IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN WEDNESDAY, THE 5TH AUGUST 2009 / 14TH SRAVANA 1931 WP(C).No. 26127 of 2008(I) ------------------------------------ PETITIONER(S): ---------------------- CHERIAN OOMMEN, CHIEF ENGINEER (RTD), KERALA STATE ELECTRICITY BOARD, VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM. (T.C.14/1022, ROSE COTE LANE, VAZHUTHACAUD, THIRUVANANTHAPURAM. BY ADVS. MR.SANTHOSH MATHEW MR.SATHISH NINAN RESPONDENT(S): ---------------------- 1. KERALA STATE ELECTRICITY BOARD REPRESENTED BY ITS SECRETARY, VYDHYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM. 2. CHAIRMAN, KERALA STATE ELECTRICITY BOARD VYDHYUTHI BHAVANAM, PATTOM,THIRUVANANTHAPURAM. ADV.MR.ASHOK M.CHERIYAN, SC, KSEB FOR R1 & R2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05/08/2009, ALONG WITH WPC NO. 32275 OF 2007 WPC NO. 32396 OF 2007 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 26127 of 2008(I) APPENDIX PETITIONER'S EXHIBITS: EXT.P1 - TRUE COPY OF THE MEMO OF CHARGES AND THE STATEMENT OF ALLEGATIONS. EXT.P2 - TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONER ON 16.8.2002. EXT.P3 - TRUE COPY OF THE ORDER DATED 12.11.2002 ISSUED BY THE CHAIRMAN. EXT.P4 - TRUE COPY OF THE DETAILED ARGUMENT NOTE SUBMITTED BY THE PETITIONER BEFORE THE ENQUIRY OFFICER. EXT.P5 - TRUE COPY OF THE BOARD ORDER DATED 9.6.2005. EXT.P6 - TRUE COPY OF THE NOTICE ISSUED BY THE CHAIRMAN TO THE PETITIONER ON 22.3.2007. EXT.P7 - TRUE COPY OF THE COVERING LETTER ALONG WITH THE ENQUIRY REPORT. EXT.P9 - TRUE COPY OF THE ORDER DATED 5.9.2007 ISSUED BY THE CHAIRMAN EXT.P10 - TRUE COPY OF THE NOTICE DATED 3.3.2008. // TRUE COPY // PA TO JUDGE rhs S. SIRI JAGAN, J ............................................... W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 ................................................. Dated this the 5th day of August, 2009 J U D G M E N T These three writ petitions bring to light a case of utter mismanagement, by the top officers of the Kerala State Electricity Board, of its affairs resulting in huge loss to the Board and then passing on the buck to junior officers alleging misconduct on their part directing recovery of the loss from them, although the loss could not have been attributed to any action or omission on their part. The facts giving rise to these three writ petitions are as follows 2. In December 1994, the KSEB placed orders for three Van Mounted Mobile Cable Fault Locating Equipments from manufacturers in New Delhi. These equipments, being Motor Vehicles as defined under the Motor Vehicle Act, had to be registered under the said Act. The manufacturers themselves got the same registered in their name, before despatching them to Kerala. The equipments arrived in Kerala in November 1996. One each was allotted to Thiruvananthapuram, Kochi and Kozhikode W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -2- divisions of the KSEB. In respect of the equipment allotted to Thiruvananthapuram division, the petitioner in W.P(C) No. 26127 of 2008, who was the Executive Engineer-in-charge, applied to the Regional Transport Officer for transfer of ownership of the equipment on 9.4.1997. By Ext.P5(a) letter dated 9.9.1997, the Regional Transport Officer insisted on remittance of Entry Tax. As directed by the Board, the Executive Engineer submitted letter dated 5.12.1997 to the Sales Tax Officer, Peroorkada, Thiruvananthapuram, seeking exemption from payment of entry tax, which is produced as Ext.P2(9) in W.P(C) No. 26127 of 2008. The Sales Tax Officer did not consider the request favourably. By Ext.P5(b) letter, (in W.P(C) No. 32275 of 2007), dated 23.1.1998, the Secretary of the Board wrote to the Principal Secretary to the Government of Kerala, for favourable consideration of the request for exemption from payment of entry tax. Ext.P5(c) note dated 26.3.1999, the Financial Adviser of the Kerala State Electricity Board advised the Chief Engineer to move the Government for exemption from payment of entry tax. By Ext.P5(d) dated 4.6.1999, the Secretary of the Board again took up the matter with the Power Secretary. That was followed by Ext.P5(e) letter dated 12.11.1999 W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -3- from the Secretary of the Board to the Power Secretary for exemption from entry tax. Ext.P5(f) dated 31.01.2000 is another letter from the Board Secretary to the Power Secretary in that regard. On 6.2.2001 the Board Secretary, by Ext.P5(g) letter, requested the Joint Commissioner (Sales Tax) for the exemption. By Ext.P5(h) letter dated 10.3.2001, the Taxes Commissioner informed the Secretary of the Board that there is no provision for tax exemption. By Ext.P5 (i) letter dated 11.4.2001, the Secretary of the Board wrote to the Chief Engineer (Distribution-South) conveying the decision of the Board to remit the entry tax. By Ext.P5(j) letter dated 25.9.2001, the Government informed the Board that exemption cannot be granted and that the request is rejected. On 27.9.2001 the Board remitted an amount of Rs.4,45,176/- towards entry tax and Rs.5,56,470/- towards penal interest for delayed payment of tax. By Ext.P5(k) letter dated 28.1.2002 the Secretary of the Board wrote to the Principal Secretary (Taxes) for waiver of penal interest, since the delay was caused because the Board was expecting exemption from payment of entry tax. This was followed up by Ext.P5(l) letter dated 22.8.2002 to the Principal Secretary, Power Department, from W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -4- Board Secretary. 