IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN FRIDAY, THE 1ST OCTOBER 2010 / 9TH ASWINA 1932 WP(C).No. 24679 of 2005(K) ----------------------------------------- PETITIONER(S): -------------------------- G.SEKHARAN NAIR,RAGAM, KEEZHOOR,VELLAYANI P.O., THIRUVANANTHAPURAM. BY ADVS. SMT.SREEDEVI KYLASANATH, SRI.ARUN.B.VARGHESE, SRI.T.P.DEYANANTHAN, SRI.JESSEL VINOHAR RODRICKS, SMT.S.PREETHA. RESPONDENT(S): --------------------------- 1. KERALA SMALL INDUSTRIES DEVELOPMENT CORPORATION LTD.,REPRESENTED BY ITS MANAGING DIRECTOR,HOUSING BOARD BUILDING, SANTHI NAGAR,THIRUVANANTHAPURAM. 2. THE DIRECTOR,VIGILANCE AND ANTI CORRUPTION BUREAU,THIRUVANANTHAPURAM. R1 BY ADV. SRI.P.FAZIL, SC, SIDCO R2 BY GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01/10/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.24679/2005 K APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE NOTICE NO.VIG/15262/2000 DTD. 24/11/2004 ISSUED BY THE 1ST RESPONDENT. P2: COPY OF THE REPLY DTD. 20/12/04 SUBMITTED BY THE PETITIONER TO P1. P2(A): COPY OF THE LETTER DTD. 3/07/98 SUBMITTED BY THE PETITIONER. P3: COPY OF THE PROCEEDINGS NO.PER(3)19148/01 DTD. 30/07/2005 ISSUED BY THE 1ST RESPONDENT. P4: COPY OF THE REPRESENTATION DTD.13/08/2005 SUBMITTED BY THE PETITIONER BEFORE THE SUTHARYA KERALAM. RESPONDENT'S EXHIBITS: R1(A): COPY OF THE LETTER NO.27418/F2/2004/ID DTD. 30/10/2004 ISSUED BY THE PRINCIPAL SECRETARY TO THE GOVERNMENT TO THE 1ST RESPONDENT. R1(B): COPY OF THE LETTER NO.CR(VC 16/2000) 25243/2000 DTD. 25/11/2000 ISSUED BY THE DIRECTOR, VIGILANCE AND ANTI CORRUPTION BUREAU TO THE 1ST RESPONDENT. R1(C): COPY OF THE LETTER NO.C4/VC 16/2000/SIU/25243 DTD. 24/01/2004 ISSUED BY THE VIGILANCE AND ANTI CORRUPTION BUREAU. R1(D); COPY OF THE LETTER NO.VIG/15262/2000 DTD. 18/01/2005 ISSUED BY THE 1ST RESPONDENT. R1(E): COPY OF THE LETTER NO.2211/F2/2005/ID DTD. 17/02/2005 ISSUED BY THE GOVERNMENT. R1(F): COPY OF THE LETTER NO.VIG/15262/2000 DTD. 30/11/2005 SUBMITTED BY THE 1ST RESPONDENT. R1(G): COPY OF THE LETTER NO.21804/F2/05/ID DTD. 5/12/2005 FROM THE GOVERNMENT. R1(H): COPY OF THE LETTER NO.3081/B1/205/VIGILANCE (B) DEPARTMENT DTD. 7/10/2005 FORWARDED TO 1ST RESPONDENT. /TRUE COPY/ P.S.TO JUDGE Kss S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= W.P(C) No. 24679 of 2005 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 1st day of October, 2010. J U D G M E N T The petitioner was an employee of the 1st respondent-KSIDC. He retired from service on 28-2-2001. All his retirement benefits were disbursed after his retirement. Thereafter, the petitioner was served with Ext. P1 dated 24.11.1004 intimating the petitioner that the petitioner is liable to pay an amount of Rs. 98021.45 towards loss caused to the KSIDC on account of certain allegedly illegal actions of the petitioner and directing that the petitioner shall remit this amount to the 1st respondent. This is stated to be on the basis of a report submitted to the Government of Kerala by the Director of Vigilance and Anti-corruption Bureau. On the basis of Ext. P1, additional gratuity found to be due to the petitioner on enhancement of D.A as per Ext. P3 proceedings was directed to be adjusted against the said amount allegedly due from the petitioner. That is under challenge in this writ petition. The petitioner seeks the following reliefs: “i) To issue a writ of certiorari or any other writ or order calling for the records relating P1 an P3 and quash the same. ii) To issue a writ of mandamus or any other writ or order directing the 2nd respondent to produce the report on the basis of which proceedings was initiated against the petitioner, before this Hon'ble Court. Iii) Issue a writ of mandamus or any other appropriate writ, order or direction directing the 1st respondent to consider and pass orders on Ext. P 2 within a time frame. iv) To declare that the recovery proceedings initiated against the petitioner is illegal and arbitrary.” 