Kerala High Court
M.Shamsudeen vs Govt.Of Kerala on 6 August, 2008
Author: P.N.Ravindran
Bench: P.N.Ravindran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP.No. 18664 of 2001(V)
1. M.SHAMSUDEEN
... Petitioner
Vs
1. GOVT.OF KERALA
... Respondent
For Petitioner :SRI.C.UNNIKRISHNAN (KOLLAM)
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice P.N.RAVINDRAN
Dated :06/08/2008
O R D E R
P.N.RAVINDRAN CR
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O.P.No.18664 of 2001
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Dated this the 6th day of August, 2008
JUDGMENT
The petitioner is a pensioner. He retired from service as District Supply Officer, Thiruvananthapuram on 31.7.1998 on attaining the age of superannuation. This Original Petition is filed challenging Ext.P1 order dated 7.5.2001 issued by the State Government, whereby, the appeal filed by the petitioner against the order passed by the Commissioner of Civil Supplies on 5.1.2000 fixing the sum of Rs.25,696/- as his liability and directing recovery of the said amount from his death cum retirement gratuity, was rejected. The petitioner has also sought disbursement of the retirement benefits in full together with interest thereon at 18% per annum, from the date of his retirement. The brief facts of the case are as follows:
2. While the petitioner was working as District Supply Officer, Thiruvananthapuram, the authorisation issued to two authorised wholesale distributors, AWD No.29 run by Sri.G.Ramesan at Naruvamood and AWD No.30 run by M/s Ahammed Khan & Company at Balaramapuram was suspended pending enquiry, under Clause 51(8) of the Kerala Rationing Order 1966, by the Deputy Controller of Rationing, South Zone, Kollam. The order suspending the authorisation of the aforesaid authorised whole sale distributors was communicated to the O.P.No.18664/2001 2 Taluk Supply Officer, Neyyattinkara, who, on 12.10.1997 took over the stock of rationed articles available with the aforesaid two authorised wholesale distributors and entrusted it with AWD No.T22 at Kattakada run by APVN & Co. and AWD No.24 at Neyyattinkara run by Smt.Sarasamma respectively. The value of the stock seized from AWD No.29 was Rs.11,27,847/- and from AWD No.30 was Rs.9,68,229/-. In his letter, No.CS2-5954/97 dated 13.11.1997, the petitioner directed the Taluk Supply Officer, Thiruvananthapuram to deposit the value of the stock in the Syndicate Bank, Statute Branch, Thiruvananthapuram.
According to the petitioner, such a direction was issued on the erroneous assumption that government orders permitted dealers in rationed articles to avail loan facilities from banks. On realising that the said facility is available only to authorised retail distributors and not to authorised wholesale distributors, the petitioner corrected the mistake committed by him and directed the Taluk Supply Officer, Neyyattinkara to deposit the amount in revenue deposit in the Sub Treasury. The money was accordingly deposited in the Sub Treasury, Neyyattinkara. For having directed the Taluk Supply Officer to deposit the value of the seized rationed articles in the Syndicate Bank, instead of depositing it in revenue deposit, disciplinary action was initiated against the petitioner and a memo of charges was issued to him on 18.5.1998.
3. The charge against the petitioner was that he had, with ulterior motives colluded with the suspended authorised wholesale distributors O.P.No.18664/2001 3 and allowed private individuals to handle government money indefinitely in violation of Article 269 (21) of the Kerala Financial Code, Volume I and the standing directions issued by the State Government and the Board of Revenue regarding the mode of remittance of the value of rationed articles held by suspended authorised wholesale distributors. It was also alleged that by the said act, he caused financial loss to the Government. On receipt of the memo of charges, the petitioner submitted Ext.P2 reply dated 20.7.1998 denying the charges. Shortly thereafter, the petitioner retired from service on 31.7.1998. The Commissioner of Civil Supplies found the petitioner and the Taluk Supply Officer guilty of the charges and directed recovery of the sum of Rs.51,392/- from them in equal moieties. The liability of the petitioner was fixed at Rs.25,696/=. The petitioner thereupon filed an appeal before the State Government followed by O.P.No.29734 of 2000 in this Court praying inter alia for an expeditious disposal of the said appeal. By judgment delivered on 23.10.2000 in O.P.No.29734 of 2000, this Court directed the State Government to dispose of the appeal filed by the petitioner against the order passed by the Commissioner of Civil Supplies, within three months from the date of receipt of a copy of the judgment. By Ext.P1 order passed on 7.5.2001, the appeal was rejected. This Original Petition was thereupon filed seeking the following reliefs:
i) issue a writ of mandamus or any appropriate writ, order or direction commanding the respondents to disburse entire pensionary benefits legally due to the petitioner O.P.No.18664/2001 4 along with interest @ 18% p.a. from 31.7.1998 forthwith.
