Kerala High Court
C.C. Rajappan vs M/S. The New India Assurance Company Ltd on 14 May, 2007
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
TUESDAY,THE 7TH DAY OF JANUARY 2014/17TH POUSHA, 1935
WP(C).No. 26520 of 2012 (L)
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PETITIONER:
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C.C. RAJAPPAN,
CHEMMANADAM HOUSE,
MANJAPRA P.O, ERNAKULAM- 683 581.
BY ADVS.SRI.ELVIN PETER P.J.
SRI.T.G.SUNIL (PRANAVAM)
SRI.K.R.GANESH
RESPONDENTS:
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1. M/S. THE NEW INDIA ASSURANCE COMPANY LTD.,
REPRESENTED BY ITS CHAIRMAN- CUM MANAGING DIRECTOR,
HEAD OFFICE, MUMBAI -400 001.
2. THE CHAIRMAN- CUM MANAGING DIRCTOR,
M/S THE NEW INDIA ASURANCE COMPANY LTD., HEAD OFFICE,
MUMBAI-400 001.
3. THE GENERAL MANAGER (APPELLATE AUTHORITY),
M/S. THE NEW INDIA ASURANCE COMPANY LTD., HEAD OFFICE,
MUMBAI-400 001.
4. THE DEPUTY GENERAL MANAGER (DISCIPLINARY AUTHORITY),
M/S. THE NEW INDIA ASURANCE COMPANY LTD., HEAD OFFICE,
MUMBAI-400 001.
5. THE SENIOR DIVISIONAL MANAGER,
M/S. THE NEW INDAI ASURANCE COMPANY LTD.,
DIVISIONAL OFFICE, IIND FLOOR, SIET BUILDING,
NEW NO. 453, ANNA SALAI, TEYNAMPET,
CHENNAI- 18.
BY ADVS. SRI.K.K.M.SHERIF,
SRI.LAL K.JOSEPH,
SRI.A.A.ZIYAD RAHMAN.
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 07-01-2014, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
Prv.
W.P.(C).NO.26520/2012-L:
APPENDIX
PETITIONER'S EXHIBITS:
EXT. P1: TRUE COPY OF THE MEMORANDUM OF CHARGES TOGETHER WITH
STATEMENT OF IMPUTATIONS ISSUED BY THE 4TH RESPONDENT TO
THE PETITIONER.
EXT. P2: TRUE COPY OF THE REPLY DATED 14-05-2007 SUBMITTED BY THE
PETITIONER TO THE MEMORANDUM OF CHARGES.
EXT. P3: TRUE COPY OF THE LETTER DATED 13-08-2010 SENT BY THE
PETITIONER'S WIFE TO THE RESPONDENT COMPANY.
EXT. P4: TRUE COPY OF THE REPLY DATED 26-08-2010 SENT BY THE
PETITIONER TO THE RESPONDENT COMPANY.
EXT. P4(A): TRUE COPY OF THE REPLY DATED 31-08-2010 SENT BY THE
PETITIONER TO THE RESPONDENT COMPANY.
EXT. P4(B): TRUE COPY OF THE REPLY DATED 02-09-2010 SENT BY THE
PETITIONER TO THE RESPONDENT COMPANY.
EXT. P5: TRUE COPY OF THE LETTER DATED 16-09-2010 SUBMITTED BY THE
PETITIONER UNDER THE RIGHT TO INFORMATION ACT.
EXT. P6: TRUE COPY OF THE REPLY DATED 15-11-2010 ISSUED BY THE
RESPONDENT COMPANY.
EXT. P7: TRUE COPY OF THE LETTER DATED 30-04-2008 ISSUED BY THE
ENQUIRY OFFICER.
EXT. P7(A): TRUE COPY OF THE SUMMARY OF ENQUIRY REPORT ISSUED BY THE
ENQUIRY OFFICER.
EXT. P8: TRUE COPY OF THE REPLY ISSUED BY THE PETITIONER
DATED 19-05-2008 TO THE ENQURY REPORT.
EXT. P9: TRUE COPY OF THE LETTER DATED 10-10-2008 ISSUED BY THE
4TH RESPONDENT TO THE PETITIONER.
