THE HON’BLE SRI JUSTICE K.C.BHANU WRIT PETITON NO.3280 OF 2001 DATED:03-12-2010. Between S.Ashok … Petitioner And 1.The A.P. State Civil Supplies corporation Ltd.,, Hyderabad rep. by Vice Chairman and Managing Director And others …Respondents THE HON'BLE SRI JUSTICE K.C. BHANU WRIT PETITON NO.3280 OF 2001 ORDER: This writ petition is filed to issue a writ of Certiorari calling for the records relating to the order passed by 1st respondent vide proceedings P.Admn.29 (42)/96, dated 21-09-1999 imposing punishment i.e., two penalties viz., 1.Recovery of Rs.1,35,379.40 towards the double the cost of shortages in lumpsum and 2) stoppage of two annual grade increments with cumulative effect and also the decision taken by the Board of Directors i.e., appellate authority in its meeting held on 09-01-2001 which was intimated by the 1st respondent vide Lr.No.P. Admn. 29 (42)/96, dated 01-12-2001 and quash the same by duly declaring the enquiry caused in this case as well as the orders passed by 1st respondent and Board of Directors as illegal and arbitrary and contrary to the provisions of A.P. State Civil Supplies Corporation Limited Conduct, Discipline and Appeals Regulations, 1975. 2. Brief facts are that in the year 1968, based on the requisition of the respondents, the petitioner was drawn from AP Scooters Ltd and was selected and was taken into the service of the first respondent corporation as Gr. III Assistant and posted at Nalgonda. Later he was transferred to Hyderabad and thereafter to Medak. He was working as Asst., Grade III incharge of Mandal Level stockist point at Papannapet, Medak District. While so, the S.I. of Police raided the godown and seized one vehicle along with stocks. Later the M.R.O. sealed the godown and recorded the statement of petitioner. Later the Inspector of Police, Vigilence conducted physical verification of the stocks with that of stock register and found shortage of rice 101.78.5 qtls and sugar 1.69 kgs. Basing on the letter addressed by the Inspector of Police, the Joint Collector issued proceedings placing the petitioner under suspension. Thereafter, the 3rd respondent issued charge memo, for which he submitted explanation. To his surprise, 3rd respondent issued show cause notice stating that as to why he should not be dismissed from service for the lapses and irregularities alleged to have been committed by him. He submitted explanation to drop the proceedings. Later Government of A.P. issued an ordinance for termination of services and Abolition of posts in the cases of employees those who were absorbed from A.P. Scooters Ltd., Then petitioner and others filed W.P.324916/96 before this Court and this Court granted interim order to reinstate them. His case was not considered as disciplinary proceedings were pending against him. He made a representation to the 1st respondent, who in turn issued a memo stating that enquiry report was received and he was held responsible with regard to shortage found in the godown and directed to remit the balance of value of shortage stock in single lumpsum to the Dist. Manager, Sanga Reddy within a period of one week pending final orders excluding the amount already remitted. Accordingly, he deposited Rs.51,123/- excluding the earlier amount paid by him and thereafter he reported for duty. To his utter surprise, 1st respondent issued show cause notice stating that value of the shortage of the goods at single cost is proof of accepting lapse and as to why disciplinary action should not be initiated for stoppage of two annual grade increments with cumulative effect besides recovery of value of Rs.1,35,379.40 towards shortage of double the cost in lumpsum. He submitted his explanation and the 1st respondent without taking into consideration his explanation passed the order, dated 21-09-1999. Aggrieved thereby, he filed appeal before the appellate authority i.e, Board of Directors. Instead of taking steps for early disposal of the appeal, 1st respondent issued letter wherein 4th respondent was directed to recover the amount pursuant to the final order dt.21-09-1999. When 4th respondent issued notice, he submitted explanation and without taking it into consideration, 4th respondent issued proceedings for recovery of amount from his salary. He made representation to 1st respondent to keep the recovery proceedings in abeyance till disposal of the appeal, but they failed to oblige it. He filed W.P.17843 of 2000 and this Court by order, dated 22-09- 2000 directed the Board of Directors of the first respondent corporation to dispose of the appeal within a period of three months from the date of receipt of a copy of that order. Board of Directors passed the order directing to remit the cost of the shortages at double the cost in lumpsum. When he was placed under suspension, he was not paid subsistence allowance as required under Regulation No.32 (3) of the Regulations. Hence, the writ petition. 3. The only point raised by the learned counsel appearing for the petitioner before this Court is that ordering recovery of double the value of the pecuniary loss caused to the corporation is contrary to rules and hence, he prays to set aside the same. 4. The rules governing the service conditions of the petitioner are the Conduct, Discipline and Appeal Regulations, 1975. Rule 28 deals with penalties. Rule 25 (1)(d) deals with recovery from pay of the whole or part of any pecuniary loss caused to the Corporation by the negligence or breach of order. Rule 25 (2) deals with penalty of recovery from pay of the whole or part of any pecuniary loss caused to the corporation by an employee’s negligence be imposed in addition to any other penalty. Therefore, the Regulations make it clear that besides for imposing punishment of stoppage of annual increments, the Corporation has got power to recover the pecuniary loss caused to the corporation. But the question is whether recovery of double the value of pecuniary loss caused to the Corporation can be ordered or not. 5. Learned counsel appearing for the respondents placed reliance on the circular No. P.Admn.A2/14027/2007, dated 31-12- 2007, which reads that keeping in view of the above circumstances only the Board in its 114th meeting held on 25-06- 1998 decided to recover the shortage at single economic cost if the variation is noticed between Physical Verification to Physical Verification on month to month basis up to 10 qtls and also to recover at double the economic cost, if the variation exceeds 10 qtls. In all the cases, disciplinary action should be initiated in accordance with the rules in vogue. Accordingly, circular instructions were issued in the reference first cited. No doubt, the circular would go to show that the Corporation has got power to order for recovery of double the value of the pecuniary loss, but at the same time, the circular is quite contrary to the statutory rules framed by the Corporation. Therefore, there cannot be any dispute that the circular cannot override the statutory rules or Regulations issued by the competent authority. Therefore, circular orders cannot be taken note of. Hence, the impugned order insofar as ordering recovery of double the value towards pecuniary loss to the Corporation is set aside and modified to the extent of recovery of value of pecuniary loss caused to the Corporation while confirming the penalty of stoppage of annual increments. 6. Accordingly, the Writ Petition is partly allowed. No order as to costs. _________________ K.C. BHANU, J DATED:03.12.2010 Hsd