Departmental enquiry - charges proved and upheld from bottom to top - But D.B. modified the punishment - Apex court held that the DB traveled beyond it's jurisdiction and set aside the order and held that However, the Division Bench chose to tinker with the quantum of punishment
imposed by the disciplinary authority. Though it upheld the punishment of recovery of loss, the punishment of reduction in pay scale has been set aside and substituted by the punishment of withholding of one increment with cumulative effect for a period of one year as per Regulation 39(1)(b) of the L.I.C. of India (Staff) Regulations, 1960. We are of the opinion that the High Court transgressed its limits of judicial review by itself assuming the role of sitting as departmental appellate authority, which is not permissible in law. =
Division Bench of the High Court has
modified the punishment imposed by the disciplinary authority of appellant
No.1, i.e. Life Insurance Corporation of India (hereinafter referred to as
the 'LIC') on the respondent employee in a departmental enquiry.=
Interestingly, the Division Bench has concurred with
the learned Single Judge regarding the guilt of the respondent in tampering
of records, which is clear from the following:
“61. On a careful consideration of respective contentions and in view of
the detailed discussions and for the reasons mentioned aforesaid, in the
instant case, we hold that the conclusions arrived at by the authorities
concerned are based on evidence and on available materials on record. In
fact, the Enquiry Officer has submitted a Report dated 23.12.1997, inter
alia, holding that the Appellant is clearly guilty of deliberately
tampering with the premium position as detailed in the Report. The
Divisional Manager (Disciplinary Authority) of L.I.C. of India has passed
the final order on 30.12.1998 by imposing the punishment of (i) Recovery of
loss to the Corporation of Rs.16,001.90 and (ii) Reduction in Basic Pay to
the lowest time scale (i.e.) Rs.1950/-. The Appellate Authority also, on
28.10.1999, has confirmed the order of the Disciplinary Authority dated
30.12.1998. Even to the Memorial dated 09.02.2000 submitted by the
Appellant/Petitioner, addressed to the 1st Respondent/Chairman of the
L.I.C. of India, Mumbai, an order of rejection has been passed on
25.09.2000 finding no merit in the Memorial warranting no interference with
the penalties of 'reduction in basic pay to minimum of scale' and 'recovery
of financial loss of Rs.16,001.90'. As such, we are in complete agreement
in regard to the conclusions arrived at by the authorities concerned that
the charges levelled against the Appellant/Petitioner have been proved.”
However, the Division Bench chose to tinker with the quantum of punishment
imposed by the disciplinary authority. Though it upheld the punishment of
recovery of loss, the punishment of reduction in pay scale has been set
aside and substituted by the punishment of withholding of one increment
with cumulative effect for a period of one year as per Regulation 39(1)(b)
of the L.I.C. of India (Staff) Regulations, 1960. =
We are of the opinion that the High Court transgressed its limits of
judicial review by itself assuming the role of sitting as departmental
appellate authority, which is not permissible in law.
The principles
discussed above have been summed up and summarised as follows in the
case of Lucknow Kshetriya Gramin Bank (Now Allahabad, Uttar Pradesh Gramin
Bank) & Anr. v. Rajendra Singh, (2013) 12 SCC 372 :
a) When charge(s) of misconduct is proved in an enquiry, the quantum of
punishment to be imposed in a particular case is essentially the domain of
the departmental authorities.
b) The courts cannot assume the function of disciplinary/ departmental
authorities and to decide the quantum of punishment and nature of penalty
to be awarded, as this function is exclusively within the jurisdiction of
the competent authority.
c) Limited judicial review is available to interfere with the punishment
imposed by the disciplinary authority, only in cases where such penalty is
found to be shocking to the conscience of the court.
d) Even in such a case when the punishment is set aside as shockingly
disproportionate to the nature of charges framed against the delinquent
employee, the appropriate course of action is to remit the matter back to
the disciplinary authority or the appellate authority with direction to
pass appropriate order of penalty. The court by itself cannot mandate as
to what should be the penalty in such a case.
e) The only exception to the principle stated in para (d) above, would
be in those cases where the co-delinquent is awarded lesser punishment by
the disciplinary authoirty even when the charges of misconduct were
identical or the co-delinquent was foisted with more serious charges. This
would be on the doctrine of equaltiy when it is found that the employee
concerned and the co-delinquent are equally placed. However, there has to
be a complete parity between the two, not only in respect of nature of
charge but subsequent conduct as well after the service of charge-sheet in
the two cases. If the co-delinquent accepts the charges, indicating
remorse with unqualified apology, lesser punishment to him would be
justifiable.