3. In the meanwhile, the equipment allotted to Thiruvananthapuram division was kept idle, since for want of registration, the equipment could not be put to use. While so, the petitioner in W.P(C)No. 32275 of 2007, another Executive Engineer of the Board retired from service on 30.6.2000. The petitioner in W.P(C) No. 32396 of 2007, who was also an Executive Engineer of the Board retired on 30.4.2001. On 12.7.2002, the petitioner in W.P(C) No. 26127 of 2008 was issued with memo of charges dated 12.7.2002, Ext.P1 marked in that writ petition, alleging that he did not take appropriate steps for registration of the equipment which resulted in the said equipment being kept idle and consequent damage to the same causing loss of Rs.44.52 lakhs to the Board. It was also alleged therein that the petitioner did not take appropriate steps to keep the vehicle in good repair. The petitioner filed his statement of defence. An enquiry officer was appointed, who conducted an enquiry and submitted Ext.P7 report, in which it was found that the petitioners in these writ petitions and 2 others were found jointly liable for the loss caused to the Board on account of non-maintenance of the vehicle properly. On the same W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -5- charges another officer by name Sri. R. Baburajan were also proceeded against. The enquiry Officer found the two officers, who were charge sheeted, guilty of dereliction of duty and misconduct and liable for punishment. It was also found that the amounts of Rs.7385.80 each being the proportionate loss has to be recovered from the petitioner in W.P(C) No.26127 of 2008. That enquiry report was forwarded to the petitioner in W.P(C) No. 26127 of 2008 under cover of Ext.P6 show cause notice. The petitioner filed his reply. Thereafter, by Ext.P9 order, the chairman of the Board found that the petitioners in these three writ petitions and two others are jointly liable not only for the loss caused on account of non-maintenance of the equipment but also for the penal interest the Board had to pay. Accordingly, it was ordered to recover an amount of Rs.1,18,686/- from the DCRG of the petitioner in W.P(C) No. 26127 of 2008. It appears that Sri.Baburajan, who was proceeded against along with the petitioner in W.P(C) No. 26127 of 2008, filed an appeal before the Board and he was exonerated in the appeal. Therefore, by Ext.P10, his share also was added as liability of the others and the petitioner in W.P(C) No. 26127 of 2008 was directed to pay an amount of Rs. 1,48,358/- as his share W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -6- of the alleged loss caused to the Board. By Ext.P1 notice dated 22.3.2007 in W.P(C) No. 32275 of 2007, the petitioner in that writ petition was directed to show cause as to why an amount of Rs.1,18,686/- being 1/5th portion of the total loss of Rs. 5,93,429/- caused to the Board on account of the non-payment of entry tax in respect of the equipment in time and the non-maintenance of the equipment should not be recovered from the petitioner in that writ petition. The petitioner in W.P(C) No. 32396 of 2007 was also issued with an identical notice, Ext.P1 in that writ petition, also dated 22.3.2007. Those notices ultimately culminated in identical orders, Ext.P4 (in both writ petitions) directing recovery of the said amount from the petitioners in those writ petitions, invoking Rule 3 of Part III of the Kerala Services Rule. Petitioners in these three writ petitions are challenging the abovesaid orders. 4. The common contention of all the petitioners is that the decision not to pay the entry tax was not taken by them at all. That decision was taken at the highest level of the Board and it was the Secretary of the Board himself who wrote letters to the Government seeking exemption from payment of entry tax. Therefore for the non-payment of entry tax and idling of the W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -7- equipment, on account of non-registration, the petitioners are not at all responsible. Hence they could not have been proceeded against for recovery of the alleged loss caused to the Government, is their contention. Petitioners in W.P(C) No. 32275 of 2007 and 32396 of 2007 has got an additional contention that they cannot be proceeded against under Rule 3 of Part III for more than one reason. The first is that no disciplinary proceedings whatsoever as contemplated under Rule 3 of Part III of KSR had ever been initiated or continued against them. Further the said Rule prescribes that in order to invoke that rule the event in respect of which proceedings are to be initiated or continued must not have taken place more than four years before such institution. According to them in their cases no enquiry was conducted and further notices were issued to them only on 22.3.2007 more than 13 years after the alleged event. 5. In W.P(C) No. 26127 of 2008, no counter affidavit has been filed. In the other two writ petitions, counter affidavits have been filed supporting the demand against those petitioners. 