Summary
A branch manager of an insurance company issued a motor cover note in March 1996 without collecting the premium, relying on a long-standing customer's assurance that he would send it; the same day a second cover note was issued against a cheque that bounced, and the first was not cancelled. The vehicle met with an accident a month later and the company had to honour a tribunal award of Rs 3,24,400 on the first cover note. Charged in 2001 with causing financial loss and failing to maintain integrity and devotion to duty, the manager was found guilty and removed from service without disqualification for future employment; the Allahabad High Court declined to interfere.
Issues
- Whether removal from service was a proportionate penalty for a branch manager who issued a cover note on a customer's assurance without collecting premium and failed to cancel it when a second cover note was issued, causing loss to the insurer.
- Whether such conduct amounts to failure to maintain integrity, as distinct from a lapse in devotion to duty.
Provisions considered
- Charge of failure to maintain integrity and devotion to duty; penalty of removal from service, Conduct, Discipline and Appeal Rules applicable to officers of United India Insurance CompanyThe charge was held proved in the enquiry and removal imposed; the Court, applying proportionality in judicial review of punishment, found that the proved misconduct was a failure to cancel the earlier cover note, not a want of integrity, and that removal was disproportionate. (¶¶ 2, 3, 4)
Held
- The insured was an old customer with a long-standing relationship with the insurer, and the manager issued the first cover note on his assurance that the premium would follow; when the second cover note was issued for the same vehicle he ought to have cancelled the first, and his failure to do so caused the loss. That lapse, however, cannot be characterised as a failure to maintain integrity. (¶ 3)
- Having regard to the plausible explanation, over twenty years of service and an unblemished record, the punishment of removal from service was disproportionate to the charge and the misconduct held proved; it was a fit case for a lesser punishment, to be imposed by the disciplinary authority on remand within three months. (¶¶ 3, 4)
Result
Appeal partly allowed; the Allahabad High Court's judgment of 14.02.2017 and the order of removal from service quashed; matter remitted to the disciplinary authority to impose an appropriate punishment lesser than removal within three months. No order as to costs.