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1970 DIGILAW 63 (KER)

Padmanabhan Nambiar v. Zonal Manager L I C Of India Madras

1970-02-26

POKYARATHU UNNIKRISHNA KURUP, T.C.RAGHAVAN

body1970
JUDGMENT P. Unnikrishna Kurup, J. 1. This Original Petition has been filed for the issue of a writ of certiorari or any other appropriate writ or order to quash the order Ext. P-3 dated 2nd December 1968 passed by the respondent terminating the petitioner's services and for the issue of a writ of mandamus or other appropriate writ directing the respondent to issue appropriate posting orders to the petitioner. 2. The petitioner was a Development Officer in the Life Insurance Corporation of India ever since its inception in 1956. The respondent is Zonal Manager of the Life Insurance Corporation of India, Madras. The petitioner was promoted as Assistant Branch Manager in 1962. Some time later the petitioner was reverted as Development Officer and in 1964 he was again promoted as Assistant Branch Manager. On 10th August 1966 the respondent again demoted the petitioner to the post of Development Officer. His representation for a reconsideration of the decision having been rejected, the petitioner filed O.P. No. 1350 of in this Court challenging the validity of the order dated 10th August 1966. The Original Petition was however, dismissed by a learned Single Judge of this Court and the petitioner filed writ appeal No. 166 of 1968 against the judgment in O.P. No. 1350 of 1967. While the writ appeal was being argued in this court, the respondent's learned counsel represented in court that the petitioner's services have been terminated by the respondent and a copy of the order terminating the petitioner's services was given to the petitioner's Advocate. That order was found dated 2nd December 1960 (Ext. P-1). The petitioner had been served with a notice by registered post on 10th October 1968 to show cause why his services should not he terminated. The petitioner sent a written representation to this show cause notice. The subsequent dismissal order was stated to have been sent by ordinary post but it is alleged that it was never received by the petitioner. Subsequently, when the petitioner met the Branch Manager of the Life Insurance Corporation of India at Manjeri he was given a copy of the order of 2nd December 1968 (Ext. P-3). 3. The subsequent dismissal order was stated to have been sent by ordinary post but it is alleged that it was never received by the petitioner. Subsequently, when the petitioner met the Branch Manager of the Life Insurance Corporation of India at Manjeri he was given a copy of the order of 2nd December 1968 (Ext. P-3). 3. The petitioner, it is alleged, entered on leave immediately after he received the order of demotion on 10th August 1966 and afterwards he has been on privilege leave from 16th August 1966 to 13th December 1966 and afterwards on sick leave and extraordinary leave on loss of pay. The reason for the termination of services of the petitioner is that the petitioner has been unauthorisedly absenting himself from duty from 3rd March 1968 and had thereby contravened Regulation 30 (1) of the Life Insurance Corporation of India (Staff) Regulations, 1960 (hereafter referred to as the Staff Regulations). The petitioner alleges that he has not contravened the said regulation and the explanation Ext. P-5 submitted by the petitioner contains a correct statement of the position according to him. According to the petitioner, leave applications together with medical certificates had been sent by him and he contends that the order of dismissal was issued mala fide and as a retaliation against the petitioner for having moved the High Court against the order of demotion. 4. The petitioner subsequently filed C.M.P. No. 3698 of 1969 praying for permission to amend the Original Petition by incorporating a new ground to the effect that the impugned order violates Regulation 39 (2) of the Staff Regulations in so far as the petitioner was not given a reasonable opportunity for defending himself against the charges levelled against him and for showing cause against the action proposed to be taken against him. Later, C.M.P. No. 147 of 1970 was filed praying for further leave to amend the original petition. In the affidavit filed in support of this petition it is stated that the petitioner was an officer in charge of the Canara Mutual Insurance Company, that when life insurance was nationalised in India in 1956 he was a whole time and permanent employee of the Canara Mutual Insurance Company and that his services stood transferred to the Life Insurance Corporation by virtue of section 11 (1) of the Life Insurance Corporation Act, 1956. The petitioner is stated to have been appointed as a Field Officer under the Corporation, which post was later designated as Development Officer. By virtue of section 11 (2) of the Life Insurance Corporation Act, 1956 the Central Government passed the Life Insurance Corporation Field Officers" (Alteration of Remuneration and other Terms and Conditions of Service) Order, 1957, hereinafter referred to as the Blue Order, on 30th December 1957 (Ext. P-19), and it represents a mandatory provision of law and the provisions thereof controlled the conditions of service of employees of the Corporation coming within the purview of the Order. No enquiry has been conducted as to the alleged misconduct as contemplated under clause 10 (a) of the order and no opportunity has been given to the petitioner to show cause against the action proposed to be taken against the petitioner. It is also alleged in the C.M.P. that the Life Insurance Corporation is an authority as referred to in Art. 226 of the Constitution and a writ is maintainable against in Corporation. 