us, the decisions of the Supreme Court on the concept of abandonment of service and the penalty prescribed for unauthorised absence are totally inapplicable. They are rendered in the context of admitted unauthorised absence and overstaying extra ordinary leave. The Honble Court upheld the argument that principles of natural justice may not apply in such cases.