Patna High Court
Abhimanyu Kumar vs The Life Insurance Corporation Of … on 20 January, 2025
Author: Harish Kumar
Bench: Harish Kumar
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.905 of 2019
======================================================
Abhimanyu Kumar S/o Sri Dhaneshwar Paswan Resident of Village-
Mayaganj,P.S. Barari,Dist.-Bhagalpur
... ... Petitioner/s
Versus
1. The Life Insurance Corporation Of India, Through Its Managing Director
2. The Managing Director, Life Insurance Corporation of India,Central
Office,Mumbai
3. The Zonal Manager, Life Insurance Corporation of India,East Central
Zone,Patna
4. The Senior Divisional Manager, Life Insurance Corporation of
India,Divisional Office,Bhagalpur
5. The Chief Manager, Life Insurance Corporation of India,Bhagalpur Branch-
1
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr. Bindhyachal Singh, Sr. Advocate
Mr. Satya Prakash, Advocate
Ms. Smriti Singh, Advocate
For the Respondent/s : Mr. Rakesh Kumar, Advocate
Mr. Abhimanyu Vatsa, Advocate
Mr. Rajni Kant singh, Advocate
Mr. Sameer Prakash, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE HARISH KUMAR
ORAL JUDGMENT
Date : 20-01-2025
Heard Mr. Bindhyachal Singh, learned Senior
Advocate for the petitioner and Mr. Abhimanyu Vats, learned
Advocate for the Life Insurance Corporation of India.
2. The petitioner is aggrieved with the order dated
03.06.2017
issued under the signature of Zonal Manager, Life
Insurance Corporation of India, East Central Zone, Patna
whereby the services of the petitioner as Development Officer
has been terminated from the date of receipt of the order in
terms of the provisions of Life Insurance Corporation of India
Development Officers (Revision of certain terms and
Patna High Court CWJC No.905 of 2019 dt.20-01-2025
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conditions of service) Rules, 2009. The petitioner also prays
for quashing of the order dated 17.07.2018 issued by the
Managing Director, Life Insurance Corporation, Central Office,
Mumbai whereby the appeal preferred by the petitioner against
the order of termination also came to rejected.
3. The short facts, which led to the filing of the
present writ petition are that after facing prescribed selection
process, the petitioner was selected for the post of Apprentice
Development Officer by the Life Insurance Corporation of India
(hereinafter referred to as ‘LIC’) on 14.12.2010.
4. On being selected, the petitioner has also completed
the requisite training successfully and thereupon he was
appointed as Probationary Development Officer vide letter dated
14.05.2011. Having completed the probationary period
successfully, the service of the petitioner was confirmed with
effect from 15.11.2012, vide letter dated 14.12.2012, the copy of
which is marked as Annexure P/4 to the writ petition. The said
letter clearly indicated that the work of the petitioner will again
be reviewed at the end of twelve months from the date of his
confirmation. Furthermore, the services of the petitioner is to be
governed by LIC (Staff Regulation, 1960) now in force and
amended from time to time and as per the provision of LIC
Development Officers (Revision of certain terms and conditions
Patna High Court CWJC No.905 of 2019 dt.20-01-2025
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of service) Rules, 2009.
5. Despite the direction for review of the work of the
petitioner, no appraisal letter was served upon the petitioner in
the year 2013, 2014 and 2015. It is the contention of the
petitioner that for the period 01.12.2012 to 30.11.2013,
01.12.2013 to 30.11.2014 and 01.12.2014 to 30.11.2015 were
settled in October, 2016. It is rather unfortunate that despite the
aforesaid fact all of a sudden, the petitioner has served upon two
letters, both dated 08.11.2016, issued under the signature of
Senior Divisional Manager, Bhagalpur wherein the petitioner’s
performance for appraisal year 2012-13 and 2013-14 issued
indicating deficient work performance of the petitioner, seeking
show cause as to why the service of the petitioner be not
terminated in terms of Sub-Rule 7 of the Life Insurance
Corporation of India (Revision of certain terms and conditions
of service) Rules, 2009. The petitioner immediately responded
to the show-cause letters both dated 08.11.2016 on 12.12.2016
with an undertaking to perform well within subscribed cost limit
for the year 2016-17.
