Rajendra Kumar Das vs The Chairman, General Insurance Corporation of India and Another

A.K. Patnaik, J.—In this writ application under Article 226 of the Constitution of India, the Petitioner who was serving as an Inspector under the National Insurance Company Ltd. has prayed for a writ of certiorari quashing the order of the Chairman-cum-Managing Director and competent Authority of the National Insurance Co. Ltd. (Respondent No. 2) dismissing the Petitioner from service for misconduct and the order dated 11.1.90 of the Chairman, General Insurance Corporation of India (Respondent No. 1) rejecting the appeal of the Petitioner against the said order of dismissal.

The brief facts of the case are that the Petitioner was serving as an Inspector in the Bongaigaon Branch of National Insurance Company Ltd. and by memorandum dated. 14th October. 1986 disciplinary proceeding was initiated against the Petitioner under Rule 25 of the General Insurance (Conduct, discipline and Appeal) Rules, for major penalty, The Charges against live'' Petitioner were that while posted as Inspector in the Bongaigaon Branch of National Insurance Co, Ltd. in collusion with Shri M.S. Thakur, the Branch Manager of Punjab National Bank, Bongaigaon and Other Bank staff and with Dr. S.P. Goswami the acting Manager of National Insurance Co. Ltd. Bongaigaon and Shri D.C. Roy, Office Assistant of the Insurance Company, the Petitioner got a fire Insurance Policy issued in favour of M/s. Srikrishna Rice and Oil Mills, Bongaigaon retrospectively w.e.f. 2.2.81 when the stock of jute proposed to be insured was already gutted by fife and thereby caused pecuniary loss to the Insurance Company to the tune of Rs. 1,37,546/- and by the aforesaid acts of misconduct the Petitioner contravened Rule 3(1)(i)(ii) of the General. Insurance (Conduct Discipline and Appeal) Rules 1975. The Petitioner however denied the said charges and an inquiry was conducted and an enquiry report was submitted by the Enquiry Officer, the Commissioner for Department of Inquiries, Government of India holding the Petitioner guilty of the charges. On consideration of the said enquiry report, the disciplinary authority (the Respondent No. 2) agreed with the findings in the inquiry report of the Enquiry Officer and imposed the penalty of dismissal on the Petitioner by order dated 20th December, 1988. Against the said order of dismissal, the Petitioner preferred an appeal before the Appellate Authority (the Respondent No. 1). But by order dated 11.1.90, the Respondent No. 1 rejected the appeal and confirmed the penalty imposed on the Petitioner by the disciplinary authority. The order dtd. 20.12.88 of the Respondent No. 2 (Annexure-6) dismissing the Petitioner from Service and the order dated 11.1 90 of the Respondent No. 1 (Annexure-7) rejecting the appeal of Petitioner are challenged in this writ petition.

Mr. A. Sharma, learned Counsel for the Petitioner submitted at the hearing of the writ petition that the findings in the inquiry report which have been concurred with by the disciplinary authority as well as the Appellate Authority were vitiated by error of law and were based on no evidence. Mr. Sharma took me through the findings of the Enquiry Officer which indicated that the Petitioner had himself informed the acting Branch Manager on 4.2.81 when he deposited the pay order dated 2.2.81 for the insurance premium that the fire had already taken place on 3.2.91 in the godown in which the insured goods were kept and thereafter the said acting Branch Manager Dr. S.P. Goswami went from Bongaigaon to the Divisional Office at Guwahati and met Mr. P.K. Dutiagupta, the Administrative Officer in the Divisional Office who told Dr. Goswami that as me Bank had issued the pay order on 2.2.81 the risk should cover from the date of issue of pay order and thereafter Dr. Goswami returned and accepted the risk according to the suggestion of Mr. Dutta Gupta. According to Mr. Sharma, the Petitioner''s duty as Inspector of the Insurance Company did not include acceptance of a proposal for an insurance and was for Branch Manager to accept the proposal or not and since the Petitioner and informed the acting Manager Dr. Goswami that the fire had already taken place on the night of 3rd February, 1981 and with full information of the said fact Dr. Goswami accepted the proposal and issued the insurance policy, the Petitioner cannot be held to be guilty of any misconduct. Mr. Sharma therefore submitted that the findings of the Enquiry Officer, the disciplinary authority and the appellate authority in so far as it holds the Petitioner guilty of the charges are vitiated by error flaw and are liable to be quashed in a certiorari proceeding before this Court. In upon of his aforesaid submission Mr. Sharma relies upon the decision of the Madras High Court in R. Srinivason v. Union of India reported in 1982 LAB IC 20.

