Madras High Court
S.M.Alagiry vs The Life Insurance Corporation Of India on 15 September, 2017
Author: S.M.Subramaniam
Bench: S.M.Subramaniam
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 15-09-2017 CORAM THE HONOURABLE Mr. JUSTICE S.M.SUBRAMANIAM WP Nos.35411, 29391, 29400, 30660, 32857, 34741, 36166, 36167, 40176, 41421, 41420, 42298, 42462, 43471 and 43524 of 2016, 99, 1242, 3722, 4816, 5615, WP(MD) 7315 of 2017, 8237 to 8240 of 2017, 14899, 15828, 16829 and 19546 of 2017 And WMP Nos.25412, 25426, 26563, 28401, 28402, 29932, 29933, 30482, 30483, 31122, 31124, 34211, 34212, 35391, 35392, 35389, 35390, 36352, 36353, 36201, 37312, 37313, 37348, 37349 of 2016 and 108, 109, 1175, 1176, 3788, 5047, WMP(MD) Nos.5757, 5758 and 5759 of 2017, 5984, 8989 to 9000, 16140, 17137, 17138, 18275, 18276 and 21108 of 2017 WP No.35411/2016: S.M.Alagiry .. Petitioner Vs. 1.The Life Insurance Corporation of India, Represented by the Chairman/ The Executive Director, (Marketing/PD), Central Office, Yogakshema, Mumbai 400 021. 2.The Zonal Manager, Life Insurance Corporation of India, Southern Zonal Office, Old No.102, New No.153, LIC Building, Anna Salai, Mount Road, Chennai-2. 3.The Senior Divisional Manager, Life Insurance Corporation of India, Salem Division, Salem. .. Respondents WP 35411 of 2016 is filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the records on the file of the first respondent in connection with the order of Modification in Ref.MKTG/ZD/20/2016 dated 23.7.2016 to Draft of Annexure III-C and also the order of the third respondent in connection with the orders passed by him in his Proc.No.Nil dated 8.9.2016 in Annexure-III and quash the same by holding that the interpretation of the Rules 7 and 8 of the Life Insurance Corporation of India Development Officer (Revision of Certain Terms and Conditions of Service) Rules, 2009 and Life Insurance Corporation of India Development Officer (Revision of Certain Terms and Conditions of Service) Amendment Rules, 2016 notified by the respondents 1 and 2 for straight termination without enquiry as unconstitutional and ultra vires. For Petitioner : Mr.R.Singaravelan, Sr. Counsel for Ms.M.Srividhya. For Respondents : Mr.S.Silambanan, Sr. Counsel for M/s.Kaviya Silambanan Associates. C O M M O N O R D E R
The factual matrix required to be considered in these batch of writ petitions are that, the writ petitioners were initially selected for appointment to the post of Apprentice Development Officer and accordingly all the petitioners had joined in service. Subsequently, the writ petitioners were appointed as Probationary Development Officers in the Life Insurance Corporation of India. On completion of the period of probation successfully, the services of these writ petitioners were confirmed in the post of Development Officers by the respondents.
2. At the outset, these writ petitions are relating to the allegations of inefficiency in business performance by the respective writ petitioners. The under-performances/inefficiencies were periodically taken note of by the respondent-Corporation and on account of not reaching the prescribed level of business performance, the action against the writ petitioners under the rules are sought to be undertaken.
3. The writ petitioners state that on account of the allegation of under-performance/inefficiency, the respondent-Management awarded with the punishment of no increment and one decrement for the respective appraisal periods. Even during the subsequent appraisal periods, yet another punishment of no increment was also granted in certain cases. However, during the third occasion for the appraisal period, the show cause notice was issued to the writ petitioners by the Senior Divisional Managers concerned, directing the writ petitioners to submit their representations with regard to the allegations of inability, inefficiency in achieving the cost ratio as prescribed under the policy. Further, it was stated in the show cause notice that the writ petitioners would be terminated from service without any reference in the event of not submitting any explanations. However, the writ petitioners have set up a ground by stating that the show cause notices should not prescribe the punishment even at the time of calling for explanation and such a prescription would be in violation of the principles of natural justice.
4. Under these circumstances, a Modification was issued under the head of Modification in the Draft of Annexure-III-C by the Life Insurance Corporation of India, directing all the Zonal Officers and the Officers In-charge of Divisional Officers to incorporate the para mentioning the order of termination of service in the show cause notice being issued to the Development Officers. Against the said notice, the present writ petitions are filed.
5. The learned Senior Counsel, appearing on behalf of the petitioners, made a submission that straight termination is contemplated by virtue of the impugned show cause notice. Such a straight termination, cannot be sustained by the respondents and the same is in violation of the constitutional provisions.
