Kuldeep Singh vs Union of India

T.S. Doabia, J.—Rule 20 of the General Insurance (Conduct, Discipline and Appeal) Rules of 1975 which confers power on the

respondentUnited India Insurance Company Limited to place its employee under suspension is a subject matter of challenge in this petition. This is

said to be unconstitutional. Taking protection of this argument it is further submitted that if the Rule in question is declared ultra vires then the

respondentInsurance Company would be left without power to place its employee under suspension and therefore order dated 9.9.1997 by which

the petitioner has been placed under suspension would be rendered nonexistent. Facts in brief be noticed. The petitioner Development Officer,

Jammu was arrested on 1.9.1997. The Central Bureau of Investigation AntiCorruption Branch, Jammu found the petitioner accepting bribe of Rs.

1,000/. This led to further investigation by the C.B.I. As the petitioner was arrested, the respondentInsurance Company in exercise of the power

conferred on it under Rule 20(1) of the Rules referred to above placed the petitioner under suspension. This order is subject matter of challenge in

this petition.

The petitioner has given his service profile in para 2 of the petition. The terms and conditions on which he came to be so appointed have been

indicated in para 3 of the writ petition. The Rules by which the petitioner is governed have again been highlighted. The effect of General Insurance

Company Business Nationalisation Act, 1972 has been commented upon in para 4 of the petition. Ultimately reference is being made to Rule 20 of

the Rules. Subrule (1) of this Rule empowers the employer to place any employee under suspension if the conditions as mentioned in the subrule

comes into existence. For facility of reference, this subrule is reproduced below :

(1) The Appropriate Authority may also place an employee under suspension

(a) where a disciplinary proceeding against him is contemplated or is pending; or

(b) where a case against him in respect of any criminal offence is under investigation or trial.

(2) An employee who is detained in custody, whether on a criminal charge or otherwise, for a period exceeding 48 hours shall be deemed to have

been suspended with effect the date of detention, by an order of the appropriate authority and shall remain under suspension until further orders.

The petitioner submits that he had an excellent service record. He submits that on 1.9.1997, he was arrested by the C.B.I. This was an act of

victimisation. The petitioner was arrested. He was released on bail on 3.9.1997. The allegation was that he had accepted a bribe. It is submitted

that this was a totally concocted story. The entire service career of the petitioner is going to be put in jeopardy on account of this mala fide action

on part of the C.B.I. It is submitted that if the petitioner is to be placed under suspension then it would further cause him an irreparable loss. It is

submitted that as the Rules provide for placing a person under suspension in case he is arrested, this is liable to be struck down. When order of

suspension is passed, in these circumstances the employer does not apply his own independent judgment. Only the fact that somebody has been

arrested for 48 hours is taken note of. This according to the petitioner leads to a mechanical order being passed. Independently of the above, the

petitioner submits that a Development Officer is not an employee and therefore Rule 20 would not be attracted to him. The stand taken by the

respondents be examined.

It is submitted that the petitioner is not entitled to challenge the validity of Rule 20 of the General Insurance (Conduct, Discipline and Appeal)

Rules of 1975. It is submitted that when the petitioner joined the service, he agreed to abide by these Rules and therefore he cannot contend that

these Rules are not applicable to him. In addition to this it is submitted that petitioner was caught red handed by the C.B.I. on 1.9.1997. He was

found demanding and accepting a sum of Rs. 1,000/ as illegally gratification from an insured party whose claim was to be settled. It is submitted

that the power to suspend is an inherent right of the employer and even if Rule is not in existence even then this power could be exercised. Another

argument which has been raised by the petitioner is that if he is not permitted to discharge his normal duties then not only the petitioner but his

agents and other persons who are associated with his work and beneficiary of business procured by him would also be affected. His total

performance would go down. This would cause him irreparable loss.

