Dismissed

V. Satyanarayana, v. Chairman and Managing Director

Telangana HC5 Nov 2009WP/14295/2004

Case brief

AI extract

What is this about?

This writ petition challenged the petitioner's removal from the National Insurance Company for temporary misappropriation of insurance premia and irregular deposit practices. The High Court affirmed the disciplinary authority's finding that the punishment was commensurate and justified due to the loss of trust in an employee handling public funds.

What did the court decide?

Writ petition dismissed on the ground that no case for interference regarding proportionality of punishment was made out.

V. Satyanarayana, Vs Chairman and Managing… — Pension and Retirement Benefits | Telangana HC (2009)

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THE HON’BLE SRI JUSTICE SANJAY KUMAR

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WRIT PETITION NO.14295 OF 2004

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TH 5 NOVEMBER, 2009

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BETWEEN

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V.Satyanarayana … Petitioner and

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Chairman & Managing Director, National Insurance Company Ltd., Regd. & Head Office, 3, Middleton Street, Kolkatta – 700 071. And Others. … Respondents

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THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.14295 OF 2004

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ORDER:

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The petitioner, a Development Officer of the National Insurance Company Limited (for brevity, ‘the Insurance Company’) at Hyderabad, is aggrieved by his removal from service under order dated 22.01.2001, confirmed in appeal by order dated 08.11.2002 and reaffirmed by the dismissal of his memorial application by order dated 09.05.2003. He challenges the said action and seeks a consequential direction to the Insurance Company to reinstate him in service with back wages, monetary benefits, seniority, promotion, increments, etc.

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The petitioner entered in the service of the Insurance Company as a Development Officer in the year 1982. He was initially posted at Peddapuram under the Kakinada Divisional Office, East Godavari District and thereafter under the control of the Deputy Manager and Competent Authority of the Insurance Company at Hyderabad. He was subjected to disciplinary proceedings under the charge memo dated 27.05.1999 enumerating as many as 7 charges. The substance of the charges in effect was that the petitioner had received cash amounting to Rs.7,699/- towards insurance premia between the dates 13.12.1997 and 03.02.1998. He issued cover notes in respect of the premia received but deposited the amount of Rs.7,699/- by way of a demand draft only in April, 1998. Therefore, he had temporarily misappropriated the sum of Rs.7,699/- for various periods between 13.12.1997 and 24.04.1998, on which date the amount was deposited. Further, the petitioner had received a demand draft for Rs.7,198/- from the Andhra Bank, Gollaprolu, on 10.09.1998 towards the insurance premia in

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respect of 15 of their loan accounts but the petitioner deposited the said demand draft as against the premia received by him from other proposers in cash and only thereafter deposited the sum of Rs.7,198/by cash on 13.01.1999 towards the premia collected from the Andhra Bank, Gollaprolu. He had therefore wrongfully deposited the premia received in respect of one set of proposals against another set of proposals and had utilized the proceeds thus retained by him for his personal purposes and temporarily misappropriated the sum of Rs.7,198/- for the period 14/15.01.1998 to 13.01.1999. This was the main thrust of the charges levelled against the petitioner and in addition thereto, there were certain incidental charges with regard to delay in the deposit of premia of lesser amount and also issuance of cover notes without proper documentation.

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The petitioner submitted his written statement of defence under letter dated 19.06.1999 denying the charges.

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Being dissatisfied with his explanation, the Insurance Company instituted a regular departmental enquiry to look into the matter. The Enquiry Officer submitted his report dated 28.08.2000 holding that all the charges levelled against the petitioner were proved. A copy of the said report was furnished to the petitioner under letter dated 27.10.2000 calling upon him to submit his representation, if any, with regard to the findings recorded by the Enquiry Officer. After considering the petitioner’s reply dated 09.11.2000, the Competent Authority of the Insurance Company held that the misconduct committed by the petitioner was serious and highly detrimental to the interests of the Insurance Company and accordingly imposed upon him the punishment of removal from service.