5. These C.M.Ps. have been opposed by the respondent and counter-affidavits have also been filed. So far as C.M.P. No. 3698 of 1969 is concerned we are of the view that the contention raised is purely one of law and no prejudice will be caused to the Respondent by allowing the C.M.P. and it is accordingly allowed. In C.M.P. 147 of 1970 the petitioner has made the allegation that he was the officer in charge of the Canara Mutual Insurance Company when life insurance was nationalised in 1956 and that he was a whole time and permanent employee of the Canara Mutual Insurance Company and his services stood transferred to the Life Insurance Corporation by virtue of section 11 (1) of the Life Insurance Corporation Act, 1956. This fact has not been denied in the counter-affidavit filed by the respondent, but the only contention raised is that the petitioner, was not a Development Officer in the Canara Mutual Insurance Company and was as such not entitled to the benefits of section 11 (1) of the Life Insurance Corporation Act, 1956. This contention will be considered in the original petition, but we feel that there can be no legal objection to the C.M.P. being allowed. We accordingly allow this C.M.P. also. 6. It is contended by Mr. This contention will be considered in the original petition, but we feel that there can be no legal objection to the C.M.P. being allowed. We accordingly allow this C.M.P. also. 6. It is contended by Mr. V. K. K. Menon, counsel for the petitioner, that very soon after the order demoting the petitioner was passed, the petitioner entered on leave and was continuing on leave till he received the impugned order terminating his services. In Ext. R-5, the notice issued to show cause why the petitioner should not be removed from service, it is stated that the petitioner had been unauthorisedly absenting himself from duty from 3rd March 1968, that no application for leave of absence with medical certificate had been submitted from 3rd March 1968 and that the petitioner had therefore contravened Regulation 30 (1) of the Staff Regulations, which provided that: "An employee shall not absent himself from his duties without having obtained the permission of the competent authority nor shall he absent it himself in case of sickness or accident without submitting a medical certificate satisfactory to the competent authority: Provided that in case of unforeseen emergency an employee may be allowed to avail of one day's casual leave without prior sanction, subject to the condition that the competent authority is promptly advised of the circumstances in which prior sanction could not be obtained." On 8th February 1968 the petitioner applied for leave from 25th January 1968 to 2nd March 1968 and this application was supported by a medical certificate (Ext. P-6 and Ext. P-7 respectively). The receipt of this application has been admitted by the respondent and it is conceded that leave has accordingly been granted. The subsequent applications, which are alleged to have been sent by the petitioner, are denied by the respondent and it is Categorically asserted that no such application has been received. According to the petitioner, he had applied on 1st March 1968 for extension of leave on medical certificate from 3rd March 1968 for a period of 2 months and in support of this contention copies of the application and medical certificate are produced as Exts. P-8 and P-9. The petitioner also alleges that he applied for further leave on 2nd May 1968, copy of which is Ext. P-11 and the copy of the medical certificate alleged to have been sent along with it is 9 Ext. P-12. Exts. P-8 and P-9. The petitioner also alleges that he applied for further leave on 2nd May 1968, copy of which is Ext. P-11 and the copy of the medical certificate alleged to have been sent along with it is 9 Ext. P-12. Exts. P-13 and 14 as also Exts. P-15, P-17 and P-18 are relied on by the petitioner to support his contention that he had duly applied for extension of leave with medical certificates. Except the assertion of the petitioner, there is nothing else to show that these petitions had been sent to the L.I.C. office. On the petitioner's own showing, they have been sent only by ordinary post and not even certificates of posting have been obtained. It is difficult to accept the interested version of the petitioner that these applications have been sent, when the receipt of these applications is categorically denied by the respondent in his affidavit. By the time the applications for extension of leave were sent, the relationship between the petitioner and his employer had become considerably strained, as the petitioner had been demoted and his request for re-consideration of the order had been turned down. The petitioner filed O. P. No. 1350 of 1967 challenging the validity of the order