RESERVED
Court No. - 36
Case :- WRIT - A No. - 29021 of 2009 Petitioner :- N.K. Mehrotra Respondent :- National Insurance Co. Ltd. And Others Counsel for Petitioner :- Rahul Sahai Counsel for Respondent :- S.C.,Vinay Khare Hon'ble Mrs. Sunita Agarwal,J.
Heard Sri Akshat Darbari, learned Advocate holding brief of Sri Rahul Sahai, learned counsel for the petitioner and Sri Vinay Khare, learned counsel for the respondents.
The petitioner herein is aggrieved by the order dated 5.12.2007, passed by the respondent no.4/disciplinary authority, whereby major penalty of relegating him to the basic pay to the minimum of Senior Assistant Grade has been imposed under Rule 23, 26 (3) of the General Insurance (Conduct Disciplinary Appeal) Rules 1974. Orders of rejection of appeal filed under Rule 37 of the said Rules and memorial under Rule 40 of the Rules 1975 dated 24.4.2008 and 30.12.2008; respectively, are also subject matter of challenge.
It appears that on revelation of a high end 13 bogus (OD) claims by Special Task Force in its report dated 11.11.1998, a charge sheet dated 13.5.2002 was served on the petitioner. The charges against the petitioner narrated in the memorandum dated 13.5.2002 are that during the years 1997 and 1998, while posted as Assistant, Branch Office-(I) Bareilly, the petitioner had failed to maintain absolute integrity and devotion to duty. Alleged misconduct and irregularities committed by the petitioner have been reduced in two charges as under:-
“1.Shri N.K.Mehrotra while working as Assistant at Branch Office-I, Bareilly deliberately recommended the payment of 13 bogus Motor (OD) Claims files for the total amount of Rs.5,53,546/- with the intention to defraud the Company for the said amount in connivance with Surveyors, Repairers/Garage Owners, Insured and other employees of the Company.
2.Sh. N.K.Mehrotra deliberately processed the Estimates prepared by Professional Estimate Makers for deputation of Final Surveyors in breach of guidelines of the Company relating to deputation of Surveyors by the then Sr.DM, deliberately connived with Surveyors in higher/inflated assessment of losses and in this manner violated the Company norms relating to handling/payment of Motor OD Claims.”
The statement of imputation of misconduct in support of Articles of charges provides details of 13 bogus Motor (OD) claim files total to Rs.5,53,546/-. The said statement provides that the petitioner in the capacity of Assistant at Branch Office-I, Bareilly was obligated to scrutinize and recommend the claim for appropriate action by his supervisors and also to bring the irregularities in the claim files to the notice of his superiors. It was also his duty to deal/monitor all types of motor claims as per the guidelines and provisions of the company. However, the petitioner had failed in his aforesaid duties, particularly relating to Motor (own damage) claims and committed misconduct as detailed therein.
Out of 13 irregularities in the claims forwarded by the petitioner to the superior authorities are to be noted hereunder, with regard to Claim No.31/61/97/242 A/c Smt Bhupendra Kaur, for Rs.46,500/- which was forwarded by the petitioner. It is mentioned in the statement of misconduct that Salvage items of some other damaged vehicles had been fitted in the instant vehicle for arranging fabricated photographs for the purpose of this fraudulent claims. The photographs enclosed in the said claim file had also been used in another claim of one Sh-Sarafat Khan. The photographs available in the above two claim files were quite similar except for the changed Registration Number Plates and slight difference in Camera angle. In Final Survey and Re-inspection, photographs of vehicle no. visible is U.P -25/7788 whereas the insured vehicle is U.P.- 25/B-7788. Further two different sets of final survey photographs are enclosed in the file: one set having white border with the name of the Photo Processing Lab ie 'Suri' Printed on it and the other set is without white border and without name of the said Photo Processing Lab printed on it. Further, it was a case of break-in-insurance, however, the concerned Development Officer granted a comprehensive cover in violation of company guidelines relating to break-in-insurance. Lastly, it is noted that the said claim was recommended by the petitioner without taking clarification from the Development Officer and Surveyors despite the above noted irregularities. The claim was recommended by the petitioner, received by Development Officer Bareilly on 20.2.1998 and then recommended by the dealing Senior Assistant, the Assistant Administrative Officer and Assistant Manager on 26.2.1998 and approved by the then Senior Division Manager on 26.2.1998 and sent back to the Branch Office the same day. In both claim files, final survey was done by Sri S.K. Singhal, Surveyor and the cash memo/bill verification, reinspection of the vehicle and document verification was done by Sri M.K.Tiwari, Surveyor.
