Central Administrative Tribunal - Ernakulam
P C Mathew vs Post Kerala Circle on 22 December, 2023
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CENTRAL ADMINISTRATIVE TRIBUNAL,
ERNAKULAM BENCH,
ERNAKULAM
Original Application No. 180/00505/2022
Friday, this the 22nd day of December, 2023
CORAM:
Hon'ble Mr. Justice K. Haripal, Member (J)
Hon'ble Mr. K.V. Eapen, Member (A)
P.C. Mathew, Aged 70 years,
S/o Late Chacko,
Saving Bank Control Supervisor(Retd),
Postal Department,
Ernakulam HPO,
Residing at Pulikkathara House,
Vazhoor P.O.,
Kottayam District-686 504. ..... Applicant
(By Advocate : Mr. C. S. Gopalakrishnan Nair)
Versus
1. Chief Postmaster General,
Kerala Circle, Trivandrum-695 033.
2. The Director of Accounts (Postal),
Trivandrum-695 033.
3. Post Master General
Central Circle, Cochin-682 020
4. Senior Superintendent of Post Offices,
Ernakulam, Cochin-682 011.
OA No.180/00505/2022
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5. Senior Post Master,
Ernakulam GPO,
Cochin-682 011.
6. Director General of Posts,
Dak Bhavan, Sansad Marg,
New Delhi-110 001.
7. Union of India,
Represented by its Secretary,
Department of Posts,
New Delhi-110 001. ..... Respondents
(By Advocate : Mrs. Sheela Devi I., SPC)
This Original Application having been heard on 09.11.2023, the
Tribunal on 22.12.2023 delivered the following:
ORDER
Per: Mr.K.V. Eapen, Administrative Member -
1. The applicant is retired Savings Bank Control Supervisor (SBCS) of the Department of Posts. He had retired from service voluntarily with effect from 01.08.2011. He had joined service as a Lower Division Clerk (LDC) on 01.08.1975 and was later promoted as Upper Division Clerk (UDC). He was then granted time bound promotion (TBOP) with effect from 01.08.1991. On passing the departmental examination for Lower Selection Grade (LSG), he was promoted as LSG Supervisor on OA No.180/00505/2022 3 13.07.1992 (this was corrected as 14.07.1992 by the respondents in their reply statement).
2. The issue in this OA, as per a summary provided by the respondents in their reply statement, had arisen because of cases of non- credits in Recurring Deposit (RD) accounts tendered at the Post Office counter by Mahila Pradhan Kshetriya Bachat Yojna (MPKBY) agents at Kaloor Sub Post Office under Ernakulam Division. This case had been detected on 06.01.2012. An investigation conducted in the case revealed that the deposits in the RD accounts to the tune of Rs. 4178908/- made through 499 schedules in 3282 RD accounts submitted by various MPKBY agents during the period from 19.08.2006 to 20.08.2010, were actually not credited in the Post Office accounts Sub-Office. This 'non- credit' was committed by one Smt. M.T. Shreemathy, the then RD counter Postal Assistant at Kaloor Sub Post Office. A detailed enquiry was conducted to analyse the lapses that had occurred at different levels which had facilitated such a fraud to operate for a considerable period. As per the respondents, after an analysis of lapses that had occurred on the part of the Savings Bank Control Organisation (SBCO), it had been found that after decentralization of the RD scheme and discontinuation of ledger OA No.180/00505/2022 4 maintenance for Sub-Office (SO) accounts at Head-Post Offices (HPO), the SBCO had to obtain 6 monthly RD balance agreements. According to the respondents there were severe supervisory lapses on the part of the SBCO supervisors for not ensuring maintenance of the prescribed registers and not carrying out prescribed checks and verifications. This facilitated the commission of fraud at Kaloor SO for such a long period.
3. As per the respondents, it was also revealed during the investigation that the work relating to RD scheme had been disregarded at SBCO Ernakulam HPO even though the same was repeatedly noted by the inspecting officers in their reports. It has been submitted by the respondents that the SBCO at the Ernakulam HPO was one of the units which was responsible for the non-detection/facilitating continuation of the fraud by the non-posting of the Sub-Office RD data of the Kaloor Sub-Office. The unit also failed to carry out periodical verification of balances which resulted in fraud continuing for a long time. It is further submitted by the respondents that the applicant had been working as the Supervisor, SBCO, at Ernakulam HPO during the period June 2009 to July 2011. Thus, the supervisory lapses on his part have contributed to facilitate the fraud to remain undetected. Hence, he has been identified as OA No.180/00505/2022 5 one of the subsidiary offenders in the Kaloor SO fraud case. A Circle Level Investigation was conducted by the Director, Postal Services, Central Region. The Circle Level Investigation Report (CLIR) submitted by the said Director is produced at Annexure-A8 in the OA.
