IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.PADMANABHAN NAIR WEDNESDAY, THE 12TH MARCH 2008 / 22ND PHALGUNA 1929 AS.No. 251 of 2001(C) -------------------------------- OS.640/1992 of II ADDL.SUB COURT,TRIVANDRUM .................... APPELLANT - PLAINTIFF: --------------------------------- N. BOOTHALINGAM, EX-CHAIRMAN, KERALA STATE ELECTRICITY BOARD, S/O.LATE P.S. NILAKANTA IYER, AGED 66, RESIDING AT T.C.. NO.20/1682, SANTHI NAGAR, THAMALAM ROAD, KARAMAN, THIRUVANANTHAPURAM. BY ADV. SRI.A.N.KUTTAN RESPONDENTS - DEFENDANTS: ------------------------------------------- 1. KERALA STATE ELECTRICITY BOARD, THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY, VAIDHYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM. 2. FINANCIAL ADVISER & CHIEF ACCOUNTS OFFICER, K.S.E. BOARD, VAIDHYUTHI BHAVAN OF DO. DO. 3. THE CHIEF ENGINEER (CIVIL), K.S.E. BOARD, VAIDHYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM. BY ADVOCATE SHRI C.K.KARUNAKARAN, SC FOR KSEB THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 12/03/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K. PADMANABHAN NAIR, J. = = = = = = = = = = = = = = = = = = = A.S. NO.251 OF 2001 = = = = = = = = = = = = = = = = = = = Dated this the 12th day of March, 2008 J U D G M E N T -------------------- Plaintiff in O.S. No.640 of 1992 on the file of the Subordinate Judge's Court, Thiruvananthapuram, is the appellant. He entered in service as a Junior Engineer in the Electricity Department of the State Government in the year 1954. Consequent to the formation of the Kerala State Electricity Board on 1.4.1957 he became an employee of the KSEB-first defendant. Subsequently he became the Chairman of the KSEB and retired from service on 30.4.1988. There was delay in sanctioning pension and Death-Cum-Retirement Gratuity. Finally pension was sanctioned after adjusting the entire amount due as DCRG towards the amount stated to be due to the KSEB. The plaintiff filed the suit. Following were the material averments in the plaint: Plaintiff submitted pension papers as required under the Kerala Service Rules which is adopted by the KSEB for application to its employees. There was inordinate delay in sanctioning the A.S.. NO.251 OF 2001 -: 2 :- pensionary benefits. Even when it was sanctioned the KSEB withheld his entire DCRG amount to the tune of Rs.45,000/- as per order dated 29.11.1988. The third defendant as per order dated 10.5.1991 directed to recover an amount of Rs.32,289.54 from the DCRG due to the plaintiff and also to withhold Rs.8,710/-. On the basis of the above illegal order, the second defendant recovered by adjustment the entire DCRG amount of Rs.45,000/-. The liabilities, if any, outstanding against the plaintiff had never been quantified and intimated to him either before or after his retirement. No opportunity was afforded to him to explain his case as enjoined under the rules. There was violation of relevant rules which militated against the settled law. Plaintiff was compelled to pay an amount of Rs.476/- to the KSEB which he was entitled to get refunded to him. Defendants did not disburse the pay and allowances amounting to Rs.6,882.93 to the plaintiff. The total amount due to the plaintiff from the defendants including the interest towards belated payment will come to Rs.86,773.06 as per the statement of accounts given in the schedule to the plaint. Hence the suit for A.S.. NO.251 OF 2001 -: 3 :- recovery of Rs.86,773.06 with interest at the rate of 18.5% per annum. 2. Defendants filed a written statement with the following contentions. The suit was not maintainable. The averment that the plaintiff had submitted his pension papers in time as required under the KSR was denied. As per Rule 110 Part III KSR every Government employee should submit his formal application for pension at least one year prior to his anticipated retirement. Plaintiff submitted his formal application for pension only on 15.1.1988, i.e., 3½ months prior to the date of his retirement. Plaintiff did not produce non-liability certificate. There were many liabilities outstanding against the plaintiff with the KSEB which included disallowed establishment claims and interest on house construction advance taken by the plaintiff. The liability incurred by the plaintiff during his deputation period from 15.9.1980 to 8.3.1982 with a Foreign employer was not settled. All this caused some delay. Pension of the plaintiff was sanctioned on 29.11.1988, but the DCRG amount was withheld for want of final non-liability certificate and vigilance A.S.. NO.251 OF 2001 -: 4 :- clearance. The averment that there was inordinate delay in sanctioning the pensionary benefit was denied. Pension was sanctioned within 7 months from the date of retirement and even within one year from the date of formal