Similarly, in another claim of Sri P.D Sharma, (file no.74), irregularities found were almost the same. The photographs of damaged vehicle were manipulated and cash memo/bills were found fake. It was also found that the Development Officer had illegally insured the vehicle-in-question vide cover noted dated 26.8.1997 in the name of Sri P.D Sharma though he did not have insurable interest in the said vehicle at the time of insurance. The dereliction on the part of the petitioner mentioned therein is that the said claim was recommended by the petitioner without taking clarification from the Surveyor ignoring the above mentioned irregularities. Similar is the position with regard to other 11 claims forwarded by the petitioner in the year 1997-98.
It appears from the record that in the departmental enquiry, the petitioner demanded for appointment of defence assistant whereupon the matter was referred to the competent authority which had turned down the request on the ground that the employee from other General Insurance Public Sector Company cannot act as Defence Assistant in any disciplinary proceeding. The petitioner was given opportunity to inspect the original documents but he did not inspect the same pleading that in absence of defence assistant he was unable to inspect the same. However, during the enquiry proceedings the photocopies of the Management documents presented by the presenting officer were provided to the petitioner. It was concluded by the enquiry officer that since the petitioner turned down the opportunity to inspect the original documents, the refusal for endorsement of genuineness of the documents by him was not correct. It was concluded that the opportunity provided to the petitioner to name his Defence Assistant as per the Companies Rules was with the intention of complying with the rules of natural justice, but the petitioner did not avail the said opportunity and hence non-availability of Defence Assistant or non- inspection of the documents cannot be taken as his defence.
A bare persual of the enquiry report dated 25.9.2006 indicates that after recording the aforesaid conclusion the enquiry officer proceeded to record its finding/conclusion on the merit of the charges in one paragraph, which reads as under:-
“The connivance of the C.S.F. with the Surveyors, Repairers, Garage owners, Insured and others employees of the Company have not been proved. But he has been found negligent while preparing and recommending the payment of 13 Motor OD bogus claims. Further Sri N.K. Mehrotra has also been observed for doing breach of guidelines of the Company relating to deputations of surveyors on the basis of estimate prepared by professional estimate makers, for deputation of final surveyors, hence both the charges have been partially proved.”
There is absolutely no discussion of evidence found against the petitioner nor there is any mention of the mistake or wrong, if any, committed by the petitioner ignoring his duties and responsibility in preparation in recommendation of the 13 motor (own damage) bogus claims. The charge of connivance of the petitioner with the Surveyors, Repairers, Garage owners, Insured persons and other employees of the Company was not proved. Only a conclusion was drawn that the petitioner was negligent in recommending the claims. There is no discussion of the evidence (oral or documentary) which would specify any act of omission/ in derogation of duties on the part of the petitioner. It is difficult to ascertain what was misconduct of the petitioner though some negligence is being attributed to him by the enquiry officer. The enquiry officer before arriving at the said conclusion has discussed in the report that the presenting officer had produced nine management witnesses including S.T.F members as MW-1 to MW-9 and documentary evidences regarding various claims files in the presence of the petitioner and the aforesaid witnesses had confirmed the contents and their signatures on the said documents. The enquiry report, thereafter, narrated the statement of the presenting officer in the last paragraph of his brief (at internal page '2' of the enquiry report). He, thereafter, recorded that the said brief given by the presenting officer was sent to the petitioner (charged officer) and in reply it was mentioned that in the S.T.F report nothing had been said against the petitioner which proved that the petitioner was innocent. The defence of petitioner that for any manipulation, the concerned investigators or surveyor should be held responsible and nor the petitioner was though mentioned in the enquiry report but it was not contradicted by discussion of any evidence on record which would prove or even point out towards the guilt of the petitioner. Apart from narration of the evidence before it and the defence of petitioner, nothing has been discussed by the enquiry officer which would even indicate an iota of evidence found against the petitioner. The conclusion drawn by the enquiry officer that the petitioner was negligent in processing the claim, therefore, is absolutely without any evidence. The enquiry report is completely silent as to whether any of the witness had spoken of any negligence on the part of the petitioner in performance of his duties. There is not even the remotest suggestion in the report to that effect. Absolutely, no reason has been given by the enquiry officer to reach at his conclusion or to even indicate as to what had travelled in his mind which had resulted in holding the petitioner guilty. The disciplinary authority has also not adverted to this aspect though specific objection was taken by the petitioner in his reply to the second show cause notice along with which the enquiry report was served on him. There is no mention of any act or dereliction in duty on the part of the petitioner in any of the orders of the disciplinary authority, appellate authority or the order of Chairman, Managing Director rejecting the memorial submitted by the petitioner.