6. Notwithstanding the exhaustive show-cause reply
of the petitioner and an undertaking to perform well within the
subscribed cost limit for the year 2016-17, the impugned order
of termination came to be passed.
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7. Aggrieved with the order of termination, the
petitioner preferred memo of appeal before the Managing
Director, LIC of India, Central Office, Mumbai with a prayer to
revoke the order of termination by raising several ground
therein. However, the same did not find any favour and the
appeal of the petitioner also came to be rejected vide order dated
17.07.2018.
8. Mr. Bindhyachal Singh, learned Senior Advocate
referring to the facts afore-noted has contended that the terms
and conditions of service applicable to the Development
Officers regarding the appraisal of their performance have been
revised by Rules, 2009 on being notified by the Government of
India on 12.11.2009. Clause 3(3) provides that these rules shall
be applicable to all appraisal years commencing from
01.12.2009 onwards. Clause 8(1)(b) provides that if the cost
ratio in appraisal year is more than 38% and the ratio of the
aggregate of the expense in the said year and the immediately
preceding appraisal year to the aggregate of the scheduled first
year premium income in those two appraisal years exceed 38%,
the services of a Development Officer shall become liable for
termination.
9. However, the said rule stands amended in the year
2016, duly notified in the Gazette on 01.08.2015. Rule 1 Clause
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3 provides that these Rules shall be applicable in respect of
appraisal falling due on 01.08.2015 and thereafter. Rule 3 Sub-
Clause (b) provides that “(8) notwithstanding anything
contained in sub-rules (1) to (7) where the annual remuneration
of Development Officer in any preceding year (hereafter in this
sub-rule referred to as the “relevant year”) exceeds 50% of the
eligible premium of that year and the aggregate of the annual
remuneration in the relevant year and the two appraisal years
immediately preceding the relevant year exceeds 50% of the
aggregate of the eligible premium in those three years, his
services shall be liable to be terminated in accordance with Rule
7″.
10. The appraisal for the period 01.12.2012 to
30.11.2013, 01.12.2013 to 30.11.2014 and 01.12.2014 to
30.11.2015 were settled in October 2016. Moreover, the show-
cause notice for the first time was served to him simultaneously
in the year 2016, and after getting information of his actual
position, he worked hard and tried to improve his performance
within prescribed expense limit. His cost ratio in the very next
appraisal year i.e. 01.12.2015 to 30.11.2016 was 23.80% and
even in the current appraisal year ending on 30.11.2017 his cost
ratio till May 2017 was 25.8%. Despite the aforesaid facts and
the improvement made by the petitioner, the same has not been
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taken into consideration while passing the impugned order.
11. Learned Senior Advocate further contended that
no opportunity to conform to expense limit was provided to the
petitioner in terms of Clause 6 of the Rule 2009, which provided
that where the cost in the appraisal year is more than 35% than
on first occasion no increment and one decrement; and on
second successive occasion no increment and two decrement;
and on the third and subsequent successive occasion no
increment and two decrements; whereas, the appraisal for the
period in question were settled in October, 2016 and during such
period the petitioner has never been served any show-cause
notice, nonetheless, the petitioner was granted increment for the
alleged appraisal periods and no increment and decrement was
given to the petitioner prior to passing of the impugned order.
12. The petitioner being the New Development
Officer was completely unaware that his performance was
below as per the norms provided under the Rule. Had there been
any intimation to the petitioner by any authority of the branch
regarding his performance, the petitioner would have been
certainly improved his performance. The petitioner, thus, cannot
be subjected to punishment for the delay and latches on the part
of the respondent authorities, since it is the respondents who are
under statutory obligation to furnish the work appraisal of the
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petitioner year to year basis by granting reasonable opportunity
to achieve the fixed cost ratio. In support of the afore-noted
contention, learned Senior Advocate has placed reliance upon
the decision rendered by the Hon’ble Supreme Court in the case
of Dev Dutt vs Union of India & Ors., (2008) 8 SCC 725;
Sukhdev Singh vs. Union of India & Ors., (2013) 9 SCC 566
and Margaret Lalita Samuel vs. Indo Commercial Bank, AIR
1979 SC 102.
13. Countering the contentions pressed on behalf of
the petitioner, learned Advocate for the Life Insurance
Corporation of India firstly contended that so far as the
amendment Rule 2016 is concerned, the same has its limited
applicability i.e., for the appraisal year 2014-15 only. For the
computation of the period of appraisal year, only first date of the
month of joining is taken as the commencement date which
simply means that even if the date of joining is any day other
than the first day of the month of joining, the period of appraisal
year will be taken into consideration from the
succeeding/coming month only till the completion of one year.
