Decided on June 11,1982

INSURANCE CO. LTD. Respondents


- (1.) THE petitioner, Arun Kumar Tandon. was on the clerical staff of the National Insurance Company Limited, respondent No. 1 herein, when on April 29, 1976, the Central Government floated a scheme known as General Insurance (Rationalisation of Pay Scales and other Conditions of Service of Development Staff) Scheme, 1976, providing for conversion of the clerical staff into Development staff. This scheme laid down the procedure for categorisation of Development Staff and their emoluments and other perquisites besides leave. Provident Fund and Gratuity, Para 11 of the scheme provided that every person employed with the Development, Staff shall maintain his cost ratio within the limits stipulated in Sub-clause (b) of Clause (17) of Para. 3. According to Clause (17) an Inspector operating in a city other than Bombay, Calcutta, Madras, or other A-Class or B-1 and B-2 Class cities was bound to maintain cost ratio up to the maximum limit of 12'/2%,
(2.) PURSUANT to this scheme the Assistant Manager of Insurance Company, respondent No. 2 herein, addressed a letter to the petitioner on 13-7-1978, that in case he accepted the conditions of service set out therein, he shall be appointed as a probationary Inspector with effect from 1-1-1978. Some of the conditions stated therein, which alone are relevant for the present discussion, read as below: 1. (a) You shall be on probation with effect from 1-1-1978 for a period of on year which can be extended by the Appointing Authority at his discretion for a period not exceeding six months. X X X X (b) You shall not be confirmed in the cadre of Development Staff unless you have passed the Licentiate examination before conversion or during the probationary period or the extended probationary period. III. Cost control during the period of probation: With the total emoluments payable to you in terms of Paragraph II you shall procure that much premium income during the probationary period or the extended probationary period which would enable you to ensure that the cost ratio computed as a percentage of the total emoluments paid during the probationary period or the extended probationary period to the "scheduled Premium Income" procured by you during the said period, shall not exceed the following limits. Place of posting Maximum limit for Cost-ratio: 1) Metropolitan cities (Bombay, calcutta, Madras and Newdelhi) 9 1/2% 2) 'a' Class cities (other thanbombay, Calcutta. Madrasand New Delhi) and B1 andb3 class cities 10 1/2% 3) Other centres 12 1/2% V. Revised and determination of targets of scheduled premium income. Your performance during the probationary period or the extended probationary period shall be reviewed half-yearly. The Authority may revert you to your previous cadre in the clerical grade in the event of unsatisfactory performance. VI. Lien during the period of probation: On the expiry of the probationary period or the extended probationary period, unless an express order in writing, confirming you as a Development Staff is issued you shall not be deemed to have been confirmed as an Inspector and you shall be reverted to your original position in the clerical cadre. During the period of probation or extended probationary period you shall have a lien over your previous post of the clerical cadre. You shall be at liberty to go back to the clerical cadre and company shall also have an option to revert you to the clerical cadre without assigning any reasons. X X X X X VII. Fitment of absorption of successful completion of probationary period: On your fulfilling the premium target as per Para.- IV above and on your passing the Licentiate Examination of the Federation of Insurances Institutes of India during the probationary period or the extended probationary period you shall be confirmed in the Development Staff Cadre and you shall be fitted into the scale of Rs. 250-15-295-20-375-25552-30-675-35-850 at the stage at which the present emoluments payable to you in terms of Para II above in equivalent to gross emoluments (as defined in the General Insurance Rationalisation of Pay Scales and other Conditions of Service of Development Staff Scheme 1976) in the above scale and if the present emoluments are not equivalent to the stage in the scale, at the stage next above in the said relevant scale.
(3.) THE petitioner, on 29-7-1978 accepted all the conditions unreservedly by writing back : "i accept all the terms and conditions stated in this letter". He continued working on the Development Staff as an Inspector when on 25-8-1980 he was placed under suspension by the Divisional Manager, respondent No. 3 herein, pending enquiry into a charge of criminal misappropriation against him. Ultimately, respondent No. 1 by his order dated 18-8-1981, reverted him to former cadre of Assistant in the Clerical staff by saying that his performance as Inspector had been unsatisfactory during his probationary period. Through the medium of this writ petition, the petitioner has challenged the aforesaid order of his reversion on the grounds : firstly, that it, has been passed at his back without giving him a prior hearing and is, therefore, violative of the principles of natural justice; secondly, that he having passed the Licentiate examination and also having conducted insurance business up to the mark a right had accrued in his favour to hold the post of Inspector substantively; thirdly, that the order is actuated by malice; and fourthly, that it is violative of Article 311 of the Constitution.;

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