LIFE INSURANCE CORPORATION OF INDIA versus MUKESH POONAMCHAND SHAH

Citation: [2020] 3 S.C.R. 986 · Decided: 25-02-2020 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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986
SUPREME COURT REPORTS
[2020] 3 S.C.R.
LIFE INSURANCE CORPORATION OF INDIA
v.
MUKESH POONAMCHAND SHAH
(Civil Appeal No. 1804 of 2020)
FEBRUARY 25, 2020
[DR. DHANANJAYA Y CHANDRACHUD
AND HEMANT GUPTA, JJ.]
Life Insurance Corporation of India (Staff) Regulations, 1960:
Regulation 39(4) – Disciplinary proceedings against
respondent – Punishment of reduction of pay – Criminal Proceedings
– Conviction – During pendency of appeal, sentence suspended –
Appellant employer’s show cause notice under Regulation 39(4)
seeking removal from service of respondent in view of his conviction
by Court – Notice to show cause challenged – Single Judge of High
Court dismissed the application – On Letters Patent Appeal, Division
Bench of High Court restrained the employer from passing final
order pending disposed of criminal appeal – Appeal to Supreme
Court – Held: Only sentence was suspended and not the conviction
– Show cause notice was issued within jurisdiction – No double
jeopardy occurred as one order was by disciplinary Committee
imposing penalty for misconduct while Notice was for conviction in
criminal case.
Allowing the appeal, the Court
HELD: 1. The respondent has been convicted and
sentenced to two years of rigorous imprisonment by the Special
Judge, CBI for offences under Sections 420, 467, 468, and 471
read with Section 120B of the Penal Code, and Sections 13(1)(d)
and 13(2) of the Prevention of Corruption Act. By the order of
the Single Judge of High Court the conviction of the respondent
has not been stayed and it is only the sentence which has been
suspended. While the court hearing a criminal appeal does have
the power to suspend the conviction in appropriate cases, this is
an exceptional power which can be exercised only when the
attention of the court is drawn to the consequences which may
ensue if the conviction is not stayed. A criminal miscellaneous
[2020] 3 S.C.R. 986
986
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application was filed by the respondent for the grant of bail pending
disposal of the criminal appeal. Significantly, in the special civil
application which was instituted before the High Court, the
respondent himself understood the order of the Single Judge as
having only suspended his sentence and not as having stayed the
conviction. On a reading of the order of the Single Judge, it is
evident that only the sentence of imprisonment was suspended.
It is not possible to accede to the plea that the conviction of the
respondent remains stayed pending the disposal of the appeal.
[Para 11][993-C-F, G; 994-A]
2. The appellant exercised its disciplinary jurisdiction while
proceeding against the respondent and after a disciplinary enquiry
imposed a penalty of a reduction of his basic pay to the minimum
of the scale. The Life Insurance Corporation of India (Staff)
Regulations, 1960 determine the terms and conditions of service
of the employees of the Life Insurance Corporation of India.
Regulation 39(1) of the 1960 Regulations deals with the penalties
which can be imposed upon an employee who is found guilty of
misconduct. Regulation 39(2) mandates compliance with the
principles of natural justice in terms of providing a reasonable
opportunity to the employee to defend the charges. Regulation
39(4) operates with a non-obstante clause. In terms of Regulation
39(4)(i), “where a penalty is imposed on an employee on the
grounds of conduct which had led to a conviction on a criminal
charge”, the appellant is independently entitled to take steps
against the employee. It is in pursuance of the above provision
that a notice to show cause was issued to the respondent. The
penalty which was imposed on the disciplinary enquiry was for an
act of misconduct. The notice which has been issued under
Regulation 39(4) is for the conviction on a criminal charge. The
former does not foreclose the latter. [Paras 12 and 13][994-B;
995-A-G]
3. In the present case, following the conviction of the
respondent by the Special Judge CBI, the appellant was acting
within jurisdiction in issuing a notice to show cause under
Regulation 39(4) of the 1960 Regulations. The Single Judge was
correct in dismissing the special civil application filed by the
respondent challenging the notice to show cause issued by the
L.I.C. OF INDIA v. MUKESH POONAMCHAND SHAH
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SUPREME COURT REPORTS
[2020] 3 S.C.R.
appellant. The judgment of the Division Bench restraining the
appellant from taking a final decision on the show cause notice
pending the disp

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