Appraisal falling due before 01st August, 2015, the special Rule
2009 is applicable and the specific appraisal year in the case of
petitioner upon which termination action has been taken on
2012-13 and 2013-14.
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14. Learned Advocate for the LIC further contended
that so far the delay in appraisal is concerned, the same was
occasioned due to some technical error in module technical
which was resolved in October, 2016 by Information
Technology Development but this was not in particular for the
petitioner only but to all the Development Officers who were
aware of this unwarranted technical issue. The petitioner being
the Development Officer working in operational area was well
aware of the eligibility criteria within which he was supposed to
work in respect of the percentage of eligible cost ratio.
15. To summarize the percentage of eligible cost ratio
it is further contended that in the first appraisal year after
confirmation the requirement of percentage of eligible Cost
Ratio was 24%, whereas in the second appraisal year after
confirmation it was 23% and in the third appraisal year after
confirmation it was 21%. Performance of the petitioner,
compared to the above prescription, the cost ratio was 104.57%
for the year 2012-13 and 60.19% for the year 2013-14. The
submission of the petitioner of having no knowledge of his
business performance-cum-merit list for the reason of delay in
appraisal on account of which he did not get the chance of
improvement is not at all tenable in view of the fact that the
Development Officers get their business performance-cum-merit
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list in every month wherein the entire development and
activities are mentioned. Moreover, the petitioner has had the
access to know their individual business performance of their
appraisal period in question as on date in ‘GROWMAX’ Menu
which also includes the Cost Ratio.
16. The termination order was issued after proper
consideration of the explanation of the petitioner to the show-
cause issued by the Life Insurance Corporation of India, as
required under the Rules. The petitioner was also paid salary in
lieu of three months and, as such, there is no violation of any
terms and condition of the service condition of the petitioner.
The facts are admitted that the business performance of the
petitioner was not within the prescribed eligibility criteria and
the same makes him entitled for disincentive action. The
defence of unawareness of work norms or delay in appraisal due
to technical latches, would not come in his rescue, in view of the
fact that he was well aware of his performance but he did not
achieve the target, is the contention of learned Advocate for the
Life Insurance Corporation of India.
17. This Court has given anxious consideration to the
contention advanced on behalf of the respective parties and also
perused the relevant materials available on record including the
rules and regulation which are applicable in the case hereunder.
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It would be pertinent to state here that at the time of
confirmation of the services of the petitioner as Development
Officer, it was made clear to the petitioner that his work will
again be reviewed at the end of twelve months from the date of
confirmation with a clear stipulation that his services shall be
governed by the rules and regulation which was/were in force
and amended from time to time.
18. Having gone through the relevant prescription of
the Rules, 2009 as well as amended Rules, 2016, this Court is of
the view that Rules, 2009 shall be applicable to the case of the
petitioner till coming into force of amended rule, 2016, as the
matter in issue, relates to appraisal for the period of 01.12.2012
to 30.11.2013, 01.12.2013 to 30.11.2014 and 01.12.2014 to
30.11.2015.
19. The Rules, 2009 contains the definition of basic
expense limit, which means the expense limit set forth in the
table of expense limit below clause (j) of Rule 2. The Rule
further made it clear that these instructions shall apply to the
salaried Development Officers of the Corporation in its services
as on the date of notification of the said rules i.e. 12.11.2009.