application. The averment that orders issued by the third defendant was tainted with illegality and therefore unsustainable is without any basis. The averment in paragraph 6 of the plaint was denied. The averment that the plaintiff was not given opportunity was also denied. The KSEB and its officials did everything in accordance with the provisions of law. The averment that the liability against the plaintiff was never quantified was denied. The details of various amounts outstanding against the plaintiff to the tune of Rs.45,475.54 were also given in the written statement. The amounts were adjusted towards the DCRG due to the plaintiff and he had deposited the balance amount of Rs.476/-. The recovery made by the KSEB was legal and proper. Plaintiff was fully aware of the liability before his retirement. Final liability was found out and the plaintiff was intimated formally about the liabilities on 17.1.1989 by the Accounts Officer of the GAD A.S.. NO.251 OF 2001 -: 5 :- Section of the second defendant. Since the plaintiff offered no explanation, the DCRG amount due to the plaintiff was adjusted only in August, 1991. Defendants prayed for dismissal of the suit. 3. Before the trial court plaintiff gave evidence as P.W.1 and Exhibits A1 to A20 proved and marked. On the side of defendants Exhibits B1 to B9 proved and marked and D.W.1 was examined. Trial court found that regarding a portion of the amount there was sufficient notice as contemplated under Rule 3 Part III of KSR. But an amount of Rs.27,150/- was illegally withheld. It was also held that in addition to that Rs.476/- was paid by the plaintiff. So the plaintiff is entitled to get refund of Rs.476/- also. Thereafter the court below calculated the amount which the plaintiff is entitled to get after the date of filing of the suit which is fixed as Rs.31,955.25. Court below found that the plaintiff is entitled to get RS.59,105.25 with interest at the rate of 6% per annum from the date of suit till realisation of the amount of Rs.27,150/- from the defendants and their assets. Dissatisfied with that part of the decree by which the trial A.S.. NO.251 OF 2001 -: 6 :- court disallowed certain amounts, plaintiff himself had filed this appeal. 4. Defendants have not challenged that part of the decree by which the court below decreed the suit. It is submitted by the Standing Counsel for the KSEB that the Board has satisfied the amount decreed by the court. So in this appeal, the only question arising for consideration is whether the finding of the court below that the deduction of certain amounts was legal as there was service of notice on the plaintiff is legal or not. 5. According to the appellant in paragraph 7 of the plaint it was specifically averred that the liabilities, if any, outstanding against the appellant was never been quantified and intimated to him either before or after his retirement and no opportunity was granted to the appellant to explain his case as enjoined under the Rules. It was also averred that the recovery made from the DCRG amount due to the appellant was violation of the rules and militated against settled law. 6. A very detailed written statement was filed. In A.S.. NO.251 OF 2001 -: 7 :- paragraph 7 of the written statement it was stated that the allegation that no opportunity was ever been granted to the appellant was not true and the KSEB and its Officials have done everything in accordance with the provisions of law. In paragraph 11 of the written statement it was stated that final liability was found out and appellant was intimated formally about the liability on 17.1.1989 by the Accounts Officer of GAD Section of the second defendant. It was further stated that the appellant did not offer any explanation. 7. Learned counsel for the appellant has strenuously argued before me that there is absolutely no material on record to show that the liabilities, if any, outstanding against the appellant was quantified and intimated to him within three years from the date of his retirement. Relying on Notes 2 and 3 of Ruling 3 of Part III of KSR learned counsel for the appellant has argued that in this case the respondents are not entitled to make any deduction. Notes 2 and 3 of Part III KSR reads as follows: “Note 2.- The word 'pension' used in this rule does not include death- cum-retirement gratuity. Liabilities fixed against an employee or pensioner can be A.S.. NO.251 OF 2001 -: 8 :- recovered from the death-cum-retirement gratuity payable to him without the departmental/judicial proceedings referred to in this rule, but after giving the employee or pensioner concerned a reasonable opportunity to explain. Note 3.