AI Structured Summary
Not yet generated for this judgment
Judgment
A.V. Ramakrishna Pillai, J.�The petitioner, a Development Officer working under the second respondent-corporation, who is under threat of termination on the ground that her annual remuneration exceeded 38% of the eligible premium during the appraisal year ended on 29.2.2012 and that her "cost ratio" on the basis of the annual remuneration for the immediately preceding appraisal year which ended on 29.2.2011 was 45.20%, has come up with this writ petition for getting Ext. P8 and all further steps taken by respondents 2 and 3 to terminate the petitioner''s service quashed. There is yet another prayer for getting sub-rule (8) of Rule 6 and sub-rule (1) of Rule 7 of Life Insurance Corporation of India Development Officers (Revision of Certain Terms and Conditions of Service) Rules, 2009 quashed on the ground that the same would detrimentally affect the fundamental right of the petitioner guaranteed under Articles 14, 19 and 21 of the Constitution of India. The petitioner, who is a Graduate in Chemical Engineering, joined the second respondent corporation on 9.2.2009 as Development Officer and on completion of her probation, she got confirmation on 9.2.2010. According to the petitioner, at the time of joining service, the Rules relating to the terms and conditions of service of the Development Officers under the second respondent was 1989 Rules (Ext. P1). This was later repealed and re-enacted by 2009 Rules (Ext. P2), which came into force with effect from 12.11.2009.
The petitioner received Ext. P3 notice issued by the second respondent asking her to show cause why her service should not be terminated on the ground that her annual remuneration exceeded 38% of the eligible premium of the appraisal year ended on 29.2.2012 and that her cost ratio for the immediately preceding appraisal year was 45.20%. She sent Ext. P4 letter dated 27.2.2012 informing the Senior Divisional Manager that she was on leave during the relevant period on medical grounds due to pregnancy. The petitioner also filed Ext. P5 reply stating that she was on long leave undergoing treatment from 8.10.2010, and that she was granted maternity leave from 16.8.2011 to 11.2.2012 and, therefore, she could not discharge more work for bringing more premium by mobilizing and encouraging agents. She also assured to work hard during the rest of tenure and requested to waive the cost ratio norms for the period from 8.8.2011 to, 27.2.2012.
The petitioner further alleges that the Zonal Manager of the second respondent without considering Exts. P4 and P5 issued Ext. P6 show-cause notice on 18.7.2013 to which, she filed Ext. P7 reply. Without considering the same, the Zonal Manager issued Ext. P8 termination order dated 27.11.2013 which was received by the petitioner on 5.12.2013. The petitioner alleges that the benefit of statutory right accepted and acted upon by the respondent corporation was denied to her and, therefore, the order is illegal and void ab initio. The petitioner also sent Ext. P10 memorandum to the Chairman projecting her grievance and she had filed Ext. Pl1 appeal to the Managing Director through proper channel. However, no final decision had been taken by the respondents on Exts. P10 and P11.
The petitioner further alleges that she is a member of Schedule Caste community and, therefore, she is eligible to get the benefit of various concessions provided by the Government of India for the interest and benefit of members belonging to SC/ST community. The petitioner further alleges that Rules 6 and 7 of 2009 Rules were framed without any detailed procedures, guidelines or criteria and the same confer unbridled power on the Zonal Manager to terminate the service of the Development Officer on slightest variation of annual remuneration vis-a-vis eligible premium in the percentage excess of 38% without considering any extenuating or other beneficent and similar circumstances. It is with this background, the petitioner has approached this Court.