4. The applicant was identified as a subsidiary offender in the above mentioned fraud case in the CLIR. He was directed to credit an amount of Rs. 2 lakh, as per the Annexure-A5 letter of the 4th respondent addressed to him, being the share of the loss apportioned to him. In response to the Annexure-A5 letter, the applicant submitted a reply dated 26.08.2019, produced at Annexure-A6, wherein, he expressed his unwillingness to credit the said amount. The applicant has filed this O.A seeking the quashing of the Annexure-A5 letter dated 19.08.2019 issued to him by the 4th respondent, Senior Superintendent of Post Officer, Ernakulam Postal Division, which, in addition to crediting an amount of Rs. 2 lakh, also informs him that this will be without prejudice to any disciplinary action that may be taken against him. He also seeks quashing of the impugned letter dated 18.06.2020, addressed to him from the 4th respondent, produced at Annexure-A11, in which it has been mentioned OA No.180/00505/2022 6 that as per the Circle Level Inspection Report (CLIR) in connection with the Kaloor fraud case, he had been identified as a subsidiary offender.
5. Further, the letter at Annexure A-11 has also informed the applicant that Post Master General, Central Region had directed that pay arrears due to him may be withheld till the finalisation of the fraud case. In relation to these pay arrears mentioned in the letter, the applicant explains that the 7th respondent, who is the Secretary, Department of Posts, New Delhi had earlier in a letter dated 08.05.2017 addressed to all the Heads of the Postal Circles, directed that, whenever seniors were being adversely affected by the implementation of the Biennial Cadre Review (BCR) Scheme placing juniors in the next higher scale of pay, such anomalies should be decided in terms of the instruction issued in that matter in relation to the TBOP/BCR scheme. A copy of the letter dated 08.05.2017 issued in this connection is produced at Annexure-A1. Pursuant to this letter, the 7th respondent had asked the 1st respondent, CPMG Kerala, to dispose of all representations which had been received in the light of the same. A letter dated 18.09.2018 issued by the 7th respondent in this connection is produced at Annexure-A2.
OA No.180/00505/2022 7
6. It is submitted that the applicant had since come to know that his junior, one Shri. K.C Gopalakrishnan, had been granted the effect of the BCR Scheme from 01.01.1993. He thus then sent a representation to the 1st respondent for granting him the BCR in terms of the above letters at Annexures-A1 and A2. On receipt of his representation, the 1st respondent, CPMG Kerala had issued an order dated 18.05.2019 produced at Annexure-A3. By this order the CPMG had approved granting the placement in the higher grade in the BCR scheme to the applicant, who had by then retired from the SBCO Ernakulam, HPO on voluntary basis on 1.08.2011. The applicant had been granted placement in the higher grade in the pay scale of Rs. 1600-2600/- with effect from 01.01.1993, the day on which his junior Shri. K.C Gopalakrishnan, PA (SBCO) was granted BCR. However, after this, since there was delay in disbursing the consequential benefits/arrears arising out of Annexure-A3, the applicant had met the Senior Post Master Ernakulam GPO Kochi for release of the arrears. Even after that since the arrears were not paid, the applicant had submitted a representation once again to the 1st respondent about the payment of arrears. On receipt of the representation, the 4th respondent, the Sr. Superintendent of Post Office, Ernakulam, Kochi, sent OA No.180/00505/2022 8 the impugned memo vide Annexure A-5, directing the applicant to first credit an amount of Rs.2 lakh towards the defaulted amount by Smt. M.T. Sreemathy at Kaloor Sub-Office because of the supervisory lapses on his part. It is submitted by the applicant that he then submitted a letter dated 26.08.2019 to the 4th respondent, Sr. Superintendent of Post Officer, Ernakulam Division, denying that there were any lapses on his part, copy of which is produced at Annexure A-6.
7. It is further submitted by the applicant that when he did not get the arrears of pay and allowances in respect of the grant of BCR promotion vide Annexure A-3, along with the consequential benefits of fixation in his pension etc., he approached this Tribunal and filed OA No.5/2020. It is submitted by him that the said OA was later withdrawn by him as it had been observed by this Tribunal, in the course of hearing, that the said memo dated 19.08.2019 produced at Annexure A-5 herein, had not been challenged in that OA. As such, the OA No.5/2020 was permitted to be withdrawn with liberty to file this fresh OA. He has thus filed this OA challenging the memo dated 19.08.2019, at Annexure A-5. A copy of the order in OA No.5/2020 has been produced at Annexure A-7. It is to be noted that the Annexure A-7 order, at paragraph 4, has recorded that in OA No.180/00505/2022 9 the light of the facts revealed through the reply statement, it was incumbent on the applicant to challenge the proceedings for recovery against him on the strength of an inquiry report if he is really aggrieved. Without challenging that or the action against him for recovering the amount, a claim for recovery of the enhanced pay and arrears under the scheme or on the strength of Supreme Court Judgement was not sustainable. It is further recorded at paragraph 5 of the order that at that juncture the learned counsel for the applicant had sought to withdraw the OA without prejudice to his rights to challenge the proceedings initiated against him. Leaving open this option open, the OA was permitted to be withdrawn.