In V.P. Gindroniya v. State of M.P., AIR 1970 SC 1494 the Supreme Court explained the three categories of suspension as follows :

Three kinds of suspension are known to law. A public servant may be suspended as a mode of punishment or he may be suspended during the

pendency of an enquiry against him if the order appointing him or statutory provisions governing his service provide for such suspensions. Lastly, he

may merely be forbidden from discharging his duties during the pendency of an enquiry against him which act is also called suspension. The right of

suspend as a measure of punishment as well as the right to suspend the contract of service during the pendency of an enquiry are both regulated by

the contract of employment or the provisions regulating the conditions of service. But the last category of suspension referred to earlier is the right

of the master to forbid his servant from doing the work which he had to do under the terms of the contract of service or the provisions governing

his conditions of service at the same time keeping in force the master's obligation under the contract. In other words, the master may ask his

servant to refrain from rendering his service but he must fulfil his part of the contract.

The basic idea underlying the root word ""suspend"" and all its derivatives is that a person in service while holding an office and performing its

functions or holding a position or privilege, should be interrupted in doing so and debarred for the time being from further functioning in the office or

holding the position or privilege. He is intercepted in the exercise of his functions or his enjoyment of the privilege and put aside as it were, for a

time, and excluded, during the period, from his functions or privileges. A servant under suspension continues to be a servant. Hence, in such cases

on the ending of the suspension, the officer is simply allotted his job and there is no question of any ""reinstatement"" in the proper sense of the terms,

as the question of ""reinstatement"" can only arise in case of dismissal or removal from service, or termination of service in any other manner. A

servant may be placed under suspension pending a criminal charge against him although no departmental proceedings are initiated against him at the

time. It is equally well settled that an order of interim suspension can be passed while a departmental enquiry is pending against him even though

there is no such term in the contract or service rules. The above proposition can be spelled out from the decisions by the Supreme Court. These

are R.P. Kapur v. Union of India, AIR 1964 SC 787 and also from the decision reported as AIR 1971 SC 823.

From the above discussion, it becomes apparent that the master has an inherent right to place a servant under suspension. This right is by now

well recognized in Service Jurisprudence. Pendency of criminal case against an employee is one of the grounds on which the employee can be

placed under suspension. It is this principle which has been made part of Rule 20(1) of the Service Rules. Therefore, to say that some arbitrary

power has been conferred on the employer is an argument which cannot be accepted. The rule in question, therefore, cannot be said to be ultra

vires.

The argument that the petitioner if he is placed under suspension is likely to result in monetary loss and which loss may also include loss of

procuring business which may further cause loss to this agents is an argument which cannot be acted. In all suspensions some monetary loss is

caused to the person who is placed under suspension.

The idea is that a person who is under eclipse and shadow should not be permitted to be associated with the day to day activities and the

business which business the employer is conducting. This is a measure of punishment. This is only done as an administrative measure so that a

person under cloud by attending to his duties may not cause any further loss to the employer. As indicated above in all these cases some monetary

loss is bound to be there. This is an inevitable consequence merely because such consequence comes into existence would neither render the rule

or the Act ultra vires. Therefore, the plea put forward by the petitioner that the Rule is ultra vires or that this power should not be exercised is an

argument which cannot be accepted.

Before parting with this judgment, one fact is required to be taken note of is this. On 8.10.1997, the operation of the order of suspension was

stayed. This order continued to remain in force. It is not clear as to at what stage the criminal proceedings are pending. The fact that the order of

suspension has remained stayed for more than 31/2 years has to be considered. The respondents are no doubt found to be well within their right to

place its employee including the petitioner under suspension, yet as the petitioner has continued to perform his duties and must have been doing

some useful work and getting business for the Corporation, the question as to whether the petitioner is to be kept under continued suspension or

not be reexmained. In examining this matter, the respondents would be guided by sole consideration as to whether keeping the petitioner still under

suspension would be in the interest of administration.

As such it is held that :

(i) Rule 20(1) of the Rules is valid;

(ii) The employer has the inherent right to suspend its employee;

(iii) The right to suspend can be exercised when a criminal case is registered;

(iv) The trial Court where the criminal case is pending shall expedite the trial and complete it within six months from the date of receipt of copy of

this order; and

(v) As order of suspension was stayed by this court on 8.10.1997, the respondents shall reconsider the question of desirability or otherwise of

keeping him under suspension and till this is so decided interim order shall remain in force.