2009 (4) KHC 173, 2009 (4) KLT SN 23 (Case No.26)
IN THE HIGH COURT OF KERALA AT ERNAKULAM
Justice P.R.Ramachandra Menon
W.P.(C) No. 14545 of 2008
Advocates appearing for the Parties : K.Harilal; P.K.Babu
J U D G M E N T
P.R.Ramachandra Menon, J.
1. The case of the petitioner, who is an octogenarian, has got a long history; particularly since he retired from the service 2 1/2 decades back, in the year 1984.
2. Earlier, the petitioner was working in the Fisheries Department of the Government of Kerala as Deputy Director, when he was appointed as the Managing Director of the Fishermen's Welfare Corporation and Fisheries Corporation. During his tenure as above, Njarackal Malsyolpadaka Co-operative Society Limited, who was a 'beneficiary Society' and eligible to obtain financial assistance in accordance with a Scheme, was provided with the financial assistance of Rs.59,202.75 and accordingly, a mechanized boat ('Boat Kerala 70') was allotted and entrusted to the said Society.
3. Subsequently, the Society turned to be a defaulter and the boat was taken back by the second respondent herein, with the permission of the Director and it was re allotted to a group of six fishermen headed by one Mr. Narayanankutty, on the strength of the surety by name V. M. Thomas, who had executed necessary documents in favour of the Fisheries Department, creating equitable mortgage over the property of 2 acres and 40 cents. Even though the boat was released to the aforesaid Narayanankutty after effecting the necessary repairs, there was no substantial repayment from the date of release on 27/09/1997, till it was seized on 25/01/1980. Finally, as per the sanction given by the second respondent, it was auctioned for Rs. 13,000/-. When the Revenue Recovery proceedings were initiated against the defaulter Narayanankutty for realization of arrears, he had approached this Court by filing OP 7452 of 1982 contending that the boat had already been transferred by him to the surety Mr. V. M. Thomas in a private deal, as advised by the officials of the department. This made this Court to order a vigilance enquiry, directing to investigate whether there was any diversion of funds with the connivance of the officials.
4.During the course of the enquiry, a report was called for from the department, on the point as to whether there was any negligence on the part of the officials in realizing the arrears. Accordingly, the Fisheries Department submitted a report stating that, a loss of Rs.75,799.46 was caused to the department because of the dereliction of duty on the part of the petitioner, while the enquiry officer had exonerated all the other officials, who had direct control and supervision over the boat. Pursuant to the above, revenue recovery proceedings were initiated against the petitioner, which made him to approach this Court by filing OP 964 of 1992, mainly contending that the proceedings were pursued against the petitioner behind his back and that he was never given an opportunity of hearing. After considering the facts and figures, this Court set aside the impugned proceedings as per Ext. P10 judgment, however making it clear that, the proceedings could be pursued and finalized, after calling for the objections, if any, from the petitioner and also giving an opportunity of hearing to him.
5.Admittedly, as per the vigilance report, it has been observed that no proceedings were legally sustainable against the petitioner under the relevant provisions of the KSR and it was in the said circumstance, that the vigilance department suggested to consider the scope of invoking Section 3 of the 'Public Accountants Act', which led to the recovery proceedings initiated against the petitioner. In furtherance to Ext. P10 judgment, a notice was issued to the petitioner, who explained the actual position, but allegedly without considering the same property, Ext. P14 order was passed, followed by Ext. P15 demand notice, fixing the liability upon the petitioner, which in turn has been subjected to challenge in the present Writ Petition.
6. The second respondent has filed a counter-affidavit, seeking to sustain the action pursued by the department and also pointing out that, the remedy available to the petitioner can only be a 'Civil Suit' as provided under Section 7 of the Act and not by filing any Writ Petition under Article 226. Reliance is also placed on the suggestion made by the Director of Vigilance Investigation, recommending the possibility of invoking Section 3 of the 'Public Accountants Act', But neither Ext. P14, nor the counter-affidavit does reflect any conscious decision taken by the Government, as to the applicability of Section 3 of the above Act, with specific reference to the facts and circumstances of the case and the status of the petitioner as on date.