ii) issue a writ of certiorari or any other appropriate writ, order or direction quashing Ext.P1 and declare that no amount is liable to be recovered from the DCRG of the petitioner.
4. While this Original Petition was pending, a consolidated liability certificate was issued on 7.11.2001 fixing the sum of Rs.78317/- as the petitioner's liability. The petitioner thereupon filed O.P.No.26912 of 2002 in this Court challenging the liability certificate inter alia on the ground that the liability was fixed more than 3 years after his retirement from service. The first item of liability noted in the said certificate was the sum of Rs.25,696/- referred to in Ext.P1 which is impugned in this Original Petition. The second item of liability was the sum of Rs.52,621/- payable to the Kerala State Civil Supplies Corporation. By judgment delivered on 18.12.2003, a learned Single Judge of this Court allowed O.P.No.26912 of 2002, and quashed the fixation of liability on the short ground that the fixation was beyond the time limit of three years stipulated in Note-3 to Rule 3 of Part III, KSR. In view of the said judgment, this Original Petition was closed with the observation that no further orders are required. The respondents in O.P.No.26912 of 2002 carried the matter in appeal. By judgment delivered on 29.6.2005 in W.A.No.1233 of 2004, a Division Bench of this Court held that the fixation of liability in respect of item No.2 of the liability certificate was beyond the time limit of three years. To that extent, judgment of the O.P.No.18664/2001 5 learned Single Judge in O.P.No.26912 of 2002 was upheld. As regards the sum of Rs.25,696/-, which is a subject matter of this writ petition, the Division Bench held that the fixation of the said amount as petitioner's liability was made within time. The judgment of the learned Single Judge, in so far as it related to the said item of liability was set aside. The petitioner had brought to the notice of the Division Bench, which disposed of Writ Appeal No.1233 of 2004, that this Original Petition was closed as unnecessary by the learned Single Judge in view of the judgment impugned in the Writ Appeal and that in the light of the view taken by the Division Bench, he may be allowed to pursue his remedies regarding that part of the liability. Taking note of the said submission, the Division Bench of this Court in Writ Appeal No.1233 of 2004 observed as follows:
"At this point of time counsel for the petitioner pointed out that on the basis of the impugned judgment O.P.No.18664 of 2001, wherein he had challenged the fixation of liability on merit has been closed. It is his own creations.
Therefore he has to find out the way out. He shall be free to pursue his remedies, whatever, available against that judgment. It shall not detain us from setting aside that part of the judgment which quashes the first part of Ext.P2 liability certificate.
In the result, the appeals are allowed in part setting aside that part of the judgment which quashed item No.1 in Ext.P2 liability certificate. In every other respect the judgment is sustained. Whatever balance amount available to the petitioner shall have to be disbursed within two months."
5. In the light of the observations made by the Division Bench, the O.P.No.18664/2001 6 petitioner filed R.P.No.801 of 2005 in this Original Petition. By order passed on 16.2.2006, the review petition was allowed and the judgment closing this Original Petition was recalled. That is how this Original Petition has come up before me for hearing.
6. I have heard Sri.C.Unnikrishnan, the learned counsel appearing for the petitioner and Sri.K.Sandesh Raja, the learned Government Pleader appearing for the respondents. I have also considered the submissions made at the bar by the learned counsel appearing on either side and the pleadings and the materials made available to me.