With the above, learned counsel for the petitioner vehemently contends that the decision of the disciplinary authority in imposing major penalty to the petitioner based on the said enquiry report cannot be sustained. Reliance is placed on the judgment of Apex Court in State of Andhra Pradesh vs S. Sree Rama Rao 1 to submit that the High Court has power to interfere under Article 226 of the Constitution of India where the department 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 the merits of the case or by allowing themselves to be influenced by irrelevant considerations or where the conclusion on the very face of it is so wholly arbitrary and capricious that no resonable person could ever have arrived at that conclusion, or on similar grounds. Reliance is also placed on the judgment of Apex Court in Rajinder Kumar Kindra vs Delhi Administration through Secretary (Labour) and ors 2to submit that some flamboyant charges levelling allegations without an iota of evidence in support of it, cannot be made basis to hold that the delinquent employee was negligent in performance of his duty for some act of omission or commission which was not specific. Submission is that the only misconduct imputed to the petitioner was that he was negligent in forwarding the claims which were found bogus during the investigation
1. AIR 1963 SC 1723
2. AIR 1984 SC 1805 made by the Special Task Force which had unearthed the involvement of Surveyors, Repairers/Garage owners, Insured persons and other employees of the Company such as Development Officers, Assistant Managers and Senior Divisional Officers, who got fraudulent claims prepared and submitted for payment after inspection by the Final Surveyor. None of the irregularities pointed out in the statement of imputation of misconduct mentioned in the charge sheet could be attributed to the petitioner. Placing the Apex Court judgment in Kuldeep Singh vs The Commissioner of Police and others reported in AIR 1999 SC 6773 it is contended that the procedure to be followed in the departmental enquiry has been laid down in the rule which postulates examination of all the witnesses in the presence of the delinquent who shall be given an opportunity to cross examine them. Any violation of the procedure in conducting a departmental enquiry would vitiate the same. Enquiry was biased as the enquiry officer did not sit with open mind. He has acted arbitrarily in the matter and held the petitioner guilty merely to carry out the command from some superior officers.
Learned counsel for the respondent bank, on the other hand, submits that in the limited scope of judicial review under Article 226 of the Constitution of India, it is not open for this Court to reappreciate the evidence and to record its own conclusion on sufficiency or insufficiency of evidence. The decision of the disciplinary authority based on the evidence produced before the enquiry officer is not open to review by this Court so as to record an independent finding. Further placing the counter affidavit it is evident that in similar type of matters 27 officials of the Company were involved and have been found guilty after conclusion of 39 disciplinary proceedings, 17 officials including the petitioner herein are facing prosecution before the C.B.I Court in similar matters, the petitioner was guilty of charges framed against him as per service rules. The Special Task Force in its note dated 11.11.1998 had recommended for
3. AIR 1999 SC 677 repudiation of claim, referral of matters to vigilance, depanelment of Surveyors and cancellation of survey licence. The note dated 11.11.1998 of the Special Task Force had identified the irregularities and not the extent of involvement of officers and employees of the company. The disciplinary enquiry was, thus, initiated to fix responsibilities on the employees of the Company to find the extent of involvement. Referring to the Rules pertaining to the disciplinary enquiry it is contended that the petitioner was allowed inspection of listed documents before the commencement of the enquiry proceedings. He was also permitted to provide the name of a Defence Assistant as per the rules but he did not comply with the rules in his demand for the defence assistant and as such refusal by the enquiry officer cannot vitiate the enquiry report.
