IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN TUESDAY, THE 31ST AUGUST 2010/9TH BHADRA 1932 OP.No. 18050 of 2000(W) ----------------------- PETITIONERS : --------------- 1. D.ASHOKAN, HELPER, KERALA STATE BEVERAGES (M & M) CORPORATION LTD., FL-1 SHOP, PATHANAMTHITTA. 2. MARY DASAN, HELPER, KERALA STATE BEVERAGES (M & M) CORPORATION LTD., FL-1 SHOP, KOLLAM. BY SRI.N.NANDAKUMARA MENON, SENIOR ADVOCATE. BY ADV. SRI.MURALI PURUSHOTHAMAN VS RESPONDENTS : --------------- 1. THE KERALA STATE BEVERAGES (MANUFACTURING & MARKETING) CORPORATION LTD., REPRESENTED BY ITS MANAGING DIRECTOR, SASTHAKRIPA OFFICE COMPLEX, SASTHAMANGALAM, TRIVANDRUM-10 2. STATE OF KERALA - REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES (F) DEPARTMENT, TRIVANDRUM. R1 BY SRI.ELVIN PETER, SC. THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 31/08/2010, ALONG WITH OP NO. 16659 OF 2000 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP.No. 18050 of 2000(W) APPENDIX PETITIONERS EXHIBITS : EXT.P1.TRUE COPY OF SHOW CAUSE NOTICE NO.KSBC/KLP/95-96 DATED 15.1.96 ISSUED TO THE 1ST PETITIONER BY THE 1ST RESPONDENT. EXT.P2.TRUE COPY OF SHOW CAUSE NOTICE NO.KSBC/KLP/95-96 DATED 15.1.96 ISSUED TO THE 2ND PETITIONER BY THE 1ST RESPONDENT. EXT.P3.PHOTOCPY OF EXPLANATION DATED 2-2-96 SUBMITTED BY THE 1ST PETITIONER BEFORE 1ST RESPONDENT. EXT.P4. TRUE COPY OF ORDER NO.KSBC/KLP/95-96 DATED 31-7-96 ISSUED TO THE 1ST PETITIONER BY THE 1ST RESPONDENT. EXT.P5. TRUE COPY OF NOTICE NO.KSBC/KLP/95-96 DATED 31-7-96 ISSUED TO THE 2ND PETITIONER BY THE 1ST RESPONDENT. EXT.P6. TRUE COPY OF APPEAL DATED 16.8.96 SUBMITTED BY THE 1ST PETITIONER BEFORE THE DIRECTORS OF THE 1ST RESPONDENT. EXT.P7. TRUE COPY OF APPEAL DATED 16.8.96 SUBMITTED BY THE 2ND PETITIONER BEFORE THE BOARD OF DIRECTORS OF THE 1ST RESPONDENT. EXT.P8.TRUE COPY OF NOTICE NO.KSBC/KLP/95-96 DATED 28-8-1997 ISSUED BY THE 1ST RESPONDENT TO THE 1ST PETITIONER. EXT.P9.TRUE COPY OF APPEAL DATED 18.9.97 SUBMITTED BY THE 1ST PETITIONER BEFORE THE GOVERNMENT OF KERALA. EXT.P10.TRUE COPY OF APPEAL SUBMITTED BY THE 2ND PETITIONER BEFORE THE GOVERNMENT. EXT.P11.TRUE COPY OF NOTICE NO.21076/P3/99/TD DATED 20-12-99 ISSUED TO THE PETITIONERS BY THE 2ND RESPONDENT. EXT.P12.PHOTOCOPY OF THE RELEVANT EXTRACT OF THE SERVICE RULES FOR EMPLOYEES OF THE 1ST RESPONDENT CORPORATION. EXT.P13.TRUE COPY OF ORDER DATED 14.6.2000 PASSED IN C.M.P. NO.27359/2000 IN O.P.NO.16659/2000 BY THE HON'BLE HIGH COURT OF KERALA. OP.No. 18050 of 2000(W) RESPONDENTS EXHIBIT: EXT.R-1(a). CIRCULAR NO.KSBC/MD/CIR/52 DATED 13.6.1988 ISSUED BY THE MANAGING DIRECTOR, KERALA STATE BEVERAGES (M&M) CORPORATION LTD. FOR FIXING LIABILITY ON ACCOUNT OF SHORTAGE IN LIQUOR STOCKS AT THE WAREHOUSES. / TRUE COPY / P.S. TO JUDGE VK S. SIRI JAGAN, J. ------------------------------ O.P.No.18050 OF 2000 ------------------------------- Dated this the 31st day of August, 2010 J U D G M E N T The petitioners were Helpers of the first respondent Corporation. They were issued with Exts.P1 and P2 show cause notices directing them to show cause why the value of stock found short on stock verification should not be recovered from them. The first petitioner filed Exts.P3 explanation. However, by Exts.P4 and P5 orders issued by the internal auditor, the petitioners were directed to pay amounts of Rs.27,525/- each towards liability for shortage in stock. The petitioners filed Exts.P6 and P7 appeals before the Board of Directors which were rejected by Ext.P8 order. Exts.P9 and P10 further appeals were refused to be forwarded to the Government on the ground that there is no provision in the rule for an appeal to the Government. Later on, the petitioners directly filed appeals before the Government and although the Government heard the same, no orders were passed. It is under the above circumstances, the petitioners have filed this original petition seeking the following O.P.No.18050/2000 2 reliefs: “i) To issue a writ of certiorari or other appropriate writ, order or direction to quash Exhibits P4, P5, and P8. ii) To issue a writ of mandamus or other appropriate writ, order or direction declaring all the steps taken by the 1st respondent to recover amounts from the salary of the petitioners by the 1st respondent on the basis of Exhibits P4, P5 and P8 as illegal and void” Among other contentions, the petitioners would raise a specific contention that Exts.P4 and P5 orders passed by the internal auditor is without jurisdiction, in so far as there is no power vested with an internal auditor to pass orders fixing liability on the petitioners. It is further pointed out that Exts.P1 and P2 show cause notices were issued by the Managing Director himself and therefore, the Managing Director was the appropriate authority to pass orders pursuant to the show cause notices and therefore, clearly Exts.P4 and P5 orders passed by the internal auditor are unsustainable. Although other contentions are also raised, I am not inclined to go into the same, since this particular contention of the petitioner finds favour with me. Admittedly, Exts.P1 and P2 show causes notices were issued by the Managing Director. Exts.P4 and P5 orders have been passed by the internal auditor, who does not have any powers to fix any liability on the petitioners which O.P.No.18050/2000 3 power lies exclusively with the Managing Director. In the above circumstances, Exts.P4 and P5 orders and Ext.P8 order on the basis of the decision of the Board of Directors are hereby quashed. The original petition is disposed of with a direction to the Managing Director to pass fresh orders after considering the contentions of the petitioners in Ext.P3 and affording them an opportunity of being heard. S. SIRI JAGAN, JUDGE acd O.P.No.18050/2000 4