Central Administrative Tribunal - Bangalore
Shweta S Naik vs D/O Post on 25 July, 2023
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OA.No.170/00518/2020/CAT/BANGALORE
CENTRAL ADMINISTRATIVE TRIBUNAL
BANGALORE BENCH, BENGALURU
ORIGINAL APPLICATION NO.170/00518/2020
DATED THIS THE 25TH DAY OF JULY, 2023
CORAM:
HON'BLE MRS. JUSTICE S. SUJATHA, MEMBER (J)
HON'BLE MR. RAKESH KUMAR GUPTA, MEMBER (A)
Smt. Shweta S. Naik,
Age: 33 years,
W/o Venkatesh Naik,
Working as Sub Post Master,
Chindiye SO 581 324
Karwar District,
Residing at:
Kanasegadde,
Bunder Road, Ankola 581 314 .... Applicant
(By Shri P. Kamalesan, Advocate)
Vs.
1. Union of India,
Represented by Secretary,
Department of Post,
Dak Bhavan, New Delhi 110 001
2. Chief Post Master General,
Karnataka Circle,
Bangalore 560 001
3. Post Master General,
N.K. Region, Dharwad - 580 001
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OA.No.170/00518/2020/CAT/BANGALORE
4. Superintendent of Post Offices,
Karwar Postal Division,
Karwar-581 301 ...Respondents
(By Shri S. Sugumaran, Senior Panel Counsel)
O R D E R (ORAL)
PER: JUSTICE S. SUJATHA, MEMBER (J)
The applicant has challenged the Memo No. KWR/F/IV/19-20/S.N dated 04.05.2020 (Annexure-A6) issued by the Respondent No. 4 and the Order No. NKR/VIG/Appeal/027/2020 dated 21.08.2020 (Annexure-A8)
issued by the Respondent No. 3 inter alia seeking a direction to the respondents to refund the recovered amount towards contributory negligence of the applicant with interest.
2. The facts in brief are that the applicant was working as Ledger Clerk II at Karwar HPO from 20.08.2013 to 23.03.2016. A fraud was detected at Awara Road BO which was having a/w Karwar Baithkol SO and Head Office - Karwar Head Post Office, the investigation revealed that the said fraud was committed by Branch Post Master, Shri Laxman Govinda Naik amounting to Rs. 27,55,398/- from 2006 to 2017. The applicant submits that there were periodical inspection by the higher authorities every year but 3 OA.No.170/00518/2020/CAT/BANGALORE the fraud was detected during 2017, after a gap of 11 years. In this regard, the applicant was directed by the Respondent No. 4 to credit Rs. 1,20,486/- towards the share of amount for contributory negligence. The applicant submitted a representation stating that there was no lapse/negligence on her part in discharging her duties.
3. The Respondent No. 4 contemplated disciplinary proceedings under the provision of Rule 16 of Central Civil Services (Classification, Control and Appeal) Rules, 1965. The applicant submitted her reply to the Memo dated 08.08.2019 on 01.09.2019. The Respondent No. 4 issued proceedings vide Memo No. KWR/F/IV/19-20/S.N. dated 04.05.2020, by ordering recovery of Rs. 1,20,486/- from the pay and allowances of the applicant in 20 equal instalments of Rs. 6,000/- and one instalment of Rs. 486/- commencing from the month of May, 2020. Being aggrieved, the applicant preferred an appeal before the Appellate Authority, the same was rejected. Hence, this OA.
4. Learned counsel Shri P. Kamalesan representing the applicant submitted that the primary offender committed a fraud of Rs. 27,55,398/- during the year 2006 to 2017 at Awara Road BO. 4
OA.No.170/00518/2020/CAT/BANGALORE The applicant was working as Ledger Clerk II from 20.08.2013 to 23.03.2016 in the Karwar HO. It was alleged that non observance of the provisions paved the way for further misappropriation and the applicant's share towards her contributory negligence was determined at Rs.1,20,486/-. Learned counsel submitted that there was periodical inspection by multiple higher officers at BO from 2006 to 2017 who were also responsible for their negligence in not detecting the fraud at BO during their inspection.