6. The writ petitioners, being permanent employees of the Life Insurance Corporation of India, cannot be terminated in such a manner by issuing a show cause notice, and the respondents are adopting the policy of terminating the services, without adhering to the regular Discipline and Appeal Rules, which is applicable to all the permanent employees of the Life Insurance Corporation of India.
7. The learned Senior Counsel emphatically contended that all the permanent employees are governed by the Staff Regulations. The Life Insurance Corporation of India Staff Regulations, 1960 is applicable to all the whole-time salaried employees of the Corporation and so also to the Development Officers. Clause 39.1 of the Regulation deals with penalties and it reads as under:-
39. (1) Without prejudice to the provisions of other regulations, [any one or more of]* the following penalties for good and sufficient reasons, and as hereinafter provided, be imposed [by the disciplinary authority specified in Schedule-I]* on an employee who commits a breach of regulations of the Corporation, or who display negligence, inefficiency or indolence or who knowingly does anything detrimental to the interest of the Corporation, or conflicting with the instructions or who commits a breach of discipline, or is guilty of any other act prejudicial to good conduct
(a) Censure;
*(b) Withholding of one or more increments either permanently or for a specified period;
(c) recovery from pay or such other amount as may be due to him of the whole or part of any pecuniary loss caused to the Corporation by negligence or breach of order;
(d) reduction to a lower service, or post, or to a lower time scale, or to a lower stage in a time-scale;
(e) compulsory retirement;
(f) removal from service which shall not be a disqualification for future employment;
(g) dismissal.
8. When the writ petitioners are the regular employees of the Life Insurance Corporation of India and the above Clause 39 also contemplates an action for the misconduct of inefficiency, the respondents ought to have initiated action only under the Staff Regulations. Contrarily, they have initiated action under the Life Insurance Corporation of India Development Officers Rules, 2009 and the amended Rules of the year 2016. Thus, the respondents have committed an error apparent even in initiation of action against the writ petitioners and by issuing a show cause notice for straight termination.
9. This apart, the writ petitioners had already served for long years in the Life Insurance Corporation of India and their services were regularised and they became permanent employees and therefore, the service conditions as applicable to the other staff of Life Insurance Corporation of India alone should be made applicable to the Development Officers.
10. The learned Senior Counsel referred the provisions of the Life Insurance Corporation of India development Officers (Revision of Certain Terms and Conditions of Service) Rules, 1989. The said Rules were framed in exercise of the powers conferred by sub-section (1) read with clause (cc) of sub-section (2) of Section 48 of the Life Insurance Corporation of India Act, 1956. Subsequently, a revised Notification was issued by the Ministry of Finance on 12th November, 2009. The said Rule says that in exercise of the powers conferred by sub-section (1) read with clause (cc) of sub-section (2) of Section 48 of the Life Insurance Corporation of India Act, 1956 (31 of 1956), the Central Government hereby makes the following Rules regulating certain terms and conditions of service relating to business performance of Development Officers of the Life Insurance Corporation of India.
11. Rule 2 of 2009 Rules provide definitions. Rule 2 sub-clause (c) defines 'appraisal date' means (I) in relation to a Development Officer appointed on or after the date of publication of these rules in the Official Gazette,, (A) in the first year of his service, the first day of the month following that in which he completes twelve months of service from the date of his appointment; and (B) in every subsequent year of his service, the first day of the month following that in which he completes twelve months of service from the last appraisal date; (II) in relation to a Development Officer appointed prior to the date of publication of these rules in the Official Gazette,, (A) in the first year of his service from the date of publication of these rules in the Official Gazette the 1st day of the month following that in which he completes a period of twelve months of service from the date on which his last annual increment accrued (whether released or not) in accordance with sub-rule (2) of rule 56 of the Life Insurance Corporation of India (Staff) Rules, 1960, and (B) in every subsequent year of service, the first day of month following that in which he completes twelve months of service from the last appraisal date.
12. Rule 2 sub-clause (d) defines 'appraisal year' means the period between two consecutive appraisal dates and the period of twelve months of service preceding the appraisal date ascertained in accordance with item (A) of sub-clause (I) of clause (c), and each period of twelve months of service next preceding the appraisal date ascertained in accordance with item (A) of sub-clause (II) of clause (c), shall also be an appraisal year.
13. Rule 2(g) defines 'Development Officer' means a whole-time salaried employee of the Corporation belonging to Class II appointed as a Development Officer.