Mr. A.R. Banerjee, learned Counsel for the Respondents submitted that it has now been held by the Supreme Court in the case of Sh. S.K. Verma v. Sh. Mahesh Ch. and Anr. reported in 1983 (2) SLJ 570 that a development officer of a Life Insurance Corporation not engaged in any administrative or managerial work is a ''workman'' as defined by Section 2(S) of the Industrial Disputes Act, 1947 since the Petitioner was an Inspector of the National Insurance Company Ltd. not discharging any administrative or managerial work, the Petitioner was a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 and could avail the remedies under, the said Act against the order of dismissal, According to Mr. Banerjee, as the Petitioner has not exhausted the alternative remedy provided under the Industrial Disputes Act, 1947, and no good reason has shown in the writ petition as to why the aforesaid alternative remedy is not efficacious, the writ petition should be dismissed in inlimini on this ground alone. In support of this submission, Mr. Banerjee relied upon the decision of this Court in Vashdeo Hoondamal v. Collector reported in (1992) 2 GLR 197 as well as the decision of the Patna High Court in the case of Dinesh Prasad v. State of Bihar reported in 1984 (3) SLR 658.

Mr. Banerjee further submitted that even otherwise in a certiorari proceedings this Court cannot interfere with the findings of the fact of the Enquiry Officer Disciplinary Authority and the Appellate Authority which are based on materials on record. Mr. Banerjee further submitted on the basis of the averments in the affidavit-in-opposition filed on behalf of the Respondents that the employer has lost confidence in the Petitioner and in the interest of the company it is not desirable to reinstate the Petitioner because of his personal interest he can without any hesitation cause wrongful loss to the Company in which he is serving. Mr. Banerjee states that in the present case as a consequence of the misconduct of the Petitioner the insurance company has been put to a loss of Rs. 1,37,546/- paid towards the settlement of the claim of M/s. Srikrishna Rice & Oil Mills.

In reply, Mr. Sharma, learned Counsel for the Petitioner, cited the decision AIR 984 SC 1149 in Ram and Shyam Company v. State of Haryana wherein it was held that the rule requiring the exhaustion of the alternative remedy is a rule of convenience and discretion rather than rule of law and does not oust the jurisdiction of the court and that there is no rule with regard to certiorari as there is with regard to mandamus that it will lie only where there is no other equally effective remedy.

I find full force in the aforesaid submission of Mr. Sharma. As has been held by the Apex court in the case of Ram and Shayam Company v. State of Haryana (Supra) even where alternative remedy is available the jurisdiction of this Court under Article 226 in a certiorari proceeding in not completely ousted but as restraint and as a rule of convenience, the court normally does not exercise the jurisdiction where effective and adequate alternative remedy is available to the Petitioner. In the present case the Petitioner was dismissed from service as far back as on 20th December 1988 and against the order of dismissal he preferred an appeal under the General Insurance (Conduct, Discipline and Appeal) Rules and the appeal was dismissed on 11.1.90 and thereafter the Petitioner filed the present writ petition on or about 6.3.90. Taking into consideration all these facts and particularly the fact that the Petitioner was dismissed from service more'' than 5 years back, it will lead to miscarriage of justice if this Court at this stage refused to exercise its jurisdiction under Article 226 of the Constitution on the ground that the Petitioner had not availed his remedy under the Industrial Disputes Act, 1947. I am, therefore, incline to entertain the writ petition and consider the same on merits.

