WP/46784/2016 of C.RAVINDRANATH, TAMILNADU STATE Vs CHAIRMAN AND M.D., NICL., WEST BENGAL AND 2 OT on 15 September 2026

ORDER:

Long story short, the petitioner joined the l't respondent-National InsuranceCompanyinlgT8.onthegroundofmisconduct,disciplinary proceedingswereinitiatedagainsthim,whichculminatedinhisremoval from service in 2002. His appeal against the order of removal was rejected by tlre Departmentat Appellate Authority. He filed a writ petition before this court in 2003. Simultaneously, the State, through the cBI, instituted a criminal case before the cBI coun in 2004. Ile was acquitted inthe criminal case in 2009. 15.09.2026 16.09.2026 (:.]

wp_4678+2016 NBK, J It was a long haul in the writ proceedings before this Court, and in 2016, this Court directed the Departmental Authority to reconsider his case. The Authority, hou ever, rejected his case and affirmed the order of removal from service in 2016. He is once again before this Court with the present writ petition, instituted in2016. It is now 24 years since he was removed from service, after having rendered 24 years cf service. It appears that this is a classic case where a person finds himse lf at a crossroads, literally, considering the period served and the period sper"t out of service. This also rerrinds me of a poem by Professor Shiv K. Kumar of the University of Hyderabad, which he wrote on "Tis Hazari Courts", Delhi. A few lines seem to be relevant to the present case, and again, so strikingly coincidental to the clight of the petitioner: "It s the long wait that kills the lover, the cancer-patient and the petitioner " PETITIONER'S CASE

2. The petitionr:r has filed the present writ petition calling in question the order dated 28. t1.2016 passed by the Appellate Authoriry. whereby the punishment of "R.emoval from Service" imposed upon him by the Disciplinary Authoriry was afftrmed.

2.1. The case of the petitioner. as set out in the writ affidavit, is that he was appointed in the 1'r respondent-National Insurance Company Limited as Inspector Grade-I on 20.05.1978 and was subsequently promoted to the post of Administrative Officer by the year 2001.

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2.2. While he was working as such, a Charge Memo dated a 26.02.2001 was issued against him alleging that, in collusion with other oflicials, he had committed various inegularities in the settlement of insurance claims.

2.3. The charges levelled against the petitioner, as extracted from the Charge Memo, are as follows: '1. Shri C Ravindranath, in collusion with Shrl. K Sridhar Rao, Ass(. (T), DO l, Secunderabad then Assisfant (T), Secundetabad Branch Office - 2, suhstituted the Group Mediclaim Policy issued to Andhra Pradesh Social Wetfarc Residential Educational lnstitutions Society with a new poticy document containing dilferent terms with the uttedor motive to accommodate and settle claims in respect of , persons over the age of 45 years which otheruise were not payable as pet the policy originally issued.

2. Shti C Ravindranath, sanctioned a claim which on having been referred to the controtting Divisional Ofiice for sanction, was retumed withoul being sanctioned. Shri C Ravindtanath sanctioned the ctaim by arbitrarily reducing the amount of the claim settled to Rs.29tt43/- in order to bring it within his finencial authority.

3. Shri C Ravindranath, sanctioned three claims totalling to Rs.62l32t- which were not payable because the persons in respect of whom claims were Preferred were not covered under the policy. While sanctioning these ctaims, Shri Ravindranath overlooked several deficiencies and incot sistencies found in the respective claims.

4. Shri C Ravindranath, sanctioned and paid fle claims totelling to Rs.90840/- which were not payable because the illness / treatment was an exclusion undet the policy. While sanctioning the claims, he overlooked severat deficiencies and inconsistencies found in the rcspective claims. a

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5. Shri C Ravindranath, sanctioned and paid five claims totalling to Rs.73181/- which were not payable because the person in respect of whom the claims were made were not covered under the terms of the relevant policy due to their being more than 45 years of age. While sanctioning these claims, he overlooked several deficiencies and inconsistencies found in the respective claims.

6. Shrr C Ravindranath, sanctioned and paid 3 claims totalling to Rs.47902/- which were not payable because the hospitals at which treatment wes claimed to have been obtained did not exist

7. Shri Ravindranath, sancfioned and paid 2 claims totalling to Rs.34180/- which were not payable because the bills ptoduced were found to be false as conftrmed by the hospitals concemed.

8. Shri Ravindranalh, sanctioned and paid 16 claims totalling to Rs.332750/- each of which was not peyable for more than one reason, as specified against each claim.

9. Shri Ravindranath facililated the irregular payment of a claim (No.077/99) which was not payable because the hospital at which the treatment was claimed to have been obtained did not exist. He signed a disbursement voucher authorizing payment thereunder and issued the claim cheque for Rs.18880/-, without the subject claim having been duly sanctioned.

10. Shri Ravindranath, sanctioned a motor claim (No.04E/99) for Rs.E010/- with several material irregularities. While sanctioning the claim, which was p/ocesse d by Shri K overlooked several deficiencies and inconsistencies found therein,

11. Shri Ravindranath, signed the cheques which were prepared by Shri K C Srinivasulu, Asst. (C) with Smt.Mehatatha Gopat as, co- signatory in all chegues except cheque no.556680 dated 29.01.1999 wherc Shri C:.S.R.Murthy was co-signatory and unauthorisedty issued these chegues with the materiat irregutarity that the "account payee"and "not negotiabte,, crossrngs were either not a{fixed or were cancelled to enable the cheques fo be encashed as 6e;rier:hegues, a a

w p_467 84 _2076 NBK, J | 12. Shri Ravindranath, signed the chequ* with SmtMehalatha Gopal as co-signatory and unauthorisedly issued the cheques which were prepared by Shri K.Sinivasulu, Asst. (C), without affixing the "Account Payee" and "Not Negotiable" crossrngs as a rcsutt of which lhe cheques were made payable to bearer and were encashed as bearet instruments.