EXT. P9(A): TRUE COPY OF THE ENQURIY REPORT ISSUED BY THE 4TH
RESPONDENT.
EXT. P10: TRUE COPY OF REPRESENTATION DATED 20-11-2008 SUBMITTED BY
THE PETITIONER TO THE 4TH RESPONDENT.
EXT. P11: TRUE COPY OF THE LETTER DATED 04-05-2009 ISSUED BY THE 5TH
RESPONDENT TO THE PETITIONER.
EXT. P12: TRUE COPY OF THE ORDER DATED 01-04-2009 ISSUED BY THE 4TH
RESPONDENT.
EXT. P13: TRUE COPY OF THE APPEAL DATED 25-07-2009 SUBMITTED BY THE
PETITIONER BEFORE THE 3RD RESPONDENT WITH ANNEXURES.
EXT. P14: TRUE COPY OF THE ORDER DATED 08-03-2010 ISSUED BY THE 3RD
RESPONDENT.
Prv.
W.P.(C).NO.26520/2012-L:
EXT. P15: TRUE COPY OF THE LETTER DATED 15-04-2010 ISSUED BY THE
REGIONAL MANAGER OF RESPONDENT COMPANY.
EXT. P16: TRUE COPY OF THE MEMORIAL DATED 14-10-2010 SUBMITTED
BY THE PETITIONER BEFORE THE 3RD RESPONDENT.
EXT. P17: TRUE COPY OF THE ORDER DATED 16-03-2011 ISSUED BY THE 2ND
RESPONDENT.
EXT. P18: TRUE COPY OF THE REVIEW PETITION 07-04-2012 SUBMITTED BY
THE PETITIONER BEFORE THE 2ND RESPONDENT.
EXT. P19: TRUE COPY OF THE ORDER DATED 29-05-2012 ISSUED BY THE CHIEF
MANAGER OF RESPONDENT COMPANY.
RESPONDENTS' EXHIBITS: NIL.
//TRUE COPY//
P.A. TO JUDGE.
Prv.
K.VINOD CHANDRAN, J
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W.P.(C).No. 26520 of 2012
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Dated 7th January, 2014
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JUDGMENT
The petitioner was an Assistant Manager with the 1st respondent, working at its Muvattupuzha Branch, officiating as the Branch Manager. While he was continuing in the Muvattupuzha Branch, the petitioner was issued with a charge memo produced as Ext.P1 dated 13.4.2007. There were in all eight charges levelled against the petitioner, which need not be noticed at present, since this Court, sitting in the jurisdiction under Article 226 of the Constitution of India, is not looking into the charges, or the evidence adduced but is essentially sitting in judicial review of the orders passed by the Administrative authority in a disciplinary proceeding instituted against an alleged delinquent employee.
2. The petitioner, by Ext.P1, was also served with a detailed statement of imputations of misconduct, as Annexure-B. The petitioner had submitted written explanation to the chargesheet, as is evidenced by Ext.P2. Being unsatisfied with the explanation WP(C).26520/12 2 offered, an enquiry was ordered appointing a Regional Manager of the respondent Company as the Enquiry Officer and a Manager of the Regional Office as the Presenting Officer. Though the said order has not been produced, by Ext.P7 the written brief submitted by the Presenting Officer was forwarded to the delinquent employee and Ext.P8 objections were submitted to the brief filed by the Presenting Officer.
3. A domestic enquiry was conducted, witnesses were examined, documents were marked and a report was submitted by the Enquiry Officer as is evidenced by Ext.P9(a). Out of the eight charges; six were established, one was partially established and the petitioner was exonerated from another of the charges. Here, it is to be mentioned that the petitioner does not have a contention that the proceedings of the enquiry was carried on without complying with the principles of natural justice or in a manner which caused prejudice to his defence being established. The enquiry report, Ext.P9(a), was promptly communicated to the petitioner by Ext.P9. The petitioner submitted a detailed explanation by Ext.P10 and the disciplinary WP(C).26520/12 3 authority passed Ext.P12 accepting the enquiry report, rejecting the contentions of the petitioner and removing him from service. The petitioner's appeal and the memorial to the Managing Director were also rejected. Petitioner is before this Court challenging the removal from service ordered by Ext.P12.