The respondent corporation in their counter contended that the petitioner gets credit of the business done by the agents under her organization for analyzing her performance for a particular year called ''appraisal year''. This, according to the corporation, is done once in a year to assess whether the Development Officer has conformed to the cost ratio in an appraisal year. The Development Officer has to do the required business through the agents under him/her for maintaining the cost ratio for avoiding disincentive or even termination of service as per prevailing Rules. If the Development Officer exceeds 38% of the cost ratio, notwithstanding anything contained in sub-rules (1) to (7) of Rule 6, where the annual remuneration of a Development Officer in the preceding year exceeds 38% of the eligible premium of that year and the aggregate of the annual remuneration in the relevant year and the appraisal year immediately preceding the relevant year exceeds 38% of the aggregate of the eligible premium in those two years, his/her service is liable to be terminated for the reason that he/she has exceeded the cost ratio.
It was further contended that at the time of commencement of the appraisal year on 9.2.2010, the petitioner was fully aware of the Rules applicable to the post. According to them, during the appraisal year 2010-2011 the petitioner has not availed any sick leave except privilege leave for 7 days in April, 2010 and casual leave for 9 days. Even then, the petitioner could not satisfy the expense ratio as per 2009 Rules. Knowing very well that she was proceeding on maternity leave, the petitioner did not take any preventive steps to procure business under her organization to match the prescribed cost norms in the next appraisal year.
It was further contended that her performance during the maternity period was better than the first 6 months which would falsify her justification for non-performance. It is not open for the petitioner to re-write the Rules on the contention that her maternity leave period ought to have been excluded for the calculation of the cost. It was contended that fixation of cost ratio for the expense limit is within the domain of the employer and, there-fore, seeking relief through this writ petition under Article 226 of the Constitution cannot be permitted.
They contended that there is no provision to exclude the remuneration paid during the maternity leave. The period spent on maternity leave shall be construed as the period spent on duty and hence, the petitioner cannot seek any relief on this ground. Under Ernakulam division where the petitioner is working, there are other female Development Officers who have fulfilled the norms prescribed under the Rules.
They further contended that petitioner was not denied any statutory right. The question of violation of natural justice also does not arise as the petitioner was put to notice regarding her non-performance for two consecutive years, for exceeding cost ratio of 38%. The petitioner was a non-performer continuously. All the terms in relation to the assessment of performance was well defined. The Rules does not provide any exemption on the basis of caste, religion or gender. Since the petitioner has exceeded the cost ratio for two years, the Zonal Manager has proceeded with the termination of service of the petitioner as contemplated under the Rules. The petitioner is trying to bring in extraneous factors in matters relating to her business performance.
More than one occasion, the petitioner was put on notice regarding her work habits. However, she refused the requirements. Under these circumstances, the respondents have been left with no alternative, but to terminate the service of the petitioner. Hence, they prayed for dismissal of the writ petition.
In answer to the contentions raised by the respondents in their counter-affidavit, the petitioner has filed a detailed reply affidavit refuting all the contentions in their counter.
I have heard Sri. N. Dharmadan, the learned Senior Counsel appearing for the petitioner and Sri. S. Easwaran, the learned counsel appearing for the respondent-corporation.
Ext. P8 order was issued by the respondent corporation on the ground that the petitioner''s annual remuneration exceeded 38% of the eligible premium during the appraisal year ended on 29.2.2012 and that her cost ratio on the basis of the annual remuneration for the immediately preceding appraisal year was 45.20%. For this, the respondent corporation is relying on Rules 6(8) and 7(1) of Life Insurance Corporation of India Development Officers (Revision of Certain Terms and Conditions of Service) Rules, 2009, which is marked as Ext. P2. The above Rules are extracted hereunder:
"Rule 6. Opportunity to conform to the expense limit:
xx xx xx xx
(8) Notwithstanding anything contained in sub-rules (1) to (7) where the annual remuneration of a Development Officer in any preceding year (hereafter in this sub-rule referred to as the "relevant year") exceeds 38% of the eligible premium of that year and the aggregate of the annual remuneration in the relevant year and the appraisal year immediately preceding the relevant year exceeds 38% of the aggregate of the eligible premium in those two years, his service shall be liable to be terminated in accordance with Rule 7.
