Major Penalty Of Removal From Service Cannot Be Imposed Without Departmental Inquiry: Bombay High Court Quashes Order Under General Insurance Rules

"The power to dispense with the Depart mental Inquiry is an exception to the normal rule and can be exercised only upon the Competent Authority recording specific, objective and cogent reasons in writing demonstrating why it was not reasonably practicable to hold such Inquiry." Bombay High Court, in a ruling dated 9 October 2026, held that the invocation of special procedures to bypass a departmental inquiry under Rule 30 of the General Insurance (Conduct, Discipline and Appeal) Rules, 1975, is impermissible without the recording of specific, objective, and cogent reasons.

A bench of Justices R.I. Chagla and Firdosh P. Pooniwalla set aside an order of removal from service passed against a Development Officer, noting that the "mechanical invocation" of rule-based exceptions, absent a justification for why an inquiry was not reasonably practicable, constitutes a violation of the principles of natural justice and constitutional safeguards.

The Petitioner, a long-serving employee of the National Insurance Company, was removed from service in 2013 following a history of medical issues and prolonged absenteeism. While the company alleged that the Petitioner had abandoned his post, the Petitioner contended that his absence was involuntary, necessitated by severe health conditions, and that he had consistently kept the employer informed. The Respondent-Company proceeded with removal under Rule 30(ii) and (iv) of the 1975 Rules, bypassing the mandatory departmental inquiry procedure prescribed under Rule 25.

The court was primarily tasked with determining whether the employer’s reliance on Rule 30(ii) to dispense with a formal inquiry was legally sustainable. The bench also examined whether prolonged absence due to medical reasons, despite repeated communication, could legally satisfy the criteria for "abandonment of post" under Rule 30(iv), thereby justifying a waiver of disciplinary proceedings.

Nature of Inquiry Dispensation

The court emphasized that the power to dispense with a departmental inquiry is an exception to the established norm. Referencing the landmark ruling in Union of India v. Tulsiram Patel, the bench underscored that the disciplinary authority must record reasons in writing, which must be based on objective material. The court observed that such satisfaction is amenable to judicial review and cannot be left to the "ipse dixit" of the authority.

Mechanical Invocation of Rules Invalidates Penalty

The bench found that the impugned order of removal was "conspicuously silent" on the mandatory requirement of demonstrating why it was not reasonably practicable to hold an inquiry. It ruled that a mere mention of the rule is insufficient in law. The court stated that the authority failed to establish any contemporaneous material that would have rendered a formal hearing impractical, thus rendering the order void.

"The requirement of recording reasons is mandatory and is not an empty formality. In the present case, the impugned Order of Removal dated 8th April 2013 is conspicuously silent on this mandatory requirement."

Abandonment of Post vs. Involuntary Absence

Regarding the allegation of abandonment, the court clarified that this is a question of intention. It noted that the Petitioner’s consistent efforts to seek transfers on medical grounds, submission of medical certificates, and attempts to avail of the Voluntary Separation Scheme clearly negated any "conscious intention to permanently sever the employer-employee relationship."

Court Rejects Assumption of Abandonment

The bench observed that absence occasioned by genuine illness, when communicated to the employer, cannot be presumed to be voluntary abandonment. It further criticized the employer for withholding an inquiry report submitted by a retired ACP, who had personally verified the Petitioner's bedridden condition, noting that this evidence contradicted the company’s claim of wilful dereliction.

"Absence occasioned by genuine illness, coupled with continuous intimation/communication with the employer and repeated assertion of service rights, can never constitute voluntary abandonment."

Final Directions of the Court

Finding the orders of removal and the subsequent appellate rejection legally unsustainable, the High Court quashed both. The court directed the Respondent to release all retirement and Provident Fund dues, including pension, with simple interest at 9% per annum from the date of superannuation. The Petitioner’s claim for back wages was denied for the period he was on leave and not working, while the Rule was made absolute against the Respondent.

Date of Decision: 09 October 2026