5. Learned counsel further submitted that a representation was submitted by the applicant to the allegation made against her that she failed to ensure preparation of withdrawal memo exceeding Rs. 5000/- and above and failed to dispatch to Sub Divisional Head for further action, as prescribed in Rule 85 of POSB Manual-I. It was explained that vide SB order No. 2/2013 dated 26.02.2013, the higher withdrawal verification limit has been enhanced to Rs. 10,000/- or more with effect from 01.03.2013. Further, the applicant has carried out all codified duties of LC during the period of her working at Karwar HO, but also important back log work of one year kept pending by her predecessors were attended by her. The applicant issued SB heavy withdrawals verification memos of 5 OA.No.170/00518/2020/CAT/BANGALORE single handed SOs under Karwar HO from August 2012 and the same was sent to Sub Divisional Heads for verification but the Sub Divisional Heads have not returned high value withdrawal verification memos. The Disciplinary Authority, without appreciating the reply/representation submitted by the applicant, has arbitrarily fixed the amount of Rs.1,20,486/- for recovery from the applicant. Similarly, the Appellate Authority, without application of mind, has confirmed the said order. Learned counsel submitted that these orders impugned not being in conformity with law, deserves to be set aside. Reliance is placed on Rule 106 and 107 of P&T Manual Volume-III.
6. Per contra, learned counsel Shri S. Sugumaran representing the respondents justifying the impugned orders submitted that the fraud committed by Shri Laxman G. Naik, BPM, (now absconding), Awara Road BO a/w Karwar Baithkol SO would have been detected at initial stage of misappropriation which could have arrested further misappropriation in other accounts had the applicant ensured verification of heavy withdrawal memos as prescribed in Rules. Further, the applicant also failed to maintain the Register of Heavy Withdrawal Verification Memo. 6
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7. As a result of applicant's failure, corroborated with other officials negligence, the BPM, managed to commit fraud to the tune of Rs. 27,55,398/-. Due to the said act, it was imputed that the applicant has failed to follow the provisions of Rule 85 of POSB Manual Volume-I and thereby exhibited lack of devotion to duty contravening the provisions of Rule 3(1)(ii) of CCS (Conduct) Rules, 1964. Accordingly, proceedings were initiated under Rule 16 of CCS (CCA) Rules, 1965 and after considering all the facts and circumstances available on record, a final order was issued to recover a sum of Rs. 1,20,486/- from the pay and allowances of the applicant in 20 equal instalments of Rs. 6,000/- and one instalment of Rs. 486/- commencing from the month of May 2020. The Appellate Authority having considered the grounds of appeal vis-à- vis the material on record, rejected the appeal confirming the order of the Disciplinary Authority. The orders being passed considering the lapses on the part of the applicant and the punishment imposed being in commensurate with the gravity of the contributory negligence of the applicant, the contributory share of Rs. 1,20,486/- fixed on the applicant is rational and justifiable. 7
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8. We have carefully considered the submissions of the learned counsel for the parties and perused the material on record.
9. The points that arise for our consideration are:
1) Whether the penalty order ordering recovery of Rs.1,20,486/- from the applicant towards the alleged contributory negligence on her part for the misappropriation/fraud committed by the principal offender Shri Laxman G. Naik, BPM, Awara Road BO is just and proper?
2) Whether the impugned orders at Annexures-A6 and A8, passed by the Respondents No. 4 and 3 respectively, are justifiable?