14. Rule 2(j) defines 'expense limit' means in respect of an appraisal year in relation to a Development Officer working in an operational area specified in column (1) of the Table below (hereinafter referred to as the 'Table of Expense Limit') means the percentage of the eligible premium of that year as specified in the corresponding entry in column (2) thereof and it shall apply to the Development Officers who have been confirmed in the services of the Corporation on a date prior to the date of publication of these rules in the Official Gazette:
TABLE OF EXPENSE LIMIT If the Development Officer is working in operational area (1) Percentage of eligible premium (2) A 19% B 20% C 21% D 22% Provided that in respect of a Development Officer who has been confirmed in service on or after the date of publication of these rules in the Official Gazette, the expense limit applicable shall be as specified in the Table below:
TABLE OF EXPENSE LIMIT If the Development Officer is working in operational area Percentage of eligible premium In the first appraisal year after confirmation In the second appraisal year after confirmation In the third subsequent appraisal years after confirmation (1) (2) (3) (4) A 22% 21% 19% B 23% 22% 20% C 24% 23% 21% D 25% 24% 22% Note:
(1) The expense limit of a Development Officer for any appraisal year is expressed as a percentage of the eligible premium of that year; a Development Officer is said to exceed the expense limit if his annual remuneration in that year is in excess of the expense limit; such excess or the ratio which such annual remuneration bears to the eligible premium of that year may also be expressed as a percentage of the eligible premium.
(2) In the case of a Development Officer who has been confirmed in the services of the Corporation on a date prior to the date of publication of these rules in the Official Gazette, the percentage specified in the above Table shall be increased by the appropriate transitional concessions, if any, as defined in clause (t):
Provided that the transitional concessions shall not apply to those Development Officers who are governed under rule 4.
15. Rule 3 of the said Rules speaks about the tenure. Subject to the provisions of these Rules, a Development Officer shall hold office by the same tenure and in the same manner as any other class of employee in the Corporation. Provided that he shall conform to the expense limit applicable to him. Provided further that the services of a confirmed Development Officer shall not be terminated on the ground of poor business production resulting in cost ratio in excess of the expense limit applicable to him, unless he has been given an opportunity to conform to the expense limit as provided in rule 6.
16. Rule 6 deals with an opportunity to conform to the expense limit which reads as under:
6. Opportunity to conform to the expense limit:-
(1) Where the annual remuneration of any Development Officer in the preceding year or years is in excess of the expense limit, his services shall not be terminated merely on that ground if his case is capable of being dealt with by awarding disincentives, subject to the provisions of rule 8, from the relevant appraisal date as provided in the Table of Disincentives, so as to afford him an opportunity to conform to the expense limit:
Provided that for the purpose of award of disincentives in accordance with the Table of Disincentives, his performance shall be appraised with reference to the annual remuneration and the prescribed expense limit applicable to him. Sl.No. Where the cost ratio is in excess of prescribed limit Disincentives where the cost ratio is in excess of prescribed limit in the appraisal year next preceding the relevant appraisal date On the first occasion On the second successive occasion On the third and subsequent successive occasion
1.
By not more than 2% (Provided that the cost ratio in the appraisal year is not more than 32%).
NIL NIL NIL
2. By more than 2% but not more than 4% (Provided that the cost ratio in the appraisal year is not more than 32%).
No Increment No Increment No Increment
3. By more than 4% (Provided that the cost ratio in the appraisal year is not more than 32%).
No Increment No Increment No Increment and one decrement.
4. Where the cost ratio in the appraisal year is more than 32% but not more than 35%.
No Increment No Increment and one decrement No Increment and two decrements.
5. Where the cost ratio in the appraisal year is more than 35%.
No Increment and one decrement.
No Increment and two decrements No Increment and two decrements.
Note:
For the purposes of this Table:-
(a) no increment means non grant of increment;
(b) decrement means reduction in basic pay by one or more stage/s.
Explanation:
(i) The application of Table of Disincentives shall be subject to the provisions contained in rule 8 provided the services of the Development Officer are not liable to be terminated under sub-rule (2) or sub-rule (8) of this rule.
(ii) For the purpose of the Table of Disincentives, the annual remuneration of a Development Officer shall be deemed to be in excess of the prescribed expense limit on a successive occasion if such remuneration exceeds such expense limit in two consecutive appraisal years even though the excess percentage over the prescribed expense limit may vary and an appraisal year in which the Development Officer exceeds the prescribed expense limit even though there is no disincentive shall be reckoned for ascertaining whether the expense limit is exceeded on successive occasions and the disincentive on the successive occasion shall correspond to the excess of the prescribed expense limit in the appraisal year next preceding the relevant appraisal date.
(iii) The Table of Disincentives shall be repeatedly applied, if, after conforming to the prescribed expense limit, the Development Officer exceeds it again at a later date.
