IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.T.SANKARAN WEDNESDAY, THE 19TH MAY 2010 / 29TH VAISAKHA 1932 WP(C).No. 9318 of 2008(H) ------------------------- PETITIONER(S): --------------- T.V.JOSEPH,JUNIOR SUPERINTENDENT (PERFOMANCE AUDIT)O/O.DEPUTY DIRECTOR OF PANCHAYAT IDUKKI RESIDINT AT: THEKKEL HOUSE,MUTHALAKODAM P.O THODUPUZHA,IDUKKI DISTRICT,PIN - 685 605. BY ADV. SRI.MURALI PURUSHOTHAMAN SRI.DEEPU LAL MOHAN RESPONDENT(S): --------------- 1. STATE OF KERALA REP.BY THE SECRETARY TO GOVERNMETN,LOCAL SELF GOVERNMENT DEPARTMENT, GOVERNMENT SECRETARIAT,THIRUVANANTHAPURAM. 2. THE ACCOUTNANT GENERAL (A&E), KERALA,THIRUVANANTHAPURAM-695 039. 3. THE DEPUTY DIRECTOR OF PANCHAYATS, IDUKKI,THODUPUZHA P.O. 4. THE DEPUTY DIRECTOR OF LOCAL FUND AUDIT MALAPPURAM. 5. THE SECRETARY,KODUR GRAMA PANCHAYT, MALAPPURAM DISTRICT. BY GOVERNMENT PLEADER SMT.NISHA BOSE FOR R1 TO R3 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19/05/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.T.SANKARAN, J. ------------------------------------------------------ W.P.(C). NO. 9318 OF 2008 ------------------------------------------------------ Dated this the 19th day of May, 2010 JUDGMENT The question involved in this Writ Petition is whether withholding of amounts from the Death-cum-Retirement Gratuity payable to the petitioner on the basis of the liability certificate issued without complying with the provisions of sub-section (9) of Section 215 of the Kerala Panchayat Raj Act, 1994 was proper. 2. The petitioner was working as Junior Superintendent in the Kerala Panchayat Subordinate Service. He retired from service on 31.10.2006. As per Ext.P1 proceedings dated 17.11.2006, an amount of Rs.2,35,802/- was sanctioned as DCRG payable to the petitioner. Ext.P1(a) Gratuity Payment Order shows the following abstract: “Gross Amount of Gratuity Sanctioned : Rs.2,35,802 Amount of Gratuity already Authorised : Rs. 84,780 Amount of Gratuity Authorised now : Rs.1,51,022 Amount kept withheld : Rs. Nil” W.P.(C) NO.9318 OF 2008 :: 2 :: Going by Ext.P1(a), no amount was withheld from the DCRG. But, it is not in dispute that a sum of Rs.84,780/- was withheld from the amount payable as DCRG to the petitioner. From 22.10.1999 to 2.4.2001, the petitioner was working as Secretary of Kodur Grama Panchayat. Ext.P2 dated 9.1.2007 is the liability certificate in respect of that period. Ext.P2 shows that the liability for 1999-2000 was Rs.45,363/- and for 2000-2001, the liability was Rs.39,043/-. As per Ext.P6 audit report, payment of Rs.374.15 to the petitioner was held under objection. Thus, the total liability of the petitioner was fixed at Rs.84,780/-. After withholding the amount from the DCRG, the respective amounts were credited to the respective panchayats. 3. The challenge in the Writ Petition is against Exts.P2 and P6. There is also a prayer for the issue of a writ of mandamus or other appropriate writ, order or direction to disburse the amounts withheld from the DCRG payable to the petitioner. 4. The Assistant Director of Panchayats in charge of the Deputy Director of Panchayats, Idukki (third respondent) filed a statement dated 4.4.2008. However, none of the respondents filed any counter affidavit in the case. In the statement, it is stated that in W.P.(C) NO.9318 OF 2008 :: 3 :: order to release the DCRG to the petitioner, the consolidated liability certificate was submitted to the Accountant General along with the letter dated 6.3.2007. Ext.R3(a) dated 6.3.2007 is the consolidated liability certificate. It is further stated that the Accountant General had issued orders to release DCRG and an amount of Rs.1,51,022/- was released to the petitioner. A sum of Rs.84,780/- was recovered from the DCRG and it was credited to the Village Panchayat Fund (VPF) Account of Kodur and Kodikulam Grama Panchayats for Rs.84,406/- and Rs.374/- respectively. 5. The petitioner filed a reply affidavit dated 9.9.2008. The petitioner produced Exts.P7 to P10 along with the reply affidavit. Ext.P7 dated 29.4.2008 is the surcharge notice issued by the Director of Local Fund Audit to the petitioner. Ext.P7 states that for the year 1999-2000, the petitioner had incurred a liability of Rs.22,414/-, while he was working in Kodur Grama Panchayat. The petitioner was directed to pay that amount and intimate to the office of the Director of Local Fund Audit within two months from the date of receipt of the notice or to state within two months why the amount should not be surcharged on the petitioner. On receipt of Ext.P7 notice, the petitioner submitted Ext.P9 reply dated 30.5.2008. The W.P.(C) NO.9318 OF 2008 :: 4 :: petitioner contended that a sum of Rs.84,780/- was illegally withheld from the DCRG payable to the petitioner and that the matter is pending adjudication in the Writ Petition. 6. The petitioner filed an affidavit dated 14.10.2009 and he produced Ext.P11 dated 29.11.2008, issued by the Joint Director of the Local Fund Audit. Ext.P11 refers to Ext.P7 notice dated 29.4.2008, Ext.P9 reply dated 30.5.2008 and the report dated 14.10.2008 of the Deputy Director of the Local Fund Audit, Malappuram. It is stated in Ext.P11 that after examining the reply submitted by the petitioner, he was exonerated from the surcharge proceedings. It is to be noted that the sum of Rs.22,414/- mentioned in Ext.P7 was in lieu of the sum of Rs.45,363/- mentioned in Ext.P2. 7. Even after the issue of Ext.P11, it is not clear whether the liability of Rs.39,043/- fixed as per Ext.P2 for the year 2000-01 stands or not. The learned Government Pleader submitted that the above liability still remains. It is strange to note that after issuing Ext.P2 liability certificate for Rs.45,363/- for the year 1999-2000, Ext.P7 surcharge notice was issued for a sum of Rs.22,414/- for that period and later it was dropped. That should certainly mean that W.P.