8. Further, in relation to the facts of the alleged fraud and issue of letter at Annexure A-5 to the applicant, it is submitted by the applicant that an investigation report in the matter was prepared by 3rd Respondent, Postmaster General, Central Circle, Ernakulam in the matter of fraud committed by Smt. M.T. Sreemathy, the RD Counter Postal Assistant at Kaloor Sub Post Office. A copy of the investigation report (CLIR) prepared by 3rd Respondent is produced at Annexure A-8. This report has indicated that the date of detection of fraud was 06.01.2012. Further the OA No.180/00505/2022 10 period of fraud was 19.08.2006 to 28.04.2010. It is submitted by the applicant that the modus operandi of the fraud is explained in paragraph V of the Annexure A-8 report. It is submitted by the applicant that the Director of Postal Services, Central Region Kochi, who conducted the investigation is not aware of the actual work done by the Savings Bank Control Organisation (SBCO) at the Head Office. This is evident from the report. It is submitted that the SBCO is actually doing audit works and is expected to do only random checks of a small percentage of the accounts sent from the Sub Office (S.O.). It is submitted by the applicant that when the money deposited by the account holder is not reported from the S.O. to SBCO, then how is it that the SBCO can even know the deposit of the amount of by different individuals in the RD accounts? Admittedly, as stated in Annexure A-8, deposits were not shown in the concerned accounts and this, as such, was not reported to the SBCO. The officials in the SBCO and Head Office were thus never in the knowledge of these non-deposits, as the vouchers were destroyed by the fraudster herself. It is submitted by the applicant that the inspecting officers such as the Assistant Superintendent of Post Offices(ASP) and Superintendent OA No.180/00505/2022 11 of Post Offices(S.P) should have checked the serial number of the vouchers when they conducted the inspection of the SO.
9. It is submitted that the Director of Postal Service, Central Region, who is the author of the report, deliberately wanted to protect those who are actual subsidiary offenders. The applicant and other officials have unfortunately figured in the Annexure A-8 report under the heading of 'contributory negligence'. However, what is their exact contribution to the negligence in this regard is not specified in Annexure A-8. In paragraph XII of Annexure A-8, six persons including the applicant who worked in SBCO Ernakulam HO during the period between June 2006 and July 2011 have been made 'subsidiary offenders'. The applicant had worked in SBCO section of Ernakulam HO from June 2009 to July 2011. It is submitted that all those who worked in the concerned SBCO section during the relevant period had since retired from service, when memos asking for deposit of share of loss were issued on them. All these persons, including the applicant, were issued memos demanding that they credit an amount of Rs.2 lakh each as per Annexure A-5. It is submitted that, in fact, all the other retirees ignored the notices issued as they knew no action could be taken. A couple of the concerned officials have also OA No.180/00505/2022 12 since passed away. It is only because the applicant had to get arrears due from the department and also get the benefit of consequential revision of pension, that the Department is taking action against him by not releasing the same till he credited the amount of Rs.2 lakh.
10. In this connection, the applicant submits that it is a well settled principle that when a person retires from service, the 'master-servant relationship' ends and, hence, no disciplinary action can be taken. The Annexure A-5 letter dated 19.08.2019 has been issued to the applicant 8 years after his voluntary retirement on 01.08.2011. Moreover, he reiterates that the deposit of money through vouchers was not reported to the SBCO by the concerned counter P.A. and, as such, it was not possible for the SBCO Section or him personally to detect such frauds. As stated in the CLIR, the said vouchers were destroyed by the concerned counter P.A. Smt. M.T. Sreemathy and as such, there was no way he could know the credit of money by the account holder. It is further submitted that out of total loss of Rs.41,78,908/-, an amount of Rs.1,50,000/- had been remitted back to the Department by the said Smt. M.T. Sreemathy before her death. Another Rs.50,000/- had been credited by the Sub Post Master, who was also identified as a subsidiary offender. Thus, the alleged net OA No.180/00505/2022 13 loss now works out to Rs.39,78,908/-. It has also been pointed out in the Annexure A-8 letter that recovery proceedings have been initiated against the property left behind by the fraudster. It is submitted the alleged loss may have been since fully realized.
