C. Damodarasamy v. India

For Appellant: Mr.N.G.R.Prasad, for M/s.Row & ReddyFor 1st Respondent: Mr.P.Wilson, Asst. Solicitor GeneralFor Respondents 2&3:Mr.S.SilambannanJ U D G M E N TN. PAUL VASANTHAKUMAR, J.This writ appeal is directed against the order passed inW.P.No.9866 of 1999 dated 9.1.2003 dismissing the writ petition filedby the appellant herein seeking regular pension or compassionateallowance under the Life Insurance Corporation of India (Employees)Pension Rules, 1995.

The brief facts necessary for disposal of this writ appealare as follows. (a)Appellant was appointed as Development Officer in the secondrespondent Corporation in the year 1962 and prior to his appointment, the appellant worked as Insurance Agent from 1958. The work of the Development Officers will be assessed in terms of certain set of normsto be followed in their performance assessment reports. (b)On 22.4.1976, the Life Insurance Corporation (Staff)Amendment Regulations, 1976, was issued and as per Regulation 5, if aDevelopment Officer failed to bring in eligible premium equal to fivetimes of his annual remuneration in three preceding years, theappointing authority may terminate his services. Regulation 7 statesthat such termination would not be a penalty within the meaning ofregulation 39 of the Staff Regulations. (c)It is the case of the appellant that the employeesnegotiated with the Corporation and as per the agreement dated10.11.1981, this was in force till the amendment of Staff Regulations.

The said writ petition was resisted by the respondents bycontending that the petitioner was terminated after giving threemonths notice or salary in lieu thereof as he could not reach thenorms due to his deteriorating health conditions. Since the appellantwas terminated from service with effect from 6.3.1990 after givingnotice and as cut-off date is fixed as 1.11.1993 under Rule 33 of the Life Insurance Corporation of India (Employees) Pension Rules, 1995,the benefit of the said rule is not applicable to the appellant. Itis also stated in the counter affidavit that the retirement of theappellant from service by way of penalty is not after 1.11.1993 andtherefore he is not entitled to get pension. It is also stated thatsince the appellant has already been compulsorily retired with effectfrom 6.3.1990 after giving due notice as per the rules, the appellantis not entitled to get any relief. In the counter affidavit therespondents have justified the fixing of cut-off date as 1.11.1993 forthe persons who are entitled to claim compassionate allowance.

The learned single Judge dismissed the writ petition filedby the appellant upholding the cut-off date fixed under the PensionRules. The learned single Judge came to the conclusion that since theappellant was terminated from service, he is not entitled to getpension and as his termination is prior to 1.11.1993 he is notentitled to get compassionate allowance.

The learned counsel for the appellant submitted that eventhough the word "termination" is used for dispensing with the servicesof the appellant, it is in effect an order similar to compulsoryretirement (not as punishment). The learned counsel also argued thatmerely because the word "termination" is used the appellant having notbeen punished for any misconduct, depriving the pensionary benefit forwhich he is otherwise eligible, is unreasonable and irrational, https://hcservices.ecourts.gov.in/hcservices/ particularly when the appellant is entitled to get reappointment under Regulation 12 of the Staff Regulations and if a person is re-employedthe past services rendered is to be counted as qualifying service forpension under Rule 18 of the Pension Rules, 1995. The learned counselfurther argued that the appellant was having only 21 months ofremaining service and he was not re-employed even though he iseligible to be re-employed and therefore there is no justification todeny pension to the appellant as he has put in more than 27 years ofservice. The learned counsel further submitted that the terminationnot being by way of punishment under Rule 39 of the Staff Regulations, the respondents are not justified in denying pension to the appellanton the hyper-technical ground that the appellant was terminated fromservice due to the reason that he has not reached the norms.

The learned counsel for the respective respondents submittedthat the appellant having been terminated from the service, is notentitled to seek pension. Appellant is also not entitled to getcompassionate allowance as his termination was prior to 1.11.1993 andthe cut-off date fixed is also valid and it is not irrational. Thelearned counsels therefore submitted that the learned single Judge wasjustified in dismissing the writ petition and the said order is liableto be sustained.

We have considered the rival submissions of the learnedcounsel for the appellant as well as the respective counsel for therespondents.

The point for consideration in this writ appeal is as towhether the appellant, who was terminated not by way of punishment andwho was on service as on 1.1.1986, is entitled to get pension underthe Life Insurance Corporation of India (Employees) Pension Rules,1995, and whether there is any distinction between the termination dueto non-reaching of norms and termination due to misconduct.