4. The learned counsel for the petitioner initially challenges the proceedings on the ground that the same was initiated under The General Insurance (Conduct, Discipline and Appeal) Rules, 1975 (for brevity the CDA Rules of 1975) and Ext.P12 final order passed, is under the New India Assurance Company Ltd (Conduct, Discipline and Appeal) Rules, 2003 (for brevity 'the CDA Rules of 2003'). The petitioner contends that there is substantial difference in the procedure to be followed as per the CDA Rules of 1975 and the CDA Rules of 2003. It is the specific contention that as per the CDA Rules of 2003, there is no requirement for a copy of the enquiry report to be furnished to the charge sheeted employee. Further contention against the CDA Rules 1975 as also the CDA Rules of 2003 is that the same has not been notified as provided under WP(C).26520/12 4 Section 39 of the General Insurance Business (Nationalisation) Act, 1972 (for brevity 'the Act of 1972) and hence, the 1st respondent could not have proceeded under either of the said Rules.
5. The petitioner also assails Ext.P12 on the ground that the same reveals total levity in the matter of consideration of the charges, the findings in the enquiry report, the objections raised by the petitioner and mechanically finds the delinquent employee to be guilty and imposes the major penalty of removal from service. The petitioner also points to Rules 25(2) of the CDA Rules of 2003, which is similar to that of the CDA Rules of 1975 to assail the appointment of the Enquiry Officer. Essential contention is that sub-Rule 2 of Rules 25 clothes the disciplinary authority with the power to appoint a retired officer or a public servant or retired Officers of Public Sector Undertakings/Organizations and the appointment of a Subordinate Officer of the disciplinary authority is not contemplated by the Rules.
6. The respondent Corporation has filed a counter affidavit in which it is contended that earlier, the Rules applicable to the WP(C).26520/12 5 respondent Company was the CDA Rules of 1975 and on de-linking of the respondent Company from the General Insurance Company and the respondent Company having been declared an independent entity bereft of a subsidiary status; rules were framed in the year 2003 for substituting the CDA Rules of 1975. It is submitted that there is substantially no difference in the Rules as framed in the CDA Rules of 1975 and the CDA Rules of 2003. There was an obvious and inadvertent mistake in the publication of the Rules which did not indicate the change in name. Hence, the Rules framed in 2003 was also published as the CDA Rules of 1975 which mistake was noticed later on and rectified in the year 2008. Actions taken under the CDA Rules of 1975 were ratified insofar as making them valid under the newly framed Rules. The Rules are also said to be the one framed under the power available to the respondent Company, on its incorporation by a Memorandum and Articles of Association. The Rules regulate the service conditions of its employees and is not one framed under Section 39 of the Act of 1972. With respect to Rule 25(2) it is submitted that the Enquiry Officer appointed in the instant case, being the Regional Manager of the respondent WP(C).26520/12 6 Company, comes within the definition of a public servant as contemplated in Section 31 of the Act of 1972.
7. The CDA Rules of 1975 as also that of 2003 have been placed before this Court. A perusal of which, as contended by the respondent Company, discloses no substantial difference even in the numbering of the Rules. Specifically Ext.P1 charge sheet, alleges contravention of Rule Nos. 3 (1) (i), (ii) (iii), Rule 4(1), (5), (9), (16) (20) and (21) of the CDA Rules of 1975. The said Rules are verbatim framed in the CDA Rules of 2003 also with identical numbering. The only difference pointed out by the learned counsel appearing for the petitioner is that there is no requirement in the CDA Rules of 2003, for supply of a copy of the enquiry report to the charge sheeted employee as is available in the 1975 Rules. For one it is to be noticed that the specific requirement pointed out by the learned counsel in the CDA Rules of 1975 is not a part of the Rules but is a part of the 'Note' to the Rules. Again, it has to be noticed that even if such a requirement is not provided for in the Rules; going by the judicially recognized principles of natural justice, WP(C).26520/12 7 to be followed in a disciplinary enquiry instituted and proceeded against an employee; supply of a copy of the enquiry report to the charge sheeted employee is a mandatory requirement.