13. Shri Ravindranath had made irregular settlement of inadmissible claims totalling Rs.69734U- and had also committed other misconducts."

3. The petitioner submitted his explanation to the Charge Memo on 10.04.2001, denying the allegations. As the explanation was not found satilfactory a departmental enquiry was conducted.

4. The Inquiry Ofhcer submitted his report dated27.02.2002, recording that all the charges except one were proved. On consideration ofthe Inquiry Report, the Disciplinary Authority, by order dated 24.05.2002, imposed the major penalty of "Removal from Service" upon the petitioner.

5. The petitioner preferred an appeal before the Appellate Authority. By order dated 27.11.2002, the Appellate Authorify rejected the appeal and affi rmed the punishment. EARLIER PROCEEDINGS BEFORE THIS COT]RT

6. Aggrieved by the punishment imposed upon him, the petitioner initially approached this Court by filing W.P. No.1360 of 2003.

7. During the pendency of the said writ petition, criminal proceedings had also been initiated by the State, represented by the Central Bureau of a

wp_46784-2016 NBK, J t Investigation, Hyderabad, in c.c. No.30 of 2004 ot the file of the Special Judge for CBI Cases, HYderabad.

8. After a fuli-fledged trial, the leamed Special Judge, by judgment dated 02.03.2009, acquitted the petitioner and the other accused of the charges levelled against them. g. By order dal.ed 21.O2.2}l1in W.P. No.1360 of 2003, this Court, taking note of the fact that the charges in the departmental proceedings and the criminal proceedings substantially arose out of the same allegations, and relying upon the judgment of the Hon'ble Supreme Court in M' Paul Anthony v. Bharot Gold Mines Ltd.,, (2006) 11 SCC 42, set aside the order of removal dated 24.05.2002 and remanded the matter to the Gerleral Manager for recc,nsideration and for passing an appropriate order after affording an opportunity to the petitioner.

10. Aggrieved by the said order dated 21.02.2011, the respondent- insurance company preferred w.A. No.549 of 2011. The Division Bench set aside the order dated 21.02.2011 and remanded the matter to the learned Single Judge for fiesh consideration.

11. Thereafter, W.P. No.1360 of 2003 was taken up for fresh consideration. Bv order dated 01.08.2016, this Court, referring to the judgment of the Hon'ble Supreme Court in Chairman, Disciplinary Authorily, Rani l.akshmi Bai Kshetriya Gramin Bank v. Jagdish Shqran Varshney, (2009) 4 SCC 240, found that the earlier order ofthe Appellate Authority was cnrptic and did not advert to the specific grounds raised by the petitioner in his appeal.

12. This Court, accordingly, remanded the matter to the Appellate Authority for con sideration of the specific grounds raised by the petitioner

wp_46784 _2076 NBK, J a and for recording reasons in accordance with Rule 37 (2) of the General Insurance (conduct, Discipline and Appeal) Rules. The relevant portion of the said order reads as follows: "As seen from lhe order under chattenge passed by the iP' respondent he did not even refer lhe specific grounds urged in the appeal preferred before him and simply afiirmed lhe otder of the ?d respondent as no new ground is urged, lf the principles laid down in Jagadeesh Sharan Varshney and others cited supra is applied lo the present facts of t re case the 4h respondent being appellate authority has to record sorne reasons to negate the relief in the appeal white confirming the order passed by the 7d respondent but no such reasons were recorded by the appellate authortU' Hence, the order of the 4' respondent appettate authority is bereft of any reasons, affirming the order passed by the ?d respondent and then not complied Regulation 37(2) of General lnsurance (Conduct, Disciptine, and Appeal) Rules and in these circumslances the course open to this Court while exercise the power ofiudicial review under Article 226 of the Constitution of lndia to rcmand the matter to the appettate authority 4' respondent ditecting to consider the specific ground surged by the writ petitioner/appetlant before the 4' respondent and record reasons afresh in compliance of Regulation 37(2) referred supra and decide the appeal within a period of three

(3) months from the date of receipt of a copy of this order after aflording reasonable oppofiunity to the writ petitioner' Il is also made ctear that as on today the otder of the 7d respondent remain in lorce tilt it is set aside by the appettate authority or any other competent Coutt." a a IIL PROCEEDINGS BEFORE THE APPELLATE AUTHORITY

13. pursuant to the aforesaid order dated 01.08.2016, the petitioner submitted d rejiresentation dated 04 -11 -2016'

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13.1. The petitioner contended, inter alia, that there w'as no evidence establishing any fraudulent act on his part; that no witness had substantiated the allegations of fraud; that no loss had been caused to the Company and that he had derivr:d no personal gain; that no complaint had been received from any policyholder or customer; and that the Intemal Audit Team had not made any adverse remarks concerning the transactions in question.