- The liabilities of an employee should be quantified either before or after retirement and intimated to him before retirement if possible or after retirement within a period of three years on becoming pensioner. The liabilities of a pensioner should be quantified and intimated to him”. 8. In Ruling No.3 of Part III KSR it is stated that it is not necessary to obtain the consent of the pensioner, but there must be communication of such liability to him so as to enable him to submit explanation before the recovery is effected. It should be specifically stated that in the communication that if no reply is received within 30 days of its issue, it will be presumed that the employee or pensioner has no explanation to offer. So the question arising for consideration is Whether there is any material to show that liabilities of the appellant were quantified and intimated to him within three years from the date of his retirement. A.S.. NO.251 OF 2001 -: 9 :- 9. It is the common case of the parties that the appellant retired from service on 30.4.1988. Trial court relying on Exhibit B3 found that the appellant was informed about the liability to the tune of Rs.30,239.54. According to the respondents this was an intimation as contemplated under Note 3 and Ruling 3 of Part III KSR. The text of Exhibit B3 letter reads as follows: “An amount of Rs.30,239/54 is the recorded liability outstanding against you to the Board, the details of which are given in the separate sheet attached. You may please arrange to send in the TA Bills for 4/88 and 6/88 for enabling this office to adjust the advance of Rs.6,000/- drawn for the 2 months”. 10. First of all there is no material to prove that Exhibit B3 letter was served on the appellant. Receipt of the said letter was denied by the appellant. In spite of such denial, no evidence was adduced by the respondents to show that actually Exhibit B3 was served on the appellant. So there is nothing on record to show that that was intimated to the A.S.. NO.251 OF 2001 -: 10 :- appellant. Again, going by the ruling the appellant ought to have been asked to offer his explanation. Exhibit B3 does not contain any such intimation which he was called upon to offer his explanation. Further Ruling No.3 of Part III of KSR shows that appellant should have been given 30 days' notice to submit his explanation. Such a clause was also absent in Exhibit B3. So even assuming that Exhibit B3 letter was prepared by the Board, there is nothing on record to show that that was ever communicated to the appellant. Exhibit B3 does not satisfy those statutory requirements. Further, in Exhibit B3 the claim is only Rs.30,239.54 whereas the final claim was Rs.45,000/-. Respondents relied on Exhibits B6 and B7 to show that that were communicated to the appellant. Exhibit B7 is a certificate. That is not a communication as contemplated under Note.3 of Part III KSR. It is not a communication addressed to the appellant. There is also no material to show that this has actually been served to the appellant. On the other hand, Exhibit B6 (Exhibit A2) shows that the Account Officer had signed that letter only on 28.8.1991 by which liability was intimated to the appellant. It A.S.. NO.251 OF 2001 -: 11 :- is very pertinent to note that there is absolutely no mention of Exhibit B3 in Exhibit A2. If, as a matter of fact, such intimation was actually given to the appellant one would expect the respondents to mention that letter also in Exhibit A2 reference. On the other hand, Exhibit A2 refers only an order of the Board dated 10.5.1991 and also Exhibit B7 certificate of the Secretary of the Board. So there is absolutely no material on record to show that Notes 2 and 3 and the principles laid down in Ruling No.3 were complied with in this case. Adjustment of Rs.45,000/- which was due to the appellant as DCRG after three years after the date of his retirement was illegal. He is entitled to get the entire DCRG amount released to him. 11. The next question to be considered is what exactly the amount the appellant is entitled to get. The trial court without going into the details came to a conclusion that the principal amount due to the appellant is Rs.27,150/- which includes Rs.476/- remitted by the appellant. The appellant is entitled to get the balance amount of Rs.18326/- with 12% interest from the date of suit till date of decree and thereafter A.S.. NO.251 OF 2001 -: 12 :- at 6%. In the result, the appeal is allowed in part. A decree is passed in favour of the appellant allowing him to recover a sum of Rs.18,326/- with interest at the rate of 12% from the date of suit till date of decree and thereafter at the rate of 6% till date of realisation on the principal amount of Rs.18.326/-. K. PADMANABHAN NAIR, JUDGE. vsv K. PADMANABHAN NAIR, J. ===================== A.S. NO.251 OF 2001 ===================== J U D G M E N T ------------------------------------------- 11TH MARCH, 2008