Dismissed

Life Insurance Corporation of India v. Danu P Prasanan

Kerala HC9 Jan 2018WA/2671/2017

Case brief

AI extract

What is this about?

A Division Bench of the Kerala High Court disposed of a writ appeal challenging an interim order that modified the effect of a termination order. The Court chose to maintain the interim stay to avoid prejudice to the petitioner while reserving liberty to move the single judge for a hearing.

What did the court decide?

Writ appeal dismissed while maintaining the interim order staying the termination order passed by the Single Judge.

Life Insurance Corporation of India Vs Danu P… — Pension and Retirement Benefits | Kerala HC (2018)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN &

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THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI

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TUESDAY, THE 9TH DAY OF JANUARY 2018 / 19TH POUSHA, 1939

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WA.No. 2671 of 2017 IN WPC. 33635/2017

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APPELLANT(S)/RESPONDENTS 2 TO 4 IN W.P.

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1 LIFE INSURANCE CORPORATION OF INDIA, REPRESENTED BY CHAIRMAN AND MANAGING DIRECTOR, CENTRAL OFFICE, MUMBAI - 400 001.

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2 ZONAL MANAGER,

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LIC OF INDIA, SOUTHERN ZONAL OFFICE, P.B.NO. 2450, 153, ANNASALAI, CHENNAI - 600 002.

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3 SENIOR DIVISIONAL MANAGER, DIVISIONAL OFFICE, JEEVAN PRAKASH, P.B.NO. 609, NAGAMBALAM, KOTTAYAM - 686 001.

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BY ADV.SRI.S.EASWARAN, SC, LIC

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RESPONDENT(S)/WRIT PETITIONERS & 1ST RESPONDENT:

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1. DANU P PRASANAN

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AGED 34, W/O. SUMANLAL P.M., RESIDING AT PANICHIYIL HOUSE, ANCHELPETTY P.O., PAMPAKUDA, ERNAKULAM, DEVELOPMENT OFFICER CODE 0207039, LIC OF INDIA THODUPUZHA BRANCH OFFICE, KOTTAYAM - 686 001.

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2. UNION OF INDIA, REPRESENTED BY ADDITIONAL SECRETARY TO GOVERNMENT OF INDIA, FINANCE DEPARTMENT, NEW DELHI - 300 001.

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R2 BY ADV. SRI.M.A.VINOD, CGC R1 BY ADVS. SRI.R.LAKSHMI NARAYAN

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SRI.M.ASHOK KINI SMT.R.RANJINI

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THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 09-01-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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P.N. Ravindran & R.Narayana Pisharadi, JJ.

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- - - - - - - - - - - - - - - - - - - - - -- - - W.A.No.2671 of 2017

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- - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 9^th January, 2018

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JUDGMENT

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P.N.Ravindran, J.

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The Life Insurance Corporation of India and its officers who are respondents 2 to 4 in W.P.(C) No.33635 of 2017, presently pending before a learned single Judge of this court, have filed this appeal challenging the interim order passed by the learned single Judge on 19.12.2017. The brief facts of the case are as follows:

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The first respondent herein, the petitioner in W.P.(C) No.33635 of 2017 is a Development Officer in the Life Insurance Corporation of India. She entered service on 1.12.2010. Her probation in the category of Development Officer was declared as satisfactorily completed with effect from 1.3.2013. After an appraisal of the writ petitioner's performance for the appraisal year that ended on 28.2.2014 (from 1.3.2013 to 28.2.2014), the Zonal Manager, Southern Zonal Office, Chennai, the competent authority, found that the cost ratio was 48.45%. For the next appraisal year, viz. from 1.3.2014 to 28.2.2015, the cost ratio was found to be 46.29%. The Zonal Manager, Southern Zonal

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Office, Chennai, thereupon issued Ext.P1 show cause notice dated 20.7.2015 calling upon the writ petitioner to show cause why her service should not be terminated in accordance with Rule 6(8) read with Rule 7 of the Life Insurance Corporation of India (Revision of Certain Terms and Conditions of Service) Rules, 2009, hereinafter referred to as “the Rules” for short.