7. In this Original Petition, the petitioner contends that though he had initially issued an order on 13.11.1997 directing the Taluk Supply Officer to remit the value of the rationed articles seized from AWD No.29 and AWD No.30 in the Syndicate Bank, Statute Branch, Thiruvananthapuram, immediately on realising the mistake, he directed the Taluk Supply Officer to deposit the amount in revenue deposit in the Sub Treasury, Neyyattinkara. The petitioner further states that the value of the seized rationed articles was not deposited in the Syndicate Bank as alleged and that the delay in remittance of the value of the seized rationed articles in revenue deposit in the Sub Treasury, Neyyattinkara was due to the delay in realising the value thereof from AWD No.T22 and AWD No.24, with whom the seized rationed articles were entrusted. The petitioner also contends that the suspended authorised whole sale distributors had already paid for the rationed articles when they lifted it O.P.No.18664/2001 7 from the Food Corporation of India and that the value of the seized rationed articles handed over to the substitute authorised whole sale distributors is not money belonging to the Government. The learned counsel for the petitioner contended that the entire amount was payable to the suspended authorised whole sale distributors and that the interest on the money realised from the substitute authorised wholesale distributors was also payable to the suspended authorised wholesale distributors only. It is further contended that the claim for interest, if any, can arise only from the owner of the stock, namely, the suspended authorised wholesale distributors and that the Government have no right to retain and appropriate the value of the seized rationed articles. The learned counsel for the petitioner also contended that the right of the Government, if any, is only to recover the amounts payable by the suspended authorised wholesale distributors towards their liability to the Government if orders in that regard have been issued in terms of Clause 51(8) of the Kerala Rationing Order and that as no such order had been passed against the suspended authorised wholesale distributors, it cannot be said that any loss has been caused to the Government merely because the petitioner had initially directed remittance of the value of the seized rationed articles in the Syndicate Bank.
8. The second respondent has filed two separate counter affidavits resisting the writ petition. It is contended that by directing the Taluk Supply Officer to remit the value of the rationed articles seized from AWD O.P.No.18664/2001 8 No.29 and AWD No.30 in the Central Bank of India in violation of the departmental standing orders, the petitioner has caused loss to the Government. In this context, it is relevant to note that while in Ext.P1 it is stated that the petitioner directed the money to be remitted in the Syndicate Bank, in paragraph-6 of the counter affidavit dated 27.9.2006, it is stated that the petitioner directed the Taluk Supply Officer to remit the value of the seized rationed articles in Central Bank of India. On noticing this disparity I called for and perused the records in Writ Appeal No.1233 of 2004. In Writ Appeal No.1233 of 2004 also, the respondents herein had contended that the petitioner directed the Taluk Supply Officer to remit the value of the seized rationed articles in Central Bank of India, violating the departmental standing orders. In the counter affidavit filed by the respondents in O.P.No.26912 of 2002 also, in paragraph-2, it is stated that the petitioner directed the Taluk Supply Officer to remit the value of the seized rationed articles in Central Bank of India violating the departmental standing orders. I also noticed that the respondents do not have a case either in the counter affidavit filed by them in O.P.No.26912 of 2002 or in Writ Appeal No.1233 of 2004 that the value of the seized rationed articles was actually deposited in the Syndicate Bank or in the Central Bank of India. The reason for fixing the sum of Rs.25,696/- as the petitioner's liability to the Government or materials to show that it represents one half of the actual loss caused to the Government due to the misconduct/negligence of the petitioner is O.P.No.18664/2001 9 not also discernible from the pleadings therein. In the counter affidavits filed in this writ petition also the reason for fixing the said amount as the petitioner's liability or materials to show that it represents one half of the actual loss caused to the Government are not placed on record. What was the basis for arriving at the estimate of the loss caused to the Government is not discernible from the pleadings. The date on which the value of the rationed articles was realised from the substitute authorised wholesale distributors is not disclosed. The date on which the amount was remitted in the Sub Treasury is also not set out. Whether there was any inordinate delay in remitting the money in the Sub Treasury after it was realised from the substitute authorised wholesale distributors is also not stated.