dated 10th August 1966 on 24th April 1967 and it is evident that the petitioner was conscious of the fact that he could get redressal of his grievances only through court. In such circumstances, it is not natural to expect that the petitioner would have sent his leave applications by ordinary post, without obtaining any token of the leave applications having been sent to the employer. No explanation is offered as to why these applications were not sent by registered post. At the same time, it is note worthy that the respondent admits that he received Exts. P-6 and P-7 which were also sent only by ordinary post. We are therefore not in a position to say with certainty that the stand taken by the respondent is true either. However, we do not consider it safe to accept the assertion of the petitioner and hold that he had applied for extension of leave from 3rd March 1968 onwards. We are therefore not in a position to say with certainty that the stand taken by the respondent is true either. However, we do not consider it safe to accept the assertion of the petitioner and hold that he had applied for extension of leave from 3rd March 1968 onwards. The learned counsel's contentions that the petitioner is entitled to four months" privilege leave, 15 months" sick leave and extraordinary leave without allowances for 12 months are of no avail since the petitioner has not applied for the leave to which he may have been eligible. Reliance on Regulation 61 (g) which enjoins the period of overstayal after the expiry of the leave to be treated as extraordinary leave is also out of place in the context of there being no application for leave from 3rd March 1968 onwards. 7. The main contention urged on behalf of the petitioner is that there has been a violation of Regulation 39(2) inasmuch as the petitioner has not been given an opportunity to deny the charges made against him and a further opportunity to show cause why the proposed punishment should not be inflicted on him. It is necessary to extract Regulation 39 (2) of the Staff Regulations to correctly appreciate this contention. Regulation 39 (2) reads: "No employee shall be dismissed or removed or compulsorily retired or reduced to a lower service or post or to a lower time-scale or to a lower stage in a time-scale by an authority subordinate to that by which he was appointed and no order imposing on an employee any of the penalties specified in clauses (b) to (g) of sub-regulation (i) supra, shall be passed by the disciplinary authority specified in schedule I without the charge or charges being communicated to him in writing and without his having been given a reasonable opportunity of defending himself against such charge or charges and of showing cause against the action proposed to be taken against him. " The contention is that this provision in substance is the same as contained in article 311 (2) of the Constitution and although differently worded, the double opportunity contemplated by Article 311 (2) of the Constitution has to be afforded to a delinquent officer under this regulation also. In Khem Chand v. The Union of India, 1958 S.C.R. 1080 this question came up for consideration in all its aspects. In Khem Chand v. The Union of India, 1958 S.C.R. 1080 this question came up for consideration in all its aspects. It may be remembered that the provision which came up for consideration was clause (2) of Article 311, as it stood prior to the Constitution (Fifteenth Amendment) Act, 1963. The wording of clause (2) was as follows: "No such person as aforesaid shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him." It will be seen that the clause refers to only a reasonable opportunity being given against the action proposed to be taken. It does not refer to two opportunities being given nor does it expressly say that an employee is entitled to make representations with regard to the charge framed against him as also the penalty proposed to be imposed on him. Nevertheless, the Supreme Court ruled that in substance the employee is entitled to have an opportunity to deny his guilt and establish his innocence as also an opportunity to make representations as to why the proposed punishment should not be inflicted on him. For this purpose, Their Lordships relied on the decision of the Judicial Committee in High Commissioner for India v. I. M. Lall, (1948) 75 I.A. 225 and observed: "In the opinion of Their Lordships, no action is proposed within the meaning of the sub-section until a definite conclusion has been come to on the charges, and the actual punishment to follow is provisionally determined on. Before that stage, the charges are unproved and the suggested punishments are merely hypothetical. It is on that stage being reached that the statute gives the civil servant the opportunity for which sub-section 3 makes provision. Before that stage, the charges are unproved and the suggested punishments are merely hypothetical. It is on that stage being reached that the statute gives the civil servant the opportunity for which sub-section 3 makes provision. " The Supreme Court after quoting certain passages from the decision in High Commissioner for India v. I. M. Lall, (1948) 75 I.A. 225 says: "The above passage quite clearly explains that the point on which Their Lordships of