Termination of service in certain cases:
(1) Where a Development Officer has failed to conform to the expense limit and where no opportunity to conform to such limit could be given under the provisions of Rule 6, the Zonal Manager may terminate his services after giving him three months notice or salary in lieu thereof.
Provided that the Development Officer shall be given an opportunity to show-cause against such proposed termination of his service."
The main argument advanced by the learned Senior Counsel for the petitioner is that these Rules do not provide or give any benefits to certain special categories of persons such as physically handicapped persons, women having protection of Maternity Benefit Act, 1961, or persons belonging to SC/ST category etc. working under the L.I.C. as Development Officers. According to the learned Senior Counsel, if the Development Officer like the petitioner goes on long leave due to illness, child''s ailment, or pregnancy and avails legally allowable absence, there is no provision in the Rules to deal with their cases while calculating annual remuneration and fixing cost ratio. This, according to the learned Senior Counsel for the petitioner is a serious lacuna or omission which would vitally affect the fundamental rights of the petitioner and other Development Officers similarly situated coming within the above said categories.
It was further argued that a conjoint reading of above sub-rules would disclose that they confer unbridled power or freedom to the Zonal Manager to terminate the service of a Development Officer on a slightest variation of annual remuneration vis-a-vis eligible premium in the percentage excess of 38% without considering any extenuating or other beneficent and similar circumstances as shown above. This, according to the petitioner, is very harsh and oppressive. It was pointed out that the petitioner, who served the L.I.C. sincerely, honestly, spending the whole of her life, tenure and carrier, for the benefit of L.I.C. on the verge of her retirement, the Zonal Manager has mercilessly terminated her service for the mere failure of bringing the premium below 38%. This, according to the learned Senior Counsel is illegal as the petitioner was not given any credit or concession by the Zonal Officer for her entire unblemished, honest and sincere service as Development Officer. This is unjust and unsupportable on any count; so submitted the learned Senior Counsel.
The learned counsel for the respondent-corporation, per contra, would submit that the prescribed Rules do not contain any provision for offering exemption from cost ratio under any circumstances to disabled, handicapped persons, women or SC/ST employees. According to the learned counsel for the respondent, it is unheard in law that non-exemption to a particular category by virtue of caste or religion would render such Rules as invalid. It was pointed out that in the absence of any statutory right conferred upon the SC and ST candidates to claim exemption from any provision of law for non-granting of such exemption could not be a subject-matter of judicial review so far as subordinate legislation is concerned. It was further pointed out that in the present case, the petitioner worked beyond the expense limit for two years continuously and this invited the petitioner''s service to be terminated. It was further pointed out that more than one occasion, the petitioner was put on notice regarding her work habits and however, she could not improve.
According to the learned counsel for the respondent corporation, the appraisal years furnished by the petitioner are incorrect and the correct dates are as under:--
However, in the reply affidavit, the petitioner averred that there was some clerical/typing mistake in the statement shown in the writ petition about the dates of appraisal years and the dates given in the counter-affidavit are also not correct. According to the petitioner, the correct dates are as under:
1st year from 9.2.2009 to 28.2.2010
2nd year from 1.3.2010 to 28.2.2011
3rd year from 1.3.2011 to 29.2.2012
As per the definition clause in Ext. P2 Special Rules, the term "appraisal date" means in the first year of his service, the first day of the month following that in which the officer completes twelve months of service from the date of appointment and in every subsequent year of service, the first day of the month following that in which the officer completes twelve months of service from the last appraisal date. Evidently and admittedly too, the petitioner joined duty on 9.2.2009 and successfully completed the probation which was declared on 9.2.2010. Therefore, the correct dates must be the dates shown in the reply affidavit by the petitioner which are extracted above.