13) Learned counsel for the respondent had no answer to the aforesaid
position in law and could not justify the stance of the High Court in
modifying the punishment in the manner indicated above.
Therefore,
sidetracking the central issue, he made a vain attempt to argue that the
charges against the respondent could not be held to be proved as per the
records.
Obviously, that is not even the issue before us.
As mentioned
above, there are consistent findings, not only of the departmental
authorities, but even the Single Judge as also the Division Bench of the
High Court to the effect that charges against the respondent stood
established in the departmental enquiry. Thus, it is not permissible for
the counsel for the respondent even to argue such a proposition, that too
when the respondent did not challenge the judgment rendered by the High
Court.
14) As a result, the instant appeal is allowed. That part of the
directions contained in para 62 of the impugned judgment which modifies the
penalty are hereby set aside and the penalty imposed by the disciplinary
authority is hereby restored. There shall, however, be no order as to
costs.
2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41829
J. CHELAMESWAR, A.K. SIKRI
NON - REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7717 OF 2014
(arising out of Special Leave Petition (Civil) No. 39113 of 2013)
|THE LIFE INSURANCE CORPORATION | |
|OF INDIA & OTHERS |.....APPELLANT(S) |
|VERSUS | |
|S. VASANTHI |.....RESPONDENT(S) |
J U D G M E N T
A.K. SIKRI, J.
Leave granted.
This appeal is preferred against the final judgment and order dated June
26, 2013 in Writ Appeal No. 1279 of 2010 passed by the High Court of
Judicature at Madras whereby the
Division Bench of the High Court has
modified the punishment imposed by the disciplinary authority of appellant
No.1, i.e. Life Insurance Corporation of India (hereinafter referred to as
the 'LIC') on the respondent employee in a departmental enquiry.
Insofar as facts are concerned, it is sufficient to note that a charge-
sheet was served upon the respondent with the allegations of tampering with
the premium position and other records pertaining to 17 insurance policies,
which resulted in settlement of surrender value payments, though these
policies had not acquired surrender value. It was alleged in the charge-
sheet that by this act of the respondent, pecuniary loss was caused to the
LIC. These charges stood proved in the enquiry held against the respondent
by the Enquiry Officer vide Report dated December 23, 1997. Based on the
said Report, the disciplinary authority issued show-cause notice to the
respondent proposing the following punishment:
(i) Recovery of loss to the Corporation of Rs.16,001.90, and
(ii) Reduction in Basic Pay to the lowest time scale (i.e.) Rs.1950/-.
The respondent submitted her reply to the said show-cause notice. After
going through the same, the Divisional Manager, as disciplinary authority,
passed orders dated December 30, 1998 accepting the findings of the Enquiry
Officer and imposing the punishment as proposed in the show-cause notice.
Appeal of the respondent preferred thereagainst was dismissed by the
appellate authority. The respondent filed a Memorial before the Chairman
of the LIC, which was also rejeged vide orders dated September 25, 2000.
At this stage, the respondent took recourse to judicial proceedings by
filing the writ petition in the High Court of Judicature at Madras. This
writ petition was dismissed by the learned Single Judge of the High Court,
who not only held that a proper enquiry was conducted in consonance with
the principles of natural justice as well as the extant rules, but even the
punishment imposed by the disciplinary authority was justified and upheld
the same. Being aggrieved, the respondent preferred writ appeal, which has
been decided by the Division Bench of the High Court vide impugned judgment
dated June 26, 2013.
Interestingly, the Division Bench has concurred with
the learned Single Judge regarding the guilt of the respondent in tampering
of records, which is clear from the following:
“61. On a careful consideration of respective contentions and in view of
the detailed discussions and for the reasons mentioned aforesaid, in the
instant case, we hold that the conclusions arrived at by the authorities
concerned are based on evidence and on available materials on record. In
fact, the Enquiry Officer has submitted a Report dated 23.12.1997, inter
alia, holding that the Appellant is clearly guilty of deliberately
tampering with the premium position as detailed in the Report. The
Divisional Manager (Disciplinary Authority) of L.I.C. of India has passed
the final order on 30.12.1998 by imposing the punishment of (i) Recovery of
loss to the Corporation of Rs.16,001.90 and (ii) Reduction in Basic Pay to
the lowest time scale (i.e.) Rs.1950/-. The Appellate Authority also, on
28.10.1999, has confirmed the order of the Disciplinary Authority dated
30.12.1998. Even to the Memorial dated 09.02.2000 submitted by the
Appellant/Petitioner, addressed to the 1st Respondent/Chairman of the
L.I.C. of India, Mumbai, an order of rejection has been passed on
25.09.2000 finding no merit in the Memorial warranting no interference with
the penalties of 'reduction in basic pay to minimum of scale' and 'recovery
of financial loss of Rs.16,001.90'. As such, we are in complete agreement
in regard to the conclusions arrived at by the authorities concerned that
the charges levelled against the Appellant/Petitioner have been proved.”