13.2. He firrther relied upon his service record and contended that he had discharged hirs duties diligently and had made a substantial contribution to the growth of the Company. He stated that he had achieved 498Yo growth and stood first in r-he Region.

13.3. The petitioner placed reliance upon his acquittal in C.C. Nro.30 of2004. He conte nded that the criminai Court had, after considering the oral and documentary evidence, acquitted him and the other accused of all the charges and that the acquittal was not based upon any mere benefit ofdoubt.

13.4. The petitioner further expiained the circumstances surrounding the Group Mediclaim Policy. According to him, it was the first occasion on which such a policy had been issued by him on behalf of the Company in favour of a Government body; the draft policy did not contain the ages of the beneficiaries; coverage was optional for employees of the insured institution; the fiigure of 9,000 was only an estimated number used for booking the prerrLium; subsequently, he was informed that coverage was required for 8,590 persons; and the complete list ofpersons covered wat not fumished to the []ranch Office even after expiry of the policy period. He therefore contend,:d that the punishment of "Removal from Service" was unwarranted and erxcessive and sought reinstatement.

NBK, J I L4. The Appellate Authority, howeveq by the impugned order dated 28.11.2}16,affrrmed the punishment of removal from service. The relevant portion ofthe order reads as follows: "AND WHEREAS the Appellate Authority having gone through the relevant documents along with the inquiry report and other related papers/document observes from the inquiry report that the contract arranged by Shri Ravindranath is not a contract which fits into the format of Group Mediclaim Scheme prevalent during the period it was entered into. He had also intended to cover up his wrongful act in producing another document by correcting the documents available in his possession. He had approved claims falling under the category of exclusions. There had been a deliberate attempt to ' bed the procedures in the guise of efficient customer service' There was a gross violation wherein claims were paid to the dependent of the insured person instead of the lnsured society' There were instances where payment made in settlement of claims were unauthorized. The argument of Shri Ravindranath that the policy issued to the Society covers persons above 45 years of age cannot be sustained on the ground that such cover was not thought of at the time of negotiation and quoting of the premium' He had arbitrarily allowed / disallowed amounts appearing under separate heads in the various supporting bills not because such amounts were payable / not payable but merely in order to create the false impression that due diligence had been applied in the sanctioning of the claims. There had been violation of guidelines bringing forth financial loss to the Company. Considering the same, it is expected I out of one in a professional environment to have proficiency in his own field and ignorance of it cannot be claimed as excuse' lt has also been stated by employee that the defects have come up due to lack of sufficient staff at his Office and that he was forced to distribute the work among the available staff which has resulted in dishonest activities. lt is superfluous to mention that there were sp.Ygrjtl irregularities both in underwriting and settlement of claims

NBK, J in various aspect which cannot be negated by Shri Ravindranath and consequently the Company was forced to bear financial loss' AND WHEREAS the undersigned having reviewed the case in detail by virtue of and in compliance of the directions of the Hon'ble Court through the ;aforesaid Order dated 01.08.201G is convinced that the penalty of "Removal from Service: as imposed on Shri Ravindranath is just and proper and does not call for any interference by the Appellate Authority. NOW THEREFORE, the undersigned, in exercise of the powers conferred urrder Rule 39 f lGeneral lnsurance (Conduct, Discipline' & Appeal) Rules, 1975 hereby confirms the Penalty of "Removal from Service" as imposed by the Disciplinary Authority vide his Order dated 24lhMay 20O2;'

15. It is this order d ated28.11.2076 passed by the Departmental Appellate Authority, which is assailed in the present writ petition.

IV. SUBMISSIONS ON BEHALF OF THE PETITIONER

16. Smt. Udaya Sri, leamed counsel for the petitioner submits that there is no evidence establishing any fraudulent act on the part of the petitioner and that there was neither any loss to the insurance company nor any corresponding gatn to the petitioner.

16.1. It is further submitted that no complaint was made byrany customer or policyholder; the Intemal Audit Team did not make any adverse remarks conceming the transactions; and the petitioner had rendered more than two decades of service to the organisation. a a

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16.2. Learned counsel submits that the criminal proceedings in C.C. No.30 of 2004 involved substantially the same factual allegations as those forming the basis of the departrnental proceedings' After a full-fledged trial and appreciation of oral and documentary evidence, the criminal Court acquitted the petitioner and the other accused.

16.3. It is therefore contended that the Appeltate Authority, while reconsidering the matter pursuant to the order dated 01.08.2016, was required to consider the acquittal of the petitioner in C.C. No. 30 of 2004, particularly when the allegations in both, Departmental as well as Criminal Proceedings, substantially arose from the same transactions. a

16.4. Leamed counsel further submits that the petitioner was acquitted after due trial, and therefore it was an honourable acquittal/acquittal on merits, and not an acquittal merely on the benefit of the doubt. It is contended that the criminal Court had found that the prosecution failed to establish the allegations of fraudulent claims, non- existent hospitals, conspiracy, criminal misconduct and pecuniary loss.

16.5. It is also contended that the impugned order dated 28.11.2016 does not deal with the petitioner's contention regarding his acquittal in C.C. No.30 of 2004, and merely stating that the Appellate Authority had reviewed the case in compliance with the order of this Court, without considering the substance of the petitioner's grounds, is insufficient.

