SUBRAMANIA PILLAI Vs. SENIOR DIVISIONAL MANAGER LIC

JUDGEMENT

(1.) THE appellant is the writ petitioner. THE brief facts of the case are the following: THE appellant was a Development Officer of the Life insurance Corporation of India working at Ernakulam. While so, he has been served with Ext. P1 charge-sheet dated 09/08/1994 accusing him of certain irregularities in reporting the proposal for insuring the life of one Sri. V. C. Devassy, who was working as an Assistant, at the relevant time, in Telecom Department. Sri. George Paul, the Agent, working under the appellant, came forward with a proposal for insuring the life of said Sri. V. C. Devassy for Rs.5,00,000/-. THE appellant submitted a 'Confidential Report' concerning that proposal on 11 /05/1988. In that report, he certified the monthly income of said Sri. Devassy as Rs.9,000/- from different sources. Without proper enquiry, it is alleged, he recommended the proposal for acceptance and induced the Corporation to accept that proposal. THE said Devassy died on 12/06/1989 and the same resulted in a claim being made on the LIC for an amount of Rs.10,00,000/-. Yet another allegation raised in Ext. P1 was that he submitted a 'Confidential Report' dated 31/05/1989 in connection with another proposal for insuring the life of the aforementioned Devassy for a further amount of Rs.4,00,000/-. In that report, the appellant certified that the Devassy's monthly income was Rs.23.500/- from different sources. It was so certified without conducting a proper enquiry into his sources of income, it was alleged. But, before the said proposal matured into a policy, the said Devassy died. During the investigation of the death claim, it was found that the said Devassy had only a monthly salary of Rs.1,900/- and therefore, the 'Confidential Reports' submitted by the appellant on 11/05/1988 and 31/05/1989 contained false information. THErefore, the appellant committed breach of Regulations 21 and 24 read with Regulation 39(1) of Life Insurance Corporation of India (Staff) Regulations, 1960, it was alleged.

(2.) THE appellant submitted Ext. P3 reply. He submitted that he was appointed as probationer in the post of Development Officer in July, 1987. Sri. George Paul was one of the many Agents recruited by him. THE said George Paul has substantial volume of business. In April 1988, the said Agent approached the appellant and told him that he has contacted Sri. V. C. Devassy and tried to persuade him to take a policy, but he failed to convince him. THE appellant immediately informed Sri. B. K. Narayanan Nair, the Assistant Branch Manager (Sales) and sought his advice. THE latter suggested that all of them together would call on Sri. V. C. Devassy at his residence. All the three went to his residence. THE Assistant Branch Manager (Sales) Sri. B. K. Narayanan Nair was able to persuade the said client to take an insurance policy for Rs.5,00,000/-. THE said Officer made a detailed enquiry with the said client regarding his income and its sources. He also met some of the neighbours and made enquiries regarding the sources of income mentioned by the client etc. Based on the information so collected, the appellant drafted a 'Moral Hazard Report' for the above proposal. Since the sum assured was above Rs.4,00,000/-, the aforementioned Assistant Branch Manager (Sales) wrote the 'Moral Hazard Report' and this resulted in the proposal being accepted and a policy being issued. Again the aforementioned Agent during 1989 persuaded the said Devassy to take a policy for a further sum of Rs.4,00,000/-. Before writing the 'Moral Hazard Report', the appellant called on Sri. Devassy at his residence and made enquiries about his income. He also made enquiries in the neighbourhood and based on the information received, he completed and submitted the 'Moral Hazard Report'. THE appellant also pointed out in his reply that for the first policy late Devassy has paid the quarterly LIC premium regularly. It was also found that he was maintaining Postal Life Insurance, Accident Insurance and additional contribution to GPF etc. Apart from that, his wife was working in the Gulf as a nurse. He was maintaining a decent standard of living also. THE same proved beyond doubt that late Devassy had sufficient income to maintain these policies, it was submitted in Ext. P3.

(3.) THE learned senior counsel also pointed out that Exts. P49, P52 and P55 were the statements of certain persons before the CBI Officer, who conducted the enquiry in the matter. But, the makers of those statements when examined retracted from their statements. But, the contents of those documents were relied on to find the appellant guilty of the charges. If those objectionable documents were removed from the evidence on record, there was no legal evidence to find the appellant guilty. In other words, the finding was entered against him based on no evidence. THErefore, the enquiry report was liable to be rejected and all proceedings initiated against the appellant based on the enquriy report were liable to be quashed. THE learned senior counsel further submitted that an employee cannot be punished for committing an error in judgment or being inefficient. THE satisfaction regarding income recorded in the 'Moral Hazard Report' concerning a policy is based on the subjective satisfaction of the Development Officer or the Assistant Branch Manager (Sales), as the case may be. THEre were no Rules prescribing objective norms for ascertaining the income of the insured. THEre is no stipulation that the Development Officer should get the certificate from the concerned Revenue Official regarding the income of the policy holder. Further, he is not supposed to verify the title deeds of the properties claimed to be owned by the insured. Normally, he interacts with the proposed client, collects information from the neighbourhood and if he is subjectively satisfied that the person has the income claimed by him, proposal is taken up and 'Moral Hazard Report' is filed. It was, what has, happened in this case. So, the objective findings made after a detailed enquiry held in 1990 on the details of actual income etc. cannot be made the basis for finding that the appellant has made a wrong report in 1988. So, the disciplinary proceeding was ill-conceived and liable to be quashed, it is submitted.