2. The petitioner raises two contentions. First is that the petitioner retired on 28.2.2002 and any liability due from him ought to have been fixed within 3 years of retirement. It has not been done within the said time limit insofar as Ext. P1 is dated 24.11.2004, W.P.C. No. 24679/2005 -: 2 :- which is 3 years and 9 months after his retirement. The second is that no liability could have been fixed against the petitioner without notice to the petitioner. As is clear from Ext. P1, it was not preceded by any notice or hearing to the petitioner. 3. A counter affidavit has been filed by the 1st respondent as also by the 2nd respondent. Both proceed on the basis that the Vigilance and Anti-corruption Bureau has recommended recovery of that amount from the petitioner and therefore they are right in adjusting the amount against the additional gratuity due to the petitioner. 4. I have considered the rival contentions in detail. 5. Admittedly, the amount of Rs. 11,484/- sanctioned to the petitioner is towards additional gratuity. Insofar as K.S.R is made applicable to employees of the 1st respondent, they could have recovered amounts from the gratuity due to the petitioner only in accordance with Part III of KSR. Under Rule 3 of Part III of KSR, liability, if any, on an employee should have been fixed within three years of retirement. Moreover, that could have been fixed only after issuing a notice to the employee and hearing him on the same. Admittedly, both have not been done in this case. Of course, the respondents would take a contention that in the proceedings before the Anti Corruption Bureau, notice was also issued to the petitioner. That does not make it a procedure prescribed under Rule 3 of Part III of KSR. The procedure before the Vigilance is only an enquiry notice for deciding as to whether any proceedings should be initiated against the petition. The notice issued in those proceedings cannot be equated with notice under Rule 3 of Part III of KSR . In any event, after 3 years, no recovery could have been made from the DCRG due to the petitioner. If at all any amount as stated in Ext. P1 has to be W.P.C. No. 24679/2005 -: 3 :- recovered from the petitioner that could only have been otherwise and not from the DCRG due to the petitioner. Even if KSR is not applicable to the employees of the KSIDC, then the recovery from gratuity can only be in accordance with with the Payment of Gratuity Act. Under the Payment of Gratuity Act, gratuity can be forfeited only if the petitioner has bee dismissed for a misconduct involving loss of the employer n account of misconduct or for riotous or disorderly conduct that also has to be decided only after notice and hearing to the petitioner. Since admittedly no notice and hearing have been granted to the petitioner for recovering from gratuity, even if gratuity is under Payment of Gratuity Act the same cannot be forfeited against the alleged loss caused to the KSIDC. Therefore, I am satisfied that the impugned orders to the extent it seeks to recover amounts from the DCRG due to the petitioner is clearly illegal and unsustainable. Accordingly, to that extent, the impugned orders are quashed. The 1st respondent is directed to pay to the petitioner the said amount of Rs. 11,484/- within one month from today. The writ petition is disposed of as above. Sd/- S. Siri Jagan, Judge. Tds/