16.6. Learned counsel therefore submits that even considering for argument that there are certain procedural lapses on the part ofthe petitioner in processing the claims, considering the honourable acquittal wherein it was established that there was no criminal collusion, and neither there was undue t pecuniary benefit to.,the petitioner nor financial loss to the insurance 1.2

NBK, J company, the punishment of removal from service, per se,is unduly harsh, and highly disproportionate, in the facts and circumstances of the 8ase, particularly having; regard to the petitioner's long service, his service record, and his honourabl,: acquittal in the criminal case tried for substantially the same allegations as in the departmental proceedings. V. SUBMISSIONS OFTHE RESPONDENT- lnsurance Company

17. Per contra, Iiri Vedula Srinivas, learned Senior Counsel appearing for the respondent-in surance company submits that the General Insurance (Conduct, Discipline and Appeal) Rules require the Appellate Authority to consider whether the procedure prescribed under the Rules has been complied with, wh,ether the findings recorded by the Disciplinary Authority are justified in the light of the facts and evidence, and whether the penalty imposed is justified.

17.1. LearrLed Senior Counsel submits that, in the present case, there was no procedural irregularity and that the Appellate Authority, pursuant to the order dated Ct1.08.2016, considered the material on record and the representation of the petitioner and recorded reasons for affirming the punishment.

17.2. Learrrcd Senior Counsel therefore contends that there is no illegality either in the order of the Disciplinary Authority dated24.05.2002 or in the subsequ.ent order of the Appellate Authority dated 28.11.1016 warranting interfe rence under Article 226 of the Constitution of lndia.

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VI. POINTS FOR CONSIDERATION

18. Having considered the respective submissions and perused the material on record, the following points arise for consideration:

(i) Whether the honourable acquittal of the petitioner in the criminal proceedings, having regard to the findings recorded therein, has material bearing upon the departsnental proceedings founded upon substantially the same factual allegations?

(ii) Whether the Appellate Authority, while passing the impugned order dated 28.11.2016, adequately considered the specific grounds raised by the petitioner, including the effect of his honourable acquittal in C.C. No.30 of 2004?

(iii) Whether the punishment of ,,Removal from Service" imposed upon the petitioner is sustainable and proportionate in the facts and circumstances of the case?

(iv) To what relief is the petitioner entifled? vII SCOPE OF JUDICIAL REVIEW IN DEPARTMENTAL DISCPLINARYPROCEEDINGS

19. Before considering the above questions, it is necessary to bear in mind the limited scope ofjudicial review in disciplinary matters.

19.1. It is settled law that, the High Court, while exercising jurisdiction under Article 226 of the Constitution of India, does not ordinarily sit as an appellate authority over the findings recorded in a a a t4 wp_46784,2016 NBK,I departmental enquiry. The principles goveming the scope ofjudicial review have been authoritar.ively stated by the Hon'ble Supreme Court in Union of Indiav. P. Gunaseharan',(2015) 2 SCC 610'

19.2. The C ourt may, howevet' interfere where there has been violation ofthe principles ofnatural justice; or where the hndings are wholly unsupported by evidence; or where the conclusions are perverse or irrational and no reasonable person could have arrived at such conclusions; or where the authority lacks jurisdiction/competence to impose the punishment; or where irrelevant or extraneous considerations have been taken into account; or where the pr,nishment imposed is highly excessive' shockingly disproportionate to the proved misconduct' a AL AC ON VIII. EFFT]CT OF DEPARTM ENTAT, DISCIPLINARY PROCEEDINGS 20, The next question concems the effect of the petitioner's acquittal in the criminal Proceedings'

20. l.Thelawiswellsettledthatdepartmentalproceedingsand criminal proceedi'rgs operate in different fields' The standard of proof in a criminal trial is proof beyond reasonable doubt' whereas departmental proceedings enquiries,, are governed by the standard applicable to disciplinary ordinarily based upon preponderance of probabilities' Consequently, an acquittal in a criminal case does not' by itself' resuJt in quashing of deparlmental proceedings or reinstatement of employee'

20.2. Hou'ever, the nature and basis of the acquittal are relevant considerations. where the criminal court, after a full-fledged trial and

wp-461a4_201.6 NBK, J appreciation of the evidence, records categorical findings, and when such categorical findings of the criminal Court substantially discredit the very factual allegations on which the disciplinary action is founded, such findings recorded by the criminal Court cannot be ignored, and the same require due consideration by the departmental authorities.

20.3. In G.M. Tank v. State of Gujarat, (2006) 5 SCC 446, the Hon'ble Supreme Court considered the effect of criminal proceedings upon disciplinary proceedings. The judgment, while referring to the principles laid down in R.P. Kapur v. Union of India, AIP. 1964 SC 787, observed: ' "lf the trial of the criminal charge results in conviction, disciplinary proceedings are bound to follow against the public servant so convicted, even in case of acquittal proceedings may follow, where the acquittal is other than honourable." (emphasis supplied)

21. The expression (honourable acquittal" has also been considered by the Hon'ble Supreme Court in Union Tbrritory, Chandigarh v. Pradeep Kumar (Civil Appeal No.67 of 2018), wherein the Court referred to the earlier decision in Depuly Inspector General of Police and Another v. S. Samuthiram, (2013) 1 SCC 598, and observed: "10. The acquittal in a criminal case is not conclusive of the suitability of the candidates in the concerned post. lf a person is acquitted or discharged, it cannot always be inferred that he was falsely involved or he had no criminal antecedents. Unless it is an honourable acquittal, the candidate cannot claim the benefit of the case. What is honourable acquittal, was considered by this Court in Deputy lnspector General of Police and Another v. s. Samuthiram (2013) 1 SCC 598], in which this Court held as under:- I a

