Supreme Court Upholds LIC’s Termination of Employee for Abandonment of Service: LIC vs. Om Parkash (2024)

Introduction

Date of the Judgment: 13 November 2024

Citation: 2024 INSC 870

Judges: Hon’ble Mr. Justice Hrishikesh Roy and Hon’ble Mr. Justice S.V.N. Bhatti.

Can an employee be terminated for abandoning their job if they fail to respond to notices and their whereabouts are unknown? The Supreme Court recently addressed this question in a case involving the Life Insurance Corporation of India (LIC) and one of its employees. The core issue was whether LIC was justified in terminating an employee who had been absent from duty for over 90 days without any communication, and whether a formal inquiry was necessary in such a case. The judgment was delivered by a two-judge bench comprising Hon’ble Mr. Justice Hrishikesh Roy and Hon’ble Mr. Justice S.V.N. Bhatti, with the opinion authored by Hon’ble Mr. Justice Hrishikesh Roy.

Case Background

The respondent, Om Parkash, was working as an Assistant Administrative Officer at the Life Insurance Corporation of India (LIC). On 25th September 1995, he absented himself from duty without informing his employer. LIC sent letters to him, asking him to resume his duties, but received no response. Subsequently, LIC issued a chargesheet-cum-show cause notice on 14th February 1996, proposing his removal from service. This notice also went unanswered. The LIC then terminated his services on 25th June 1996, considering it a case of abandonment of service under Regulation 39(4)(iii) of the Life Insurance Corporation of India (Staff) Regulation, 1960. The employee had been absent for more than 90 days without any intimation, which, according to the regulations, was deemed as abandonment of service.

Timeline:

Course of Proceedings

The disciplinary authority of LIC ordered the removal of Om Parkash from service on 25th June 1996, citing abandonment of service. Om Parkash’s appeal against this order was rejected by the Appellate Authority on 19th August 1997. Subsequently, Om Parkash filed a writ petition before the High Court of Himachal Pradesh. The learned Single Judge of the High Court set aside the termination order on 21st May 2003, stating that the employee was not given a proper opportunity to be heard. The High Court Division Bench upheld the Single Judge’s order on 26th June 2008. The High Court had stated that LIC was at liberty to conduct an inquiry on the charges as per the Life Insurance Corporation of India (Staff) Regulation, 1960. LIC then appealed to the Supreme Court against the High Court’s decision.

Legal Framework

The case primarily revolves around Regulation 39(4)(iii) of the Life Insurance Corporation of India (Staff) Regulation, 1960. This regulation deals with the abandonment of service by an employee. The relevant part of the regulation states:

“39 (4) (iii) Where an employee has abandoned his post, the disciplinary authority may consider the circumstances of the case and pass such orders thereon as it deems fit.”

Explanation 1 of the same regulation defines abandonment of service as:

“Explanation 1. For the purpose of this regulation, an employee shall be deemed to have abandoned his post if he absents himself from duty without leave or overstays his leave for a continuous period of ninety days without any intimation therefore in writing.”

Explanation 2 of the same regulation deals with service of notice:

“2. All communications under this regulation and copies of orders passed there under may be delivered personally to the employee if he is attending office; otherwise they shall be sent by registered post to the address noted in the service record. Where such communications or copies of orders cannot be served on him personally or by registered post, copies thereof shall be affixed on the notice board of the office in which the employee is employed, and on such affixing such communications and orders shall be deemed to have been properly served on him.”

Arguments

Arguments by the Appellant (LIC):

• The LIC argued that they had taken all necessary steps to serve notices to Om Parkash, who had been absent since 25th September 1995. They contended that the notices were sent to his permanent address, and the postal authorities had confirmed that he had left his job and residence.

• The LIC submitted that Om Parkash had secured employment with the Food Corporation of India (FCI) on 14th April 1997, which was a clear indication of abandonment of service. This fact was concealed by Om Parkash in his writ petition before the High Court.