It was further contended by the respondent-corporation that the petitioner has not availed any sick leave except privilege leave for 7 days in April, 2010 and casual leave for 9 days during April 2010-2011. The same is seriously refuted by the petitioner in the reply affidavit. The petitioner''s maternity leave period of 6 months i.e., from 16.8.2011 to 13.2.2011, falls within the third appraisal period and the pay received by her during the said period is Rs. 1,17,586/-. According to the learned Senior Counsel for the petitioner, if the aforesaid amount is deducted from the annual remuneration of the third appraisal year, the cost ratio would be 23.03% and the petitioner would not have faced termination and, therefore, Ext. P8 order of the respondent-corporation would become illegal and void on the face of it. The calculation is as under:
Regarding the averment in the counter-affidavit that the petitioner had not availed sick leave except privilege leave is really an appreciation by the L.I.C. of the petitioner''s devotion to duty even during her sick period. The learned Senior Counsel for the petitioner points out that in fact, disregarding the medical advice to take rest due to her health condition, the petitioner has tried her level best to work in the field to motivate her agents and to procure insurance business through them for the benefit of L.I.C. It was also argued that she was given to understand by her senior colleagues that the sick leave salary is not excluded from the annual remuneration of a Development Officer for calculating cost ratio and that was the reason why she risked her already weak health to work in the field even without taking sick leave for her treatment.
It was further pointed out by the learned Senior Counsel for the petitioner that the petitioner knowing fully the limitations and ignoring the doctor''s advice, worked for getting the business and involved in all such activities after the delivery. With all constraints, she tried to be in the field until the eve of the delivery date i.e. 17.8.2011 for canvassing business and she managed to slightly improve her business performance during the time of her maternity leave period from 16.8.2011 to 13.2.2012.
The fact that the petitioner had done good business is admitted by the respondent-corporation in their counter-affidavit. However, it is distressing to note that this marginal improvement in business is used against the petitioner by the respondent-corporation to discredit her effort with the object of tarnishing her image and creating prejudice in the mind of this Court. It is rattier uncharitable and most inhuman approach on the part of the respondent-corporation to expect a lady Development Officer to work in the field during her child bearing stage for the benefit of the LIC and increase the business output. This is an unheard of and unfair demand as far as any other class of lady employees in the respondent-corporation as well as any other organization anywhere in the world is concerned, as rightly pointed out by the learned Senior Counsel for the petitioner.
The learned counsel for the respondent-corporation further relied on Rules 2(b) and 2(o) of L.I.C. Development Officers (Revision of Certain Terms and Conditions of Service) Rules, 2009 which are extracted below:
2(b). "Annual Remuneration" means the basic pay, special pay, personal pay, dearness allowance and all other allowances and nonprofit sharing or ex gratia bonus due to, or paid to, a Development Officer during the appraisal year and includes the expenses payable or reimbursed to him or incurred by the Corporation during that year in respect of travelling, residential telephone, mobile, insurance premium and taxes on motor vehicles but does not include incentive bonus paid to him in accordance with Rule 13."
2(o). "Service" means the period spent on duty as a Development Officer and leave including the extraordinary leave which has been condoned under sub-rule (4) of Rule 69 of Staff Rules."
It was argued that the above Rules clearly demonstrate" that there was no provision to exclude the remuneration paid during the maternity leave period. It was also argued that as per the Staff Rules, the period spent on maternity leave shall be construed as period spent on duty and therefore, the petitioner cannot seek any relief on this ground.
The above definition of "annual remuneration" is exhaustive and, therefore, it has to be interpreted and followed strictly. Admittedly, the above mentioned definition does not take "leave salary" to be included along with various other categories of pay and allowances specified therein. So mush so, inclusion of "leave salary" in "annual remuneration" is a clear violation of the statutory definition and it is impermissible particularly when the Staff Regulation 1960, [Rule 69(5)] makes it clear that an employee on maternity leave shall draw leave salary equal to the salary he drew on the day preceding that on which he proceeded on such leave. If the respondent-corporation includes "leave salary" paid during the maternity period with "annual remuneration" for the purpose of using it for boosting up the figures of "annual remuneration" in order to extract more business from the Development Officer, it is gross violation of the object, purpose and scope of the Maternity Benefit Act. Sanctioning of maternity leave on one hand and including the "leave salary" for the said period in the "annual remuneration" for fixing the "cost ratio" is like, taking away with the left hand whatever is given to the employees by the right hand by the LIC.