10. Re. Point No. 1: The undisputed facts are that the applicant had worked as Ledger Clerk II at Karwar HO during the period from 20.08.2013 to 23.03.2016. Shri Laxman G. Naik, Branch Post Master (BPM) Awara Road BO a/w Karwar Baithkol 'C' Class SO committed fraud to the tune of Rs. 27,55,398/- during the period from 27.02.2006 to 20.06.2017. The applicant has been 8 OA.No.170/00518/2020/CAT/BANGALORE identified for her alleged contributory negligence and disciplinary action was initiated under Rule 16 of CCS (CCA) Rules, 1965 vide Memo dated 08.08.2019. Penalty order has been passed vide Memo dated 04.05.2020 to recover a sum of Rs 1,20,486/- from the pay and allowances of the applicant in 20 equal instalments of Rs. 6,000/- and one instalment of Rs. 486/- commencing from the month of May, 2020. Appeal filed by the applicant against that order has been rejected.
11. The main offender and the applicant were working at different post offices (BO and HO). The lapses noticed against the applicant are that the applicant failed to ensure preparation of withdrawal memo exceeding Rs. 5000/- and above and failed to dispatch to Sub Divisional Head for further action, as prescribed in Rule 85 of POSB Manual-I. For the aforesaid lapses, the contributory negligence on the part of the applicant is said to have been established in the investigation. The explanation of the applicant that the guidelines was not received after CBS migration to generate High Value Withdrawals memo was rejected by the Disciplinary Authority. It is for the reason that the delinquent BPM
- Shri Laxman G. Naik - had misappropriated the amount of Rs. 9
OA.No.170/00518/2020/CAT/BANGALORE 19,06,354/- due to non-observance of the provisions by the applicant, the contributory negligence on the part of the applicant has been fixed at Rs. 1,20,486/- since the delinquent BPM (main offender) has committed misappropriation to the tune of Rs. 27,55,398/- and only Rs. 60,605/- was recovered from him. Further, similar to the applicant, many of the officers/officials were identified for their contributory negligence i.e. 13 other inspecting officers/SPMs/PAs and a total amount of Rs. 16,28,808/- has been recovered/recovery under progress. In order to make good the loss sustained to the department, the contributory share is fixed on the applicant.
12. Rule 85 of POSB Manual Volume-I prescribes certain duties which requires to be discharged by the Head Office/Sub Office. Initiating disciplinary proceedings for not discharging the duties prescribed is one aspect whereas recovery of the amount of Rs. 1,20,486/- towards contributory share to make good the loss sustained to the department is another aspect. In the guise of punishing the official for not maintaining the register as prescribed under Rule 85 POSB Manual Volume-I, fixing the contributory 10 OA.No.170/00518/2020/CAT/BANGALORE share on the applicant appears to be harsh in the circumstances of the case.
13. Contributory negligence ordinarily is the failure to exercise reasonable care for their safety by the party who brings a case against another party. Contributory negligence can bar recovery or reduce the amount of compensation a person receives if their actions increased the likelihood that an incident occurred. Contributory negligence has to be established. Merely on presumptions and assumptions no contributory negligence could be fixed. In the Full Bench decision of the Hon'ble High Court of Karnataka in the case of North East Karnataka Road Transport Corporation vs. Smt. Vijayalaxmi and Others reported in ILR 2011 KAR 4845 (FB), the Hon'ble High Court has held thus:
"NEGLIGENCE
11. Negligence is conduct, not a state of mind-conduct which involves an unreasonably great risk of causing damage. Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do. In strict legal analysis, negligence means more than heedless or careless conduct, whether in omission or commission. It properly connotes the complex concept of duty, breach and 11 OA.No.170/00518/2020/CAT/BANGALORE damage thereby suffered by the person to whom the duty was owing. It is a question of law whether in any particular circumstances a duty of care exists. The question is was the defendant under any duty of care at all, and, if so, did he observe the standard required in the circumstances of the case? Foresight is the test for duty and remoteness. It is a characteristic of the definition of the tort of negligence that it does not refer to the scope of the protection it affords to the plaintiff but rather to the qualities of blameworthiness or fault to be attributed to the conduct of the defendant. There is no liability for negligence unless there is in the particular case a legal duty to take care, and this duty must be one which is owed to the plaintiff himself and not merely to others. This duty of carefulness is not universal; it does not extend to all occasions and all persons and all modes of activity. The harm to the plaintiff's interest which has in fact occurred must be of a kind against which it was the duty of the defendant to take precautions. In the absence of some existing duty the general principle is that there is no liability for a mere omission to act. The fundamental notion appears to be that the imposition of an obligation to take positive steps for the benefit of another requires that other should furnish something by way of consideration. The standard of conduct required by the common law is that of the reasonable man. The reasonable man is presumed to be free both from over-apprehension and from over-confidence. A reasonable man does not mean a paragon of circumspection. But he is also cool and collected and remembers to take precautions for his own safety even in emergency. So, while on the one hand an error of judgment may not amount to negligence, on the other hand the fact that it might happen to him is not necessarily a defence - even the most careful are sometimes careless.
