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Tuesday, February 17, 2015

in misappropriation of money - it is not the quantum but loss of confidence !! says Apex Court

Is it the act of crime or the value of such crime, which should be focal point ? The ‘Anniyan’ dialogue is certainly one to ponder – the general reaction to ‘5 paisa thirudina thappa’ – is that the amount is negligible but when ‘5 kodi per 5 thadava 5 paisa thirudina’ ?   Here is what the Apex Court of the Nation had to say in a Civil Appeal between an individual and Life Insurance Corporation of India decreed in Jan 2015. 

The case pertains to the appeal against  judgment and  order  dated  27.8.2009, passed by the High Court of Judicature at Allahabad, whereby  said  Court  has  partly  allowed  the  appeal,  and substituted  the  punishment  of  removal  awarded  to  the  appellant,   by compulsory retirement from service.

The facts of the case, in brief, are that the appellant was  a  cashier  with  LIC working in an Office in UP.  A Policy holder deposited an amount of Rs.533/- towards half yearly insurance premium in Aug 1990 -  the same was not deposited in LIC till Nov 1990, though a receipt was issued on 13.8.90 by the appellant.  It appears  that when the LIC agent did not get his commission for this particular payment, the amount of Rs.533/-  was  shown deposited by the appellant with late fee of Rs.15.90/-, and entry  was  made in the cash register on 28.11.1990. Also, a forged entry was made in  ledger sheet on back date. 

In connection with the above misconduct, a charge sheet was served on the employee in Apr 1991 on the counts of  temporary embezzlement of  Rs.533/-  for a short period and  forging entry of Rs.533/- in the carbon copy of  the  ledger sheet dated 13.8.1990 between entry Nos. 12 and 13.  On  conclusion  of  the departmental enquiry, the appellant was found guilty, and served  with  copy of enquiry report, whereafter he was removed from service in Jan 1992.  The departmental appeal too was dismissed.  Challenging the order of removal from service  and  that  of  the  appellate authority, the appellant filed  writ petition before the High Court in Sept 1999.  Aggrieved by order of the learned Single  Judge,  Special Appeal was filed before Division Bench of the High Court,  by   LIC.

 The Division Bench, after hearing  the  parties,  came  to the conclusion that the appellant appears to have committed the  forgery  to cover his mistake, and partly allowed the appeal by substituting  punishment of compulsory retirement in place of removal from service.   The  appellant-employee has challenged the order of the Division Bench of  the  High  Court by way of SLP mainly on the ground  that  the  punishment of compulsory retirement is disproportionate, unreasonable and harsh. 

Attention of the Court was drawn to Rule 23 of  Life  Insurance  Corporation  of  India  (Employees)  Pension Rules, 1995, which reads as under:-
"23. Forfeiture of  service.  -  Resignation  or  dismissal  or  removal  or termination or compulsory retirement of an employee from the service of  theCorporation  shall  entail  forfeiture  of  his  entire  past  service   andconsequently shall not qualify for pensionary benefits."  - it was argued on behalf of the appellant that it being a case of temporary embezzlement of a small amount, as such awarding minor  punishment of stoppage of increment etc. would have met the ends  of  justice.   It was also sought to be portrayed that the amount could not be credited as the cash paid by policy holder was short !

It did not hold water and Court held that they did not find the punishment to be harsh or disproportionate to the guilt,   in  view  of  the nature of the charge of which the appellant is found guilty.   The Court opined that time and again the Court  has consistently held that in such  matters no sympathy should be shown by the Courts.  Reference was drawn to - Divisional Controller, N.E.K.R.T.C v.  M.  Amaresh,    where the Court held that :
" In the instant case, the misappropriation of the funds by  the  delinquent employee was only Rs 360.95. This Court has considered the  punishment  that may be awarded to the delinquent employees who misappropriated the funds  of the Corporation and the factors to be considered. This Court in a catena  of judgments held that the loss of confidence is the  primary  factor  and  not the amount of money misappropriated and  that  the  sympathy  or  generosity cannot be a factor which is impermissible in law.”

When an employee is  found guilty of pilferage or of misappropriating the  Corporation's  funds,  there is nothing wrong in the Corporation losing confidence or faith  in  such  an employee and awarding punishment of dismissal. In such cases,  there  is  no place for generosity or misplaced sympathy  on  the  part  of  the  judicial forums    and    interfering    therefore    with     the     quantum     of punishment........".

In another case of KSRTC, the unaccounted money was only Rs.93/- - there too, the Court held that  " Coming to the question of quantum of punishment, one should bear  in  mind the fact that it is not the amount of money misappropriated that  becomes  a primary factor for awarding punishment; on the contrary, it is the  loss  of confidence which is the primary factor to be taken  into  consideration.” In another case of Rajasthan State Road Transport Corporation, the Court opined that in  cases  involving corruption there cannot be any other  punishment  than  dismissal. 

The Court held that any sympathy shown in such cases is totally  uncalled for and opposed to public  interest.   The  amount  misappropriated  may  be small or large; it is the act of  misappropriation  that  is  relevant.   In the instant case, the Hon’ble Court held that they are not inclined to interfere with  the  impugned  order passed by the High Court and accordingly dismissed the appeal, with no order to costs.

With regards – S. Sampathkumar

17th Feb 2015.  

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