As regards the duties and responsibilities of the Assistant in the company, it is contended that the petitioner was required to be diligent in the work that was entrusted to him. The petitioner has been found guilty of negligence as also of committing breach of guidelines of the Company on the basis of evidence before the enquiry officer and the findings of fact returned by the enquiry officer cannot be subject matter of review under Article 226 of the Constitution of India. The penalty imposed on the petitioner is proportionate to the proved guilt. The allegations of enquiry officer being biased are baseless, in as much as, the enquiry officer himself concluded that the charge of connivance of the petitioner with the Surveyors, Repairers, Garage owners, Insured persons and other employees of the Company had not been proved.
Having considered the submissions of learned counsel for the parties, relevant facts reflected from the record as noted hereinabove, before dealing with the same it would be appropriate to go through the scope of interference in the matter of High Court in the matter of departmental enquiry.
As has been held in a catena of decisions, it is true that a Writ Court should be very slow in interfering with the finding of facts recorded by a departmental authority on the basis of evidence on record. But it is equally true that in a case where the disciplinary authority records a finding which is unsupported by any evidence whatsoever or a finding which no reasonable person could have arrived at, or the conclusion drawn by the enquiry officer or the disciplinary authority is not supported by any finding at all, the Writ Court would be justified if not duty bound to examine the matter and grant relief in appropriate cases. The Writ Court will certainly interfere with disciplinary enquiry or the resultant orders passing by the competent authority on that basis. Non- application of mind by the enquiry officer or the disciplinary authority, non recording of reasons in support of conclusion arrived at by them are grounds on which the Writ Courts are justified in interfering with the orders of punishment.
Going through certain pronouncements of Apex Court, relevant is to note the observations in Nand Kishore vs State of Bihar and others 4 wherein it is said that :-
“The desirability of writing a self-contained speaking order in disciplinary proceeding culminating in an order of removal of the delinquent from service, cannot be over- emphasised. It is true that the impugned orders do not fully measure upto this devoutly desired standard. Nevertheless, they do contain a bald and general allusion to the primary facts, and a cryptic inference therefrom. There is no specific reference to or discussion of the evidence. The High Court, therefore, examined the record of the disciplinary tribunal, not with a view to make out or reconstruct a new case, but only to see whether there was some evidence of the primary facts relied upon by the domestic tribunal in support of its conclusion. We do not see any impropriety in the course adopted by the High Court.”
In B.C. Chaturvedi vs Union of India 5 while dealing with the scope of interference in the disciplinary enquiry in exercise of judicial review by a Writ Court/Tribunal the Supreme Court held as under:-
“12. ….... Whether the findings or conclusions are based on some evidence, the authority entrusted with the power to hold inquiry has jurisdiction, power and authority to reach a finding of fact or conclusion. But that finding must be based on some evidence. Neither the technical rules of Evidence Act nor of proof of fact or evidence as defined therein, apply to disciplinary proceeding. When the authority 4.1978 3 SCC 366 5.1995 6 SCC 749 accepts that evidence and conclusion receives support therefrom, the disciplinary authority is entitled to hold that the delinquent officer is guilty of the charge. The Court/Tribunal in its power of judicial review does not act as appellate authority to re- appreciate the evidence and to arrive at its own independent findings on the evidence. …......
13.The disciplinary authority is the sole judge of facts. Where appeal is presented. The appellate authority has co- extensive power to reappreciate the evidence or the nature of punishment. In a disciplinary inquiry the strict proof of legal evidence and findings on that evidence are not relevant. Adequacy of evidence or reliability of evidence cannot be permitted to be canvassed before the Court/Tribunal. In Union of India v.
H.C. Goel [(1964) 4 SCR 781], this Court held at page 728 that if the conclusion, upon consideration of the evidence, reached by the disciplinary authority, is perverse or suffers from patent error on the face of the record or based on no evidence at all, a writ of certiorari could be issued.”