the Judicial Committee agreed with the majority of the Federal Court is that a further opportunity is to be given to the Government servant after the charges have been established against him and a particular punishment is proposed to be meted out to him." It is therefore clear that while interpreting clause (2) of Article 311 of the Constitution, as it stood prior to the Fifteenth Amendment, the Supreme Court considered that the delinquent officer was entitled to two opportunities before any of the major penalties could be inflicted on him. The wording of Regulation 39 (2), which we have already extracted above, makes it clear that no order imposing on an employee any of the major penalties could be passed without the charge being communicated to him and without his having been given a reasonable opportunity for defending himself against such charge and for showing cause against the action proposed to be taken against him. In this case, as will be seen from the show cause notice Ext. P-4, the authorities have proceeded on the basis that the charges against the petitioner have already been proved and the notice only requires the petitioner to show cause why he should not be removed from service for violation of Regulation 30 (1) of the Staff Regulations. This notice obviously covers only the second opportunity contemplated by Regulation 39 (2). The mandatory duty of the employer to communicate the charge or charges against the delinquent and to give him a reasonable opportunity for defending against such charge has been denied to the petitioner on respondent's own showing and admission. This notice obviously covers only the second opportunity contemplated by Regulation 39 (2). The mandatory duty of the employer to communicate the charge or charges against the delinquent and to give him a reasonable opportunity for defending against such charge has been denied to the petitioner on respondent's own showing and admission. We have referred to Article 311 and the decision of the Supreme Court in Khem Chand v. The Union of India, 1958 S.C.R. 1080 not because the petitioner is entitled to the protection under Article 311, but only to show how a provision which is more restrictive than Regulation 39 (2) has been interpreted by the Supreme Court in Khem Chand's 1958 S.C.R. 1080 case. Clause (2) of Article 311, as it stood before the Fifteenth Amendment to the Constitution, as we have stated earlier, expressly mentions of only an opportunity to show cause against the action proposed, but even that expression was construed by the Supreme Court as necessarily taking within its ambit an earlier opportunity to meet the charges and to defend the delinquent officer. That being so, Regulation 39 (2) in more explicit terms grants an employee two opportunities to defend a disciplinary action entailing major penalties. The facts of this case clearly establish that there has been a violation of Regulation 39 (2) of the Staff Regulations and the order dismissing the petitioner cannot therefore stand. 8. On behalf of the respondent it is contended that the Life Insurance Corporation of India is not an "other authority" as contemplated by Article 12 of the Constitution of India, that a writ under Article 226 can be issued only to such authorities as coming within the ambit of the expression "other authorities", and therefore, no writ can be issued against the Life Insurance Corporation when it dismisses one of its servants. To put it differently, the Contention is that the relationship between the Corporation and its employees is governed by the ordinary law of master and servant and when an alternative appropriate remedy by way of suit is available to an employee in such cases, the writ jurisdiction of the High Court under Article 226 cannot be invoked. To put it differently, the Contention is that the relationship between the Corporation and its employees is governed by the ordinary law of master and servant and when an alternative appropriate remedy by way of suit is available to an employee in such cases, the writ jurisdiction of the High Court under Article 226 cannot be invoked. It was also pointed out that an appeal is provided in the Staff Regulations against an order of dismissal by the Zonal Manager, that Regulation 40 authorises the dismissed officer to appeal against the decision to the appellate authority and so there being an alternative remedy which the petitioner has not availed of, he is not entitled to invoke the writ jurisdiction of the High Court. In support of this contention Mr. Easwara Iyer, the counsel for the respondent, has relied on the decision of the Bombay High Court in Pramodrai v. Life Insurance Corporation, A.I.R 1969 Bombay 337. Mr. V. K. K. Menon for the petitioner countered this argument by pointing out that in identically similar situations the Supreme Court has quashed the order of the Life Insurance Corporation in exercise of writ jurisdiction. The decision relied on is Life Insurance Corporation of India v. Sunil Kumar, (1964) 5 S.C.R. 528 , where an employee, who was working in the Metropolitan Insurance Co., Ltd., which was taken over by the Life Insurance Corporation of India, was dismissed from service without being given an opportunity to show cause against the termination. The dismissed employee