The Rule made applicable to all the appraisal years commencing
from 01.12.2009 and onwards. The Rule, 2009 stipulates the
deferment of disincentives. Rule 7(3) clearly speaks that if in
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the succeeding year the Development Officer conforms to the
prescribed expense limit, no disincentives shall be imposed for
the preceding appraisal year and the normal grade increment
due on the relevant appraisal date for the preceding year as well
as the increment for the succeeding year shall be released,
provided that if in the succeeding appraisal year he does not
conform to the prescribed expense limit, the disincentives liable
to be imposed for the preceding appraisal year and the
succeeding appraisal year shall be imposed. The disincentives so
imposed, shall be final.
20. Now coming to the Rule 8 of 2009, which
stipulates the termination of service in certain cases. Rule 8(1)
(b) clearly says that the services of a Development Officer shall
become liable for termination if the Cost Ratio in appraisal year
is more than 38% and the ratio of the aggregate of the expense
in that and the immediately preceding appraisal year to the
aggregate of schedule first year premium income in those two
appraisal year exceeds 38%.
21. Indisputedly the performance of the petitioner
compared to the first and second appraisal year after
confirmation was 104.57% for the year 2012-13 and 60.19% for
the year 2013-14; thus, the Cost Ratio was exceeding than the
limit prescribed. The petitioner failed to conform to bring the
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Cost Ratio less than 38% in the questioned appraisal year.
Hence, Clause 8(1)(b) of Rules, 2009 would obviously attracted.
22. The averments made in the counter affidavit,
although indicate that the Development Officers were duly
getting their business performance-cum-merit list in every
month, wherein the entire achievement and activities were
mentioned apart from their access to the GROWMAX menu,
which also included the Cost Ratio, but this contention has been
specifically refuted by the petitioner in his rejoinder to the
counter affidavit that GROWMAX was not functional in the
year 2012, 2013 & 2014 and the petitioner had no access to the
same. Had the GROWMAX been functional, the answering
respondents would have been certainly served the appraisal
report for the year 2012-2013 & 2013-2014 alongwith the show
cause notice.
23. Now coming to the question as to whether, non-
service of appraisal report within stipulated time makes the
impugned order bad and illegal in the case in hand, is placed for
consideration before this Court.
24. There is not even a slightest hesitation in
accepting the well settled proposition of law that every entry
relating to an employee under the State or an instrumentality of
the State, whether it is Civil, Judicial, Police or other service,
Patna High Court CWJC No.905 of 2019 dt.20-01-2025
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must be communicated to him within a reasonable period. Non-
communication of an entry may adversely affect the employees
chance of promotion or getting some other benefit, because
when competitive merit is being considered for promotion, a
person getting any of the entries of outstanding, very good,
good, average, fair and poor should be communicated such
entry, so that he may have an opportunity of making
representation praying for its upgradation, and thus his
representation must be decided fairly and within a reasonable
period by the authorities concerned.
25. The Hon’ble Supreme Court in the case of Dev
Dutt (supra) has held in no uncertain terms that “every entry in
the ACR of a public servant must be communicated to him
within a reasonable period, whether it is poor, fair, average,
good or very good entry. This is because non-communication of
such an entry may adversely affect the employee in two ways :
(1) had the entry been communicated to him, he would know
about the assessment of his work and conduct by his superiors,
which would enable him to improve his work in future; (2) he
would have an opportunity of making a representation against
the entry if he feels it is unjustified, and pray for its upgradation.
Hence non-communication of an entry is arbitrary.” The
Hon’ble Court further says, “It is not only when there is a
Patna High Court CWJC No.905 of 2019 dt.20-01-2025
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benchmark but in all cases than an entry must be communicated
to a public servant, otherwise there is violation of principle of
fairness, which is the soul of natural justice”.
26. The Hon’ble Supreme Court reiterating the law
laid down in the case of Dev Dutt and Sukhdev Singh (supra),
further in the case of Pankaj Prakash vs. United India
Insurance Company Ltd. & Anr., (2020) 7 SCC 590 has held
that the judgment of this Court rendered in the afore-noted case
is declaratory in nature and the respondent was duty bound to
comply with the law laid down by this Court. The Hon’ble
Court has categorically observed that non-communication of
entries would certainly cause prejudice and thus, every entry in
the ACR of the public servant must be communicated to him/her
within a reasonable period is legally sound and helps in joining
threefold objectives as has been held in the case of Sukhdev
Singh (supra).