1t wp_46784_2015 NBK, J "24. l'he meaning of the expression "honourable acquittal" came up for consideration before this Court in RBI v. Bhopal Singh Panchal (1994) I SCC 541. ln that case, this Court has considered the impact of Regulation 46(4) dealing with honourable acquittal by a crinrinal court on the disciplinary proceedings. ln that context, this Court held that the mere acquittal does not entitle an employee to reinstatement in service, the acquittal, it was held, has to be honourable. The expressions "honourable acquittal"' "acquitted of blame", "fully exonerated" are unknown to the Code of Criminal Procedure or the Penal Code' whichr are coined by iudicial pronouncements. lt is difficult to define precisely what is meant by the expression "honourably acquitted". When the accused is acquitted after full consideration of prosecution evidence and that the prosecution had miserably failed to prove the charges levelled against the accused, it can possibly be said that the accused was honourably acquitted."

22. Thus, accolding to G.M. Tank (supra), when the charges, evidence, and witnesses in both the departmental inquiry and the criminal trial are same, and the employee is honourably acquitted by the criminal Court, after due trial, it is unjust and oppressive to uphold a dismissal from service'

IX. CRIMINA.LPROCE EDINGS IN THE PRESENT CASE c , ,

23. In the presr:nt case, the petitioner was arraigned as Accused No.l in C.C. No.30 of 20r)4 before the Special Judge for CBI Cases, Hyderabad.

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23.1. The criminal prosecution axose out of the same broad transactions relating to the Group Mediclaim Policy and alleged irregularities in the settlement of mediclaim claims which formed the basis of the departmental proceedings.

23.2. The trial Court, after considering the oral evidence of PWs.1 to 37, and. the documentary evidence Exs.Pl to P149 adduced on behalf of the prosecution; and the oral evidence of Mr. S.M. Kamal, and the documentary evidence Exs.D1 to D10 adduced on behalf of the accused, acquitted the petitioner and the other accused. a

23.3. If is, however, relevant to state that the trial Court did not necessarily reproduce each ofthe departmental charges in the exact language subsequently used by the Appellate Authority. However, what is material is that the trial Court examined the underlying transactions and the evidence relied upon by the prosecution and found that the criminal charges had not been established beyond reasonable doubt. X. RELEVANTFINDINGSOFTHE CRIMINALCOURT IN C.C. NO. 30 0F 2004

24. The relevant findings, as emerging from the record, may be considered issue-wise. a A) Alle ation o us or Fraudulent Mediclaim Claims

(i) The departmental proceedings proceeded on the basis that bogus or irregular claims had bee4 processed and approved.

(ii) The corresponding criminal prosecution alleged that Accused Nos.5 to 28 had submitted false or bogus mediclaims, a

B) Allegation o Non-existe nt H osp itals wp_46784_2016 NBK, J medical bills and hospital records and that Accused Nos.l to 4 had prrocessed or settled those claims pursuant to a conspiracy.

(iii) The trial Court examined the individual claim files and founrl that, in most of the files, there were case sheets, hospital bills, doctors' names, pathological repofts, discharge sumrnaries and other medical documents. (i") The Court found that the opinion of P.W.2 describing the claints as bogus was insufftcient, particularly when several documents said to be unavailable were actually found in the clainr fi1es. (") The Court further noted that P.W.2 had not verified the case sheets against the admission registers of the concemed hospitals, although he had stated that such verification was necessarv.

(vi) Thus, the foundational allegation that the claims were fabricated was not established before the criminal Court. f

(i) Several departmental allegations concerned claims alleg;edly supported by treatment at hospitals which did not exrs1..

(ii) The criminal prosecution similarly alleged that the hosp,itals where treatment was said to have been received did not r:xist at the addresses mentioned. ,

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(iii) The trial Court considered the evidence of the postmen and found that their evidence only established that certain hospitals were not found at the stated addresses when the addresses were checked in the year 2004, whereas the alleged treatment had taken place in 1998-99.

(iv) The Court observed that there was a possibility that a nursing home or hospital could have shifted during the intervening period. (") The Court further observed that the appropriate course would have been to examine neighbours or other persons acquainted with the locality during the relevant period. Such evidence was not forthcoming. ("i) The Court also noticed that the prosecution evidence itself contained contradictions. P.W.3 1 stated that Vij aya Laxmi Nursing Home was functioning, while there was also contradictory evidence conceming Chella Nursing Home.

(vii) Consequently, the allegation that the hospitals were bogus or non-existent was not established. c) Allesation ofCriminal Conspiracv

(i) The criminal prosecution included an allegation under Section 120-8 IPC, alleging conspiracy between Accused Nos.1 to 4 and Accused Nos.5 to 28. a ,

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(ii) The prosecution was required to establish that Accused Nos.l to 4 knowingly participated in the processing of false claims and thereby caused wrongful loss to the National Insuriurce Company and corresponding gain to the accused or claimants.

(iii) The trial Court found that the necessary chain of circurnstances was not established.