filed a writ petition before the High Court under Article 226 of the Constitution challenging the validity of the order and this was allowed by a learned Single Judge and in appeal by a Division Bench. When the matter came up before the Supreme Court, it was held that the decision of the High Court quashing the order of dismissal was perfectly justified and that the impugned order was violative of the statutory protection given to the dismissed officer. The Madras High Court had also occasion to consider a similar question in K.P.C. Menon v. Divisional Manager, A.I.R. 1960 Madras 888. There also, it was a case where the Life Insurance Corporation had dismissed an employee holding him to be guilty of mis-conduct. The Madras High Court had also occasion to consider a similar question in K.P.C. Menon v. Divisional Manager, A.I.R. 1960 Madras 888. There also, it was a case where the Life Insurance Corporation had dismissed an employee holding him to be guilty of mis-conduct. It was contended that case that even if there was a violation of the regulations under which the termination of the employment took place, it was not justiciable and would not be subject to the jurisdiction of the High Court under Article 226. The counsel for the Corporation contended in that case that the employment under the Life Insurance Corporation was similar to that under a private employer and that the failure to observe the regulations might enable the employee to seek relief by way of damages in an ordinary civil action but that the latter could not move the High Court to set aside the order of termination of employment by the issue of a writ of certiorari. Rajagopala Ayyangar, J. in dealing with this question observed as follows: "In the decision in 1958-I Madras Law Journal 367, this court has held that a disqualification provided for by the Regulation of the Corporation was a disqualification under a law made by Parliament under Article 191 (1) (e) of the Constitution. If a regulation were such a law, and there is no doubt either that the Life Insurance Corporation is a public authority, and if there was a violation on the part of such public authority to observe a law, I would be inclined to hold that a violation of the law contained in such a regulation could be the subject matter of proceedings in this court under Article 226 of the Constitution and that a suitable remedy could be afforded to the person who had been injuriously affected by a violation of such a statutory provision. " We feel that in view of the Supreme Court pronouncement referred to earlier, the contention of the respondent that the writ jurisdiction of the High Court cannot be invoked in the present case cannot be accepted. 9. " We feel that in view of the Supreme Court pronouncement referred to earlier, the contention of the respondent that the writ jurisdiction of the High Court cannot be invoked in the present case cannot be accepted. 9. It was next urged on behalf of the respondent-Corporation that a contract of personal service cannot be enforced by an order for specific performance, that the remedy of the employee is only to claim damages for wrongful dismissal or for breach of contract and that no declaration to enforce a contract of personal service can normally be granted. This question has been elaborately discussed by the Supreme Court in the decision reported in U. P. State Warehousing Corporation v. Chandra Kiran, (1969) II S.C.W.R. 905. In that case, Vaidialingam, J. after reviewing the English decisions on the subject and after referring to the Supreme Court decisions on the point summarised the position by quoting the following passage from the decision of the Supreme Court in Dr. Dutt's , 1959 S.C.R. 1236 case: "Under the common law the Court will not ordinarily force an employer to retain the services of an employee whom he no longer wishes to employ. But this rule is subject to certain well recognised exceptions. It is open to the courts in an appropriate case to declare that a public servant who is dismissed from service in contravention of Article 311 continues to remain in service, even though by so doing the State is in effect forced to continue to employ the servant whom it does not desire to employ. Similarly under the industrial law, jurisdiction of the labour and industrial tribunals to compel the employer to employ a worker, whom he does not desire to employ is recognised. The courts are also invested with the power to declare invalid the act of a statutory body, if by doing the act the body has acted in breach of a mandatory obligation imposed by statute, even if by making the declaration the body is compelled to do, something which it does not desire to do so. " The facts of this case indicate that the first two exceptions would not govern the petitioner. But the question for consideration is whether the act of the Life Insurance Corporation is in preach mandatory obligation imposed by statute a envisaged by the last exception referred to in the passage quoted above. " The facts of this case indicate that the first two exceptions would not govern the petitioner. But the question for consideration is whether the act of the Life Insurance Corporation is in preach mandatory obligation imposed by statute a envisaged by the last exception referred