(2) If, as a consequence of the application of the provisions contained in sub-rule (1) the basic pay arrived at falls below the minimum of the grade applicable to the Development Officer, his basic pay shall be fixed at such minimum as applicable to Development Officer:
Provided that the fixation of basic pay at minimum under this sub-rule shall not be allowed more than once during the entire service of a Development Officer and if, on a second occasion, the basic pay so arrived at falls below such minimum, his services shall be liable to be terminated in accordance with rule 7.
(3) Where the basic pay of a Development Officer is reduced or fixed under sub-rule (1) or sub-rule (2) (hereinafter referred to as the revised basic pay), he shall be allowed only such allowances and other benefits as are admissible on that basic pay:
Provided that there shall be no protection of the annual remuneration either by granting a personal allowance or otherwise; and no arrears of pay or any allowance for the past period consequent on his conforming to the expense limit later on shall be payable.
(4) The appointing authority shall be the competent authority for implementing the provisions of sub-rules (1), (2) and (3) and it shall determine the matters specified in the said sub-rules, as soon as may be, after the expiry of the relevant appraisal year:
Provided that the competent authority concerned shall, before deciding any matter under this rule, give an opportunity to the Development Officer to make a representation.
(5) Where the representation received under proviso to sub-rule (4) discloses, (a) any factual inaccuracies in the computation of eligible premium or other figures, the competent authority shall revise his decision to the extent it is warranted by the revised figures and pass appropriate orders disposing of the representation; (b) any cause beyond the control of the Development Officer, such as accident or sickness which warrants relaxation on the expense limit and he pleads that the award of disincentives should not be effected on that ground, the competent authority shall forward the representation to the Zonal Manager, for decision.
(6) If the Zonal Manager is satisfied that there is any merit in the representation, he may consider the facts and circumstances of the case and pass such orders as he may deem fit.
(7) A Development Officer whose representation has been rejected by the Zonal Manager may submit a Memorial to the Chairman in respect of that matter.
(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 services shall be liable to be terminated in accordance with rule 7.
(9) In the case of a Development Officer who has been confirmed in the services of the Corporation on a date prior to the date of publication of these rules in the Official Gazette, the percentage mentioned in sub-rule (8) above shall be increased by the appropriate transitional concessions, and it shall be as under:-
(a) The services of a Development Officer shall be liable for termination in accordance with rule 7, if his annual remuneration in the First appraisal year commencing after the date of publication of these rules in the Official Gazette (hereinafter referred to as the first appraisal year) exceeds 50% of the eligible premium in that year and the aggregate of the annual remuneration in the first appraisal year and the two appraisal years immediately preceding the first appraisal year exceeds 50% of the aggregate of the eligible premium in those three years.
(b) The services of a Development Officer shall be liable for termination in accordance with rule 7, if his annual remuneration in the Second appraisal year commencing after the date of publication of these rules in the Official Gazette (hereinafter referred to as the second appraisal year) exceeds 45% of the eligible premium in that year and the aggregate of the annual remuneration in the second appraisal year and the two appraisal years immediately preceding the second appraisal year exceeds 50% of the aggregate of the eligible premium in those three years.
(c) The services of a Development Officer shall be liable for termination in accordance with rule 7, if his annual remuneration in the Third appraisal year commencing after the date of publication of these rules in the Official Gazette (hereinafter referred to as the third appraisal year) exceeds 40% of the eligible premium in that year and the aggregate of the annual remuneration in the third appraisal year and the two appraisal years immediately preceding the third appraisal year exceeds 47.50% of the aggregate of the eligible premium in those three years.
(d) The services of a Development Officer shall be liable for termination in accordance with rule 7, if his annual remuneration in the Fourth appraisal year commencing after the date of publication of these rules in the Official Gazette (hereinafter referred to as the fourth appraisal year) exceeds 38% of the eligible premium in that year and the aggregate of the annual remuneration in the fourth appraisal year and the appraisal year immediately preceding the fourth appraisal year exceeds 38% of the aggregate of the eligible premium in those two years.
17. Now let us look into the contents of Rule 7 which deals with termination of service in certain cases as under:
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.
(2) An appeal against an order passed under sub-rule (1) shall lie to the Managing Director and the provisions of rules 41, 42, 43, 44 and 45 of the staff rules shall, so far as may be, apply to any such appeal.
(3) In the case of an appeal under sub-rule (2), the Managing Director shall consider the records of the case and pass orders on merits having regard to the circumstances of the case.
