Central Administrative Tribunal - Ernakulam
C. Madhusoodhanan vs The Superintendent Of Post Offices on 18 February, 2011
CENTRAL ADMINISTRATIVE TRIBUNAL
ERNAKULAM BENCH
O.A. NO. 891 OF 2009
Friday, this the 18th day of February, 2011
CORAM:
HON'BLE Ms. K. NOORJEHAN, ADMINISTRATIVE MEMBER
HON'BLE Dr. K.B. SURESH, JUDICIAL MEMBER
C. Madhusoodhanan
Sub Postmaster
Peroorkada MDG
Thiruvananthapuram - 695 005 - Applicant
(By Advocate Mr. Vishnu S. Chempazhanthiyil)
Versus
1. The Superintendent of Post Offices
Thiruvananthapuram South Division
Thiruvananthapuram.
2. Union of India, Represented by the
Chief Postmaster General
Kerala Circle, Thiruvananthapuram. - Respondents
(By Advocate Mr. Sunil Jacob Jose, SCGSC)
The application having been heard on 10.02.2011, the Tribunal
on 18-02-2011 delivered the following:
O R D E R
HON'BLE Ms. K. NOORJEHAN, ADMINISTRATIVE MEMBER The Challenge in this O.A is against recovery of Rs. 722.60 /- and Rs. 87,000/- as per the impugned orders in Annexure A-12 and A-13.
2. The fact matrix shows that a burglary took place in Karamana Post Office on night of 5/6-07-2008 when the applicant was working as the Sub Postmaster resulting in a loss of Rs. 1,445/-. The Applicant was held responsible for the loss and hence was directed to credit an amount of Rs. 722.60/- (A-1). The applicant submitted his explanation (A-2) stating that he has not violated the Rule 23 of Volume VI Part I of Postal Manual and he is not liable to pay the amount of Rs 722.60/-. Therefore, one more notice was issued to him at Annexure A-3. The applicant avers that the cash and valuables were kept in joint custody under the double locking arrangement in the embedded iron safe supplied by the Department. The burglars had broken open the lock, later the contents and hence he could not be held responsible for the burglary and consequent loss of cash and valuables. He added that there was a burglary earlier on 25.12.2005 and the Assistant Superintendent of Post Offices, Thiruvananthapuram East Sub- Division, who inspected the office had pointed out the need to strengthen the security of the building or shift the office. However, the respondents have not taken any action.
3. The applicant while working as SPM, Cotton Hill Post Office, had issued ten Kissan Vikas Pathras (KVPs in short) worth Rs. 1 lakh to M/s. B Ramdas Associates. The holder of the KVPs, had to be paid Rs. 1.87/- lakhs on its discharge as per the judgement of the Hon'ble High Court of Kerala. The applicant was directed to credit the interest amount of Rs. 87,000/- vide Annexure A-9, which was issued to him without giving him an opportunity to hear him or putting him to notice. He added that M/s. B. Ramdas Associates was neither a company nor an institute registered under any Act, and the KVPs were issued as per the application for the same submitted by the SAS agent, Smt M. Syamalakumari.
4. Per contra, the respondents submitted that on the night of the burglary, the applicant kept all the cash and valuables in the D-7 cash chest. The office is provided with one "REG" Iron safe, which is embedded at the rear room of Post Office and a D-7 Godrej cash chest with seven lever locking arrangement, which is kept on the top of the embedded safe. All valuable items such as cash certificates, IPOs, cash etc. are to be kept inside the embedded iron safe and not in the D-7 cash chest. The respondents stated that had he kept the cash and valuables in the iron safe, the burglar would not have succeeded in taking away the cash and NSCs. Besides cash, the Department lost 33 NSC @ Rs. 5000/- and another 98 NSC @ Rs. 10,000/- and one computer and its peripherals. For failure to follow the rules on the subject, the applicant and Smt T.P. Umadevi, treasurer and the joint custodian were issued notice and directed to credit an amount of Rs. 1,444.20/- .