to in the passage quoted above. Under section 11 (2) of the Life Insurance Corporation Act, 1956, the Central Government has been empowered to alter the terms and conditions of service of the employees to such extent and in such manner as it thinks fit and it is by virtue of this power that the Central Government passed on 30th December 1957 the Blue Order. Clause (10) (a) of the Blue Order provides that in case of unsatisfactory performance of duties by a Development Officer, or if a Development Officer shows negligence in his work or is guilty of misconduct or is otherwise incapable of discharging his duties satisfactorily, his remuneration may be reduced or his services may be terminated, after giving him an opportunity of showing cause against the action proposed to be taken in regard to him and after conducting such enquiry as the Corporation thinks fit. The petitioner's counsel contended that the Blue Order is a statutory direction given by the Central Government by virtue of the powers conferred on it by section 11 (2) of the Life Insurance Corporation Act, 1956 and that a violation of any of the provisions of the Blue Order is a violation of the mandatory obligation imposed by the statute as contemplated in Dr. Dutt's case, 1959 S.C.R. 1236. We feel that this contention of the petitioner is correct. In Life Insurance Corporation of India v. Sunil Kumar, (1964) 5 S.C.R. 528 , the Supreme Court has held that the Blue Order provides the terms and conditions of service in matters Covered by the Order and that in regard to the termination of services of the employees, whenever the Corporation wants to terminate the services of any Development Officer, clause 10 has to be complied with. In that case Manager, the impugned orders terminating the services of the employees were found not in Accordance with clause 10(a) or 10(b) and hence the termination was held to be invalid. The same is the case here also. In that case Manager, the impugned orders terminating the services of the employees were found not in Accordance with clause 10(a) or 10(b) and hence the termination was held to be invalid. The same is the case here also. The order of termination of the services of the petitioner is violative of clause 10 (a) of the Blue Order as also Regulation 39 (2) of the Staff Regulations. As such, the Courts have jurisdiction to declare that the dismissal is invalid as the Corporation has acted in breach of the statutory obligation imposed by the statute. 10. Mr. Easwara Iyer's contention that the petitioner has not been proved to be a Development Officer can be disposed of on a short ground. It has been asserted by the petitioner, and this fact has not been denied, that the petitioner was a whole-time permanent employee of the Canara Mutual Insurance Company till it was nationalised in 1956. He was appointed as a Field Officer under the Corporation and later on the post was designated as Development Officer. "Development Officer" has been defined in the Blue Order as "a person whether designated by an insurer as Branch Manager, Branch Secretary, Assistant Branch Manager, Assistant Branch Secretary, Zonal Agency Manager, Superintendent of Agencies, Divisional Superintendent, Organizer or by any other name, who before the 1st day of September 1956, was wholly or mainly engaged in the development of new life insurance business for the insurer by supervising, either directly or through one or more intermediaries, the work of persons procuring or soliciting new life insurance business, and who was remunerated by a regular monthly salary; and who has become an employee of the Corporation under section, 11 of the Act; but does not include any person now in the employment of the Corporation as Assistant Branch Manager, Branch Manager or in any higher capacity." It will be clear from the above definition that a person who was wholly or mainly engaged in the development of new life insurance business for the insurer by supervising, either directly or through one or more intermediaries, the work of persons procuring or soliciting new life insurance business will come within the definition of "Development Officer". The petitioner was clearly engaged in this work before he was taken over as an employee of the Life Insurance Corporation and he is therefore a Development Officer as contemplated by the Blue Order. The original designation of this class of officers was "Field Officers", and it was subsequently changed into "Development Officers". The contention raised by the respondent that the petitioner is not a Development Officer has no substance. 11. In the view we have taken, the further contention raised by the petitioner that the impugned order is a mala fide exercise of power and it was actuated by improper motives does not require investigation. We express no opinion on that aspect of the petitioner's case. It will be clear from the foregoing discussion that the termination of the petitioner's service by the order Ext. P-3 is invalid as being in violation of Regulation 39 (2) of the Staff Regulations. We therefore allow the writ petition and quash the order Ext. P-3 dated 2nd December 1968 and declare that the petitioner's services have not been validly terminated. The petitioner will be entitled to his costs from the respondent.