However, the Division Bench chose to tinker with the quantum of punishment
imposed by the disciplinary authority. Though it upheld the punishment of
recovery of loss, the punishment of reduction in pay scale has been set
aside and substituted by the punishment of withholding of one increment
with cumulative effect for a period of one year as per Regulation 39(1)(b)
of the L.I.C. of India (Staff) Regulations, 1960. Discussion on this
aspect can be found in paragraph No.62 of the impugned judgment, which
reads as under:
“62. Bearing in mind an important fact that awarding of punishment must
suit the offence and offender and also that the said punishment should not
be either vindictive or unduly harsh, we are of the considered view that in
the present case, for the proved charges against the Appellant/Petitioner
(Delinquent Employee), the imposition of penalty viz., recovery of loss to
the L.I.C. of India to an extent of Rs.16,001.90 in terms of Regulation
39(1)(c) of L.I.C. of India (Staff) Regulations, 1960 is just valid and
proper one. However, to secure the ends of Justice, inasmuch as the
imposition of 'punishment of reduction in basic pay to the lowest scale pay
(i.e.) Rs.1950/-' imposed on the Appellant/Petitioner in terms of
Regulation 39(1)(d) of the L.I.C. of India (Staff) Regulations, 1960, is on
the higher side, accordingly, we set aside the same and instead we impose a
penalty of withholding of one increment with cumulative effect for a period
of one year as per Regulation 39(1)(b) of the L.I.C. of India (Staff)
Regulations, 1960, by restoring her to the original position at the time of
order of punishment dated 30.12.1998. However, we hereby direct the
Respondents that the period of service put up by the Appellant/Petitioner
in the lowest time scale of pay viz., Rs.1950/- be treated as service in
the original post held by her prior to the award of the penalty, subject to
the condition that the Appellant/Petitioner shall not be entitled to any
difference of salary for and during the period of reduction to the lowest
time scale of pay. Consequently, the order passed by the Learned Single
Judge dated 26.04.2010,. in dismissing the Writ Petition, is set aside by
this Court for the reasons assigned in this Appeal.”
The respondent has not filed any appeal thereby accepting the judgment of
the Division Bench. However, the appellants are aggrieved by the decision
of the Division Bench in modifying the punishment, as mentioned above.
Therefore, in the instant appeal, we have heard the learned counsel for the
parties on this limited aspect as that is the only scope of the present
appeal.
It was argued by the learned counsel for the appellants that it was not
open to the High Court to modify the penalty of reduction in pay scale to
the lowest scale of pay, that too without giving any reasons, what to talk
of justifiable reasons. His submission was that the High Court, in
exercise of judicial review, had very limited jurisdiction to interfere
with the quantum of punishment imposed by the disciplinary authority. It
could be only in those cases where penalty is found to be shockingly
disproportionate to the gravity of charge. He also submitted that it was
not within the domain of the High Court to impose a particular penalty and
thereby assume to itself the role of disciplinary authority. The leanred
counsel submitted that the aforesaid approach of the High Court was
directly in conflict with the judgment of this Court in Om Kumar v. Union
of India, (2001) 2 SCC 386, wherein this Court has held that the question
of the quantum of punishment in disciplinary matters is primarily for the
disciplinary authority and the jurisdiction of the High Courts under
Article 226 of the Constitution or of the Admnistrative Tribunals is
limited and is confined to the applicability of one or other of the well-
known principles known as 'Wednesbury principles'. This Court, while
analyzing the said principles, also observed that in case if the Court felt
that the quantum of punishment was disproportionate, then it should remand
the matter back to the disciplinary authority instead of modifying the
punishment on its own. Relevant passage from the judgment is extracted
below:
“71. Thus, from the above principles and decided cases, it must be held
that where an administrative decision relating to punishment in
disciplinary cases is questioned as “arbitrary” under Article 14, the court
is confined to Wednesbury principles as a secondary reviewing authority.