CONTRIBUTORY NEGLIGENCE
12. The doctrine that, if the plaintiff's act was the proximate cause of the damage the plaintiff could not recover damage was 12 OA.No.170/00518/2020/CAT/BANGALORE a well-established principle of medieval law. In the sixteenth and seventeenth centuries the conception of negligence as a ground of liability worked its way into the common law. With the recognition of negligence as a ground of liability a practice grew up of alleging that a plaintiff could not recover because he was debarred by his own negligence. The Rule of law is that if there is blame causing the accident on both sides, however small that blame may be on one side, the loss lies where it falls. When any person suffers damage as the result partly of his own fault and partly on the fault of any other person or persons, the claim in respect of that damage shall not be defeated by reason of the fault of the person suffered damage, but the damages recoverable in respect thereof shall be reduced to such extent as the Court thinks just and equitable having regard to the claimant's share in the responsibility for the damage.
13. The question of contributory negligence does not depend upon any breach of duty as between the plaintiff and the defendant. All that the defendant is obliged to prove is that the plaintiff failed to take reasonable precautions for his own safety in respect of the particular danger which in fact occurred, so that he thereby contributed to his own injury. This however is not to say that in all cases the plaintiff who is guilty of contributory negligence owes to the defendant no duty to act carefully. The governing principle is that the defendant must show that the plaintiff has failed to take reasonable care for his own safety in respect to the particular danger which has in fact occurred. The question whether the principle applies in any particular case is, as always, one of fact. Firstly, the law does not, in general, require any man to be careful of his own safety. What it does say is that a man who has negligently created a danger whereby another person is injured may plead as a way of avoiding liability that the injured person by his negligence contributed to create the danger. Secondly, no question of operative contributory negligence arises in a case where the defendant proves that the plaintiff has failed to take precautions 13 OA.No.170/00518/2020/CAT/BANGALORE against a foreseeable danger which has not occurred and that those precautions, if taken, would have been effective to protect him against the unforeseeable danger which in fact occurred. The statement that the plaintiff must be shown to have failed to take proper precautions for his own safety against the particular danger which in fact occurred does not mean that the particular form in which the danger manifested itself should actually have occurred to his mind. It is sufficient if it is a danger of a particular class whose occurrence he should anticipate and take reasonable precautions to guard against him. It is necessary to consider not only the causative potency of a particular act, but also its blameworthiness, though culpability here, as elsewhere in the law of torts, means not so much moral blameworthiness as a departure from the standard of care of the reasonable man. The court must also consider a third factor - namely, what is just and equitable. Hence the precise percentage by which the award is reduced is a question of fact in each case. The Court should find and record the total damages which would have been awarded if the claimant had not been at fault. It is inappropriate to apply this principle when the responsibility of one of the parties is properly to be assessed at 100 per cent. The court cannot deal with minute percentages. It is a question of fact in each case whether the conduct of the plaintiff amounts to contributory negligence. The burden of proving the negligence of the plaintiff that contributed to the damage in such a way as to exonerate the defendant wholly or partially lies upon the defendant. The defendant must always establish such contributory negligence as will amount to a defence. When the court has to decide, that the case is one in which it is proper to apportion the loss between the parties, the result is that the plaintiff's damages are reduced to such extent as the court thinks just and equitable having regard to the plaintiff's share in the responsibility for the damage."14