9. It is now settled by a series of decisions of this Court, the latest of which is the decision of the Full Bench of this Court in Raveendran Nair v State of Kerala (2007(1)KLT 605) that the Government have the right to order recovery from the pension including gratuity, the whole or any part of the pecuniary loss caused to the Government, besides the right to withhold or withdraw the pension or any part thereof, permanently or for a specified period. It is also now well settled that while the right to withhold pension or any part thereof can be exercised invoking Rule 59(b) of Part III KSR even if no pecuniary loss has been caused to the Government, the right to effect recovery can be exercised only if any pecuniary loss has in fact been caused to the Government due O.P.No.18664/2001 10 to the inaction/negligence or misconduct of the pensioner. It is also settled by the decision of a Full Bench of this Court in Xavier v Kerala State Electricity Board (1979 KLT 80) that disciplinary proceedings commenced against a government servant while he was in service can be continued after his retirement for the purpose of ordering the recovery of any pecuniary loss caused to the Government. The Full Bench in Xavier's case (supra) held that the disciplinary enquiry initiated against a government servant while he was in service gets transmuted into an enquiry under Rule 3 of Part III KSR on his retirement, for the purpose of ordering the recovery of any pecuniary loss caused to the Government by reason of his misconduct or negligence. In Vasudevan v Secretary to Government, Vigilance (B)Department (1979 KLT 489), a Division Bench of this Court following the decision of the Full Bench of this Court in Xavier v Kerala State Electricity Board (supra) held that after retirement, the disciplinary proceedings initiated against a government servant before his retirement can be continued for the limited purpose of recovering the loss, as contemplated by Rule-3 of Part III KSR. In the instant case, in view of the decision of this Court in Writ Appeal No.1233 of 2004 to which the petitioner and the respondents herein are parties and the principles laid down by this Court in the decisions referred to above, the order passed by the Commissioner of Civil Supplies on
5.1.2000 directing recovery of the sum of Rs.25,686/- from the death cum retirement gratuity payable to the petitioner and Ext.P1 order O.P.No.18664/2001 11 affirming it cannot be faulted either for the reason that they were passed after his retirement or for the reason that the liability was not fixed within three years thereafter. Then the only question that remains to be considered is whether the fixation of the sum of Rs.25,696/- as the petitioner's liability is sustainable in law and on facts.
10. As noticed earlier, Ext.P1 proceeds on the basis that the petitioner directed the Taluk Supply Officer to remit the value of the seized rationed articles in Syndicate Bank, Statute Branch, Thiruvananthapuram. In the counter affidavit filed by the respondents in this Original Petition, it is contended that the petitioner directed remittance of the money in Central Bank of India. In O.P.No.26912 of 2002 and in Writ Appeal No.1233 of 2004 also the stand taken is that the petitioner directed remittance of the money in Central Bank of India. There is no material produced before me or available in the judges papers in Writ Appeal No. 1233 of 2004 to which the petitioner and the respondents herein are parties, to show that the value of the rationed articles realised from the substitute authorised wholesale distributors was in fact deposited either in Syndicate Bank or in Central Bank of India. There is also no pleading much less any proof as regards the date on which the value of the rationed articles seized from the suspended authorised wholesale distributors was realised from the substitute authorised wholesale distributors and the date on which the said amount was deposited in the Sub Treasury in revenue deposit. In short, O.P.No.18664/2001 12 there is no material to show that due to the erroneous direction issued by the petitioner, which was later withdrawn, there was any delay in remittance of the amount in the revenue deposit after it was realised from the substitute authorised wholesale distributors. There is also no material to show that the money had been deposited after it was realised from the substitute authorised wholesale distributors either in the Syndicate Bank or in the Central Bank of India. There is also no material to show that the Government was in any way entitled to the value of the rationed articles seized from the suspended authorised wholesale distributors and realised from the substitute authorised wholesale distributors, or any part thereof. Whether any amount was due from the suspended authorised