It is held in M.V. Bijnani vs Union of India 6 that though the charges in departmental proceedings are not required to be proved like a criminal trial ie beyond all reasonable doubt, however, the enquiry officer performs a quasi judicial function, who upon analysis of the documents arrive at a conclusion that there had been a preponderance of probability to bring the charges home on the basis of material on record. While doing so he cannot take into consideration any irrelevant fact, he cannot refused to consider the relevant facts, he cannot shift the burden of proof. Further more in Roop Singh Negi vs Punjab National Bank 7 the Apex Court has held that the order of the disciplinary authority as also the appellate authority are the orders having severe civil consequences, appropriate reasons should have been recorded. On the question of proof in a departmental enquiry, it was observed:-
“23..............The materials brought on record pointing out the guilt are required to be proved. A decision must be arrived at on some evidence, which is legally admissible. The provisions of the Evidence Act may not be applicable in a departmental proceeding but the principles of natural justice are. As the report of the Enquiry Officer was based on merely ipse dixit as also surmises and conjectures, the same could not have been sustained. The inferences drawn by the Enquiry Officer apparently were not supported by any evidence. Suspicion, as is well known, however high may be, can under no circumstances be held to be a substitute for legal proof. Suspicion, as is well 6.2006 5 SCC 88 7.2009 2 SCC 570 known, however high may be, can under no circumstances be held to be a substitute for legal proof. Suspicion, as is well known, however high may be, can under no circumstances be held to be a substitute for legal proof.
In Mohd Yunus Khan vs State of U.P and others 8 it is held that the disciplinary proceedings under the statutory rules are in the nature of quasi-judicial proceedings. Though the technical rules of procedure contained in the Code of Civil Procedure 1908 and the provisions of the Evidence Act, 1872 do not apply in a domestic enquiry, however the principles of natural justice are required to be observed strictly. Therefore, the enquiry is to be conducted fairly and reasonably and the enquiry report must contain reasons for reaching the conclusion that the charges framed against the delinquent stood proved against him. It cannot be an ipse dixit of the enquiry officer.
The same view has been reiterated in Allahabad Bank & ors Vs Krishna Narayan Tewari . 9 It is trite in law that the High Court in the writ proceeding cannot appreciate evidence as a Court of appeal and would not substitute its decision over the decision of the disciplinary authority. It is concerned only whether enquiry is held by an authority competent in that behalf and according to the procedure prescribed for the same and further whether the rules of natural justice have been followed. Where there is some evidence which the authority entrusted with the duty to hold the enquiry as accepted and the said evidence may reasonably support the conclusion of guilt, it is not the function of the High Court in Writ jurisdiction to review the evidence and to arrive at an independent finding on the same set of evidence. The sufficiency or insufficiency of evidence or reliability thereof is not the matter which can be permitted to be canvassed before the High Court in a Writ proceedings.
The High Court can undoubtedly interfere where the disciplinary 8.(2010) 10 SCC 539 9.(2017) 2 SCC 308.
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 disciplinary authority has reached at its conclusion on some consideration extraneous to the evidence and merits of the case or allowing themselves to be influenced by irrelevant considerations. If the decision is so arbitrary and capricious that no reasonable person could arrive at that conclusion, on consideration of the evidence on the face of it, writ court can held otherwise. At the same time an enquiry on vague charges which does not give a clear picture to the delinquent to make out his effective defence stands vitiated being in violation of the principles of natural justice. It is not necessary for the enquiry officer to prove the guilt of accused beyond all reasonable doubts like a criminal court after collecting evidence, however, the evidence adduced should not be perfunctory. Even if the delinquent does not take the defence or make a protest against that the charges are vague, that does not save the enquiry from being vitiated for the reason that the principles of fair play in disciplinary action are attracted, in as much as, any adverse order involves civil consequences and may involve a serious penal consequences. The purpose of disciplinary enquiry is to find out the truth of the allegations or charges levelled against the delinquent. Strict adherence to the statutory provisions and principles of natural justice are required in a departmental enquiry which has to be conducted fairly, objectively and not subjectively. The findings on the evidence should not be based on conjectures and surmises and should not be perverse or unreasonable. The observations of Apex Court in paragraph '35' in Union of India and others vs Gyan Chand Chattar 10 are relevant to be noted hereunder:-
“35.In view of the above, law can be summarized that an enquiry is to be conducted against any person giving strict adherence to the statutory provisions and principles of natural justice. The charges should be specific, definite and giving 10.(2009) 12 SCC 78 details of the incident which formed the basis of charges. No enquiry can be sustained on vague charges. Enquiry has to be conducted fairly, objectively and not subjectively. Finding should not be perverse or unreasonable, nor the same should be based on conjunctures and surmises. There is a distinction in proof and suspicion. Every act or omission on the part of the delinquent cannot be a misconduct The authority must record reasons for arriving at the finding of fact in the context of the statute defining the misconduct.”