(ir) The Court, inter alia, noted that other officers in the branc'h had also processed mediclaim applications, that those offrcers were not examined by the prosecution, and that procr:ssing mediclaim applications was part of the ordinary coursie of branch work. ,

(r) The Court also found that there was no suffrcient evidence establishing that Accused Nos.2 to 4 knew that the claims were bogus or that there was a dishonest agreement bet'w een the offrcials and the claimants. ("i) The trial Court consequently found that mere processing or signing of claim documents was insufficient, by itself, to estalrl ish the al leged conspiracy. D) Alle ation of Abuse or Misuse of Oflicial Position (D The criminal prosecution alleged that the pJblic servants, including Accused No' 1, had committed criminal misconduct under Section 13(2) read with Section 13(1)(d) of

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NBK,I the Prevention of Comrption Act, 1988, by abusing or misusing their offrcial position. (iD The trial Court expressly considered this allegation and, in paragraph 69 ofitsjudgment, held that the prosecution had not brought home the guilt of Accused Nos.l to 4 for criminal misconduct by abusing or misusing their official position. (iiD This finding is of particular significance because the Appellate Authority subsequently relied upon alleged abuse of official responsibilities and resulting financial loss while affirming the punishment imposed upon the petitioner. E) Allesed Pecuniarv Loss lo the insurance comoanv and undue benelil to the accused/claimants

(i) The prosecution alleged that the acts of the accused resulted in a loss of approximately Rs.5,00,500/- to the National Insurance Company and corresponding pecuniary benefit to the accused or claimants. (iD The trial Court found that the prosecution had failed to establish the necessary financial link.

(iii) Although certain cheques issued by the National Insurance Company were produced, the relevant bank statements or account records necessary to establish that the amounts had actually been credited to or encashed by the ' " concemed accused were not produced. a a

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(ir) Ttte Court therefore found that a material link necessary toestablishconspiracyandpecuniaryadvantagewasabsent. a

(r) The Court also took note of the fact that the National Insuranc:e Company had not instituted recovery proceedings or lodged a complaint despite the alleged financial loss and despite the existence of audit mechanisms'

(i) l'he departmental proceedings also attributed signific'ance to the manner in which claims were processed by thesubordinatestaffunderthepetitioner'ssupervision.

(ii) the trial Court found that Accused Nos'2 to 4 had not been g;iven training for processing mediclaims' It also noted thatAr:cusedNo.4wasatypistwhoseappointmentconditions requir,:d him to foliow the directions of his superior offrcers'

(iii) The trial Court held that merely processing claims in the course of official duties, particularly pursuant to directions' could not by itself establish conspiracy or dishonest conduct'

(ir) The Court also considered the evidence relating to AccusedNo'3,whohadreducedoneclaimfromapproximately Rs.2ll,300l to Rs.18,142l- after scrutiny' and treated that circumstanceasindicativeofscrutinyratherthancoliusion.

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wp _467 A4 -2016 NBK, J G) Alleeation ofInadequate Scrutinv (D The Appellate Authority subsequently observed that the petitioner had arbitrarily allowed or disallowed amounts under various heads in the supporting bills so as to create a false impression of due diligence.

(ii) The criminal Court examined the evidence of P.W.2 and found inconsistencies between the opinions expressed by the witness and the actual contents of the claim files.

(iii) The Court did not accept the prosecution's contention that the claim files established bogus claims merely because certain documents or particulars were allegedly unavailable' H) Alleeed Alteralion or ,sUDDTCSSrc n of Documents O The Appellate Authority also relied upon an allegation that the petitioner had attempted to cover up his alleged wrongful act by producing another document after correcting documents available with him.

(ii) In the criminal proceedings, the prosecution was required to establish such acts through admissible evidence' The trial Court found deficiencies in the production and proof of material documentary evidence relating to the policy and claim files and also noticed that certain other opinions of P'W'2 and handwriting-expert materials had not been produced' t a

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(iii) Thus, while the departmental authority treated the alleged document-related irregularities as established, the criminal Court found deficiencies in the prosecution evidence concerning the underlying documentary case. D Resull ofthe Criminal Proceedinss (D Most significantly, the operative conclusion of the criminal Court, as recorded in the material before this Court, was: "all the accused are found not guilfy for charges levelled against them"

(ii) The accused were acquitted as follows:

(a) Accused Nos.l to 28 were acquitted of the charges under Sections 120-B and 420lPC:'

(b) Accused Nos.5 to 28 were acquitted of the charges under Sections 468 and47l IPC; and

(c) Accused Nos.l to 4 were acquitted of the charge under Section 13(2) read with Section 13(l)(d) of the Prevention of Comrption Act, 1988.

(iii) The trial Court thus found that the prosecution had failed to bling home the guilt of Accused Nos.l to 4, including the alleg,ation that they had committed criminal misconduct by abusing or misusing their official position. ,

a

wp _467 a4_2076 NBK,I

XI. APPELLATEAUTHORITY'SORDER

25. The question now is whether the Appellate Authority, while reconsidering the petitioner's case pursuant to the order passed by this Court in W.P. No. 1360 of 2003, dated 01.08.2016, properly considered the grounds raised by him, including the aspect of his honourable acquittal in C.C. No. 30 of 2004, and his representation that there was no evidence of fraud, no personal gain, no established loss, no complaint from any policyholder, and no adverse audit finding. a

26. The impugned order records, inter alia, that the Group Mediclaim contract did not conform to the prescribed format; that the petitioner had manipulated and corrected documents to bring them within his financial powers; that he had approved claims falling within exclusions; that procedures had been circumvented; that claims had been paid to dependants instead of the insured Society; that certain payments were unauthorised; that his explanation regarding persons above 45 years of age was unacceptable; that amounts under different heads had been arbitrarily allowed or disallowed; and that the Company had suffered financial loss.