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At that point of time, a batch of writ petitions challenging the validity of the rules was pending in this court. In view of the said fact, the petitioner also moved this court by filing W.P.(C) No.29454 of 2015. While it was pending, by Ext.P11 judgment delivered on 3.8.2015 in W.A.No.2006 of 2014 and connected cases, a Division Bench of this court upheld the validity of Rules 6(8) and 7 of the rules. The Division Bench however held that it will be open to the Development Officers to plead and prove mitigating circumstances under rule 6(8) of the Rules when they are faced with termination of service in terms of the Rules. In the light of Ext.P11 judgment of this court, W.P.(C) No.29454 of 2015 filed by the writ petitioner in the instant case was disposed of by Ext.P2 judgment delivered on 7.1.2016 with the observation that her case will have to be considered in the light of the declaration of law in Ext.P11 judgment, a copy of

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W.A.No.2671/2017

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which was produced and marked as Ext.P6 in W.P.(C) No.29454 of 2015. It is not in dispute that in the light of the observations in Ext.P11 judgment in W.A.No.2006 of 2014 and connected cases, further action against the writ petitioner in the instant case was dropped accepting her explanation for the deficiency in performance.

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It is relevant in this context to note that pursuant to and in terms of Ext.P11 judgment, the writ petitioner submitted representations dated 27.1.2016 and 15.3.2017. Accepting the grounds put forward therein, the competent authority relaxed the expenditure limit for the appraisal year ended on 28.2.2014 and increased her basic pay to Rs.12,235/- with effect from 1.3.2014. In view of that development, Ext.P1 lost its relevance for the appraisal year ending with 1.3.2014 in so far as it related to the applicability of Rules 6(8) and 7 of the rules. That did not however affect the assessment of performance of the writ petitioner for the appraisal year from 1.3.2014 to 28.2.2015. The cost ratio continued to be above 38% of the eligible premium of the year. For the next appraisal year, viz. from 1.3.2015 to 29.2.2016 the cost ratio was found to be 49.24%, once again above 38% of the eligible premium of the year. These facts are

W.A.No.2671/2017

not in dispute.

Based on the performance appraisal for the appraisal year ending with 29.2.2016, the petitioner once again became liable to be proceeded against under the Rules. The competent authority thereupon issued Ext.P6 notice dated 8.8.2017 and Ext.P7 notice dated 16.8.2017 in relation to the two appraisal years and called upon her to submit her representation if any against the said notices within 15 days from the date of receipt thereof. The writ petitioner did not submit a reply to Ext.P6. In other words, she admitted the contents of Ext.P6 notice and did not have an explanation as to why her performance was in excess of the cost ratio. She however submitted Ext.P9 representation dated 11.9.2017 with a request that the appraisal year that ended on 28.2.2014 may not be treated as an occasion during which she has exceeded the prescribed cost ratio. It is relevant in this context to note that the said request had already been granted pursuant to Ext.P2 judgment. After Ext.P9 representation was submitted, the petitioner moved this court by filing the instant writ petition where she prayed for the following reliefs:

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“i) Call for the records leading to Ext.P8 and P10 and quash the same by issuance of a writ of certiorari or any

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W.A.No.2671/2017

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other appropriate writ.

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ii) Issue a writ of mandamus or other appropriate writ or direction, directing the 4^th respondent, to reconsider Ext.P9 in the light of Ext.P11 and P12 judgment of this Hon'ble Court after affording the petitioner with an opportunity of being heard.

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iii) Pass such other order or direction may be deemed fit or proper by this Hon'ble Court, in the facts and circumstances of the case.”

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The writ petition came up for admission hearing on 23.10.2017 and on that day it was adjourned to 24.10.2017, so as to enable learned standing counsel for the Life Insurance Corporation of India to get instructions. The writ petition thereafter came up for consideration before the learned single Judge on 24.10.2017. On that day the learned single Judge admitted the writ petition and passed the following order:

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“Admit. Assistant Solicitor General of India takes notice for 1^st respondent. Sri.S.Easwaran, learned Standing Counsel takes notice for respondents 2, 3 and 4. There shall be an interim order allowing the petitioner to submit explanation to Exhibit P8 show cause notice within a period of three weeks. There shall be a further direction to the 4^th respondent to afford an opportunity of hearing to the petitioner there after. The order shall be produced before this court.”

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W.A.No.2671/2017

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Pursuant thereto, the petitioner submitted Ext.P15 representation dated 13.11.2017 putting forward her explanation for the increase in the cost ratio. Thereafter, the Senior Divisional Manager heard the writ petitioner and passed Ext.P16 order dated 14.12.2017, whereby he ordered that the writ petitioner's service shall stand terminated on the date of receipt of a copy of the order. He also directed payment of salary for three months in lieu of notice. The writ petitioner thereupon filed I.A.No.20693 of 2017 to amend the writ petition, I.A.No.20694 of 2017 for an interim order staying the operation and implementation of Ext.P16 and I.A.No.20694 of 2017 to receive Exts.P15 and P16. The aforesaid applications came up for consideration before the learned single Judge on 19.12.2017. By order passed on the same day the learned single Judge directed that Ext.P16 order shall be treated as notice of termination to take effect on the expiry of the period of three months. The said order is under challenge in this writ appeal.