wholesale distributors to the Government and as a result of the erroneous direction issued by the petitioner, the Government suffered any loss on that count is also not discernible from the pleadings or the materials produced in the case. It is not in dispute that the money was deposited in revenue deposit in the Sub Treasury. How the Government sustained the loss of Rs.51,392/- (one half of which is fixed as the petitioner's liability) is also not discernible. Clause 51(8) of the Kerala Rationing Order 1966 empowers the District Collector or any officer of the Civil Supplies Department not below the rank of a Taluk Supply Officer to amend, vary, suspend or cancel the appointment of an authorised wholesale distributor, if on inspection of the stock and accounts any shortage or excess in the quantity of rationed articles in O.P.No.18664/2001 13 the stock is found or any irregularities in the accounts are detected or there is non-compliance with any of the directions issued by the competent authorities or there is contravention of the provisions of any order issued under Section 3 of the Essential Commodities Act, 1955. Clause 51(8) also to order forfeiture of whole or any part of the amount deposited by the authorised wholesale distributor as security under sub clause (5) of Clause 51 and also to order realisation of the amount equivalent in value to the cost of the rationed articles including the cost of any quantity of rationed articles misappropriated by falsification of accounts and all sums collected in excess by way of transport charges, handling charges, profit, etc. and gained by the authorised wholesale distributor due to incorrect fixation of price or any other defect in calculation. Sub-clause (8B) of Clause 51 of the Kerala Rationing Order, 1966 states that all sums found due to the Government by virtue of the agreement executed by the authorised wholesale distributor under Clause 51(6) shall be recovered from the authorised wholesale distributor and his movable and immovable properties under the provisions of the Kerala Revenue Recovery Act as though such sums are arrears of land revenue. The said provision also stipulates that for the purpose of recovery, the quantum of liability of the authorised wholesale distributor shall be adjudicated by the Government or the Commissioner of Civil Supplies or the District Collector or any officer of the Civil Supplies Department not below the rank of a Taluk Supply Officer after giving the O.P.No.18664/2001 14 authorised wholesale distributor an opportunity of being heard. It has not been pleaded or proved that any order had been passed under sub- clause (8) of Clause 51 of the Kerala Rationing Order, 1966, fixing any liability on the suspended authorised wholesale distributors and that any amount was ordered to be realised from them, under sub-clause (8B). It has not also been pleaded or proved that due to the direction issued by the petitioner on 13.11.1997, which was later withdrawn, the Government could not realise any amount due from the suspended authorised wholesale distributors after orders were passed under sub- clauses (8) and (8B) of Clause 51 of the Kerala Rationing Order, 1966. Since the suspended authorised wholesale distributors had furnished security, forfeiture of the security does not depend upon realisation of the value of the rationed articles from the substitute authorised wholesale distributors and its deposit in the Sub Treasury in revenue deposit. There is thus total lack of material to show that due to the direction issued by the petitioner on 13.11.1977, which was admittedly withdrawn later, the Government suffered any pecuniary loss. In short, the liability fastened on the petitioner by the Commissioner of Civil Supplies has not been shown to be the pecuniary loss caused to the Government.
11. Under Rule-3 of Part III KSR, the Government can recover only the actual pecuniary loss which it has suffered due to misconduct/ negligence of the government servant. To invoke Rule-3, pecuniary loss O.P.No.18664/2001 15 should have been in fact caused to the Government. Even the loss caused to a government organisation can be recovered, but it is not possible for the Government to realise the loss caused to a private individual, except in cases where the Government had to compensate that private individual due to the wrongful act of the government servant. In the instant case, the entitlement of the Government to the sum of Rs.51,392/- has not been established. There is no material except the mere assertion by the State Government that the petitioner and the Taluk Supply Officer have caused a loss of Rs.51,392/- to it, to hold that the Government had in fact suffered any pecuniary loss and that the petitioner is liable to re-imburse one half of the said sum of money to the Government.