Admittedly in this case, the appellant was terminated at theage of 56 years after completion of 27 years of service due to non-reaching of norms and the appellant was not terminated for anymisconduct. Clause 6 of the Schedule-III provides for termination ofthe services of the Development Officers under certain circumstances. Clause 6(1) provides that the Zonal Manager may terminate the servicesof a Development Officer by giving him three months notice or salaryin lieu thereof, if his annual remuneration in any preceding year isin excess of the expenditure limit, after affording an opportunity toshow cause against the process of termination. Clause 11 of Schedule-III provides that nothing contained in the said scheduleshall be deemed to affect the right of the competent authority to https://hcservices.ecourts.gov.in/hcservices/ retire or discharge the services of a Development Officer inaccordance with the relevant regulations or to affect the right of thedisciplinary authority to impose any penalty on him under Regulation39 on any of the grounds specified therein. Chapter III is a specialprovision, which provides for termination in case, a DevelopmentOfficer fails to perform in terms of the norms and as a result ofwhich the annual remuneration in any preceding year is in excess ofthe expenditure limit. There is no quarrel in this case, the saidpower has been invoked and the petitioner was terminated with effectfrom 6.3.1990 by proceedings dated 28.11.1989.

Regulation 39 deals with penalties, and the relevant portionreads as under,"Penalties:39.(1) Without prejudice to the provisions ofother regulations, any one or more of thefollowing penalties for good and sufficientreasons, and as hereinafter provided, be imposedby the disciplinary authority specified in Schedule-I on an employee who commits a breach ofregulations of the Corporation, or who displaynegligence, inefficiency or indolence or whoknowingly does anything detrimental to theinterest of the Corporation, or conflicting withthe instructions or who commits a breach ofdiscipline, or is guilty of any other actprejudicial to good conduct-(a)Censure; (b)Withholding of one or more increments eitherpermanently or for a specified period; (c)recovery from pay or such other amount as maybe due to him of the whole or part of anypecuniary loss caused to the Corporation bynegligence or breach of order; (d)reduction to a lower service, or post, or toa lower time scale, or to a lower stage in a time-scale; (e)compulsory retirement; (f)removal from service which shall not be adisqualification for future employment; (g)dismissal. "

As rightly contended by the learned counsel for theappellant, the appellant was terminated from service as per Schedule- https://hcservices.ecourts.gov.in/hcservices/ III Clause 6 and not under Regulation 39(1) of the Staff Regulations,1960. Rule 3(1) of the Pension Rules states that the said rules areapplicable to persons who were in service of the Corporation on orafter the 1st day of January, 1986, but had retired before the 1st dayof November, 1993, provided he exercises his option to claim pension. It is also not in dispute that an Officer terminated under Schedule-III clause 6 is entitled to get re-employment/re-appointment in the Corporation under Regulation 12. Pension Rule 18 states that if aperson is re-employed in accordance with the provisions contained in Regulation 12 of the Staff Regulations or an employee being aDevelopment Officer, whose services had been terminated in accordancewith the provisions contained in schedule-III to the staff regulation, etc., and who is re-appointed in the service of the Corporation, theservice of such person or officer prior to the re-employment or re-appointment, as the case may be, shall be counted in the qualifyingservice for pension.

Admittedly the appointment was terminated in exercise of thepowers conferred under Schedule-III clause 6 and he is entitled to bere-appointed in the Corporation. But he was not re-appointed since hewas having only 21 months of remaining service. Once the eligibilityof the appellant for re-employment/re-appointment is admitted, on re-employment, the earlier services rendered by the appellant iscountable. It is unjust to deny pension to the appellant solely onthe technical ground since the appellant was terminated not by way ofpunishment, but as per Schedule-III, Clause 6 of the ServiceRegulations and he was not re-appointed/re-employed. It is not indispute that the appellant has put in 27 years of service and duringthe performance review as contemplated under Schedule-III, Clause 6,the appellant was terminated. It should be, in the normalcircumstances, treated as compulsory retirement otherwise thanpunishment.

It is well settled in law that pension is to be paid for thepast services rendered. To explain this position, paragraphs 19 and20 of the decision reported in (1983) 1 SCC 305 (D.S. Nakara v. Unionof India) can be usefully referred to which reads as follows, https://hcservices.ecourts.gov.in/hcservices/ "19. What is a pension? What are the goals ofpension? What public interest or purpose, if any, it seeks to serve? If it does seek to serve somepublic purpose, is it thwarted by such artificialdivision of retirement pre and post a certaindate? We need seek answer to these and incidentalquestions so as to render just justice betweenparties to this petition.20. The antequated notion of pension being abounty, a gratuitous payment depending upon thesweet will or grace of the employer not claimableas a right and, therefore, no right to pension canbe enforced through Court has been swept under thecarpet by the decision of the Constitution Benchin Deokinandan Prasad v.