18. Rule 15 deals with re-appointment of terminated Development Officers which reads as under:
15. Re-appointment of terminated Development Officer:
If a Development Officer, whose services are terminated in pursuance of rule 7 has completed at least seven years of service in Class II on the date of such termination and has not completed 55 years of age, he shall be eligible for re-appointment in the service of the Corporation to do administrative work in Class III either as Assistant or Record Clerk in accordance with such qualification and suitability as may be specified under the Life Insurance Corporation of India (Re-appointment of Terminated Development Officers) Rules, 1990:
Provided that notwithstanding the break in service as a consequence of termination, his service in the Corporation shall be deemed to be continuous for the purpose of leave; and also for the purpose of gratuity or Provident Fund if he has not received or if he has received but repays to the Corporation such amount of Gratuity or Provident Fund as he has received.
19. Rule 16 provides Repeal and Savings Clause and sub-clause (4) to Rule 16 reads as under:-
(4) Nothing contained in these rules shall be deemed to affect the right of the Competent Authority to discharge, retire, or determine the service of a Development Officer in accordance with the Life Insurance Corporation of India (Staff) Rules, 1960 (hereinafter referred to as the Staff Rules) or to affect the right of the disciplinary authority to impose any penalty on him under rule 39 of the staff rules on any grounds specified therein or to apply the staff rules to Development Officers in respect of matters not dealt with in these rules.
20. Thereafter, the respondent issued Life Insurance Corporation of India Development Officers (Revision of Certain Terms and Conditions of Service) Amendment Rules, 2016. The said Rule was notified on 22.1.2016 and certain amendments were issued to the Rules issued in the year 2009. As per the amended Rule, the formats have been prescribed with regard to the performance for the appraisal years and for issuing show cause notices. Such formats are also questioned by the petitioners in these writ petitions holding that such a prescribed format in a mechanical manner, cannot be adopted, so as to terminate the services of the permanent employees.
21. The learned Senior Counsel for the writ petitioners further relied upon the judgment of the Honourable Supreme Court of India in the case of Siemens Ltd vs. State of Maharashtra and Others {(2007) 2 MLJ 295 (SC)}, the Honourable Supreme Court laid down the ratio which reads as under:-
13. A bare perusal of the order impugned before the High Court as also the statements made before us in the counter-affidavit filed by the respondents, we are satisfied that the Statutory Authority has already applied its mind and has formed an opinion as regards the liability or otherwise of the appellant. If in passing the order the respondent has already determined the liability of the appellant and the only question which remains for its consideration is quantification thereof, the same does not remain in the realm of a show-cause notice. The writ petition, in our opinion, was maintainable.
22. The learned Senior Counsel, appearing on behalf of the respondents, made a submission that the Rules relating to the Staff Regulations, are not applicable in respect of the facts and circumstances of the case now before this Court. The Staff Regulations can be invoked only in the event of certain misconducts or certain other allegations in connection with the malpractices, corrupt activities, misbehaviour etc. In such circumstances, action against the staff of the Life Insurance Corporation of India, will be initiated under the Staff Regulations, a charge memo will be issued and a domestic enquiry will be conducted and thereafter, in the event of proving the charges, the penalties contemplated under Rule 39(1) will be imposed on the Officials who committed any of the misconduct.
23. The learned Senior Counsel further urged this Court that the very Rule 39 (1) starts by stating without prejudice to the provisions of other Regulations. Thus, the Staff Regulations are issued for the specific purpose of initiating disciplinary actions for certain misconducts committed by the staff of the Life Insurance Corporation of India. The Staff Regulations can be applied without prejudice to the provisions of other Regulations. When a specific Regulation has been issued in respect of monitoring the business performance of the Development Officers, such Special Rules alone shall be applicable in respect of the inefficiency or under-performance by the Development Officers while performing their job.
24. A separate Scheme is formulated for the purpose of monitoring the business development in this regard by the Life Insurance Corporation of India and the Life Insurance Corporation of India is bound to formulate such a Scheme for the development of the Organisation. In other words, it is the policy of the Life Insurance Corporation of India to incorporate the Schemes and other Development Programmes in order to develop the Corporation activities.
25. In this view of the matter, separate rules were issued by virtue of the powers conferred under the Life Insurance Corporation of India Act and it forms part of the service conditions of the Development Officers working in the Life Insurance Corporation of India. When the Special Rules are in force, issued in respect of the business performances of the Development Officers, the Special Rules alone will be applicable and the General Rules relating to the other staffs, cannot be applied. The legal principle is that when there are Special Rules, the same alone to be applied and the General Rules, cannot be applied.
26. The learned Senior Counsel further contended that the Life Insurance Corporation of India Development Officers (Revision of certain terms and conditions of Service) Rules, is a comprehensive one, which provides for regulating certain terms and conditions of service relating to business performance of the Development Officers of the Life Insurance Corporation of India. When the Rule provides with regard to the business performance of the Development Officers, the same alone to be applied in respect of the Development Officers found not performing the business activities upto the mark as prescribed by the Life Insurance Corporation of India Management.