11. It is submitted by the applicant that, from a RTI application made by him he had learnt that the 4th respondent, Senior Superintendent of Post Offices, Ernakulam had instructed the 5th respondent, the Senior Post Master, Ernakulam, vide letter dated 04.08.2019 produced by him at Annexure A-9, not to disburse the arrears of the BCR/TBOP schemes due to him since he is a subsidiary offender in the Kaloor fraud case as per CLIR. After this letter at Annexure A-9 came to his notice, the applicant had submitted another representation to the 4th respondent, Senior Superintendent of Post Offices, Ernakulam explaining his position and requesting that he be removed from the list of subsidiary offenders. He submitted another letter on 05.06.2020 and it is in reply to this that he received the impugned letter at Annexure A-11 dated 18.06.2020. This letter informed him that the PMG, Central Region had directed that the arrears may be withheld till the finalization of the fraud case. The OA No.180/00505/2022 14 applicant then submitted another representation to the Postmaster General, Central Region on 25.07.2020 on similar lines as earlier.
12. It is submitted by the applicant that the 6th respondent, Director General of Posts, New Delhi had issued a communication dated 29.11.2021, drawing attention to the Rules 106, 107 and 111 of Postal Manual Vol.III in regard to recovery proceedings relating to pecuniary loss caused to the Government through negligence by a Government servant. A copy of this communication dated 29.11.2021, is produced as Annexure A-13. In paragraph 3 of this communication it is indicated that it should be clearly understood by 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 commission of fraud or misappropriation. The letter also indicates that this does not mean that for the alleged lapses, an official cannot be 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 penalty of recovery, any other statutory penalty should be imposed. It is submitted that on the lines explained in these instructions, the applicant OA No.180/00505/2022 15 should have not been made responsible for the fraud committed at Kaloor SO by Smt. MT. Sreemathy.
13. Finally, among the 'Grounds' presented in the OA, the applicant contends that a fraud which was committed many years before and also when he had retired from service as far back as 01.11.2011, cannot be sufficient justification 8 years after retirement to issue recovery against him as per Annexure A-5. He contends that none of the people working in the SBCO had any role in this fraud. The SBCO was functioning as the internal check point of the money received and accounted for in Government Account. Since no vouchers were received, it was not possible to know the credit of money by the account holder. Further, he submits that the delay in payment to him of his arrears of pay, pension and other retirement benefits actually amounts to negligence on the part of the concerned officials. He is thus entitled for interest on the entire arrears of amount due to him. He relies on the dictum laid by the Hon'ble Supreme Court in Union of India vs. S.S. Sandhawalia {(1994) 2 SCC 240}, in which it has been held that payment of interest @12% is valid on delayed payment of retirement gratuity, which is delayed by almost a year. He submits that he is entitled for interest on delayed payment of OA No.180/00505/2022 16 arrears of retirement benefits and leave encashment amounts. He submits that the communications at Annexure at A-5 and A-11 treating him as a subsidiary offender as well as demanding money of Rs.2 lakh from him thus need to be quashed. He has thus filed the OA seeking the following relief:-
(i) To call for the records leading upto the issue of Annexure A5 and A11 and quash the same.
(ii) to direct the respondents to revise the pay w.e.f 1.1993 and disburse the arrears with in a time frame.
(iii) To direct the respondents to revise the pension and other retirement benefits including leave salary amount within a stipulated period.
(iv) To direct the respondents to pay interest on the entire arrears including retirement benefits and leave encashment amount @ 12 p.a.
(v) To grant such other relief or reliefs that maybe prayed for or that are found to be just and proper in the nature and circumstances of the case
(vi) To grant cost of this OA
14. The respondents have filed a reply statement in the OA. They have accepted that, as per the Annexure A-3 order dated 18.05.2019 issued by the office of the Chief Postmaster General, Kerala Circle, the applicant had been ordered to be placed in higher grade under the Biennial Cadre Review Scheme (BCR Scheme), with effect from 01.01.1993. It had been ordered to pay Rs.2,26,483/- as arrears to the applicant. However, OA No.180/00505/2022 17 the said payment was not made as Rs.2 lakh was due to be recovered from him, being the amount apportioned in the Kaloor fraud case for supervisory lapses. It is submitted that SBCO at Ernakulam HPO had failed to do the RD data entry and to ensure that Kaloor SO had completed the six monthly list of balances. They had failed to cross check the up-to-date balance available with SBCO with that of six monthly balance report of Kaloor SO. It is submitted that since duties like data entry work and obtaining six monthly balance reports from the SO had not been properly attended to by the SBCO, Ernakulam HPO, the officials working at SBCO were also found responsible for the loss sustained by the Department. It is submitted that the applicant, while working as Supervisor, SBCO, Ernakulam HPO, had a clear responsibility to ensure observance of the procedure prescribed by the relevant rules. If it had been done properly this kind of fraud which had led to substantial pecuniary loss to the Department could have been prevented.
