IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 29TH SEPTEMBER 2010 / 7TH ASWINA 1932 WP(C).No. 25044 of 2008(F) -------------------------------------- PETITIONER(S): ---------------------- P.A.ANNAMMA, AGED 59 YEARS, W/O.THOMAS, MULANGACHERIL HOUSE, NARIYAMPARA KARA, KATTAPPANA, UDUMPANCHOLA TALUK, IDUKKI DISTRICT. SECRETARY, ELAPPARA PANCHAYATH BY ADV. SRI.A.C.DEVASIA RESPONDENT(S): ------------------------- 1. ELAPPARA GRAMA PANCHAYATH, REPRESENTED BY ITS SECRETARY, ELAPPARA, PEERUMEDU VILLAGE, PEERUMEDU TALUK, IDUKKI DISTRICT. 2. THE DEPUTY DIRECTOR OF PANCHAYATS, LOCAL FUND AUDIT ACCOUNTS, IDUKKI, THODUPUZHA KARA THODUPUZHA VILLAGE, THODUPUZHA VILLAGE, IDUKKI DISTRICT. R1 BY ADV. SRI.S.K.AJAY KUMAR R2 BY GOVERNMENT PLEADER SMT.N.SUDHA DEVI THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO. 25044/2008 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE REPLY DTD. 30.4.2002 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT. P2:- COPY OF THE REPLY DTD. 30.4.2002 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT. P3:- COPY OF THE REPLY DTD. 30.4.2002 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT. P4:- COPY OF THE REPLY DTD. 30.4.2002 SUBMTITED BY THE PETITIONER TO THE 2ND RESPONDENT. P5:- COPY OF THE RESOLUTION NO.XVII DTD. 13.8.04 OF THE IST RESPONDENT. P5(a):- COPY OF THE COMMUNICATION DTD. 22.9.04 BY THE IST RESPONDENT TO THE 2ND RESPONDENT. P6:- COPY OF THE NOTICE DTD. 12.10.2006 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT. P7:- COPY OF THE DECISION BY THE IST RESPONDENT DT.D 27.3.2008. P8:- COPY OF THE LIABILITY CERTIFICATE DTD. 1.3.2008 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. RESPONDENT'S EXHIBITS NIL TRUE COPY P.A. TO JUDGE tss T.R. RAMACHANDRAN NAIR, J. ~~~~~~~~~~~~~~~~~~~~~~~~~~~ W.P.(C). No.25044/2008-F ~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 29th day of September, 2010 J U D G M E N T The petitioner is aggrieved by the issuance of liability certificate as per Ext.P8 by the Deputy Director of Panchayats showing an amount of Rs.1,36,629/-. 2. The petitioner retired from service as Special Grade Secretary on 31/03/2002. It is mainly contended that the proceedings Ext.P8 dated 01/03/2008 is beyond three years after the date of retirement of the petitioner and, therefore, the same is illegal and invalid. 3. The liability certificate, evidently, is issued based on the liability reported by the Secretary of the Panchayat. The petitioner was working as Secretary during 1999-2000 and 2000-2001. The audit notes were circulated seeking her explanation on some items. In the audit report for the year 1999-2000, it is alleged that the petitioner is liable to pay an amount of Rs.18,786/- altogether as per para Nos.21(a), 22(a), 25, 26, 27, 29 and 31. Exts.P1, P2, P3 and P4 are the copies of the reply given to the same, addressed to the Local Fund Deputy Director. The first respondent-Panchayat also passed Ext.P5 resolution to relieve the petitioner from liabilities. By Ext.P5(a), the objections were dropped. W.P.(C). No.25044/2008 -:2:- 4. With regard to the year 2000-01, as per the audit notes in paragraphs 31, 33 and 35, a liability to the tune of Rs.98,802/- was pointed out. Thereafter, the petitioner was issued with Ext.P6 notice dated 12/10/2006, based on her objections, to conduct enquiry in the office of the Panchayat. The Panchayat also by Ext.P7 resolution requested to drop the objections. 5. The learned counsel for the petitioner submitted that Ext.P8 liability certificate was issued without notice to the petitioner and the same is beyond three years prescribed under Note 3 and Ruling No. 3 of Rule 3 Part III K.S.R. Reliance is placed on a decision of a Division Bench of this Court in Sugathan v. Cochin Devaswom Board [2005 (1) KLT 46]. 6. The second respondent has filed a counter affidavit. The details regarding the audit objections have been made mention of in paragraph (7) onwards of the counter affidavit. Ext.R2(a) is the Surcharge Notice dated 17/04/2006 and Ext.R2(b) is the true copy of the Surcharge Certificate dated 04/04/2007. It appears that the Surcharge Certificate could not be served to the petitioner as she was abroad. Finally, it is mentioned that there is a liability of Rs.98,802/- regarding the Surcharge W.P.(C). No.25044/2008 -:3:- Certificate. It is pointed out that the remedy of the petitioner is to challenge the same in appeal before the District Court. 