As would appear from the articles of charges annexed as Annexure-I to the memorandum dated 14.10.86 (Annexure-2), the Petitioner had been charged for having contravened Rule 3(1)(i)(ii) of the General Insurance Conduct, Discipline and Appeal Rule 1975. The said Rule 3(1)(i)(ii) of the General Insurance (Conduct Discipline and Appeal) Rules 1975 are quoted here in below:

General:

(1) Every employee shall at all times;

i. maintain absolute integrity;

ii. maintain devotion to duty;

The particular misconduct by which, the Petitioner was charged to have contravened the aforesaid Rule 3(1)(i)(ii) of the Rules was that, white-posted as Inspector of National Insurance Co. Bongaigaon, he acted in collusion with Shri M.S. Thakur, Branch Manager of Punjab National Bank, Bongaigaon and with Shri P.K. Sur and P. Kataki. Accountant and Godown keeper of the said Bank, and with Dr. Section P. Goswami, actiong Manager of National Insurance Co. Ltd. Bone gaigaon and Sri D.C. Roy, Office Assistant of the said insurance company at Bongaigaon in getting fire insurance policy No. 499/3101141 issued in favour of M/s. Srikrishna Rice & Oil Mills, Bongaigaon retrospectively w.e.f. 2.2.81 when the stock of jute proposed to be insured was already gutted by fire and thereby caused a pecuniary loss to the insurance company to the tune of Rs. 1,37,546/-.

In the statement of imputations annexed as Annexure-II to the Memorandum dated 14.10.86 (Anncxure-2), the details of the aforesaid misconduct have been given, It has been alleged therein that the pay order dated 2.2.81 for Rs. 7000/-including the insurance premium was actually written by Shri P.K. Sur and Shri P. Kataki and issued by Shri M.S. Thakur after the lire incident on 3.2.81, but the pay order in question was ante dated and the Petitioner in collusion with the said officials of the Punjab National Bank and the National Insurance Company Ltd. Bongaigaon got the fire insurance policy issued by Dr. S.P. Goswami on 5.2.81 with retrospective effect from 2.2.81. As a result, the fire insurance claim of Rs. 1,34,467/- had to be paid to M/s. Srikrishna Rice & Oil Mills and the National Insurance Company was cheated of the said amount.

The question for consideration in the writ petition is, therefore, as to whether in the enquiry report with which the disciplinary authority as well as the appellate, authority had fully concurred, there was any error of law apparent on the face of the records. Regarding collusion with Shri M.S. Thakur, Branch Manager. Punjab National Bank and Shri P.K. Sur and P. Kataky, Accountant and Godown Keeper of the said Bank no finding whatsoever has been recorded by the Enquiry Officer in his enquiry report dated 29.2.88. The only finding recorded by the Enquiry Officer with regard to the issue of the pay order dated 2.2.81 are extracted herein below:

6.9. - The pay Order, Ex. S-37, in question, was issued by the Bank and was dated 2.2.81. Though this was a transfer, the transfer voucher was not entered into the Transfer Journal but was directly entered into the Day BOOK. This is rather unusual because the entry in the Day Book is made only after the entry has been made in the Transfer Journal it is quite likely that this could have been entered into the Transfer Journal subsequently after the fire had occurred.

The aforesaid findings would show that the Enquiry Officer merely made a conjecture from the face of non-entry of the pay order in the Transfer Journal on 2.2.81 that it was likely that the pay order was entered in the Transfer Journal after the fire had occurred. The disciplinary authority has not recorded any separate finding with regard to the collusion of the Petitioner with Sri M.S. Thakur and other officials of the Punjab National Bank, Bongaigaon and has fully concurred with the findings of the inquiry report. In my opinion, therefore, the first part of the charge relating to the collusion between the Petitioner and Shri M.S. Thakur and Shri P.K. Sur and P. Kataky, Accountant and Godown Keeper respectively of the Bank, has not been established in the disciplinary proceedings.

Regarding the collusion of the Petitioner with the acting Branch Manager of National Insurance Company Ltd. Bongaigaon, Dr. S.P. Goswami, in issuing the fire insurance policy on 5.2.81 retrospectively w.e.f. 2.2.81 in respect of the stock of jute already gutted in fire, the relevant discussion of the evidence and the findings in the enquiry report are extracted herein below:

6.10 Ex. S-8, is the file of investigation conducted into the matter by M/s. Commercial Intelligence and Investigation Company Ltd. This was a prosecution document and was shown to the CO. The charged officer did not question the authenticity of this document. It is thereby held that the CO did accept the authenticity of all portions of this file. Pages 80-81 of Ex. S-8 are the statement of Shri R.K. Das, the Charged Officer. The CO states therein below:

As such on 4.2.81 after the office was opened, I deposited the pay order to the officer-in-charge concerned and informed hint also of fire that took place in the night of 3/4-2-81.

