IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN THURSDAY, THE 27TH NOVEMBER 2008 / 6TH AGRAHAYANA 1930 OP.No. 14307 of 2003(C) ----------------------- PETITIONER(S): --------------- K.VINAYACHANDRAN, ADDITIONAL GENERAL MANAGER (FINANCE) (NOW UNDER ORDER OF DISMISSAL), KERALA STATE CIVIL SUPPLIES CORPORATION LTD., GANDHI NAGAR, COCHIN - 682 020. BY ADV. SRI.ELVIN PETER P.J. RESPONDENT(S): --------------- 1. KERALA STATE CIVIL SUPPLIES CORPORATION LTD., GANDHI NAGAR, COCHIN - 682 020, REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR. 2. THE CHAIRMAN AND MANAGING DIRECTOR, KERALA STATE CIVIL SUPPLIES CORPORATION LTD., GANDHI NAGAR, COCHIN - 682 020. ADV. SRI.GEORGE POONTHOTTAM,SC, KSCSC SRI.GEORGE JACOB (JOSE) FOR R1,2 SRI.M.N.SUKUMARAN NAYAR(SR.) FOR R1,2 SMT.MOLLY JACOB SRI.LAKSHMI NARAYAN, SC, SUPPLYCO THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 27/11/2008, THE COURT, ON THE SAME DAY, DELIVERED THE FOLLOWING: PETITIONER'S EXHIBITS: O.P.NO. 14307/2003. ----------------------------------------------------------------- EXT.P1 TRUE COPY OF MEMO OF CHARGES. EXT.P2 JUDGMENT IN O.P.NO. 6203/2002. EXT.P3 JUGMENT IN W.A.NO. 2678/2002. EXT.P4 ORDER DT. 13-12-2002 IN R.P.NO. 915/2002. EXT.P5 MEMO OF CHARGES AND STATEMENT OF ALLEGATIONS DT. 30-6-2000. EXT.P6 DO. DT. 4-7-2000. EXT.P7 EXPLANATION DT. 7-8-2000. EXT.P8 ENQIRY REPORT DT. 23-7-2001. EXT.P9 SHOW CAUSE NOTICE DT. 20-12-2001. EXT.P10 REPLY DT. 26-2-2002. EXT.P11 SHOW CAUSE NOTICE DT. 24-1-2003. EXT.P12 REPLY DT. 6-2-2003. EXT.P13 ARGUMENT NOTE DT. 9-5-2002 EXT.P14 SUPPLEMENT ARGUMENT NOTE. EXT.P15 ORDER DT. 20-3-2003. EXT.P16 NOTE DT. 28-2-2000. [TRUE COPY] P.S TO JUDGE. S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= O.P. No. 14307 of 2003 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 27th November, 2008. J U D G M E N T The 1st petitioner was the Finance Manager of the Kerala State Civil Supplies Corporation Ltd., the 1st respondent herein. Disciplinary proceedings were initiated against him by issuing Ext. P1 memo of charges dated 6-6-2000. Disciplinary proceedings pursuant to that memo of charges were quashed by a Division Bench of this Court by Ext. P3 judgment giving liberty to the respondents to proceed again in accordance with law on account of certain irregularities in conducting the disciplinary proceedings. However, the Corporation did not find it necessary to continue disciplinary action against the 1st petitioner pursuant to Ext. P1. Instead, Ext. P5 fresh memo of charges were issued to the petitioner on the following charges: “1) That you Shri. K. Vinayachandran, while holding the post of Additional General Manager (Fin) have committed gross negligence and dereliction of duty as head of the Finance Division for almost 15 years by not instituting a proper system for maintaining accounts in time. 2) That,by your above failure to institute a proper system for maintaining accounts, you committed delays in finalising the Accounts of the Corporation so much so that the accounts continue in arrears even today, thereby leading the Corporation to contravene Section 220(1) & Section 220(2) of the Companies Act, 1955, for several years, for which offences the Corporation and its officers other than you have been prosecuted and a compounding fee of Rs. 24,000 has been imposed on the Company. 3) That, by your above failure to institute a proper system for maintaining accounts and to finalise accounts in time, you have caused a loss of Rs. 2.51 crores to the Corporation by way of penalties and interest loss in its Income Tax assessments. 4) That, by your above failure to institute a proper system of accounts and cash management, you have caused a loss of interest to the Corporation of Rs.31.74 lakhs by failing to detect the non- conversion of the Margin Money amounts deposited for the opening of Letter of Credit and for issue of Bank Guarantee for nearly seven years after the need for the same was over.” O.P.No. 14307/03 -: 2 :- An enquiry was conducted and the enquiry officer submitted Ext. P8 enquiry report in which the 1st petitioner was found guilty only to the extent of being negligent in his duties and was absolved from liability in respect of the charges. The 2nd respondent did not agree with the findings of the enquiry officer. Therefore, Ext. P9 show cause notice was issued to the 1st petitioner directing him to show cause why the 2nd respondent should not differ with the findings of the enquiry officer and find the 1st petitioner guilty of the misconducts for the reasons mentioned therein. Along with the same, the 1st petitioner was also directed to show cause why penalty of dismissal from service should not be imposed on him if the findings are confirmed. Despite the objections filed by the 1st petitioner, the 2nd respondent found the 1st petitioner guilty of all the charges. As a result by Ext. P15 order, punishment of dismissal from service was imposed on the 1st petitioner and an amount of Rs. 2.28 crores was directed to be recovered from the 1st petitioner as loss sustained to the Corporation on account of the misconduct committed by him. The 1st petitioner filed this original petition challenging Exts.P 11 and P 15 orders. 