(C) NO.9318 OF 2008 :: 5 :: Rs.45,363/- shown as liability of the petitioner for the year 1999-2000 does not subsist. 8. Now the question to be decided in this Writ Petition is whether the procedure adopted in fixing the liability was legal and proper. It is relevant to extract sub-sections (9), (11) and (13) of Section 215 of the Kerala Panchayat Raj Act in this context. “(9) The auditors shall, after giving a reasonable opportunity to the person concerned to explain his case, disallow every item of expenditure incurred contrary to law and surcharge the same on the person incurring, or authorising the incurring of, such expenditure and may charge against any person responsible therefor the amount of any deficiency, loss or unprofitable outlay occasioned by the negligence or misconduct of that person or of any sum which ought to have been but is not brought into account by that person and shall, in very such case, certify the amount due from such person: Provided that no surcharge under this sub-section shall be made after a period of four years from the date on which the expenditure in question was incurred. W.P.(C) NO.9318 OF 2008 :: 6 :: Explanation:-- It shall not be open to any person whose negligence or misconduct as caused or contributed to any such deficiency or loss, to contend that notwithstanding his negligence or misconduct the deficiency or loss would not have occurred, but for the negligence or misconduct of some other person.” “11. Any person aggrieved by any disallowance, surcharge or charge may, within fourteen days after the date of service on him of the decision of the auditor, make an application to the district court to set aside such disallowance, surcharge or charge and the court, after taking such evidence as is necessary may confirm, modify or remit such disallowance, surcharge or charge with such orders as to costs as it may think proper in the circumstances.” “13. From the decision of the district court under sub-section (11) an appeal shall lie to the High Court.” 9. Subsection (9) of Section 215 of the Kerala Panchayat Raj Act provides the procedure for fixing the liability of a person. It provides that the auditors shall give a reasonable opportunity to the person concerned to explain his case. There is no material in the case to indicate that such an opportunity was afforded to the W.P.(C) NO.9318 OF 2008 :: 7 :: petitioner. There is no pleading to that effect. No surcharge notice was issued to the petitioner before finally fixing the liability. That no surcharge notice was issued to the petitioner before the issue of Ext.P2 is clear from the fact that Ext.P7 surcharge notice was issued after filing the Writ Petition and that too for a limited sum of Rs.22,414/- for the year 1999-2000 instead of Rs.45,363/- mentioned in Ext.P2. There is no case for the respondents that any surcharge notice was issued for the liability fixed for the year 2000-01. It is quite evident that the procedure under sub-section (9) of Section 215 was not complied with before fixing the liability. The proviso to sub- section (9) provides that no surcharge shall be made after a period of four years from the date on which the expenditure in question was incurred. The expenditure in question was for the years 1999-2000, 2000-01 and for the year 1987. Ext.P2 liability certificate was issued on 9.1.2007. That shows that the proviso to sub-section (9) of Section 215 of the Kerala Panchayat Raj Act is violated. Sub-section (11) provides for an opportunity to the person aggrieved by any disallowance, surcharge or charge, to apply before the District Court within fourteen days, to set aside such disallowance, surcharge or charge. Sub-section (12) provides that the respondents in that application shall be the auditors. Sub-section (13) of Section 215 of W.P.(C) NO.9318 OF 2008 :: 8 :: the Kerala Panchayat Raj Act provides for an appeal to the High Court from the decision of the District Court. Sub-section (14) also provides that every sum certified by the auditors to be due from a person shall be paid to the Secretary of the Panchayat concerned within thirty days after the date of service on him of the decision of the auditors unless within that time such person has made an application to the court against that decision. This provision also indicates that the amount cannot be recovered from the person, if he has filed an application before the District Court against the decision of the Local Fund Audit until the matter is decided by the District Court. In the present case, since the procedure to be followed under Section 215 of the Kerala Panchayat Raj Act was not followed by the Local Fund Audit, the valuable rights of the petitioner were denied to him. The liability was fixed disregarding the specific provisions in Section 215 of the Kerala Panchayat Raj Act. Therefore, withholding of the amounts from the DCRG payable to the petitioner was not justified. 10. For the aforesaid reasons, the Writ Petition is allowed and Ext.P2 is quashed. The second respondent is directed to disburse a W.P.(C) NO.9318 OF 2008 :: 9 :: sum of Rs.84,780/- to the petitioner within a period of three months from the date of receipt of a copy of the judgment. 11. The petitioner claimed interest at 12% per annum on the amount withheld from DCRG. In this Writ Petition, I do not think it is proper to decide the question whether the petitioner is entitled to get interest. Therefore, that contention is left open to be decided in appropriate proceedings. The learned Government Pleader submitted that disposal of this Writ Petition should not stand in the way of recovery of the amount from the petitioner under any other law. It is made clear that the disposal of the Writ Petition would not be a bar for invoking any other provision of law if that is permissible. (K.T.SANKARAN) Judge ahz/