5. Regarding the irregular issue of 10 KVPs on 22.01.1999 for a face value of Rs. 1 lakh, the respondents submitted that in accordance with Ministry of Finance (DEA) Notification No. GSR 119(E) dated 08.03.2005, KVPs can be issued only to individuals and registered trusts w.e.f. 01.04.1995. M/s. Ramdas Associates was a company and the applicant was expected to verify the Rules and refuse to issue the KVPs to M/s. Ramdas Associates. The firm had immediately pledged these KVPs to the Secretary to the Government of Kerala, through Superintending Engineer, Roads and Bridges, Thiruvananthapuram on 23.01.1999. Once the KVPs were released from the pledge, they tendered the KVPs for payment of the maturity value. When the amount of interest on the KVPs was refused by the respondents, they filed WP ) No. 4884/2009 before the Hon'ble High Court of Kerala and a judgement was given in is favour for payment of Rs. 1,87,000/-. As the applicant failed to check up that he was issuing the KVPs to a company, the respondents directed him to pay Rs. 87,000/-, which the respondents were obliged to pay to M/s. Ramdas Associates as per the judgement of the Hon'ble High Court. They added that the respondents are fully empowered to initiate recovery from the applicant for the loss sustained to the Department due to his negligence. Rule 204 & 204 A of P&T Manual Volume III clearly lays down that personal liability must be strictly enforced against all officers who are dishonest, careless or negligent in the duties entrusted to them.
6. The applicant filed rejoinder denying that he has issued KVPs to a company. He averred that M/s. Ramdas Associates is not a company and he had done it on the advice of SAS agent and the 2nd respondents decided to recover Rs. 87,000/- from him without giving an opportunity to the applicant to explain his stand. He reiterated that he kept the cash and variables inside the cash chest and therefore, he had followed Rule 23 of Volume 6 Part-I P & T Manual.
7. The respondents filed an additional reply statement. They reiterated that the applicant, should have kept the cash and valuables inside the embedded iron safe and not in the cash chest. As the Head of the Post Office, he should have referred to the rules before effecting an irregular issuance of KVPs to M/s. Ramdas Associates, which is indeed a `company'. The commission paid to the SAS agent was recovered from her.
8. The applicant filed an additional rejoinder to point out that the Hon'ble High Court has not found him guilty and has noted that "Government has been a beneficiary of the amount deposited by the petitioner. Obviously, the Government use the money and hence, the petitioner was entitled for the interest".
9. Heard the counsels for the parties and perused the documents. The applicant has produced Rule 23 of Volume VI Part I P&T Manual, which is extracted below:-
".... All the money, Government Currency notes, postage stamps, reply-coupons, receipt for cash or stamps, Indian Postal Orders, and generally all other easily removable Government property value in the custody of the Postmaster and Treasurer either jointly or severally used at, or received, paid, deposited, or brought into post office by any person for whatever purpose, must be kept securely locked up in the office safe or safes ........"
10. The reply statement of the applicant shows that his office was provided with one "REG" Iron safe and one D-7 Godrej cash chest. He has not followed Rule 23 of Volume VI Part I P&T Manual and got the cash and other valuables secured in the iron safe. Instead, the cash and valuables were kept in the D-7 Cash chest and the burglars were able to break open the locks, which were used on the clasps. The iron safe comes with a built in lock, which is difficult to break in. Moreover, there was a burglary in the office in the year 2005. The respondents were not able to either shift the office or strengthen the security of the rented building, wherein the Post Office was housed. Hence, the applicant should have been fore warned and more cautious in ensuring the safety of cash and valuables and the National Saving Certificates. Therefore, the respondents cannot be faulted for ordering the recovery of Rs. 1,444.20/- from the Treasurer and the applicant in accordance with Rule 204 & 204 A of P&T Manual Volume III. The loss of computer, printer, etc. which obviously cannot be kept in to safe is not attributed to him, nor the loss of NSC, which could be encashed fraudulently, anywhere in India, unless the staff are vigilant.
11. It is gathered that the main objective of the Post Office Savings Bank is to mobilize small savings and to promote thrift among the rural masses and urban customers. The amount so raised is utilized towards the infrastructure development of the State. To canvass the different savings schemes and to collect money from the public for this purpose, the District Collector nominates a large number of SAS agents, who are paid commission commensurate with the amount collected. Therefore, when an application along with the amount is tendered at the Post Office, it was the duty of the applicant as the Head of the Office to cross check the rules on the subject before issuing the KVPs. The issuance of KVPs to companies was stopped w.e.f. April 1995. The applicant has issued the KVPs on 22.01.1999 to M/s. B. Ramdas Associates four years after the Rule has been modified. It was his duty to keep himself up-dated about the latest Rules and he cannot lean on the commissioned agents to help him in that matter. Therefore, the applicant was at fault for effecting the irregular issuance of the KVPs to a company. The respondents have produced Annexure R-1, which deals with the procedure to be adopted when any irregular issue of KVP/NSE is made. To regularize irregular issue, the matter has to be taken up with the Ministry of Finance. R-1 (4) is the prescribed proforma in which the irregular issue of NSE/KVP has to be notified to the Department of Post and from there to the Ministry of Finance. Against Column 12 & 13 of the Proforma, the name and designation of the officials responsible for the irregularity and the nature of action taken against the official(s) are to be shown respectively. They also furnished a copy of the D.G. Post letter No. 61-6/88-SB dated 20/22.11.1989 and further amended vide No. 6-39/2000-SB dated 03.07.2001. Para 2 of this letter is extracted below:-
"(2).........As per these rules, any certificate purchased or acquired in contravention of the rules shall be encashed by the holder at the earliest possible time and no interest shall be paid to him. The certificates issued irregularly are to be discharged without any interest and in case any interest has been paid in the meanwhile the same shall also be recovered.