The court will not apply proportionality as a primary reviewing court
because no issue of fundamental freedoms nor of discrimination under
Article 14 applies in such a context. The court while reviewing punishment
and if it is satisfied that Wednesbury principles are violated, it has
normally to remit the matter to the administrator for a fresh decision as
to the quantum of punishment. Only in rare cases where there has been long
delay in the time taken by the disciplinary proceedings and in the time
taken in the courts, and such extreme or rare cases can the court
substitute its own view as to the quantum of punishment.”
We find sufficient force in the aforesaid submission of the learned counsel
for the appellants.
We have already reproduced paras 61 and 62 of the impugned judgment
of the High Court. After detailed discussion of the various contentions
advanced by the respondent here (appellant before the High Court), the High
Court repelled all those contentions and in para 61 summed up the position
by holding that the respondent herein was very much guilty of deliberately
tampering with the premium position as detailed in the report. So much so,
it expressed its 'complete agreement' in regard to the conclusions arrived
at by the authorities concerned that the charges levelled against the
respondent had been proved. As noticed above, charges pertain to tampering
with the premium position and other records pertaining to 17 insurance
policies. It had resulted in pecuniary loss to the LIC as well. Charge of
tampering with the record is a very serious charge and it adds to the
gravity when it is coupled with financial implications. Even for such a
severe charge, the disciplinary authority had inflicted the penalty of
reduction in basic pay to the lowest time scale. The High Court has not
even stated as to how this penalty was bad in law and simply labelled it to
be “harsh” that too with no reasons. While intermeddling with this
penalty, the only epithet used is “to secure the ends of justice”. In the
absence of any exercise undertaken by the High Court that how it perceived
such a penalty to be “harsh”, there was no reason to interfere with the
same. Even otherwise, we do not find such a penalty at all to be
shockingly disproportionate having regard to the very serious charge
levelled against the respondent.
The scope and power of judicial review of the courts while dealing with the
validity of quantum of punishment imposed by the disciplinary authority is
now well settled. In the case of Deputy Commissioner, KVS & Ors. v. J.
Hussain, (2013) 10 SCC 106, the law on this subject, is recapitulated in
the following manner:
“6. When the charge proved, as happened in the instance case, it is the
disciplinary authority with whom lies the discretion to decide as to what
kind of punishment is to be imposed. Of course, this discretion has to be
examined objectively keeping in mind the nature and gravity of charge. The
Disciplinary Authority is to decide a particular penalty specified in the
relevant Rules. Host of factors go into the decision making while
exercising such a discretion which include, apart from the nature and
gravity of misconduct, past conduct, nature of duties assigned to the
delinquent, responsibility of duties assigned to the delinquent, previous
penalty, if any, and the discipline required to be maintained in department
or establishment where he works, as well as extenuating circumstances, if
any exist. The order of the Appellate Authority while having a re-look of
the case would, obviously, examine as to whether the punishment imposed by
the Disciplinary Authority is reasonable or not. If the Appellate
Authority is of the opinion that the case warrants lesser penalty, it can
reduce the penalty so imposed by the Disciplinary Authority. Such a power
which vests with the Appellate Authority departmentally is ordinarily not
available to the Court or a Tribunal. The Court while undertaking judicial
review of the matter is not supposed to substitute its own opinion on
reappraisal of facts.(See: Union Territory of Dadra & Nagar Haveli vs.
Gulabhia M.Lad (2010) 5 SCC 775) In exercise of power of judicial review,
however, the Court can interfere with the punishment imposed when it is
found to be totally irrational or is outrageous in defiance of logic. This
limited scope of judicial review is permissible and interference is
available only when punishment is shockingly disproportionate, suggesting
lack of good faith. Otherwise, merely because in the opinion of the Court
lesser punishment would have been more appropriate, cannot be a ground to
interfere with the discretion of the departmental authorities.