8. Further, in the present case, it has to be specifically noticed that the copy of the enquiry report was supplied to the delinquent employee and he was also granted an opportunity to make submissions by way of objections against the findings in the enquiry report. In the context of the finding that; substantially the CDA Rules of 1975 and the CDA Rules of 2003 are identical and in the context of there being no prejudice caused to the delinquent employee in the procedure followed in conducting the enquiry, the procedural irregularity pointed out by the petitioner insofar as initiating the proceedings under the CDA Rules of 1975 and concluding the same by an order passed under the CDA Rules 2003 has to be negatived.
9. The next contention is that the Enquiry Officer appointed is not one competent to be appointed under either the CDA Rules of 1975 or the CDA Rules of 2003. Rule 25(2) of the CDA Rules 2003 WP(C).26520/12 8 is extracted herein.
25(2).Whenever the competent Authority is of the opinion that there are grounds for inquiring into the truth of any imputation of misconduct or misbehaviour against an employee it may itself inquire into or appoint a retired officer or any public servant (hereinafter called the inquiring authority) including the retired Officers of other public Sector Undertakings/Organizations to inquire into the truth thereof.
Definitely a public servant would be a person competent to be appointed to conduct an enquiry as per the CDA Rules. The respondent Company would place reliance on Section 31 of the Act of 1972 to contend that the Enquiry Officer appointed herein being an Officer of the Company is a public servant. Section 31 reads as under:-
S.31- Every Officer or other employee of the Corporation or of an acquiring Company shall be deemed to be a public servant for the purposes of Chapter 9 of the India Penal Code.
10. Specific reference in the definition clause is made to the WP(C).26520/12 9 Act of 1972 and Rule 25(2) r/w Section 31 of the Act of 1972 definitely supports the contention of the respondent Company that the Enquiry Officer appointed herein is a public servant as contemplated under Rule 25(2). The contention of the petitioner that the disciplinary authority could not have appointed a Subordinate Officer cannot at all be countenanced.
11. The petitioner then would argue that the CDA Rules ought to be notified and on the context of the admitted position that neither the CDA Rules 1975 or that of 2003 was notified, the entire proceedings are vitiated. The petitioner would also place reliance on Section 39 of the Act of 1972 to buttress his contention. The learned counsel would also place before me Rajendra Agricultural University v. Ashok Kumar Prasad & Ors. (AIR 2010 SC 259) to advance the oft repeated proposition that when a statute prescribes a certain act to be done in a particular manner, then it shall be done in that manner or not at all. There can be no dispute on the proposition that if the statute prescribes a notification for the Rules to be made applicable, definitely there should be a notification and in WP(C).26520/12 10 the absence of such a notification, rules framed would have absolutely no effect.
12. However, one has to look at the Act of 1972 and Section 39 to understand as to whether the CDA Rules either of 1975 or of 2003 is framed invoking the powers under Section 39. Act of 1972 was one enacted to provide for the acquisition and transfer of shares of Indian Insurance Companies and undertakings of other existing insurers to serve better the economy and public interest by securing the development of General Insurance Business and for the regulation and control of such business. Act of 1972 does not at all regulate the service of the employees of the Insurance Company. The Act as is evidenced from Section 2, declares it to be one enacted for giving effect to the policy of the State towards securing the principles in clause (c) of Article 39 of the Constitution; aimed at avoidance of economic polarisation.
13. Section 17A definitely specifies that the Central Government has the authority to bring out a notification regulating WP(C).26520/12 11 service conditions of the employees of the Insurance Companies. But it does not provide a definite mandate as is clear by the words employed viz ; "Central Government may by notification in the official Gazette..." If the Central Government decides to invoke such powers conferred under Section 17A, necessarily notification in the Gazette is mandatory, and on being notified; would override any rule framed by the Company. Section 39 also does not support the contention of the petitioner, since the service condition of the employees is not a matter which could be categorized under the object of carrying out the provisions of the Act and none of the specific matters dealt with under sub clause (a) to sub clause (f) of sub-section 2 refer to the service conditions of the employees. Hence, the prescription in sub section 3 of Section 39 that the Rules so framed under Section 39 shall be placed before both Houses of Parliament, also is not applicable in the case of Conduct, Discipline and Appeal Rules regulating the service conditions of the employees of the respondent Company, brought out by the Company itself.