• The LIC contended that since Om Parkash was absent for more than 90 days without any intimation and did not respond to the notices, conducting an inquiry was impossible. Therefore, they were justified in treating it as a case of abandonment of service and terminating his employment under Regulation 39(4)(iii) of the LIC Staff Regulation.

Arguments by the Respondent (Om Parkash):

• The respondent, represented by the Amicus Curiae, argued that the service of notice by the LIC should be treated with caution as the notices were sent to different addresses.

• The respondent argued that the termination order was passed without affording a reasonable opportunity or conducting an inquiry into the charge of absence from duty.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was whether the High Court was correct in setting aside the termination order of the respondent, Om Parkash, by the LIC. The core issue was whether the LIC was justified in terminating the employee’s services for abandonment of service, given the circumstances of his absence and the lack of response to notices.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Court primarily relied on the provisions of the Life Insurance Corporation of India (Staff) Regulation, 1960, specifically Regulation 39(4)(iii) and its explanations.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Court relied on Regulation 39(4)(iii) of the Life Insurance Corporation of India (Staff) Regulation, 1960 to conclude that the LIC was justified in terminating the employee’s services for abandonment of service.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the respondent’s conduct, which included his unauthorized absence, failure to respond to notices, and concealment of his subsequent employment with the FCI. The Court also considered the fact that the LIC had followed the procedure as per the LIC Staff Regulations. The Court emphasized that the respondent’s behavior could not be condoned and that the LIC was justified in treating it as a case of abandonment of service.

Sentiment Analysis of Reasons Given by the Supreme Court:

Fact:Law Ratio:

Logical Reasoning:

The Supreme Court considered the fact that the employee was absent without intimation, failed to respond to notices, and concealed his subsequent employment with FCI. The Court also considered the legal framework of Regulation 39(4)(iii) of the LIC Staff Regulations. The Court rejected the argument that a formal inquiry was necessary, stating that the employee’s conduct justified the employer’s actions.

The Court observed that the High Court had overlooked the fact that the employee had abandoned his services without informing his employer and subsequently joined FCI. The Court stated that such conduct could not be condoned by the employer.

The Court also noted that the employee was guilty of suppression of the fact of his employment with the FCI.

The Supreme Court stated:

“Such conduct of the respondent could not have been condoned by the employer and therefore, in our assessment, treating the respondent to have abandoned his service and taking appropriate action against him, in terms of the LIC Staff Regulation, cannot be faulted.”

The Court also stated:

“It is also necessary for us to say that as the delinquent was guilty of suppression of the fact of his employment with the FCI, he was disentitled to equitable relief from the High Court in exercise of powers under Article 226 of the Constitution.”

The Court further stated:

“With the above conclusion, the High Court in our assessment, erred in granting relief to the respondent by allowing the Writ Petition. The impugned order is accordingly set aside and quashed.”

Key Takeaways

• Employees must inform their employers of their absence and maintain communication.
• Absence from duty for a continuous period of 90 days without intimation can be deemed as abandonment of service.
• Concealing subsequent employment while seeking relief from the court can result in denial of relief.
• Employers can terminate an employee for abandonment of service without a formal inquiry if the employee fails to respond to notices and their whereabouts are unknown.

Directions

No specific directions were given by the Supreme Court in this case.

Development of Law

The ratio decidendi of this case is that an employer is justified in terminating an employee’s services for abandonment of service when the employee is absent for more than 90 days without intimation, fails to respond to notices, and conceals their subsequent employment. This judgment clarifies the interpretation and application of Regulation 39(4)(iii) of the Life Insurance Corporation of India (Staff) Regulation, 1960. There is no change in the previous position of law, but a clarification on the interpretation of the law.

Conclusion

In conclusion, the Supreme Court allowed the appeal of the LIC, setting aside the High Court’s order. The Court held that the LIC was justified in terminating the services of Om Parkash for abandonment of service. The Court emphasized the importance of employee communication and the consequences of concealing information from the court.