7. When the punishment is found to be outrageously disproportionate to
the nature of charge, principle of proportionality comes into play. It is,
however, to be borne in mind that this principle would be attracted, which
is in tune with doctrine of Wednesbury Rule of reasonableness, only when in
the facts and circumstances of the case, penalty imposed is so
disproportionate to the nature of charge that it shocks the conscience of
the Court and the Court is forced to believe that it is totally
unreasonable and arbitrary. This principle of proportionality was
propounded by Lord Diplock in Council of Civil Service Unions vs. Minister
for Civil Service in the following words:
“Judicial review has I think developed to a stage today when, without
reiterating any analysis of the steps by which the development has come
about, one can conveniently classify under three heads of the grounds on
which administrative action is subject to control by judicial review. The
first ground I would call “illegality”, the second “irrationality” and the
third “procedural impropriety”. This is not to say that further development
on a case by case basis may not in course of time add further grounds. I
have in mind particularly the possible adoption in the future of the
principle of proportionality.”
8. Imprimatur to the aforesaid principle was accorded by this Court as
well, in Ranjit Thakur vs. Union of India (1987) 4 SCC 611. Speaking for
the Court, Justice Venkatachaliah (as he then was) emphasizing that “all
powers have legal limits” invokes the aforesaid doctrine in the following
words:
“The question of the choice and quantum of punishment is within the
jurisdiction and discretion of the court-martial. But the sentence has to
suit the offence and the offender. It should not be vindictive or unduly
harsh. It should not be so disproportionate to the offence as to shock the
conscience and amount in itself to conclusive evidence of bias. The
doctrine of proportionality as part of the concept of judicial review,
would ensure that even on an aspect which is, otherwise within the
exclusive province of the court-martial, if the decision of the court even
as to sentence is an outrageous defiance of logic, then the sentence would
not be immune from correction. Irrationality and perversity are recognized
grounds of judicial review.”
We are of the opinion that the High Court transgressed its limits of
judicial review by itself assuming the role of sitting as departmental
appellate authority, which is not permissible in law. The principles
discussed above have been summed up and summarised as follows in the
case of Lucknow Kshetriya Gramin Bank (Now Allahabad, Uttar Pradesh Gramin
Bank) & Anr. v. Rajendra Singh, (2013) 12 SCC 372 :
a) When charge(s) of misconduct is proved in an enquiry, the quantum of
punishment to be imposed in a particular case is essentially the domain of
the departmental authorities.
b) The courts cannot assume the function of disciplinary/ departmental
authorities and to decide the quantum of punishment and nature of penalty
to be awarded, as this function is exclusively within the jurisdiction of
the competent authority.
c) Limited judicial review is available to interfere with the punishment
imposed by the disciplinary authority, only in cases where such penalty is
found to be shocking to the conscience of the court.
d) Even in such a case when the punishment is set aside as shockingly
disproportionate to the nature of charges framed against the delinquent
employee, the appropriate course of action is to remit the matter back to
the disciplinary authority or the appellate authority with direction to
pass appropriate order of penalty. The court by itself cannot mandate as
to what should be the penalty in such a case.
e) The only exception to the principle stated in para (d) above, would
be in those cases where the co-delinquent is awarded lesser punishment by
the disciplinary authoirty even when the charges of misconduct were
identical or the co-delinquent was foisted with more serious charges. This
would be on the doctrine of equaltiy when it is found that the employee
concerned and the co-delinquent are equally placed. However, there has to
be a complete parity between the two, not only in respect of nature of
charge but subsequent conduct as well after the service of charge-sheet in
the two cases. If the co-delinquent accepts the charges, indicating
remorse with unqualified apology, lesser punishment to him would be
justifiable.
13) Learned counsel for the respondent had no answer to the aforesaid
position in law and could not justify the stance of the High Court in
modifying the punishment in the manner indicated above. Therefore,
sidetracking the central issue, he made a vain attempt to argue that the
charges against the respondent could not be held to be proved as per the
records. Obviously, that is not even the issue before us. As mentioned
above, there are consistent findings, not only of the departmental
authorities, but even the Single Judge as also the Division Bench of the
High Court to the effect that charges against the respondent stood
established in the departmental enquiry. Thus, it is not permissible for
the counsel for the respondent even to argue such a proposition, that too
when the respondent did not challenge the judgment rendered by the High
Court.
14) As a result, the instant appeal is allowed. That part of the
directions contained in para 62 of the impugned judgment which modifies the
penalty are hereby set aside and the penalty imposed by the disciplinary
authority is hereby restored. There shall, however, be no order as to
costs.
| | |
| |..................................|
| |...........J. |
| |(J. CHELAMESWAR) |
| | |
| | |
|New Delhi; |..................................|
|August 14, 2014. |...........J. |
| |(A.K. SIKRI) |