This Court is of the view that Rule 2(o) has nothing to do with the "annual remuneration" or exclusion of "leave salary". It is uncharitable on the part of the respondent-corporation to insist a pregnant woman to work and canvass the business for LIC during maternity leave period.
There was an attempt on the part of the respondent-corporation to show that the petitioner had availed extra benefit from the respondent-corporation in addition to the salary paid by way of medi-claim reimbursements for Rs. 49,480/- for the first delivery and Rs. 48,464/- for the second delivery in addition to the salary paid on leave. Here, the petitioner points out that all employees of the respondent-corporation are subscribers of the Medical Insurance Scheme prevailing in the L.I.C. and based on the amount covered for the medical insurance, the premium is deducted from the employer''s salary and the same is remitted in the account of the general insurance companies. In the event of any claim, whether maternity/illness or accident was submitted by the concerned employee through the corporation, the concerned company would, either allow or disallow the said claim. The L.I.C. is not making any payment. The role of L.I.C. is just that of a facilitator. In fact, the L.I.C. had not paid any medical claim. What the L.I.C. had done is to add the maternity leave salary with annual remuneration for inflating the cost ratio of the petitioner.
Admittedly, the petitioner got confirmation as Development Officer by virtue of her performance and, therefore, her performance and her hard earned service cannot be terminated on flimsy ground of exceeding a small percentage of the cost ratio without taking into account her weak physical condition, which was temporarily being associated with infertility treatment and subsequent child bearing.
It is crystal clear that it was only due to the above peculiar circumstance that the petitioner was unable to achieve the prescribed cost ratio for two years which was liable to be condoned on humanitarian considerations.
The petitioner in reply to the show-cause notice had detailed out the circumstances which led to the increase of cost ratio and the Zonal Manager has not taken into account those circumstances while taking the decision to terminate the service of the petitioner. There is nothing in Ext. P8 order to indicate that the circumstances explained by the petitioner had been considered by the Zonal Manager.
As Ext. P8 order has been passed without considering any of the facts stated above, this Court is of the definite view that Ext. P8 order has to be interfered with. Regarding the prayer for nullifying Rules 6(8) and 7(1) of Life Insurance Corporation of India Development Officers (Revision of Certain Terms and Conditions of Service) Rules, 2009, this Court is of the view that it is for the employer to impose conditions which would entitle them to remove the employees for non-performance and the same being a policy decision, it cannot be questioned without specifically disclosing violation of any constitutional provision of the Life Insurance Corporation Act. It is crucial to note that the previous Rules i.e. Ext. P1 under which the petitioner was appointed also contained similar provisions and the petitioner joined service with its eyes wide open. Therefore, this Court is of the view that the prayer to quash Rules 6(8) and 7(1) of Life Insurance Corporation of India Development Officers (Revision of Certain Terms and Conditions of Service) Rules, 2009 will not stand. The aforesaid rules work out injustice when they are applied mechanically to all cases without trying to distinguish each fact situation. Injustice could be averted if the said rules were reckoned as the broad guidelines within which each case has to be considered independently. In the instant case, arbitrariness has crept in while the respondent treated the petitioner at par with other employees in violation of Article 14 of the Constitution of India.
In the result, the writ petition is disposed of quashing Ext. P8 order and all further steps taken by the respondents 2 and 3 to terminate the service of the petitioner from the post of Development Officer.
It is hereby declared that the petitioner is not liable to be terminated for the reasons stated in Ext. P8. This judgment will not stand in the way of the respondent-corporation in assessing the performance of the petitioner during the subsequent years and taking action, if warranted.