27. In this regard, the said Rule 7 provides termination of service in certain cases. The Rule categorically enumerates that, 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 the Rule 6, the Zonal Manager may terminate his service after giving him 3 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 services.
28. Thus, the provision is unambiguous with relate to the clause of termination of service in certain cases where Development Officers have failed to achieve the business targets. The said rules form part and parcel of the service conditions to the post of Development Officers and thus, the writ petitioners cannot say that they are ignorance of such rules or the rules are inapplicable to their services.
29. Even in the amended rules, the formats are prescribed in order to maintain an uniformity in respect of all Development Officers throughout the Nation. Such common formats are prescribed in order to avoid inconsistencies between the Zonal Managers and the other Competent Authorities while exercising the powers under the Rules. Thus, there is no irregularity or illegality in the show cause notice impugned in these batch of writ petitions.
30. This apart, the learned Senior Counsel contended that several opportunities are given to the writ petitioners for improving their business performances. The officials competent are also monitoring the cases on individual basis and making assessments in relation to the business performances and assessments are made periodically against the individual Development Officers and the same are recorded.
31. When such assessments are made known to the respective Development Officers and due to the continuous, non performance or under-performance in business developments, the Competent Authorities are issuing the show cause notices by invoking the powers provided under Rule 7 of the said Rules. Thus, there is no irregularity or illegality in initiating action against the writ petitioners. The respective appraisal year assessments are provided to the Development Officers and they have been provided with an opportunity to develop their business performances after finding that the respective Development Officers have failed to improve their business developments in accord with the norms prescribed by the Life Insurance Corporation of India in this regard, then only actions are initiated.
32. The Life Insurance Corporation of India, being a Corporation, cannot suffer such inefficient or under-performing Development Officers at the cost of the public and the condition, being categorically, enumerated in the Rules, the Development Officers so appointed and working in the Life Insurance Corporation of India are bound by the Rules and Regulations attached with the service conditions.
33. Considering the arguments advanced both by the respective Senior Counsel appearing on behalf of the writ petitioners as well as the respondents, this Court is of the view that the challenge in these writ petitions is only a show cause notice. In normal circumstances, no writ can be entertained against the show cause notice. A show cause notice can be challenged and a writ can be entertained only on exceptional circumstances. If any show cause notice was issued by an authority having no jurisdiction or incompetency or on the ground of mala fides, the same can be entertained. If a show cause notice is in violation of the statutory Rules, then also a writ can be entertained.
34. In the absence of any of these grounds, no writ can be entertained against a show cause notice and it is left open to the writ petitioners to submit his explanations/objections and to prove his case before the Authorities Competent. Even in case of raising an allegation of mala fides, the authority against whom such an allegation is raised to be impleaded as a party respondent in the writ proceedings in his personal capacity.
35. Such being the legal precedents laid down by the Honourable Supreme Court of India, in the matter of entertaining a writ against the show cause notice, the Courts are to be cautious while exercising the powers of judicial review under Article 226 of the Constitution of India, more specifically, in relation to the cases of show cause notices.
36. In the case on hand, no doubt, the punishment of termination is a major penalty and the same is proposed to be imposed by virtue of the show cause notice on the ground of under-performance of business of the Life Insurance Corporation of India by the Development Officers. The Life Insurance Corporation of India, being a Corporation, performing varieties of business activities are bound to develop the business activities through its staff members. In order to develop the business activities, various schemes are published to solicit the public in general and to develop the business activities.
37. Under these circumstances, a separate condition was imposed in respect of the post of Development Officer and the very name of the post itself carries the word Development Officer and it defines the nature of the job to be performed by these Officers in respect of the business development.
38. It is the primary duty of the Development Officer to actively participate in the business development of the Corporation. They are not mere Ministerial staff like other employees. These Officers are meant for the business development of the Corporation and keeping this in mind, the Management of the Life Insurance Corporation of India has decided to issue the Special Rules covering the business performances of the Development Officers and those Rules cannot be said to be unconstitutional and the Rules were issued for the development of the business activities of the Corporation, which is in conformity with the nature of the business to be carried out by the Corporation.
39. It is the prerogative of the employer to prescribe the conditions of service. However, the test would be the principles of reasonableness and fairness. If any Rule is arbitrary, unreasonable or unconstitutional, then the Courts have to interfere with such Rules. However, on perusal of the entire Rule and its object, this Court is of the firm opinion that the Rules were issued in order to protect the business interest of the Corporation and for the development of the same.
40. The Life Insurance Corporation of India, being a business development Organisation, any compromise on business activities will certainly harmful to the very existence of the Corporation. Thus, the Special Rules prescribed for the post of Development Officers, cannot be said to be arbitrary or unreasonable.