14. The learned counsel for the petitioner has placed before WP(C).26520/12 12 me a decision of the High Court of Karnataka at Bangalore in Crl. Appeal Nos.933 and 835 of 2010 wherein purportedly the Karnataka High Court has held that the CDA Rules of 1975, for reason of it not being placed before the Parliament and there being no Gazette notification issued, would render the sanction order issued under the CDA Rules of 1975 to be invalid. On an anxious consideration of the proposition laid down by a learned single Judge of the Karnataka High Court I am unable to accept the said proposition. In fact, the Karnataka High Court has held so in paragraphs 41, 42 and 43 which are extracted herein.
41. Now coming to the sanction part of the case, PW-1 has deposed in his evidence that, he issued the sanction order as per Ext.P1. The witness has submitted that he was not specifically authorised by the Board to issue the sanction. The Memorandum of Articles of Association placed on record by the accused as per Ext.D1 indicates that the Board's authorisation is a must. The second defect in the prosecution case with regard to the sanction order is that, the witness PW-1 has stated in his evidence that there is no separate rules for the United India Insurance Company Limited and the rules which were applied were the General Insurance Conduct Discipline Appeal Rules, 1975 (CDA Rules). It is also in his evidence that the CDA Rules were not placed before the Parliament. No Gazette Notification was WP(C).26520/12 13 issued. Whether in such circumstances, the CDA Rules could have been invoked is the point for consideration. In this connection the decision referred by the learned counsel Sri.Kiran S. Javali is required to be taken note of.
42. In the case of Rajendra Agricultural University Vs. Ashok Kumar Prasad (AIR 2010 SC
259) dealing with Bihar Agricultural Univeresities Act, 1987 and Section 36 of the said Act laying down steps for making or amending a Statute, the Apex Court has observed at para 9 that, if the Act lays down the manner in which a statute under the Act should be made. It shall have to be made in that manner and no other. The Court went on to hold that the requirement that the statute should be published in the official Gazette, is an itegral part of the process of 'statute making' under section 36 of the Act and it is mandatory and not directory. It was further held that, until publication in the official Gazette, the stattue will be considered as still being in the process of being made, even if it had received the assent of the Chancellor. Consequently, the court went on to observe that a statute in the making or a 'statute in process' is incomplete and is neither valid nor effective as a statute.
43. The aforesaid principles, if applied to the case on hand, would render the sanction order also invalid in view of the evidence of PW-1 that the CDA rules were not gazetted. The learned trial Judge did not consider the aforesaid aspects while dealing with the contentions put forward by the accused in respect of the validity of the sanction order.
15. Noticing the absence of a Gazette notification and the fact that the Rules were not placed before the Parliament, the learned single Judge of the Karnataka High Court found the rules framed to WP(C).26520/12 14 be bad. However, the Court has not examined as to whether there is any requirement for such a Gazette notification or for placing the Rules before the Parliament. On an examination of the provisions of the Act of 1972, this Court has found that there is no such requirement and this Court is inclined to accept the contention of the respondent Company that the respondent Company has framed the Rules to regulate the conditions of service of the employees under the inherent powers vested in the respondent Company on its incorporation under a statute and based on its legal status as a validly registered Company.
16. On the findings rendered herein above, this Court does not find any procedural illegality or violation of principles of natural justice in the disciplinary enquiry initiated and continued against the petitioner. However, the last aspect regarding the manner in which the enquiry report and objection filed by the delinquent employee was considered by the disciplinary authority also has to be considered. As was noticed at the outset, the circumscribed jurisdiction of judicial review does not permit this Court to make a WP(C).26520/12 15 roving enquiry or to re-appreciate the evidence adduced in the enquiry either to find the delinquent employee guilty or to exonerate him from the charges. This Court is not expected to re-appreciate the evidence. What is contemplated is a conscientious review as to whether there is any illegality, irrationality or procedural irregularity. It has already been held that there is absolutely no procedural irregularity. But then, the Enquiry Officer's findings on the charges, only aids the Disciplinary Authority and does not at all bind such authority who has to pass the final orders on an independent consideration. On a consideration of the evidence recorded at the enquiry, the Disciplinary Authority is entitled to differ from the findings of the Enquiry Officer and hold the delinquent employee who has been found guilty by the Enquiry Officer, to be not guilty or vice- versa. What assumes significance, is the satisfaction of the Disciplinary Authority, who has to examine the evidence on record and enter a finding on the guilt or otherwise of the delinquent employee; independent of the findings entered into by the Enquiry Officer. This exercise definitely contemplates application of mind especially in the context of the accepted principles of the valuable WP(C).26520/12 16 right given to the delinquent employee to submit objections with respect to the findings of the Enquiry Officer. That is not an empty formality.