7. The learned Government Pleader during the course of hearing, placing reliance on the decision rendered by this Court in Padmanabha Iyer v. State of Kerala, 1974 KLT 556 submitted that petitioner is liable to be regarded as a 'public accountant' and further that the impugned order passed by the authority on the basis of the said statutory prescription is perfectly valid and sustainable. The scope and applicability, as well the manner in which it is to be dealt with, is dearly discernible from the opening paragraph of the above decision itself. The Act will not be and cannot be attracted except in the circumstances expressly mentioned therein, where the concerned person who was holding the office of the 'public accountant' as defined under 'Section 2(b)' of the Act should have been entrusted with the receipt, custody, possession or control over any monies or security for money taken or other property belonging to the-Government and should have acted in a contrary manner than it was actually intended. In the instant case, the petitioner, by virtue of his office, had sanctioned the allotment of the boat, of course with the permission and authority of the second respondent/Director and when the beneficiary turned to be a defaulter, it was subsequently taken back and sold in public auction. The allegation is only such that the petitioner did not take effective steps to realize the loan from the defaulter, between the period from the date of release of the boat on 27/09/1977, till the date of seizure of the boat on 25/01/1980. This, at best, may amount to some supervisory lapse and even in such circumstances, for holding the delinquent employee guilty of the misconduct, it had to be enquired into, in the manner as contemplated under the relevant provisions of law.
8. The petitioner admittedly retired from the service in the year 1984 and was never served with any notice, either during the course of his service or even within the permissible period after the retirement, for realization of the loss as contemplated under Part III Rule 3 of the Kerala Service Rules. The respondents do not have a case that the alleged loss, which has been quantified without any notice to the petitioner can be recovered invoking the provisions under the KSR, particularly since the enabling provision (as borne by Note 3 of Rule 3 Part III, KSR) stipulating that the liabilities of an employee should be quantified either before or after the retirement and intimated to him before the retirement if possible and after the retirement within a period of 3 years on becoming the pensioner, found a place in the statute book only in 1986: whereas the petitioner had retired from the service as early as in 1984.
9. The scope and applicability of the Public Accountants Act, 1963, have been very much considered and explained by the Division Bench of the this Court in Paramu Piliai v. District Collector, 1989 (1) KLT 224 wherein it has been categorically held that definition of the expression 'public accountant' will not take 'any employee' in the service of the Government and will take in only the employee as specifically stipulated therein. It is further observed that, if the loss is caused by the conduct of a person employed in the service of the Government, by negligence or misconduct or otherwise than in respect of the moneys, securities for money, documents or other property entrusted to him, the remedy available to the State to recover the said loss, is either by resorting to the provisions of the Kerala Civil Services (Classification, Control and Appeal) Rules or by instituting an appropriate suit for recovering the loss, or damages caused by the negligence or misconduct on the part of the Government servant. It has been stated in crystal clear terms that, the above provision of the law cannot be pressed into service, where there is no entrustment of moneys, securities for money, documents or other property belonging to the Government or belonging to any person or persons or to any institution for and on behalf of the Government to a public accountant.
10. Coming back to the case in hand, the only allegation against the petitioner is that, he did not take effective steps for realization of the loan, on the default committed by the allottee/beneficiary, to whom the boat was entrusted. This will not alter the status of the petitioner, who had acted in accordance with the Rules, Stipulations and Norms, so as to be categorized as a 'public accountant', to be in the dock. More so, when the position of law has been made clear in unequivocal terms by the Division Bench, as per the decision cited herein before.
11. In the above facts and circumstances, the impugned orders passed by the respondents cannot have any valid existence at all and hence the recovery proceedings pursued against the petitioner as per Ext. P14 and P15 are hereby set aside. However, it is made clear that, this will not stand in the way of the respondents from proceeding against the actual defaulters or their sureties, if permissible in law, particularly in the light of the specific contention raised from the part of the petitioner that the boat was released to the defaulter Narayanankutty on the basis of the security furnished by a surety by name Mr. V. M. Thomas, creating equitable mortgage over 2.40 acres of land.
The Writ Petition is allowed as above. No cost.