27. At this juncture, it is relevant to note that the trial Court, in C.C. No. 30 of2004, substantially dealt with regard to the allegations/charges relating to (i) approval of fraudulent claims, (ii) sanctioning of claims that fell under exclusions, (iii) claims for treatment in non-existent hospitals, (iv) deliberate processing of false claims, (v) criminal conspiracy in processing of claims,

(vi) abuse/misuse of offrcial position, (vii) financial loss to the insurance company, (viii) undue pecuniary 9enefit to the accused / claimants, (ix) conduct ofsubordinate staff, (x) inadequate/arbitrary scrutiny of claims, (xi)

N8K, J alleged alteration / suppression of documents, (xii) deliberate attempt to circumvent the prc,cedures, (xiii) iack of due diligence in processing claims'

27.1. To putit precisely, the allegations conceming fraudulent/b3gus Mediclaim claimri, processing and settlement of such claims, alleged conspiracy, abuselmisuse of offrcial position' alleged financial loss and the role of subordinat,: staff were directly examined by the trial Court as stated above under sub-paragraphs A, C, D, E, and F ofthe Paragraph-X (Relevant Findings of the trial Court in C.C. No. 30 of 2004)'

27.2. The allegations conceming inadequate scrutiny and the alleged documentary irregularities were substantially considered by the trial court as stated in sub-paragraphs G and H ofParagraph-X (Relevant Findings of the trial Court in C.C. No' 30 of 2004).

27.3. The allegations with regard to non-compliance with the procise format of the Group Mediclaim contract, payment to dependants of the insured, instead ofthe insured Society, the contractual coverage of persons above 45 years, v'ere not directly adjudicated by the trial Court'

27.4. How ever, it is a matter borne out by the record, in the judgment in C.C. No. 30 of 2004 that the substantial allegations relating to collusion/conspiracy in approval of claims, processing of claims for treatment in non-existent hospitals, misuse/abuse of official position, inadequate scrutiny, alteration of documents, undue pecuniary beneht to the accused/claimants, lack of due diligence etc., have been substantially dealt by the trial Court. e

27.5. Thelefore, the findings recorded by the trial Court in C'C' No.30 of 2004 srrbstantially overlap with, and in several respects directly

wp-467 a4 _2016 NBK, I concerr, the very factual allegations subsequently relied upon by the Appellate Authority for confirming the penalty of removal from service.

27.6. Consequently, the judgment of the trial Court in C.C. No. 30 of 2004, dated 02.03 .2009, was not an unrelated or extraneous proceeding, but concerned the same underlying transactions and factual allegations which formed a substantial part of the basis of the disciplinary punishment.

27.7. The Departmental Appellate Authority affirmed the penalty of "removal from service" by relying upon factual allegations which had subgequently been examined in detail by the criminal Court, and the criminal Court found that the foundational factual allegations, including fraudulent claims, fraudulent hospitals, criminal conspiracy, misuse/abuse of offrcial position and the alleged pecuniary loss to insurance company, were not established by the prosecution.

27.8. The Appellate Authority, while reconsidering the matter pursuant to the directions ofthis Court, was required to consider the frndings of the criminal Court in C.C. No. 30 of 2004 and, if it differed from those findings, to give reasons explaining how the same underlying facts, which had not been proved before the criminal Court, could still be treated as proved against the petitioner in the disciplinary proceedings.

28. Though the standard ofproofapplicable to the departmental enquiry is different from the standard applicable in a criminal trial, and though the acquittal could not, by itself, have been treated as an automatic ground for reinstatement, it is to be noted that a subsequent acquittal on merits where the criminal Court has examined substantially the same factual allegations and evidence and has found the prosecution case to be unproved, and honourably-4qquitted the petitioner/accused No. l, cannot be i grrored. , a ,t

wp_45784_2016 NBK, J

29. Notwilhstanding the distinction between criminal liability and departmental misconduct, when the same factual allegations form the foundation olboth proceedings, and where the criminal Court, after afi;ll- fledged trial, has found that the essential allegations were not proved, the disciplinary authority must meaningfully address the effect of those findings before sustaining the extreme penalty of removal from service.

30. In the present case, the Appellate Authority was specifically directed by this Court, in W.P. No.1360 of 2003, dated 01.08.2016, to consider the grounds raised by the petitioner and pass appropriate orders. Appropriate orders connc,te recording of reasons substantiating and justifring the orders being passect, by taking into consideration the relevant material placed on record. At this juncture, it is also to be noted that the grounds on which the impugned order dated 28.11.2016 was passed, were not merely abstract allegations. '[he grounds taken by the appellate authority for affrrming the punishment have substantially overlapped with the factual substratum which had been considered by the criminal Court. The criminal Court had considered the allegations relating to fraudulent claims, non-existent hospitals, ccnspiracy, abuse of oflicial position, pecuniary benefit and also the alleged nranner in which the claims were processed by the accused. After due trial, the criminal Court ultimately honourably acquitted the petitioner. Therefore, in the circumstances of the present case, the acquittal cannot be treated as an irrelevant or inconsequential circumstance.