6.12- Again Ex.S-8 contains the statement of Shri S.P. Goswami, the A.O. who was the Acting Branch Manager at the period in question (one of the co-charged officers). This document was listed as a prosecution document and was shown to the CO for his inspection. He had inspected this and did not raise any doubts about the authenticity of this document at all It is thus, held that he accepts the authenticity of this document. In the is the statement at pages 82-83 of Ext. S-8, Shri Goswami, one of the co-charged officers has stated that he was informed at his hotel in the morning of 4.2.81 of the fire by one of the sub staff of the Bongaigaon Branch Office. Then after sometimes, he was handed over the pay order of Rs. 7,000/- Ex. S-57 from the PNB, collected by the Inspector, Shri R.K. Das (the charged officer), Shri Das told him (Shri Goswami) that this was the premium regarding the insurance policy of M/s. Sreekrishna Rice & Oil Mills. The proposal for insurance was also handed, over to Shri Goswami at that lime. He further states that:

Since the incident of fire had already occurred, I came to Gauhati on the same day to ascertain whether to accept the premium or not. The Divisional Manager was on four on that day and I met Mr. P.K. Duttagupta, A.O. (Division Office) and detailed him the fact. He told me that as the Bank has issued the pay order on 2.2.81 the risk should be covered from the date of issue of the pay order then went back to Bongaigaon on the same day and accepted the risk according to the suggestion given by Mr. Duttagupta.

6.13- It is seen that Dr. S.P. Gpswami, and Shri R.K. Das (the CO) both accept that the fire had taken place in the early hours of 4.2.81 while the policy was received and cover given, alter this, but retrospective effect from 2.2.81 it is, thus, seen that both these officers of the NIC were guilty of fraudulent collusive action Ex S-40 is the disbursement voucher through which the claim was settled on 3-6-81.

From the aforesaid finding in the enquiry report it would be clear that the Enquiry Officer has relied upon the statement of the Petitioner at pages 80-81 of Ex. S-8, wherein the Petitioner has stated that when he deposited the pay order on 4.2.81 with the Officer-in-charger concerned, he also informed him of the fire that took place in the night of 3/4-2-81. The Enquiry Officer has also relied on the statement of Dr. Goswami at pages 80-82 of Ext. S-8 that he was informed at his hotel in the morning of 4.2.81 of the fire by one of the sub-staff of Bongaigaon Branch Office. In fact on the basis of the aforesaid statements of the Petitioner and Dr Goswami recorded in Ext. S-8, the Enquiry Officer has Come to his conclusion in paragraph 6.13 of the report extracted above that Dr. Goswami and the Petitioner accepted that the fire had taken place in the early hours of 4.2.81, but the policy and cover were thereafter issued with retrospective effect from 2.2.81 and on the basis of the said conclusion held that both the said officers were guilty of fraudulent collusive action.