7. The learned counsel for the petitioner also pointed out that in the light of Section 215(9) and the proviso thereunder of the Kerala Panchayat Raj Act, 1994, the surcharge certificate has also been issued beyond the period of four years from the date on which the expenditure in question was incurred and, therefore, no recovery can be made against the petitioner. 8. First, I shall consider the question whether Ext.P8 is beyond the period prescribed under Note 3 to Rule 3 of Part III K.S.R. Evidently, Note 3 to Rule 3 specifies that “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.” Going by Ruling No.3 to Rule 3 of Part III K.S.R, there should be a communication of such liabilities to the pensioner so as to enable him to submit his explanation before the recovery is effected. 9. Here, we are concerned with Ext.P8 proceedings which is evidently beyond the three years period provided W.P.(C). No.25044/2008 -:4:- in Note 3 to Rule 3 of Part III K.S.R. Ext.P8 shows that the liability has been arrived at based on the report of the Secretary, Elappara Grama Panchayat. The amount mentioned therein is Rs.1,36,629/- which is far beyond the surcharge certificate. Evidently, therefore, at the time when the liability was reported by the Secretary, the audit was not over. It is not clear from Ext.P8 in what manner the liability was arrived at. For the purpose of considering the legality of the proceedings Ext.P8, I need only consider the effect of Note 3 to Rule 3 of Part III K.S.R. In Sugathan's case [2005 (1) KLT 46] in paragraph (7), while considering the time limit prescribed under the Rules for fixation of liability, it was held thus:- “7. ..............The liability against the pensioner can also be quantified after retirement, but not beyond three years after becoming a pensioner. If the liability could not be assessed and fixed before retirement, it should be assessed and adjusted from the recoverable dues within a period of one year from the date of retirement. If the liability could not be assessed and adjusted within one year, the death-cum-retirement gratuity has to be released....” W.P.(C). No.25044/2008 -:5:- 10. Herein, in this case, the liability sought to be adjusted is against the D.C.R.G sanctioned to the petitioner. Evidently, the case considered by the Division Bench was one where a liability was yet to be fixed. Still, the Bench was of the view that as far as quantification of liability after retirement is concerned, it should not be after three years after becoming a pensioner. Judged in that manner, it can be seen that Ext.P8 which is beyond three years after retirement cannot survive. Further, the petitioner was not given, evidently, any notice also before quantification. For these reasons, Ext.P8 cannot survive. 11. The learned Government Pleader submitted that if Ext.P8 is quashed, the surcharge certificate will remain and the remedy of the petitioner is to approach the District Court if the petitioner is aggrieved by the surcharge proceedings. The learned counsel for the petitioner submitted that the surcharge cannot be enforced against the petitioner in the light of embargo provided under Section 215(9) and the proviso thereunder of the Kerala Panchayat Raj Act, 1994. It is therefore submitted that evidently in the present writ petition, the surcharge proceedings are not under challenge as according to the learned counsel for the petitioner, the petitioner was not W.P.(C). No.25044/2008 -:6:- served with those proceedings at the time of filing of the writ petition and from the counter affidavit, it was revealed that the proceedings have been finalised. Going by the proviso to Section 215(9) of the Kerala Panchayat Raj Act, 1994, no surcharge under the sub-section shall be made after a period of four years from the date on which the expenditure in question was incurred. Therefore, it is upto the petitioner to seek remedies by filing an appeal, if so advised, against the surcharge certificate or to take up such valid contentions if the amount is sought to be recovered through R.R. proceedings. 12. The writ petition is allowed quashing Ext.P8. There will be a direction to the second respondent to issue the non-liability certificate to the petitioner for enabling her to draw the D.C.R.G sanctioned and appropriate proceedings will be issued by the second respondent within a period of one month from the date of receipt of a copy of this Judgment. No costs. (T.R. Ramachandran Nair, Judge.) ms