(4) It is necessary that action taken against the officials at fault is recorded in the proposal sent to this Department which should be signed personally by the Director Postal Services in the Circle/Regional Office. The action taken should be deterrent enough to save the Department from such situation in future and the action taken against the defaulting officials should be intimated to this Department with a copy to the Head of the Circle."
12. The relevant portion of Rule 204 & 204A of Postal Manual Vol. III (R-3) empowering the respondents to order recovery of loss is extracted below:-
"Rule 204:- Where owing to the negligence of a departmental employee or its agent including an extra-departmental agent, or through the omission on his part to observe any rule as provided in the different volumes of the Posts and Telegraphs Manual, or other books like the Post Office Guide, the Department, either by reason of the enquiry being impeded or frustrated, directly or indirectly or for any other reason is put to a loss of Government money or property or has to make good the loss of any money or property, or where the Department loses money by embezzlement or fraud of any of its employees, etc. any member of the staff or any agent who by his negligence, default or disregard of the rules, has caused the loss or has contributed to its occurrence, either by reason of the enquiry being impeded or frustrated directly or indirectly or for any other reason, may be required to make good the loss either in whole or in part as the competent authority may decide provided that there is a clear finding that (i) the departmental employee/E.D Agent is held responsible for a particular act or acts of negligence or breach of orders or rules..........."
13. Again, the respondents were acting only in accordance with the Rules of the Department for effecting recovery of the loss sustained by the Department directly due to a negligent act by the applicant.
14. As soon as the irregularity in the issue of KVPs was noticed, the respondents have attempted to bring it to notice of Ministry of Finance and get it regularized. In the meanwhile, the holder of the KVPs, M/s. Ramdas Associates approached the Hon'ble High Court and succeeded in getting a verdict in their favour. So, an amount of Rs. 87,000/- as interest was paid after deducting Rs. 13,000/- as Income Tax. The fact remains that Ministry of Finance was in possession of the face value of Rs. 1 lakh during the currency of KVP, which is six years. However, Ministry of Finance has taken a view that the Post Office Savings Bank is not meant for big deposits by companies and it is only meant to mobilize the savings of individuals as generally the interest paid is in the past by Post Office Savings Bank was much higher than prevailing market rate. Since, the issue has been already decided by the Hon'ble High Court, the respondents had no other option but to act in consonance with Rule 204 of P & T Manual Volume III.
15. In view of the finding by the Hon'ble High Court, even though M/s. Ramdas Associates was a company, the entitlement of the interest has been established. It may not be fair to recover Rs. 87,000/- from the applicant. Rs. 13,000/- has gone to the Income Tax Department. No doubt, as the Ministry of Finance is insisting on deterrent action to save the department from such recurrence, the respondents cannot be faulted for initiating action for recovery. The loss in interest comes to Rs. 74,000/-, since Rs. 13,000/- is deducted towards Income Tax. The applicant has since retired and hence the issue needs consideration. The respondents are empowered to order a token recovery of Rs, 74,000/-, which was paid to the holder of the certificates in excess on the face value of Rs. 1 lakh.
16. We are of the view that the ends of justice will be met, if the O.A is disposed of with the following directions:-
(i) The applicant is directed to pay Rs. 722.60 /-
as ordered by the respondents.
(ii) The respondents are directed to consider the
A-10 representation of the applicant and order
small percentage of Rs. 74,000/- as a token
recovery against Rs. 87,000/- now ordered. This
may be done within a time line of six weeks.
(Dated, the 18th day of February, 2011)
DR. K.B. SURESH K. NOORJEHAN
JUDICIAL MEMBER ADMINISTRATIVE MEMBER
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