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The same was confirmed in appeal by the order dated 08.11.2002. Thereupon, the petitioner submitted a memorial application dated 31.03.2003 to the Chairman-cum-Managing Director of the Insurance Company seeking review of the disciplinary action taken against him. The same was rejected by the Chairman-cum-

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Managing Director of the Insurance Company by order dated 09.05.2003. Hence, this writ petition.

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The Insurance Company, in its counter affidavit, stated that the petitioner’s past record was not clean as claimed by him. Reference was made to the punishment imposed upon the petitioner by order dated 23.02.1995 directing reduction of his salary by 7 stages for the misconduct committed in remitting the premia against 65 cover notes with inordinate delay. The Insurance Company stated that the disciplinary proceedings were conducted, duly following the procedure laid down by law and accordingly prayed for dismissal of the writ petition.

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Needless to state, this Court would not sit as a court of appeal while exercising jurisdiction under Article 226 of the Constitution in matters relating to punitive action taken by a competent Disciplinary Authority. As held by the Supreme Court in STATE OF ANDHRA PRADESH v. S.SREE RAMA RA O^[1] , it is not the function of the High Court in a writ petition to review the evidence and arrive at an independent finding on such evidence. It is only when the departmental authorities have held the proceedings against the delinquent in a manner inconsistent with the rules of natural justice or in violation of the statutory rules prescribing the mode of enquiry or where the authorities have disabled themselves from reaching a fair decision by some considerations extraneous to the evidence and merits of the case or by allowing themselves to be influenced by irrelevant considerations or where the conclusion on the very face of it was so wholly arbitrary or capricious that no reasonable person could ever arrive at such conclusion or on similar grounds; that the Supreme Court opined that interference was warranted. The same principle was reiterated in the later Judgments of the Supreme Court [STATE OF MADRAS v. G.SUNDARA M^[2] ; STATE OF ANDHRA PRADESH v. CHITRA VENKATA RA O^[3] ; B.C.CHATURVEDI v. UNION OF

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INDIA^[4] ; APPAREL EXPORT PROMOTION COUNCIL v. A.K.CHOPRA^[5] ; HIGH COURT OF JUDICATURE AT BOMABY v. SHASHIKANT S PATIL^[6] ; SOUTH BENGAL STATE TRANSPORT COPRN. v. SWAPAN KUMAR MITRA^[7] . Therefore, the scope of judicial review in matters of this nature is severely circumscribed.

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Sri Gopala Krishna Kalanidhi, learned counsel for the petitioner, did not advance any arguments with regard to the correctness of the decision arrived at in the enquiry and accepted by the disciplinary authorities. Further, the learned counsel also did not attempt to make out a case that there were any procedural infirmities or lapses on the part of the Insurance Company in the conduct of the disciplinary proceedings. His contention is that the punishment was shockingly disproportionate to the misconduct committed by the petitioner thereby warranting interference by this Court.

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In the light of the argument advanced by the learned counsel, the only issue that arises for consideration is as to whether the punishment imposed upon the petitioner is unduly harsh and/or disproportionate?

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Sri Samineni Kishore, learned counsel for the Insurance Company, submitted that the past conduct of the petitioner, inviting the punishment of reduction of his salary for a similar misconduct, clearly indicated that he was a seasoned delinquent who was in the habit of utilizing the premia amount received by him in cash and thereafter depositing the same with delay. He therefore submitted that this was not a case which called for any indulgence towards the petitioner and asserted that the punishment was justified and commensurate given the facts of the case. He placed reliance on the Judgments of the Supreme Court in REGIONAL MANAGER, RAJASTHAN STATE ROAD TRANSPORT CORPORATION v. SOHAN LAL^[8] ; DIVISIONAL CONTROLLER, KSRTC (NWKRTC) v. A.T.MANE^[9] a n d BHARAT PETROLEUM CORPN. LTD. V. T.K.RAJU^[10] in

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support of his contentions.