Merely because the appellant was terminated by invokingSchedule-III, Clause 6, the earlier services rendered by him cannot beignored as in the case of termination due to punishment. If thecontention of the respondents is accepted as decided by the learnedsingle Judge, there will be no difference between the person who isterminated due to imposition of penalty and to the person terminateddue to lack of utility. If the said distinction is accepted, theappellant having been in service as on 1.1.1986, is entitled to getpension on fulfilling other conditions.

Yet another factor in this case as rightly contended by thelearned counsel for the appellant is that the appellant was aDevelopmental Officer of the Life Insurance Corporation, who has totravel for attaining the target fixed for him by getting policies. In the affidavit filed in support of the writ petition the appellant https://hcservices.ecourts.gov.in/hcservices/ has clearly stated that he was suffering from dislocation of thespinal cord and was on medical leave for more than one year from November, 1984 to December, 1985 and due to his ill-health, hisperformance was not up to the mark. The said disease is occurredduring the course of the employment of the appellant and the same isnot denied in the counter affidavit.

Bearing the same in mind the Persons with Disabilities(Equal Opportunities, Protection of rights and Full Participation)Act, 1995 was enacted by the Parliament, which came into force from1.1.1996, wherein section 47 contemplates the employer to givealternate employment to the persons with disabilities either by givingalternate employment if there is vacancy available and if no vacancyis available, by creating a supernumerary post with pay protection andpromotional opportunities.

A similar issue arose before the Honourable Supreme Court inthe decision reported in AIR 1991 SC 1003 = (1991) 1 SCC 731 (AnandBihari v. Rajasthan State Road Transport Corporation, Jaipur). In thesaid case, the point for consideration was whether the drivers of the Transport Corporation who were terminated on the ground that they havedeveloped eye-sight which was not the standard required to drive busesdue to occupational disease, would be covered by sub-clause (b) of Section 2(oo) and thus would not amount to retrenchment within themeaning of S.2(oo). The Honourable Supreme Court in para 8 (scc p.9)of the Judgment held as follows,"8. Although the order of termination ofservice per se cannot be faulted on the ground ofthe breach of the Act, the important question thatstill remains to be considered is whether in thecircumstances of the case and against thebackground of the relevant provisions of ourConstitution, it can be said that the action ofthe Corporation is proper, equitable andjustified.

Here in this case, under the service regulations, re-employment or re-appointment is permissible to the persons likeappellant and on such re-employment/re-appointment the past servicesrendered also shall be entitled to be counted for the purposes ofpension. However, the appellant is denied the payment of pension onthe technical ground that he is a terminated employee of thecorporation, forgetting the fact that the said termination was not byway of punishment but by way of dispensing with the services due to"non-utility".

As rightly contended by the learned counsel for theappellant, only few people will be available to claim the benefit ofpension similar to the appellant herein, since a cut-off date isgiven to claim the pension that the person should be in service as on1.1.1986. It is also to be noted that if the appellant was terminatedeven by way of punishment after 1.11.1993, he could have beensanctioned with compassionate allowance. A person who is terminateddue to the proved charges is entitled to get compassionate allowanceas per Rule 33 of the Pension Rules, 1995, whereas a person who isterminated otherwise than punishment is denied of pension as well ascompassionate allowance. The said discrepancy also supports thearguments of the learned counsel for the appellant that the appellantis entitled to get pension taking note of the fact that he was onservice on 1.1.1986 and his termination was due to performanceassessment and not by way of punishment.

Similar issue arose before the Honourable Supreme Court inthe decision reported in 2000-I LLJ 1617 (Bank of India v. InduRajagopalan & Others) wherein pension was denied to the persons, whowent on voluntary retirement with effect from 1.1.1986 to 31.10.1993and at that time there was no pension scheme available. Taking noteof the said factual aspect and having regard to the fact that thepersons went on voluntary retirement during that period would be verylimited, the Honourable Supreme Court upheld the order of the HighCourt to extend the benefit of sanctioning pension to those retiredvoluntarily. For proper appreciation paragraph 3 of the Judgment isextracted hereunder, https://hcservices.ecourts.gov.in/hcservices/ "3. All that has happened is in such of thebanks where a Scheme for voluntary retirement wasavailable, certain employees retired under thatscheme. Now a comprehensive Pension Scheme hasbeen framed which came into force w.e.f.

In the light of our above finding and having regard to thefact that the appellant's service was not terminated by way ofpunishment, but the termination of the appellant is similar to the oneof compulsory retirement not by way of punishment, we are of the viewthat the appellant is entitled to get pension taking into https://hcservices.ecourts.gov.in/hcservices/ consideration his 27 years of his service in the second respondentCorporation.