27. Now coming to the case in hand, it is the admitted
position that for the first time the notices and the appraisal
report for the period 2012-13 and 2013-14 were served upon the
petitioner in the month of November, 2016. The stipulations
made in the Rule, 2009 clearly contemplates that the purpose of
serving the performance report was to impose disincentives in
case the performance of the officer was not upto the mark. It is
Patna High Court CWJC No.905 of 2019 dt.20-01-2025
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also the admitted position that at no point of time any
disincentives has been imposed in terms of Rule 7 of the Rules,
2009. If the contention of the respondent would be accepted that
the petitioner was well aware and having knowledge of his
business performance-cum-merit list through GROWMAX,
which was also available with the senior officials, there was no
question not to serve the appraisal report and impose the
disincentives. The non-service of the appraisal report and the
notice in due time, certainly snatched away the petitioner with
an opportunity to improve his performance.
28. There is neither any laches on the part of the
petitioner, nor the petitioner was at fault and moreover, if there
was any technical error in the module, the petitioner cannot be
blamed for the same. It would be apt and proper to quote the
relevant paragraph of a celebrated judgment of the learned
Division Bench of the Bombay High Court, in the case of All
India Groundnut Syndicate Ltd. vs. Commissioner of Income
Tax, Bombay City, [AIR 1954 Bom 232] wherein the Court
observed as follows:-
“9. But the most surprising contention is
put forward by the Department that
because their own officer failed to
discharge his statutory duty, the assessee
is deprived of his right which the law has
given to him under sub-section (2) of S.
24. In other words, the Department wants
Patna High Court CWJC No.905 of 2019 dt.20-01-2025
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advantage of its own default. It is an
elementary principle of law that no
person–we take it that the Income-tax
Department is included in that definition
–can put forward his own default in
defence to a right asserted by the other
party. A person cannot say that the party
claiming the right is deprived of that
right because “I have committed a
default and the right is lost because of
that default.”
29. The Hon’ble Supreme Court while describing the
expression abuse of power, held in Shrisht Dhawan vs. Shaw
Brothers, (1992) 1 SCC 534 that the “abuse of power or mala
fide exercise of power may arise due to overstepping the limits
of power or defeating the provision of statute by adopting
subterfuge or the power may be exercised for extraneous or
irrelevant consideration. The rules, 2009 clearly obligates the
authority in terms of clause 6 to impose “no increment and one
decrement” on first occasion when the development officer
failed to conform the expense limit and likewise, on the second
occasion “no increment and two decrement” in similar
circumstances. The very object of this clause is to guard the
officer to get an opportunity to improve his performance. None
adherence to the aforenoted clause, coupled with non-furnishing
of appraisal report and the notice in the relevant period would
certainly deprive the petitioner to work harder and achieve more
that helps in improving his worth and give better result.
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30. Now coming to the impugned order, this Court
finds that there is no appreciation on the issue of the settled
legal position as has been discussed hereinabove, the action of
the respondent lacks fairness as the order of termination is based
upon on the appraisal report, which has never been served
within stipulated period and thus, thereby no opportunity was
accorded to the petitioner to improve his performance. The
Hon’ble Apex Court in no uncertain term held that the
respondent was duty bound to comply with the law laid down
by the Supreme Court in Dev Dutt and Sukhdev Singh (supra).
The ACR or the appraisal report needs to be communicated to
the employee within a reasonable time. In view of the aforesaid
settled legal position, this Court finds that the impugned order
suffers from serious error and, as such, fit to be set aside.
31. Accordingly the impugned order dated 03.06.2017
issued under the signature of Zonal Manager, Life Insurance
Corporation of India, East Central Zone, Patna as well as the
order dated 17.07.2018 issued by the Managing Director, Life
Insurance Corporation, Central Office, Mumbai are hereby set
aside. The petitioner is directed to be reinstated forthwith;
however, the petitioner shall not be entitled for any
remuneration for the period till he has not discharged any duty.
32. The writ petition stands allowed. Pending
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application, if any, also stands disposed off.
33. There shall be no order as to cost.
(Harish Kumar, J)
supratim/-
AFR/NAFR NAFR CAV DATE NA Uploading Date 23.01.2025 Transmission Date NA
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