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The facts not being in dispute, it is established that the petitioner delayed the deposit of the sum of Rs.7,699/- received by him in cash towards insurance premia thereby making himself liable for the charge of temporary misappropriation of the said sum. Similarly, it is made out that he wrongfully deposited the premia amount of Rs.7,198/received from the Andhra Bank, Gollaprolu, towards the premia received by him in cash from other proposers and deposited the premia received towards the Andhra Bank, Gollaprolu, insurance policies only on 13.01.1999. The misappropriation on this account was for a period of one year from 14/15.01.1998 to 13.01.1999. It is also established that the petitioner had undergone the punishment of reduction of his salary by 7 stages for a similar misdemeanor with respect to delayed remittance of premia in February, 1995. Such being the circumstances, it would be necessary to take into account the loss of confidence that is occasioned in the employer, the Insurance Company, making it difficult for retention of such an employee in service.

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Further, the doctrine of proportionality requires as a prerequisite for interference, that the punishment should not be vindictive or unduly harsh or so disproportionate to the offence as to shock the conscience (RANJIT THAKUR v. UNION OF INDIA^[11] ) . As pointed out in the aforestated decision, the question of choice and quantum of punishment would normally be left to the jurisdiction and discretion of the disciplinary authority. The Supreme Court, in REGIONAL MANAGER, U.P.S.R.T.C. v. HOTI LAL^[12] , held that if the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently and misconduct in such cases would have to be dealt with iron hands. The Supreme Court observed that where the person deals with public money or is engaged in financial transactions or acts in a fiduciary capacity, the highest degree of integrity and

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trustworthiness is a must and unexceptionably so.

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In SOHAN LAL⁸ , the Supreme Court opined that the High Court would not interfere with the quantum of sentence unless the same is wholly disproportionate to the misconduct proved. The Court further observed that if the misconduct proved is one of dishonesty, the quantum of loss is immaterial as it is the loss of confidence that matters.

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In A.T.MANE⁹ , the Supreme Court reiterated this principle and held that it is not the amount of money misappropriated that becomes a primary factor for awarding punishment; on the contrary, it is the loss of confidence which is the primary factor to be taken into consideration. The Court further observed that when a person is found guilty of misappropriating the corporation’s funds, there is nothing wrong in the corporation losing confidence or faith in such a person and awarding the punishment of dismissal.

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In T.K.RAJU¹⁰ , the Supreme Court affirmed that the power of judicial review in matters such as this is limited and that interference with the quantum of punishment should not be done in a routine manner.

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Viewed in the backdrop of these crystallized principles and keeping in mind the established facts of the present case, it cannot be said that the punishment of removal from service imposed by the Insurance Company upon the petitioner is “unduly harsh” or “shockingly disproportionate”. The facts clearly indicate that sufficient reasons existed for the loss of confidence on the part of the Insurance Company in the petitioner. Being its Development Officer and acting in a fiduciary capacity duty-bound to account for the premia received by him towards insurance policies, the practice adopted by the petitioner in remitting the same with inordinate delay, thereby misappropriating the sums for temporary periods is clearly a midsconduct which warranted severe counter measures. The petitioner failed to display

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the high degree of integrity and trustworthiness required of him while discharging his duty as a Development Officer and cannot therefore seek the indulgence of this Court to reduce the punishment imposed on him.

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The unreported Judgment of a learned Judge of this Court in P.VENKATESH v. THE REGIONAL MANAGER, APSRTC, JBS, SECUNDERABAD^[13] , relied upon by Sri Gopalakrishna Kalanidhi, learned counsel, turned upon its own special facts and has no application to the present case, where the petitioner’s misconduct is established and the punishment imposed is not only commensurate but well justified in the light of the said misconduct. Similarly, the Judgment of the Supreme Court in P.ANBALAGAN v. DISTT. EDUCATIONAL OFFICER^[14] , relied upon by Sri Gopalakrishna Kalanidhi, learned counsel, was one where the punishment was altered on the concession made by the employer and no principle, as such, was laid down with regard to reduction of punishment. The said Judgment is therefore of no avail to the petitioner.

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For the reasons aforestated, this Court is of the opinion that no case is made out warranting interference with the punishment imposed upon the petitioner, on the ground of proportionality. The punishment, having not been challenged on any other ground, is found to be unassailable.

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The writ petition is therefore devoid of merit and is accordingly dismissed. No costs.

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____________________ SANJAY KUMAR, J.

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________ November, 2009. VGSR

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