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The impugned order reads as follows:

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“Learned counsel for the petitioner seeks a stay of Ext.P16 order, pointing out the interim order passed by this court on 24.10.2017.

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Learned Standing Counsel points out that

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the order is passed perfectly in tune with the order of this Court and even if it was produced the order would not have been otherwise. However, I am of the view that, in view of the order passed on 24.10.2017, there shall be a direction to respondents to treat Ext.P16 order as a notice for termination to take effect on expiry of three months.”

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It is not in dispute that there is no challenge to Ext.P6 show cause notice in the writ petition as originally filed or as amended. The petitioner has not taken any step to challenge the finding in Ext.P6 that the cost ratio for the appraisal year 01.03.2014 to 28.02.2015 was 46.29%. Ext.P6. Ext.P6 became irrelevant, in so far as it related to the appraisal year which ended on 28.02.2014 for the reason that the competent authority had accepted the explanation for that appraisal year. However, when during the appraisal year that commenced on 01.03.2015 and ended with 29.02.2016, the cost ratio exceeded 38%, became relevant. The attempt of the writ petitioner is to show that before the appraisal for the appraisal year ending with 29.02.2016 was made, she was not put on notice or heard.

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She relies on Rule 6(5) of the Rules as also Ext.P12 judgment of the learned single Judge of this court in

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W.P.C.No.28220 of 2014 and connected cases in support of her contentions in that regard. It is her contention that before Ext.P8 show cause notice dated 13.09.2017 was issued, she ought to have been put on notice and heard. The stand taken by the Life Insurance Corporation of India is that she was heard on 08.12.2017 and that in the absence of any stipulation in the Rules that the officer concerned should be heard before Rule 6 or Rule 7 is invoked, the petitioner cannot contend that the omission to hear her before Ext.P8 show cause notice was issued is of no consequence for the reason that she was heard on 08.12.2017 before Ext.P16 order terminating her services was passed. Learned counsel for the appellant also contends that as Ext.P6 is not disputed, Ext.P7 notice being one in relation to the second occasion which renders the writ petitioner liable to be proceeded against, the hearing if any conducted is of no consequence. The stand of the Life Insurance Corporation of India is that if there is no explanation for the increase in the cost ratio during the preceding year, termination of services is automatic for the reason that fixation of pay at a minimum as a result of disincentive cannot be allowed more than once during the entire service and if on a second occasion the basic pay falls

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below such minimum, his or her service is liable to be terminated in accordance with Rule 7. It is contented by Sri.S.Eswaran, learned standing counsel for the Life Insurence Corporation of India that as Ext.P6 has not been challenged and the petitioner virtually admits it, even if she had been heard before Ext.P8 show cause notice was issued, the Life Insurance Corporation of India could have terminated her service.

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After hearing learned counsel on both sides at length, we are of the opinion that if we were to finally decide the issue arising for consideration before us in this appeal on the merits it would preclude the writ petitioner from raising the very same contentions before the learned single Judge. We however find merit and force in the submission made by Sri.S.Eswaran, learned counsel appearing for the appellant that when the Life Insurance Corporation of India has the option to either give notice of three months and terminate the appointment or dispense with notice and pay three months salary in lieu of notice, this court cannot interfere with the exercise of discretion by the appointing authority and direct that instead of notice pay, notice should be given. Learned counsel contends that in the absence of any stipulation in the interim order passed on

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24.10.2017 to the effect that the order of termination shall not be implemented without obtaining further orders of this court, the learned single Judge erred in passing the impugned order. We find considerable force in the said submissions as well. However as stated earlier, any view taken by us in this writ appeal, even prima facie, will cause prejudice to the petitioner. We therefore, deem it appropriate to maintain the interim order passed by this court in this writ appeal and to dispose of the writ appeal, reserving liberty with the parties to move the learned single Judge to have the writ petition heard and decided at the earliest.

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We accordingly dispose of this writ appeal, maintaining the interim order passed in this appeal staying the interim order passed by the learned single Judge on 19.12.2017. It will be open to either of the parties to move to the learned single Judge for expeditious hearing of the writ petition.

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Sd/-

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P.N.RAVINDRAN (JUDGE)

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Sd/-

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R.NARAYANA PISHARADI (JUDGE)

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True copy

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P.A to Judge

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kav/DG

Life Insurance Corporation of India v. Danu P Prasanan

Case brief

What is this about?

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Life Insurance Corporation of India v. Danu P Prasanan

Case brief

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