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14. Even assuming that there was some negligence on the part of the applicant in not discharging the duties as required under the POSB Manual Volume-I, the appropriate action would be to impose the penalty coming within the ambit of Rule 16 of CCS (CCA) Rules, 1965, but fixing the contributory negligence to the extent of 40% on the supervisory staff and 60% on the operative staff based on the fraud/misappropriation amount, as a rule, without ascertaining the actual degree of negligence contributed by the officer/official is wholly unscientific and irrational. There cannot be any hard and fast rule or mathematical precision for fixing responsibilities of contributory negligence on the officers/officials to make good the loss suffered by the department owing to the fraud committed by the main offender. Apportionment of this recovery amount on the other officers/officials (identified as subsidiary offenders) leaving the main offender, as he is absconding, is totally unreasonable. It is the specific case of the applicant that no attempts have been made by the department to recover the fraud amount from the assets/properties of the main offender. It is hard to accept the responsibility fixed on the other officers/officials under the title contributory negligence in order to 15 OA.No.170/00518/2020/CAT/BANGALORE recover the loss made by the main offender on a fixed percentage basis unless the same is established.
15. Rules 16 of the CCS (CCA) Rules, 1965 prescribes procedure for imposing minor penalties "(1) Subject to the provisions of sub-rule (5) of rule 15, no order imposing on a Government servant any of the penalties specified in clause (i) to (iv) of rule 11 shall be made except after-
(a) informing the Government servant in writing of the proposal to take action against him and of the imputations of misconduct or misbehaviour on which it is proposed to be taken, and giving him reasonable opportunity of making such representation as he may wish to make against the proposal;
(b) holding an inquiry in the manner laid down in sub-rules (3) to (24) of rule 14, in every case in which the disciplinary authority is of the opinion that such inquiry is necessary;
(c) taking the representation, if any, submitted by the Government servant under clause (a) and the record of inquiry, if any, held under clause (b) into consideration;
(d) consulting the Commission where such consultation is necessary. The Disciplinary Authority shall forward or cause to be forwarded a copy of the advice of the Commission to the 16 OA.No.170/00518/2020/CAT/BANGALORE Government servant, who shall be required to submit, if he so desires, his written representation or submission on the advice of the Commission, to the Disciplinary Authority within fifteen days; and
(e) recording a finding on each imputation or misconduct or misbehaviour."
Rule 11 (iii) of the CCS (CCA) Rules, 1965 reads thus:
"recovery from his pay of the whole or part of any pecuniary loss caused by him to the Government by negligence or breach of orders"
Imposing of punishment under the said Rule should be in proportionate to the gravity of charges imputed. If a fraud is committed by one main offender and he is absconding, contributory share or apportionment made on the applicant based on fixed percentage basis, is dictatorial. The factum of contributory negligence is not static and it varies from case to case. In other words, it depends on the facts and circumstances of each case. It cannot be uniformly prescribed or applied. The charges levelled against the applicant are not serious in nature, as such, minor penalty proceedings have been initiated, but surprisingly, the penalty imposed is grave in nature. Charge memo does not 17 OA.No.170/00518/2020/CAT/BANGALORE explicitly disclose the quantum of loss suffered by the department due to the alleged lapses on the part of the applicant. Identification of subsidiary offenders in a fraud case cannot be made in a casual manner sans disclosing the same in the charges framed. The fraud has been committed by the main offender from the year 2006 to 2017, the same has been detected after 11 years in the year 2017. The applicant was working at Karwar HPO from 20.08.2013 to 23.03.2016. It is not the initial stage of misappropriation as stated in the charge memo.