2. During the pendency of the original petition, the 1st petitioner died and his legal heirs have come on record as additional petitioners to prosecute the original petition. 3. The petitioners would contend that the orders finding the 1st petitioner guilty disagreeing with the findings of the enquiry officers are grossly incorrect and unsustainable. According to counsel for the petitioners, the accounts of the Corporation was in disarray not on account of any misconduct on the part of the 1st petitioner, but only because of the inaction on the part of the Managing Director and the Board of Directors in appointing appropriate personnel for the accounting department to maintain accounts properly. He further O.P.No. 14307/03 -: 3 :- submits that whatever the 1st petitioner has done, which has resulted in recovery of penal interest from the Corporation, was done in the interest of the Corporation since the interest payable by the Corporation for the overdraft from Banks required for payment of tax would have been much more than the interest payable to the income tax authorities and as such the 1st petitioner actually was trying to save money for the Corporation. Counsel therefore would submit that the finding of guilt on the petitioner and consequent imposition of punishment of dismissal from service and recovery are loss is patently unsustainable. 4. I have considered the contentions of the petitioner in detail. 5. One fact is not disputed by the petitioners also, which is that the accounting system and the accounts of the 1st respondent Corporation was in shambles. The 1st petitioner was the head of the accounts department. It was his responsibility to see that the accounts department functions properly. There is no dispute about the fact that the accounting department was not functioning properly. The 1st petitioner cannot on his own do things which are not in accordance with law even if the same is to save money for the Corporation except with the prior approval and sanction of the Managing Director or the Board of Directors. In this case, even if the 1st petitioner's contention can be accepted, it remains a fact that the petitioner did everything on his own. As such, I do not think that the conclusions arrived at by the disciplinary authority differing with the finding of the enquiry officer can be faulted. 6. All the same, it cannot be stated that the entire blame for the situation should be on the shoulders of the 1st petitioner alone. The Managing Director and the Board of Directors cannot be stated to be unaware of the state of accounts of the Corporation for 17 long years. O.P.No. 14307/03 -: 4 :- If they were aware of the same, they should certainly have taken appropriate measures to set at right , which admittedly, they have not done. Therefore part of the responsibility for the situation should certainly be borne by the disciplinary authority himself. It is not as if by these misconducts the 1st petitioner had made personal gains for himself. Whatever he has done or has not done was either because of inefficiency or because he did not have proper assistance in the matter of maintaining the accounts. As such, essentially this can be regarded as lack of proper managerial skills on the part of the petitioner. That being so, I am not satisfied that the 1st petitioner deserves the extreme punishment of dismissal from service. I am of opinion that justice would be met if the 1st petitioner is treated as having retired from service as on the date of dismissal from service pursuant to Ext. P5. Consequently, the legal heirs of the 1st petitioner would be entitled to terminal benefits due to the 1st petitioner. The same shall be paid to the legal heirs of the 1st petitioner within two months from the date of receipt of a copy of this judgment. The original petition is disposed of as above. Sd/- S. Siri Jagan, Judge. Tds/