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Service & Administrative LawSupreme Court of India

Diwan Singh v. Life Insurance Corporation of India & Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 3655 of 2010)Decided 5 Jan 2015
Civil Appeal No. 3655 of 2010
Justice Vikramajit Sen · Justice Prafulla C. Pant

Background

The appellant, a cashier with the Life Insurance Corporation of India (LIC), was found to have collected a policyholder's premium of Rs. 533 in August 1990 but not credited it to the policyholder's account until November 1990, and to have made a forged back-dated entry in the ledger to cover the delay. After a departmental enquiry found him guilty of temporary embezzlement and forgery, he was removed from service; a writ petition succeeded before a Single Judge, but a Division Bench of the Allahabad High Court partly allowed LIC's appeal and substituted the removal with compulsory retirement (which, under LIC's pension rules, still forfeits past service and pension benefits).

Decision Breakdown

The Supreme Court held the appellant's explanation for the delayed deposit unconvincing, noting that a cashier would not issue a receipt without counting the cash, and that a genuinely bona fide lapse would not have required a forged ledger entry, so the enquiry officer's finding of guilt was not against the evidence. On the question of punishment, the Court relied on a consistent line of its own precedent holding that in misappropriation/corruption cases it is the loss of institutional confidence, not the amount involved, that matters, and that courts should not show misplaced sympathy by reducing such punishments. Since the appellant had also been found guilty of an earlier, separate act of misconduct, the Court declined to interfere with the High Court's order and dismissed the appeal, with no order as to costs.

Lesson Learnt

In disciplinary cases involving an employee's dishonesty (even an admittedly small amount of money), courts are reluctant to reduce the punishment on sympathy grounds: what matters legally is the breach of trust/loss of confidence, not the size of the sum misappropriated.

Diwan Singh v. Life Insurance Corporation of India & Ors. – Legal Case Shots | LegalAware