15. It is submitted by the respondents that the allegation raised by the applicant, that the Department had tried to protect some senior officers, OA No.180/00505/2022 18 does not hold good. This was clear by the fact that officials at different levels were identified as subsidiary offenders. The applicant was one among them. The contribution of Supervisors like the applicant working at SBCO, Ernakulam HPO in the operation of the fraud was very clear. The pendency of work related to RD data entry had been neglected by the SBCO. There was failure in obtaining six monthly balance reports from SOs. As such, the applicant is also responsible towards the loss sustained by the Department. The averment of the applicant that as no vouchers were received it was not possible for the SBCO to detect the fraud is not valid. Even though vouchers were not received, if the work relating to RD data entry and verification of six monthly balance reports was done on a up-to-date basis, the fraud could have been prevented. It is submitted that the modus operandi adopted by the fraudulent official, Smt. M.T. Sreemathy, was to access the RD data entry option through the confidential supervisory password by obtaining the same unauthorisedly and also by incorporating all the non-credits into the respective accounts through the date entry option, operated by her. As such, if six monthly RD balance reports had been obtained from SO and checked by the SBCO, the balance difference could have been identified by the SBCO.
OA No.180/00505/2022 19 The fraud could have then been identified at an earlier stage. Thus, the SBCO at Ernakulam HPO is also responsible for non-
detection/facilitating continuance of the fraud by lack of supervision of the non-posting of SO RD by the due date in the Kaloor SO in particular.
16. It is submitted by the respondents that the SBCO unit also failed to carry out periodical verification of balances, which also facilitated the continuation of the fraud for a period of 46 months. Further, unlike what is stated by the applicant, if the loss sustained by the Department had been completely recouped, the applicant would not have been addressed to credit his share of the loss. He is also responsible for the loss sustained by the Department as he was the Supervisor, SBCO. In any case, any recovery proceedings initiated against the principal offender does not obviate the lapses which have occurred on the part of the applicant herein. Appendix 4 of Financial Handbook Vol.I, clause 2 and 3(a) and (b) stipulate that if any loss has occurred to the Department due to a lack of proper supervision, the supervisor at fault should be properly penalized by recovery of a proportionate loss for the fraud. It is pointed out that the applicant has not credited the amount of loss apportioned to OA No.180/00505/2022 20 him till date. The averment of the applicant that he is not responsible for the fraud committed at Kaloor SO by Smt. M.T. Sreemathy is not acceptable, as he had been working as a SBCO Supervisor, Ernakulam, HPO. He had failed to obtain six monthly balance report from the Sub Office. This was something which was to be performed by the SBCO wing periodically. In other words, if the RD data entry work had been up-to-date- and the six monthly balance reports had been obtained from Kaloor Sub Office for verification, the fraud committed by the RD counter PA at Kaloor SO could have been detected earlier. Hence, any further operation of the fraud could have been prevented. The contribution of the Supervisors like the applicant in allowing the occurrence of the fraud is thus very clear. As such, the applicant has to share the loss sustained by the Department.
17. The applicant has drawn attention in a rejoinder filed by him to the inquiry report at Annexure A-8, where the modus operandi had been explained. It is submitted that it can be ascertained from the report that it was not possible for the SBCO Section to find out about the fraud committed and, as such, the applicant or other officials working in the OA No.180/00505/2022 21 SBCO Section cannot be made subsidiary offenders. Further, in fact, there were instructions to outsource the work of RD if the work load was heavy. However, this was not done by the Superintendent of Post Offices or the Head Postmaster. The Register of Ledger/Office wise balance in SB-85 and SB-85(a) were not maintained with effect from 01.05.1992 as stated in the CLIP. In addition, RD vouchers checking was pending since 31.01.1991. It is to be noted that in respect of the fraud, no vouchers were sent to the Head Office by the Sub Office. Hence, the applicant who joined the SBCO Section in June 2009 and worked there for a short period cannot be made responsible. In fact, as stated in the Investigation Report (CLIR) the entire work was in arrears since 1991. No action was taken by the Superintendent of Post Offices or the Head Postmaster to clear it. The applicant has also brought out certain other technical aspects in relation to the maintenance of six monthly balance reports etc. in the rejoinder. It is submitted that the Financial Hand Book Vol.I, produced as Annexure R-1 by the respondents in appendix 4 actually applies to supervising officers like Superintendent of Post Offices/Assistant Superintendent of Post Offices, who are supposed to be conducting periodical inspections of the Sub Office. It is contended that in order to OA No.180/00505/2022 22 favour the higher officials, they have deliberately been not made subsidiary offenders and no action seems to have been taken against them.