31. Therefore, this Court is of the considered opinion that the "honourable acquittal" of the petitioner in C.C. No. 30 of 2004 by' the criminal Court, after due trial of the substantially same allegations, has a

wp-467 84_2016 NBK, J material bearing upon the departmental proceedings founded upon substantially the same factual allegations.

32. Therefore, this Court is of the considered opinion that the Departmental Appellate Authority, while passing the impugned Order dated 28.11.2016, has not adequately considered the specific grounds raised by petitioner, including his honourable acquittal in C.C. No. 30 of 2004.

33. Accordingly, the Points No. 18(i) and l8(ii) under Paragraph No. 18 of the Points for Consideration, stand answered. a xII) PROPORTIONALITY OF PUNISHMENT

34. In light of the honourable acquittal of the petitioner in C.C. No. 30 of 2004, for the substantially same grounds that formed the basis for departmental proceedings, the punishment imposed by the Departmental authority requires due consideration.

35. This Court, in normal course, does not substitute its own view for that of the disciplinary authority, except when the punishment imposed is highly excgssive or shockingly disproportionate to the proved misconduct and the surrounding circumstances.

36. In the instant case, when the substantive allegations/charges in the criminal proceedings in C.C. No. 30 of 2004, relating to conspiracy, fraudulent claims, non-existent hospitals, criminal misconduct, misuse/abuse of offrcial position and obtaining pecuniary advantage were not proved by the fr6iecution, and thereby the petitioner was honourably

wp-46784-2016 NBK,I acquitted ofthe charges under Sections 120-8 and 420 ofthe IPC' as well as Sections 13(1)(d) and l3(2) of the Prevention of Comrption Act; and when the material allegations forming the basis of both the departmcntal proceedings and the criminal proceedings have thus remained unproved' the same ought to have been dury considered by the Apperlate Authority, while reviewing the casc of the petitioner' 37, Even thoullh there is certain non-compliance on the part of the petitioner with regard to the precise format of the Group Mediclaim contract' the guidelines for claim payments to dependants of the insured' and claims of insurance coverage for persons above 45 years, the fact remains that the allegations in the Charge Memo dated 26'02'2001' namely' collusion' passing of medical claims without scrutiny' clearing claims for treatments taken in non-existent hospitals' misuse of offrcial position' causing hnancial loss to the insurrmce company' and processing/settlement of claims' stood unproved before the criminal Qourt in C'C' No' 30 of 2004' resulting in the petitioner's honourable acquittal.'

38. Consequently, considering that honourable acquittal' wherein the criminal Court tried the petitioner for substantially the same allegations/charges as in the departmental proceedings' and further considering hi:, approxim ately 24 years of service in the respondent- insuranee comp any, this Court is of the considered opinion that the penalty of "Removal fr'rm Service" is unduly harsh' disproportionate and excessive in the facts irnd circumstances of the case' and therefore deserves modification ir the interests of justice'

J1

NBK, J x[r) coNCLUSToN

39. Accordingly, the impugned order dated 24.05.2002 passed by the Disciplinary Authority, insofar as it relates to the punishment imposed upon the petitioner, and the subsequent order dated 28.11.2016 passed by the Appellate Authority, insofar as it affirms the said punishment, are hereby set aside. Consequently, the punishment of "Removal from Service" imposed upon the petitioner is hereby modified to "Compulsory Retirement".

40. Accordingly, the Points No. 18(iii) and 18(iv) under Paragraph No. I 8 of the Points for Consideration, stand answered. a

41. At this juncture, leamed counsel for the petitioner prays that the petitioner is around 73 years old, and is suffering from a terminal medical illness condition, and therefore the insurance company may be directed to disburse all the consequential pension and retirement benefrts, gratuity, provident fund etc., in a time bound manner. Therefore, considering the submission made, the respondent-insurance company is directed to disburse all the consequential pension and retirement benefits, gratuity, provident fund etc., within 6 weeks from the date of receipt of a copy of this order.

42. The writ petition is accordingly allowed to the above extent, with the'above direction. No costs. Miscellaneous petitions pending, if any, shall stand closed. That Rule Nisi has been made absolute as above. Witness THE HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH, on this TUESDAY, THE FIFTEENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY SIX SD/. P.C.SULEKHA DEVI ASSISTANT REGIST R //TRUE COPY// SECTI FFICER

1. The Chairman and Managing Director, National lnsurance Company Limited, Registered Office: 3, lr,4iddleton Street Kolkatta 700071, West Bengal. I To

2. The General l\4anager & Appellate Authority National, lnsurance Company Limited, Registered Office 3, Middleton Street Kolkatta 700071

3. The Assistan': General Manager & Competent Authority, Regional Office National lnsurance Company Limited, Basheerbagh, Hyderabad 500001

4. One CC to SIvlT. K.UDAYA SRl, Advocate [OPUC]

5. One CC to SFll VEDULA SRINIVAS, Advocate [OPUC]

6. Two CD CoPit;s PSK. TKSt*

HIGH COURT DATED: 11:t09t2026

ORDER

WP.No.46784 of 2016 t HE SI4 1s sEP 206 oFs:. 1T [.ti CC TODAY ( al L) z * * ALLOWING THE WRIT PETITION WITHOUT COSTS

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