41. In respect of penalty, this Court is of the view that the termination in the case on hand, has not been imposed by way of penalty under the Staff Regulation. In the event of committing a misconduct, then the Corporation can initiate disciplinary action under the Staff Regulations. However, in the case on hand, it is purely relating to the business development performance of the Development Officers and it is something relates to the official performance and relating to the record of performance of the Development Officers.
42. Actions are initiated under these Rules based on the continuous performances of the respective Development Officers recorded by the Competent Authorities. Thus, the penalty of termination prescribed in these Rules, cannot be compared with the penalty prescribed under the Staff Regulation. The penalty of termination is simplicitor in nature in respect of the Development Officers in relation to the allegation of under-performance. Thus, the concept of the Special Rules and its nature, cannot be compared with the Staff Regulation which is applicable to all staff of the Life Insurance Corporation of India.
43. The very purpose of issuing the Development Officers (Revision of Certain Terms and Conditions of Service) Rules, is for regulating the terms and conditions of service relating to the business performance of Development Officers. Thus, it is necessary for the respondent-Corporation to monitor the business performance as well as the efficiency level of the Development Officers for the growth of the Organisation. When, at the time of appointment, these writ petitioners, while accepting the conditions of service, had accepted the terms and conditions. The terms and conditions of service are part and parcel of the offer of appointment and once the same is accepted by the petitioners, then they are bound by the same.
44. The Rules are specifically issued as Special Rules in order to regulate the business performance of the Development Officers in the Life Insurance Corporation of India, the Corporation is meeting out huge expenditure by way of establishment costs, salary to the staff etc. Therefore, as a public institution, it is duty mandatory on the part of the respondent to regulate the service conditions of such Officers and other staffs.
45. The development of business is the prime object sought to be achieved by Life Insurance Corporation of India. Such being the nature of the Organisation, certainly the Special Rules issued in respect of the terms and conditions of service for the business performance of the Development Officers, are in order and there is no legal infirmity, in invoking such Special Rules for a particular cadre.
46. The Special Rules relating to the Development Officers are unambiguous with regard to the termination of services of these Development Officers in certain cases. It is a termination simplicitor. Thus, the penalty of termination in this context with reference to the Special Rules, cannot be construed as a major penalty as contemplated under the General Staff Regulations. A fine distinction is to be drawn between the General Rules governing the service conditions and the Special Rules governing the service conditions. General Rule is applicable to the entire staff of the Organisation in respect of certain misconducts committed and by invoking General Staff Regulations, a charge memo is to be framed, a domestic enquiry is to be conducted and thereafter by following the procedures on the principles of natural justice, a final order in the disciplinary proceedings shall be passed.
47. However, in the case of termination simplicitor, the assessment of performance as per the Special Rules are sufficient to invoke the provisions of termination. The very object of the Rule is to assess the business performance of the Development Officers and take a decision. A show cause notice has been issued in order to provide an opportunity to the Development Officers to express their grievances/ explanations/objections for invoking the provisions of termination simplicitor. In the event of getting a convincing reply from the Development Officers concerned, then the Competent Authorities may consider the explanation and grant extension of service or continuance of service as per their decision in this regard.
48. Even there is a provision under the Special Rules for re-appointment of a terminated Development Officer, the re-appointment of Development Officer arises only after issuing the order of termination under the Special Rules. This apart, the Special Rules contemplate an appeal against the order passed before the Managing Director and in relation to the appeal, Rules 41, 42, 43, 44 and 45 of the Staff Rules shall, so far as may be, applied to any such appeal. The said appeal shall lie against an order passed under sub-Rule (1) of Rule 7. In case of an appeal under Sub-Rule (2) of Rule 7, the Managing Director shall consider the records of the case and pass orders on merits having regard to the circumstances of the case.
49. Therefore, it is clear that the show cause notice was issued to the Development Officers, an opportunity to submit their explanations/objections was given and on receipt of the same, an order can be passed by the original authority and thereafter an appeal lies to the Managing Director and the Managing Director on receipt of any such appeal shall decide the same in accordance with the Rules on the circumstances of the case.
50. On looking into the provisions of the Special Rules, this Court is of the clear opinion that the principles of natural justice have been complied with. This apart, the appraisal year assessments are provided to the Development Officers and a chance for improvement is also provided to the Development Officers and after continuous assessment for certain years, then the Competent Authorities are invoking the powers under the Special Rules in order to impose the penalty of termination.
51. Thus, it is clear that after the show cause notice, the Development Officers concerned have to submit their explanations and if any adverse order is passed, then they may prefer an appeal to the Managing Director and there are two avenues for redressing the grievances of the Development Officers in case the non-performance is on genuine grounds.