18. Further, it is submitted that the aforementioned Financial Handbook at Annexure R-1 applies only to those who are in service and does not apply to retired personnel. It is submitted by the applicant that the 6th respondent D.G. of Posts, New Delhi had issued a letter to all the Heads of Circles/Regions regarding the number of unlisted schedules by agents in Post Office 5 year RD accounts. A copy of this letter dated 25.05.2006 is produced at Annexure A-14. It is submitted that if these instructions were followed by the Superintendent as well as the Assistant Superintendent of Post Offices, during their visits/inspections, the fraud would not have been committed. The alleged fraud had been committed between 2006 and 2010, whereas, this letter was issued in May 2006. The Superintendent as well as the Assistant Superintendent of Post Offices have presumably conducted inspections a number of times between 2006 and 2010. If they had been vigilant the fraud would not have occurred but they had repeatedly failed to follow the instructions in OA No.180/00505/2022 23 Annexure A-14. It is submitted that the Director of Postal Services, Central Region, who had conducted the investigation has deliberately avoided mentioning /discussing the roles of the Superintendent as well as the Assistant Superintendent of Post Offices and has not made them subsidiary offenders.
19. An additional point made by the applicant in the rejoinder is that having retired from service w.e.f. 01.08.2011(FN), a master-servant relationship between the Department and him has ceased to exist. The Annexure A-5 memo has been issued 8 years after his retirement and, as such, it has no 'legal validity'. It is only because some arrears were due to him that the authorities have been able to issue a notice to adjust the same, against the arrears due to him. All the workers in the SBCO section during the relevant period had been made subsidiary offenders. It is contended that since they have all retired from service, no amount can be recovered from them. In fact, none of them have even bothered to reply to the memo in this regard. In addition, the reply statement does not state as to how much has been realized by attaching and selling the property left behind by the person who committed the fraud. It is OA No.180/00505/2022 24 submitted that the loss to the Department might have already been realized. It is also submitted that the arrears of pay and allowances due to the applicant which has been drawn and withheld by the respondents, actually relates to the period from 1993 to 2011. The amount has not been paid even 11 years after the retirement of the applicant. The applicant, therefore, relies on the judgement in Union of India v. S.S. Sandhawalia { (1994) 2 SCC 240}, referred to earlier, that interest should be paid for the arrears. Moreover, 3 years after of drawing the arrears of pay, his balance of retirement benefits like gratuity, leave encashment and pension have not been revised and paid. There was no reason for inaction on the part of the respondent in revising the retirement benefits and paying the arrears. The representation that he had submitted was returned by Annexure R-2 stating that the matter is sub-judice. This response is incorrect as no case is pending with regard to the revision of pension based on Annexure A-3 and, as such, the revision of his retirement benefits is not sub-judice. No action can be taken against the applicant by the respondent as he is a pensioner, who had retired from service 11 years ago. Hence, it is submitted that the OA should be allowed in view of the instructions contained at Annexure A-13 issued by OA No.180/00505/2022 25 the Director General of Postal Services dated 29.11.2021.
20. After carefully considering the contentions framed above, we think it is important at the outset, before arriving at any conclusions, to be clear about the sequence of events in the case. From the details provided and as indicated in the beginning of the Annexure A8 Circle Level Investigation Report (CLIR), as well as in the reply statement filed on behalf of the respondents, the fraud in the Kaloor Sub-Post Office had been detected way back on 06.01.2012. The exact date of submission of the report at Annexure A-8, which was prepared by the Director, Postal Service Central Region, Kochi is not clearly indicated. It is also not clear to us about the action taken pursuant to the said Annexure A-8 report soon after its submission, atleast in respect of the applicant herein. The first step in this regard vis-à-vis the applicant thus appears to be the issuance of the Annexure A-5 impugned letter directing him to credit an amount of Rs.2 lakh, without prejudice to any disciplinary action that could be taken against him. This Annexure A-5 letter is dated 19.08.2019 and has been issued almost over 7 years after detection of fraud on 06.01.2012. It only indicates in the letter that, as per the said Report, the OA No.180/00505/2022 26 applicant has been held responsible for certain lapses for which he had to credit the said money.
21. Further as per the report and information provided in the reply statement by the respondents, the total amount of the fraud is estimated at Rs.41,78,908/- after the investigation. The applicant being a subsidiary offender has been directed to credit an amount of Rs.2 lakh as his share of the responsibility only on 19.08.2019 by Annexure A-5. It is to be noted that the applicant had taken voluntary retirement from service with effect from 01.08.2011. The letter dated 19.08.2019 at Annexure A-5 for crediting the amount of Rs.2 lakh issued to him 8 years after his retirement. Coincidentally, it also appears that it was around the same time that orders had been passed on his application for placement in the higher grade under the BCR scheme. Annexure A-3 order dated 18.05.2019, placing the applicant in the scale of Rs.1600 -2600/- from 01.01.1993 on the day on which his junior Sri K.C. Gopalakrishnan, PA (SBCO) was granted BCR, was ordered just 3 months before the recovery notice at Annexure A-5 was issued in the matter. As per the reply statement, at page 5, it had been ordered to pay Rs.2,26,483/- to the OA No.180/00505/2022 27 applicant which is presumably covering the arrears due to him after being placed in the BCR scheme with effect from 01.01.1993. Hence, from the above sequence of events and dates it appears that very soon after an amount of Rs.2,26,483/- was worked out to be paid to the applicant, a decision was also taken to recover as much as Rs. 2 lakh apportioned as his share as a subsidiary offender in the Kaloor fraud case.