As has been noted therein, every act or omission on the part of delinquent cannot be treated as misconduct and the authority must record reasons for arriving at the finding of fact, in the context of the statute defining the misconduct.
Tested on the touchstone of the legal principles noted above, in the instant case, though the article of charges framed against the petitioner indicated two definite charges first that while working as an Assistant at Branch Office in Bareilly he deliberately recommended the payment of 13 bogus Motors (OD) claim files with the intention to defraud the Company, in connivance with Surveyors, Repairers, Garage owners, Insured and other employees of the Company and secondly that he deliberately processed the estimate prepared by previously estimate makers for deputation of final Surveyor in breach of guidelines of the Company relating to deputation of surveyors, thus, deliberately connived with surveyors in higher/inflated assessment of claims and in the said manner he had violated the company norms relating to handling/payment of motor (own damages) claims.
But none of the above charges were proved as enquiry officer himself concluded that the charge of connivance of petitioner with the surveyors, repairers, garage owners, insured and other employees of the company had not been proved. For coming to the findings of the negligence on the part of the petitioner in recommending the payment of 13 motor (OD) bogus claims, nothing has been discussed in the enquiry report. The extent of duties and responsibilities to be discharged by the petitioner in processing the disputed claims is not mentioned in the enquiry report, absolutely no reason has been assigned by the enquiry officer for arriving at the said finding.
The initiation of enquiry against the petitioner appears to be the result of report of S.T.F about large scale bungling in processing Motor (own damage) claims which starts with the preparation of bogus reports of the Surveyors with the connivance of insured and garage owners, the report of surveyors were approved by the Senior Officer and the files were moved from the desk of the petitioner. The irregularities in preparation of bogus claims with the Surveyor's appointment and processing of the same by the Final Surveyor could be unearthed only after an extensive investigation conducted by the Special Task Force. The statement of imputation of misconduct in support of the article of charges framed against the petitioner does not indicate his involvement in any of the said matter in preparation of fake claims. Few discrepancies such as difference in the vehicle number visible in the photographs of one of the claims may not have been noticed due to over sight. In fact there is no discussion of any evidence which would indicate or even point out any act or omission on the part of the petitioner. There is no proof of act of negligence of the petitioner and as such the allegation that the petitioner had forwarded the insurance claims deliberately to constitute misconduct, is not proved.
From the perusal of the enquiry report, it is evident that the enquiry officer recorded its conclusion of holding the petitioner guilty without single line of reasoning to arrive at the same. The enquiry report, thus, is wholly non-speaking. In absence of finding of guilt of the petitioner, it is not possible to sustain the order of punishment awarded by the disciplinary authority, which is equally non speaking. This Court, therefore, reaches at irresistible conclusion that there was no evidence at all imputing the petitioner for the charges narrated in the charge sheet. It appears that the petitioner was held responsible only for the fact that some files of the bogus claims passed through his desk.
The superior authorities namely respondent nos.2 and 3 have also committed the same illegality in passing mechanical orders in dismissing appeal and memorial presented by the petitioner.
For the above discussion, the entire enquiry report which culminated in passing of the order of punishment dated 5.12.2007 is found vitiated. The order of punishment dated 5.12.2007 and the orders of affirmation thereof dated 24.4.2008 and 30.12.2008 are, therefore, liable to be set aside. The petitioners is held entitled for all consequential benefits.
The writ petition is allowed. No order as to cost.
Order Date :- 27.8.2019 Harshita