In my opinion, the aforesaid conclusion of the Enquiry Officer that the Petitioner was guilty of fraudulent collusive action does not follow from the facts as found in the enquiry report. As per the findings in the enquiry report, all that the Petitioner did was to hand over the proposal for insurance along with the pay order dated 2.2.81 towards the premium to the Acting Branch Manager Dr. S.P. Goswami of the National Insurance Company and while handing over the said proposal, the Petitioner also informed Dr. Goswami, the Acting Branch Manager, that the fire had already taken place at the place in which the goods proposed to be insured had been stored The Petitioner, therefore, had informed the Acting Branch Manager about the fire incident of 3rd night when he submitted the proposal for insurance along with the premium to the Acting Branch Manager on 4.2.81 and there was no fraudulent intention alongwith the premium to the Acting Branch Manager on 4.2.81 and there was no fraudulent intention on the part of the Petitioner. It was thereafter for the Acting Branch Manager, Dr. Goswami to accept the said proposal for insurance or not and if Dr. Goswami accepted the said proposal for insurance despite knowledge of the fact that the insured goods had been gutted with fire, the Petitioner cannot he held to be guilty for collus on with Dr. Goswami. This is because the word collusion has been defined to mean improper act or improper refraining from doing an act for a dishonest purpose (AIR 1963 SC 1889 para 9) and the facts as found by the Enquiry Officer do not disclose any dishonest purpose on the part of the Petitioner Mr. Banerjee, learned Counsel for the Respondents, vehemently submitted that the fact that the Petitioner delivered the proposal for insurance and the pay order for premium to Dr. Goswami knowing fully well that the goods proposed to be insured were already gutted in fire clearly establishes that the Petitioner had the dishonest purpose of cheating the insurance company, but this submission loses sight of the admitted position that the stock of rice and paddy pledged in the bank godown were already covered by an earlier insurance policy of this very insurance company for an amount of Rs. 2,25,000/- for the period 25.1.25 to 25.1.81 and the fresh proposal for fire insurance was for the goods pledged with a nationalised Bank which included stock of paddy, rice and jute and was accompanied with a pay order dated 2.2.81 and that the decision to accept or reject this fresh proposal for insurance was not within his powers but within the powers of the Acting Branch Manager Dr. Goswami.

Thus the conclusion of the Enquiry Officer that the Petitioner was guilty of the charges was one which no person properly instructed in the law could have reached on the facts as found in the enquiry report, and the court has no option but to assume that there has been some misconception of law which is responsible for the said conclusion. As has been hold by the Supreme Court in The Provincial Transport Service Vs. State Industrial Court, referred to in the decision of the Madras High Court, reported in 1982 Lab IC 920 cited by Mr. Sarma, learned Counsel for the Petitioner such a conclusion is vitiated by an error of law apparent on the face of the record and it was proper and reasonable for the High Court to correct the error in a certiorari proceeding under Article 226 of the Constitution. Since the Disciplinary Authority and the Appellate Authority have no recorded any separate finding and have agreed with the conclusion of guilt of the Petitioner recorded by Enquiry Officer, the impugned orders of the Disciplinary Authority and the Appellate Authority are also vitiated by errors of law and are liable to be quashed.

Regarding the contention of Mr. Benerjee learned Counsel for the Respondent that since the insurance company has lost confidence in the Petitioner no direction should be given by Court for his reinstatement in to service of the insurance company, I may state that in the case of Chandulal v. Management (sic) Airways Inc AIR 1985 8C 1128 and in the case of Kamal Kishore Lakshman Vs. Management of Pan American World Airways Inc. and Others, it has been held by the Apex Court that loss of confidence amounted to stigma and an inquiry must precede termination of an employee grounded upon such stigma. In the present case, the loss of confidence in the Petitioner is in fact grounded on misconduct or stigma for which a disciplinary proceeding was initiated but as stated above the misconduct to stigma has not been established against the Petitioner and thus the Petitioner''s (sic) statement in service cannot be resisted by the Respondents on the ground of loss of confidence in the Petitioner.

In the present case, no averment has been made in the writ petition that the Petitioner has been without any alternative employment since the impugned order of dismissal was passed by the Disciplinary Authority on 20.12.88 and only a bald averment has been made in paragraph 37-A of the writ petition that the Petitioner has a family with minor children and has been suffering from great financial hardship. I am, therefore, inclined to take a view that the Petitioner has not been without any employment all these years, though the alternative employment may not have been with the salary and allowances as high as the Petitioner as entitled as Inspector of the National Insurance Co. Ltd. In these circumstances, therefore, I am of the opinion that the appropriate relief in the present case would be reinstatement of the Petitioner, in the service of the National Insurance Co. Ltd. with 50% back wages for the period he was out of service of the said insurance company on account of the order of dismissal.

The writ petition is, therefore, allowed. The impugned order dated 20.12.88 (Annexure-6) of the Disciplinary Authority dismissing the Petitioner from service and the impugned order date 11.1.90 (Anncxure-7) of the appellate authority rejecting the appeal of the Petitioner against the said dismissal from service are hereby quashed and it is directed that the Petitioner shall be re-instated in service with 50% back wages for the period he was out of service of the insurance company on account of the order of dismissal. This direction shall be carried out by the disciplinary authority within 4 months from today.

Parties to bear their own costs.