22. What is unclear to us is the basis of linkage in above exercise, whether this is covered by a rule or any other office order, through which, the release of arrears to a pensioner for the time he was in service on placement in the BCR scheme can be linked to the recovery of an amount from him, which has been estimated without any details provided, after he was declared as a subsidiary offender by an internal report without a process of departmental action and due notice. The reply statement has not indicated the basis on which this has been done. The authorities also do not seem to have taken any decision on the representations made by the applicant, subsequent to the filing of the OA, on the ground that the matter is sub-judice. Our first concern, therefore, without going into the many technical details as to whether the applicant was correctly declared OA No.180/00505/2022 28 in the CLIR to be a subsidiary offender is that, in the absence of an explicit linkage between these two different acts i.e. release of pay arrears and the recovery of amount apportioned as his share, whether this can be judged legally correct particularly in the case of pensioners. As stated, this is without going into the many details in relation to the role and responsibilities of supervisory staff in the SBCO and whether the applicant had been rightly declared to be a subsidiary offender, on which both the sides have focussed a considerable amount of their pleadings. On the other hand, our consideration is on the plea which was taken only in passing by the applicant, i.e. after retiring from service with effect from 01.11.2011, his personal status has changed from being a 'government employee' to that of a 'pensioner'; what he has called as the master-servant relationship has ceased to exist. It is not clear to us as to how recovery from some loss which occurred due to alleged supervisory lapses during the period that he was supervisor/ employee of the Department can now be legally assigned on him after so many years of retirement. We also note that the concerned postal official responsible for the fraud, Smt. M.T. Sreemathy had worked in the RD counter for the period from 13.07.2006 to 21.05.2010, when the fraud was supposed to OA No.180/00505/2022 29 have taken place. The applicant worked as Supervisor of SBCO for the period June 2009 to July 2011. Effectively, therefore, there was only 11 months of the period as overlap, when Smt. M.T. Sreemathy worked in the RD counter with the amount of time that the applicant worked as her supervisor. It is not clear how the amount of Rs.2 lakh was worked out and apportioned on him later when he was a pensioner.
23. We note that the applicant had taken voluntary retirement on 07.08.2011. He thus became a pensioner in status with effect from 08.08.2011. Thus, as posed earlier, the question still remains as to whether any recovery can be made at this length of time for a fraud which took place in July 2011 covering the period of 11 months when there was alleged supervisory lapse, by issuing a notice as late as 19.08.2019. Recovery is sought to be made 8 years of retirement without recourse to specific rules or OM's in relation to his present status as a pensioner. Further, the Annexure A-5 notice has directed him to credit the Rs.2 lakh, without prejudice to the disciplinary action that may be taken against him. Any proposed disciplinary action against a government pensioner is covered under Rule 8 of the Central Civil OA No.180/00505/2022 30 Services (Pension) Rules, 2021, which deals with the power to withhold or withdraw pension. The relevant portion of this Rule are reproduced below:
8. Power to withhold or withdraw pension .- (1) The President reserves to himself the right of withholding a pension or gratuity, or both, either in full or in part, or withdrawing a pension in full or in part, whether permanently or for a specified period, and of ordering recovery from a pension or gratuity of the whole or part of any pecuniary loss caused to the Government, if, in any departmental or judicial proceedings, the pensioner is found guilty of grave misconduct or negligence during the period of service, including service rendered upon re-
employment after retirement :
Provided that the Union Public Service Commission shall be consulted before any final orders are passed:
Provided further that where a part of pension is withheld or withdrawn the amount of such pension shall not be reduced below the amount of minimum pension under rule
44. 2 (a) .........
(b).........
(c) The departmental proceedings, if not instituted while the Government servant was in service, whether before his retirement, or during his re-employment, -
(i) shall not be instituted save with the sanction of the President in Format 2;
(ii) shall not be in respect of any event which took place more than four years before such institution; and
(iii) shall be conducted by such authority and in such place as the President may direct and in accordance with the procedure applicable to departmental proceedings in which an order of dismissal from service could be made in relation to the Government servant during his service:
Provided that for the purpose of instituting departmental OA No.180/00505/2022 31 proceedings under this sub-rule, a memorandum of charges shall be communicated to the pensioner concerned in Format 3.