52. The genuinity or otherwise, placed before the Competent Authorities by the Development Officers concerned, shall be considered only by the Competent Authorities and the High Court cannot enter into the arena of the details of the reports relating to the business performances of the Organisation. The business performances are the expertise of the team of the Organisation concerned and the High Court in this regard, cannot exercise the power of Judicial Review, more specifically, under Article 226 of the Constitution of India.
53. Thus, the performance chart of the Organisation, cannot be gone into by this Court, at this stage, when these writ petitions are filed challenging the very issuance of the show cause notice. All such explanations in relation to the business performance of the Development Officers concerned and their personal grievances or otherwise, shall be placed before the Competent Authorities for consideration and for appropriate decision. Thus, the scope of entertaining the writ against such show cause notice prescribed under the Special Rules are certainly limited and the same cannot be entertained in a routine manner.
54. This apart, another ground was raised that a format has been prescribed in the 2016 Amendment issued to the Rules by the respondents. The Amendment Rules 2016 was issued on 23.4.2016. The Rules prescribe certain formats to be adopted uniformly by all Competent Authorities. On perusal of the formats, it is clear that nothing irregular on the format and certain columns are provided in order to assess the business performance of the Development Officers concerned.
55. It is always possible for human errors, while recording the business performances of the Development Officers, such formats and columns are provided in order to avoid such inconsistencies, discrepancies, omissions and commissions. By providing such formats, there will be a clear assessment in relation to the business performances of the Development Officers concerned. By prescribing the format, certain human errors in this regard shall be averted.
56. This apart, the respondent-Organisation is All India Level Corporation and certainly uniformity and consistency is required while initiating actions under these kind of Special Rules against the Development Officers. Thus the Management thought fit to enact and prescribe the format to maintain uniformity in respect of the assessment required to be made for the purpose of invoking the Special Rules for imposing the penalty of termination simplicitor.
57. Thus, this Court is of the firm opinion that prescribing a format, per se, cannot be said to be illegal. If any such prescription violates the principles of natural justice or unconstitutional, then the Courts can exercise the power of Judicial Review. However, on perusal of the format, certain columns are provided, to be filled up by the Competent Authorities providing details regarding the business performances of the Development Officers concerned.
58. Therefore, that is not the final document for invoking the powers of termination under the Special Rules, and the other records also can be perused before issuing any such order by the Competent Authorities against the Development Officers concerned. Even otherwise the aggrieved Development Officer also can request for perusal of certain documents or produce certain documents along with the explanations to be submitted in response to the show cause notice issued against him.
59. Such being the nature of principles contemplated under the Special Rules, there is no reason for this Court to intervene, at this juncture, against the show cause notices issued to these writ petitioners. It is left open to the writ petitioners to submit their explanations/objections and documents, if any, to the Competent Authorities and it is for the Authorities to consider all the materials available on record and take a final decision under the Rules and communicate the same to the writ petitioners.
60. The learned Senior Counsel Mr.R.Singharavelan, made a submission that personal hearing also to be provided to these Development Officers, to explain their position and to plead certain personal grievances for not achieving the business performances in the respective appraisal years in person. The said submission of the learned Senior Counsel is certainly reasonable and therefore, the respondents are directed to fix a date and provide an opportunity of personal hearing to the writ petitioners to plead their grievances and on receipt of explanations/objections/documents from the writ petitioners and thereafter, consider all the materials available on record and take a decision in this regard under the Rules.
61. In view of this, no further adjudication on the grounds raised in these writ petitions in respect of the merits of the case and business performances, need not be considered in view of the fact that the show cause notice is under challenge in these writ petitions.
62. With these observations, all these writ petitions stand dismissed. However, there shall be no order as to costs. Consequently, connected miscellaneous petitions are also dismissed.
15-09-2017 Svn Index : Yes/No Speaking /Non-speaking order To
1.The Chairman/The Executive Director, Life Insurance Corporation of India, (Marketing/PD), Central Office, Yogakshema, Mumbai 400 021.
S.M.SUBRAMANIAM, J.
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2.The Zonal Manager, Life Insurance Corporation of India, Southern Zonal Office, Old No.102, New No.153, LIC Building, Anna Salai, Mount Road, Chennai-2.
3.The Senior Divisional Manager, Life Insurance Corporation of India, Salem Division, Salem.
WP Nos.35411, 29391, 29400, 30660, 32857, 34741, 36166, 36167, 40176, 41421, 41420, 42298, 42462, 43471 and 43524 of 2016, 99, 1242, 3722, 4816, 5615, WP(MD) 7315 of 2017, 8237 to 8240 of 2017, 14899, 15828, 16829 and 19546 of 2017 15-09-2017