12. In Kolappa Pillai v State of Kerala (1982 KLT 551), Kochu Thommen (J) (as his lordship then was) held as follows:
"The object of this rule is not to inflict a punishment upon a retired government servant, but to recover from him amounts to recompense the Government for the loss caused by him. This recovery may be made either by withholding or withdrawing a pension or by specifically ordering recovery from the pension payable to him. In all these cases recovery is made by resort to denying the petitioner so much pension as will make up for the loss caused to the Government. This is the object of Rule 3. Although such recovery may cause hardship to the person affected, it is not by way of punishment that that recovery is made, but only to adjust against specific loss found to have been caused by the person, I cannot accept the contention that, even where no loss is found to have been caused, amounts can be withheld, withdrawn or recovered from pension merely because a proceeding initiated under the C.C.&A Rules is transmuted as a proceeding under O.P.No.18664/2001 16 the K.S.R. The object of the law in allowing such transmutation is not to inflict a punishment upon the retired government servant, but to make him pay for the pecuniary loss which he has caused. This rule cannot be of any avail to the Government unless loss has been caused and found to have been caused"
(emphasis supplied)
13. In George v Tahsildar Cochin (1992 (2) KLT 919) Sreedharan (J) (as his lordship then was) held, following the decision in Kolappa Pillai v State of Kerala (supra) that, if the misconduct alleged against the government servant is not one causing pecuniary loss to the Government, no proceeding as contemplated by Rule-3 to withhold payment of the death cum retirement gratuity can be initiated against him. In Mary v State of Kerala (1994(2) KLT 853) a learned Single Judge of this Court held that there must be a casual connection between the act of the employee and the pecuniary loss incurred by the government. It was held that as Rule-3 employs the words 'loss caused to the government' (emphasis supplied), the essence of the right to invoke that provision is that the Government servant concerned must have caused pecuniary loss to the Government and that there must be a casual connection between the loss caused and the act or omission of the employee. In Raveendran Nair v State of Kerala (2007(1) KLT
605) the Full Bench of this Court drew a distinction between withholding or withdrawing the pension or any part thereof and the right to order recovery from the pension of the whole or part of any pecuniary loss O.P.No.18664/2001 17 caused to the Government. As regards the former, it was held that the Government has the power, even if no pecuniary loss has been caused to it to withhold or withdraw the pension or any part thereof, whether permanently or for a specified period. As regards the latter, the Full Bench held that recovery of the pecuniary loss is compensatory in nature. It was held that where the misconduct of the employee/pensioner has caused pecuniary loss to the Government, they can exercise both rights and if no pecuniary loss is involved, the first right, namely, the right to withhold or withdraw the pension or any part thereof alone can be exercised. The principle that emerges from the aforesaid decisions is that while the Government have the right to recover the pecuniary loss caused to it by the employee or the pensioner, it must be established that the misconduct or negligence of the employee/pensioner resulted in pecuniary loss to the Government. The fact that the Government suffered pecuniary loss has to be established in the disciplinary enquiry, if such enquiry was initiated while the employee was in service or in proceedings initiated against the pensioner under Rule 3 of Part III, K.S.R.
14. In the instant case, as noticed by me earlier, there is no material apart from the mere assertions in Ext.P1 and in the counter affidavits to show that the Government had actually suffered any pecuniary loss. It has not been shown that due to the wrong direction issued by the petitioner on 13.11.1997 to his subordinate, the Taluk O.P.No.18664/2001 18 Supply Officer, which was later withdrawn, the Government in fact suffered any pecuniary loss. There is no finding that the said erroneous direction was complied with and it resulted in pecuniary loss to the Government. The entitlement of the Government to the sum of Rs.51,392/- has not been stated with clarity. On what count, the Government suffered the loss of Rs.51,392/- is not discernible. Whether the money was in fact deposited in the Syndicate Bank/Central Bank of India ,whether it was directly remitted in the Treasury, whether there was any inordinate delay between its realisation from the substitute authorised wholesale distributors and remittance in revenue deposit in the Sub Treasury are not set out. Apart from the mere assertions in the pleadings and in Ext.P1 that the Government have suffered a loss of Rs.51,392/- and that the petitioner is liable to make good one half of that sum of money, there is no cogent material on the basis of which, it can be held that the misconduct or negligence of the petitioner caused loss to the tune of Rs.51,392/- to the Government. In short, everything is left to guess work. In my opinion, there is also no material to show that there was any casual connection between the act of the petitioner and the alleged loss. There is no material at all to show that any pecuniary loss was in fact caused to the Government by reason of the petitioner's conduct.
For the reasons stated above, I hold that Ext.P1 is not sustainable in law. I, accordingly quash Ext.P1 and direct the respondents to disburse O.P.No.18664/2001 19 to the petitioner, the sum of Rs.25,696/- withheld from his death cum retirement gratuity, together with interest thereon at 6% per annum from 1/10/1998 (two months after the date of his retirement) in terms of the direction issued by the Apex Court in State of Kerala v Padmanabhan Nair(1985 KLT 86). The payment as directed above shall be made within two months from the date of receipt of a copy of this judgment.
The Original Petition is allowed as above. No costs.
P.N.RAVINDRAN, JUDGE css/ O.P.No.18664/2001 20 P.N.RAVINDRAN, J.
O.P.No.18664 of 2001
JUDGMENT .8.2008 O.P.No.18664/2001 21