17. On a consideration of Ext.P12, it can only be concluded that there is absolute and total non-application of mind with respect to the charges alleged, evidence adduced, the findings of the Enquiry Officer and the objections proferred. Ext.P12 itself is an order which imposes a major penalty of 'removal from service'. The gravity of the offence committed definitely has to be considered by the Disciplinary Authority before imposing such major penalty. The consideration in Ext.P12 is confined to the last four paragraphs which are extracted herein.
"On perusal of the representation of Mr.C.C.Rajappan, I find that he has not brought out any new material fact necessitating re-look at the conclusion of the Inquiry report but has reiterated his earlier stand which has been considered by the Inquiry Officer whilst arriving at his conclusion.
I also find that during the course of the inquiry, Mr.C.C.Rajappan was given full opportunity to defend his case and that he had fully participated in the said Inquiry and nowhere during the course of the Inquiry, WP(C).26520/12 17 the principles of natural justice were vitiated.
On overall consideration of the case, I have no doubt whatsoever that Mr.C.C.Rajappan was collecting extra amount ranging from Rs.500/- to Rs.1000/- from the prospective insureds in the name of service charges. Moreover he was also found to have utilized Company's funds for his personal use by misusing his authority. Even whilst accepting commercial TP proposals he did not show due diligence and prudence and contravened the underwriting norms of the Company.
Therefore having considered the case from all angles, I find that the misconduct on the part of Mr.C.Rajappan is grave in nature and warrants severe action. I, therefore impose upon him the penalty of Removal from Service of the Company which is just and fair, as provided under Rule 23(h) of The New India Assurance Co.Ltd. (Conduct, Discipline and Appeal) Rules, 2003 as amended up to date.
18. The Disciplinary Authority has dealt with the issue in abject levity and merely concurred with the findings of the Enquiry Officer without at all, dealing with any evidence adduced at the enquiry and totally ignoring the objections filed by the delinquent Officer. The order passed, Ext.P12, shocks the judicial conscience and has to be set aside, for the obvious illegality in having not considered any of the objections raised by the delinquent employee, especially in the context of imposing a major penalty of removal from service. Ext.P12 hence is set aside.
WP(C).26520/12 18
19. However, it is trite that in any challenge against a validly instituted disciplinary proceedings; on an order being set aside in judicial review, the employer has to be given an opportunity to rectify such defect; by reason of which the order has been set aside and direct the enquiry to be proceeded with from the stage at which the defect is noticed. In the circumstances of Ext.P12 having been set aside, and in the circumstances of this Court having found that Ext.P12 is bad for non application of mind, it is only proper that the matter be considered afresh by the Disciplinary Authority, ie:
whoever is the Disciplinary Authority as per the schedule of the CDA Rules, 2003 as on today. For the purpose of consideration of the objections of the petitioner and for the purpose of passing a final order, the order in appeal and that in the memorial before the Managing Director; being Exts.P14 and P17; are set aside. The order passed in review Ext.P19, is also set aside. The Disciplinary Authority shall issue notice to the petitioner; fixing date of hearing and shall afford an opportunity of hearing to the petitioner within a period of one month from the date of receipt of a certified copy of WP(C).26520/12 19 this judgment. The Disciplinary Authority shall consider the matter afresh; as indicated herein above and pass final orders within a period of two months from the date of hearing.
Writ petition allowed. Parties are l5eft to suffer their costs.
SD/-
K.VINOD CHANDRAN, Judge Mrcs (TRUE COPY)