Re. Point No. 2:
16. Rules 106 and 107 of P&T Manual Volume-III reads thus:
"106. In the case of proceedings relating to recovery of pecuniary losses caused to the Government by negligence, or breach of orders by a Government servant, the penalty of recovery can be imposed only when it is established that the Government servant was responsible for a particular act or acts of negligence or breach of orders or rules and that such negligence or breach caused the loss.18
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107. In a case of loss caused to the Government, the competent disciplinary authority should correctly assess in a realistic manner the contributory negligence on the part of an officer and while determining any omission or lapses on the part of an officer, the bearing of such lapses on the loss considered and the extenuating circumstances in which the duties were performed by the officer shall be given due weight."
17. It is beneficial to refer to the Instructions dated 20.12.2022 issued by the Department of Posts, Vigilance Division, Government of India wherein the instructions issued vide DGPS DO letter dated 29.11.2021 has been reiterated. Para 3 of the said instructions is reproduced in the instructions dated 20.12.2022. The same reads thus:
"ln this context, a need has been felt to sensitize the Disciplinary Authorities about the adverse outcome of such faulty identification of offenders and making recovery from them for no lapse or the lapses, which are not relatable to the commission of a particular fraud. It should be clearly understood by the all Disciplinary Authorities that an official can be punished for good and sufficient reasons, but the penalty of recovery can be awarded only if the lapses on their part have led to the commission of fraud or misappropriation. This does not mean that for the alleged lapses, an official cannot be 19 OA.No.170/00518/2020/CAT/BANGALORE identified as subsidiary offender, but it is only to emphasize that in cases where the contributory negligence cannot be explicitly attributed to a particular offender or pecuniary liability cannot be worked out, instead of the penalty of recovery, any other statutory penalty should be imposed. Wherever it is proposed to award penalty of recovery, the charge sheet should be drafted carefully to clearly indicate the loss due to lapses on the part of the official concerned. The instructions contained in this office communication no. DG P&T- No. 114/176/78- Disc.II dated 13.02.1981 Gol No.12(b) below Rule 11 of CCS(CCA) Rules 1965 may also be referred to."
18. The quasi-judicial authorities are bound to consider these Rules/instructions in cases of contributory negligence before imposing the penalty of recovery. It should be established that the lapses on the part of the applicant has led to the commission of fraud/misappropriation to fix the contributory negligence. Imputation and findings of the authorities should denote that there was good and sufficient reasons for imposing a penalty of recovery from the pay towards a loss not directly caused by her but done by Shri Laxman G. Naik, BPM, Awara Road BO. Assessment of final liability is a factor to be determined based on evidence in fixing the contributory negligence. Easier process of recovery by summary proceedings, involving good lot of money, without holding any 20 OA.No.170/00518/2020/CAT/BANGALORE inquiry is against the principles of natural justice. Failure of the administration in not recovering the loss from the main offender itself is not the ground to fix the financial liability on the identified subsidiary offender. Failure of the best endeavours made to recover from the main offender is not forthcoming. Any frustrated inquiry against the real culprit is also not forthcoming. In our considered view, penalty of recovery based on standard percentage basis attributing pecuniary liability is not appropriate and the same requires reconsideration. The Disciplinary Authority as well as the Appellate Authority have proceeded in a narrow direction focusing only on the recovery which is not in conformity with law.
19. We have taken similar view in OA No. 436/2020 (DD:
18.07.2023) involving identical issue. For the reasons aforesaid, the impugned orders are not sustainable. Hence, we set aside the impugned orders at Annexure-A6 dated 04.05.2020 and Annexure-
A8 dated 21.08.2020 issued by the Respondents No. 4 and 3 respectively and the matter is restored to the file of the Disciplinary Authority, Respondent No. 4, to reconsider the mater in the light of the observations made hereinabove.
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20. The Disciplinary Authority shall take an appropriate decision in accordance with law after providing an opportunity of hearing to the applicant.
21. Compliance shall be made in an expedite manner.
22. The OA stands disposed of in terms of above. No order as to costs.
(RAKESH KUMAR GUPTA) (JUSTICE S. SUJATHA)
MEMBER (A) MEMBER (J)
/ksk/