(emphasis supplied) Hence, as per these Rules, the departmental proceedings if not instituted while the Government servant was in service, whether before his retirement or during his re-employment, shall not be instituted save with the sanction of the President in Format 2. It also shall not be in respect of any event which took place more than four years before such institution. Further, they have to be conducted by such authority and in such place as the President may direct and in accordance with the procedure applicable to departmental proceedings in which an order of dismissal from service could be made in relation to the Government servant during his service.
24. Given this legal provision, it is not known as to under which provisions, the letter at Annexure A-5 even mentioned the possibility of disciplinary action against the applicant. It appears from what the applicant has contended that all those who were the applicant's colleagues in SBCO have neglected notices issued to them about recovery. We find that in light of the available provisions and rules the recovery of Rs.2 lakh from a retired employee, 8 years after an apparent OA No.180/00505/2022 32 lapse was committed does not seem to have a legal footing and is also affected by the principles of natural justice. In addition, a specific linkage being made between two separate actions i.e. recovery of Rs.2 lakh vide Annexure A-5 and release of arrears after Annexure A-3, also seems to be incorrect in the absence of any specific instructions or Office Memorandum or Rules covering pensioners in such cases. Hence, without going into any related aspects such as roles or responsibilities of SBCO supervisors over postal officials, we find that these two separate actions cannot be linked together, without adequate justification and the necessary legal backing. We, therefore, quash the attempted linkage between these two actions.
25. We are accordingly disposing of the OA with a direction to the respondents to take steps pursuant to Annexure-3 to revise the pay of the applicant with effect from 01.01.1993 on his placement in the higher grade under the BCR scheme. They may also to release his arrears within next three months from the date of receipt of this order. They may also, accordingly, revise his pension and also consequently other retirement benefits, including leave salary dues, within the same period. We also OA No.180/00505/2022 33 feel there has been a clear justification established for entitling the applicant to interest for delayed payments in the matter. The respondents may pay interest on the entire arrears including retirement benefits, leave encashment @ 9% per annum effective from the date of entitlement.
This too will be worked out and paid to the applicant within the said three months period indicated for paying the arrears.
26. Finally, in relation to the recovery proposed by Annexure A-5, as noted we are not in possession of sufficient information as to whether such recovery can be legally made from a retired Government servant for an event which took place more than 8 years prior to the issuance of the notice of recovery. We are not making any directions in this regard. However, even if respondents still decide to proceed on whatever legal basis they have for the same, we still clarify that it cannot be linked with the release of his arrears consequent to refixation of pay and pension etc, as ordered above. We have also, in relation to possible disciplinary action, already pointed out the relevant provisions of Rule 8 of the Central Civil Services (Pension) Rules, 2021.
OA No.180/00505/2022 34
27. The OA disposed of with the above directions. We make no order as to costs.
(K.V. EAPEN) (JUSTICE K. HARIPAL)
ADMINISTRATIVE MEMBER JUDICIAL MEMBER
"va"
OA No.180/00505/2022
35
Original Application No. 180/00505/2022
APPLICANT'S ANNEXURES
Annexure A1 - True copy of the letter No.22-06/2000 PE-1(Pt) dt.
08.05.2017 issued by the 7th respondent Annexure A2 - True copy of the letter No.22-06-2000-PE-1(Pt dated 18.09.2018 issued by the 7th respondent Annexure A3 - True copy of the Order No.ST/13-60/2017(Pt) dated 18.05.2019 issued by the 1st respondent Annexure A4 - True copy of the applicant submitted a representation dt. 10.07.2019 to the 1st respondent Annexure A5 - True copy of the Memo No.F 4-1/2012 dated 19.08.2019 issued by the 4th respondent Annexure A6 - True copy of the letter dated 26.08.2019 to the 4th respondent Annexure A7 - True copy of the Order dated 01.09.2022 in OA No.5/2020 Annexure A8 - True copy of the Investigation Report dated NIL issued by the 3rd respondent Annexure A9 - True copy of the Memo No.B1/5-14/14-15 dated 14.08.2019 Annexure A10 - True copy of the representation dated 23.12.2019 Annexure A11 - True copy of the Memo No.B1/5-14/14-15/(Pt.) dt.18.06.2020 issued by the 4th respondent Annexure A12 - True copy of the representation dated 25.07.2020 OA No.180/00505/2022 36 Annexure A13 - True copy of the Communication No.DO No.INV-
17/18/2021 -INV-DOP dt. 29.11.2021 issued by the 6th respondent Annexure A14 -True copy of Letter F.No.111-14/2001-SB dated 25.05.2006 issued by the 6th respondent RESPONDENTS' ANNEXURES Annexure R1 - True copy of the relevant page of Clause 2 and 3(a) and (b) of Appendix 4 of Financial Hand Book Volume I Annexure R2- True copy of the letter No.INV/2-29/2011-12.
Vol.2(Pt) dated 27.01.2021 issued by the 3rd respondent to the applicant
-x-x-x-x-x-x-x-x-
OA No.180/00505/2022