NARINDER MOHAN ARYA versus UNITED INDIA INSURANCE CO. LTD. & ORS.

Citation: [2006] 3 S.C.R. 932 · Decided: 05-04-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
NARINDER MOHAN ARYA 
v. 
UNITED INDIA INSURANCE CO. LTD. & ORS. 
APRIL 5, 2006 
B 
[S.B. SINHA AND DAL VEER BHANDARI, JJ.] 
Constitution of India, 1950: 
Article 226-Disciplinary proceedings and consequential orders-
C Judicial review of-Held, power of judicial review would not be refused to 
be exercised by High Court although despite it would be lawful to do so--
Writ court would bear in mind distinction between some evidence and no 
evidence-Evidence adduced by Management must have nexus with charges-
Inquiry Officer cannot base his findings on mere hypothesis-Discussion on 
D material available on record for purpose of applying legal principles was 
imperative, which High Court failed to do. 
Code of Civil Procedure, 1908: 
Section 9-Suit challenging findings arrived at disciplinary proceedings 
E and consequential orders-Held, is maintainable-(Juidelines laid down. 
Service Law: 
General Insurance (Conduct, Discipline and Appeal) Rules, 1975-
Rule 37(2)-Disciplinary proceedings-Order of dismissal-Appellate Order-
F Held, must show that there has been proper application of mind by the 
appellate authority-Factors to be considered by appellate uuthority-
Discussed. 
Disciplinary Proceedings-Report of Inquiry Officer based on no 
evidence-Findings of civil court on the same issue-Relevancy of-Inspector 
G in Insurance Company chargesheeted for antedating an insurance cover, 
goods dispatched whereunder caught fire-Inquiry Officer holding delinquent 
guilty-Dismissal order passed-On same issue civil court, in a suit filed by 
firm held the contract to be valid and insurance cover not to be antedated-
Held, the findings were relevant and appellate authority could not have 
H 
932 
·-
-
-
NARINDER MOHAN ARYA v. UNITED INDIA INSURANCE CO.LTD. 
933 
without expressing his mind simply ignore the same-Order of appellate A 
authority demonstrates total non-application of mind-High Court failed to 
exercise its jurisdiction_;_Order of dismissal set aside-Employee to be 
reinstated with 50% back wages-Doctrine of merger-Applicability of 
Appellant was working as an Inspector in the respondent-United India 
Insurance Company. Certain bales of cotton dispatched by a firm and covered B 
under the insurance cover issued by the appellant caught fire. A disciplinary 
action was initiated against the appellant on the allegation of antedating the 
insurance cover. The Inquiry Officer found the appellant guilty. Consequently 
he was removed from the service. His appeal was dismissed by the appellate 
authority. 
Meanwhile, the firm also filed a suit against the respondent company 
arraying the appellant also as a defendant therein. The trial court decreed 
the suit holding that the insurance cover was not antedated. The appeal of the 
insurance company was dismissed by the High Court and the decision attained 
c 
finality. 
D 
After the outcome of the suit, the appellant filed a memorial bringing 
the findings of the courts to the notice of the Chairman-cum-Managing 
Director of the Insurance Company. The memorial was summarily dismissed. 
Thereafter the appellant approached the High Court. The litigation before the 
High Court ultimately culminated in maintaining the order of dismissal. E 
Aggrieved, the delinquent-employee filed the present appeal. 
Jt was argued for the appellant, inter alia, that since the subject matter 
of dispute in the civil suit as also of the disciplinary proceedings was the same 
and the same evidence was adduced, the judgment and decree passed in the 
civil court was binding upon the employer; and while disposing of the p 
memorial, the Chairman-cum-Managing Director was bound to take into 
consideration the relevant fact, namely, the judgment and decree passed by 
the Civil Court; that the findings recorded by the Inquiry Officer were based 
on no evidence; that the order of appellate authority being a non-speaking 
one, was liable to be set aside. 
Allowing the appeal, the Court 
G 
HELD :1.1. Despite limited jurisdiction ofa civil court, it is entitled to 
interfere in a case where the report of the Enquiry Officer is based on no 
evidence. In a suit filed by a delinquent employee in a civil court as also a writ 
court, in the event the findings arrived at in the departmental proceedings H 
934 
SUPREME COURT REPORTS 
(2006] 3 S.C.R. 
A are questioned, it should keep in mind the following: (l) the enquiry officer 
is not permitted to collect any material from outside sources during the 
conduct of t

Excerpt shown. Read the full judgment & AI analysis in Lexace.