6. I have considered the rival contention in detail. 7. It cannot be disputed that, for the purpose of proceeding W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -8- against these petitioners, first of all there should have been a culpable conduct on their part. The allegation against them is that they are responsible for non-registration of the equipment for which payment of entry tax was a condition. Only if that is true, the proceedings which are impugned in these writ petitions could have been initiated and concluded against them. For that the Board must first of all prove that the decision not to pay the entry tax and to apply for exemption was taken by these officers. The documents placed before me not only prove that the petitioners had nothing to do with that decision and that the decision was taken at the highest level of the Board as evidenced by Ext.P5 series of correspondence exchanged between the Secretary of the Board and various Government officials. In view of those documents, I am at a complete loss to understand how these petitioners could have been, by any stretch of imagination, found guilty of any negligence or improper conduct on their part in not paying the entry tax and not getting the vehicle registered. Therefore the entire blame for the loss caused to the Board as a result of non-payment of entry tax and non-registration of the vehicle rests exclusively with the Board and the Secretary and to W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -9- nobody else. Therefore, if at all anybody is liable to make good the loss caused to the Board, that is the members of the Board and the Secretary and certainly not the petitioners. Therefore there was absolutely no basis for the disciplinary proceedings against the petitioner in W.P(C) No. 26127 of 2008. Added to that, the enquiry officer did not find the petitioner in that writ petition guilty of any misconduct in respect of non-payment of the entry tax, which resulted in payment of penal interest. The enquiry officer found them liable only for the loss caused to the Board on account of non- maintenance of the equipment, at the rate of Rs. 7385.80 each. The Chairman while fixing the responsibility for the penal interest also on the petitioners did not choose to differ with the findings of the enquiry officer or to issue notice to the petitioner in W.P(C) No. 26127 of 2008 as to why he should not differ with the findings of the enquiry officer. Without such a procedure, which is mandatory under law, the chairman has simply mulcted the petitioners with the liability in respect of the penal interest also. It is per se illegal and unsustainable. 8. Regarding the loss caused to the Board on account of the non-maintenance of the vehicle, it is not a secret that a mechanical W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -10- equipment, if kept idle for long years, would get rusted and become unserviceable. Without registration of the equipment by paying the entry tax, nobody could have used the same. If that be so, one fails to understand how these innocent employees could be mulcted with the liability to make good the loss on account of non- maintenance of the vehicle for long years, which happened only because of the failure on the part of the Board to pay the entry tax and get the equipment registered at the appropriate time. 9. As far as the petitioners in W.P(C) No. 32396 of 2007 and 32275 of 2007 are concerned, Rule 3 of part III could not have been invoked against them at the time when it was actually invoked. The institution of the proceedings was on 22.3.2007. Rule 3 contains a bar for institution of proceedings under that Rule in respect of any event which took place more than four years before such institution. Here evidently, the institution of the proceedings under Rule 3 by Ext.P1 is 13 years after the alleged event. Apart from that Rule 3 presupposes a departmental proceedings. The two petitioners in the above two writ petitions were not served with any charge memo or any other proceedings whatsoever in a departmental proceedings. Without departmental proceedings W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -11- Rule 3 of Part III of KSR could not have been invoked. Even note 3 to Rule 3 of Part III of the KSR could have been invoked against them since notices were issued to their only on 22.3.2007 far beyond the 3 years limitation prescribed since they had retired from service on 30.6.2000 and 30.4.2001. Therefore in any event the proceedings initiated against the petitioners in W.P(C) Nos. 32396 of 2007 and 32275 of 2007 are totally without jurisdiction and unsustainable. For all the above reasons I am satisfied that the orders impugned in all these three writ petitions are totally unsustainable. Accordingly they are quashed. If any amounts have been withheld from their retirement benefits or recovered from them otherwise, the same shall be refunded to them, as expeditiously as possible, at any rate, within two months from the date of receipt of a copy of this judgment, with interest at the rate of 9% per annum on the said amount from the date on which the same were due to them or recovered from them, till date of payment. 10. Before parting with these cases, I wonder whether the increase in electricity charges from time to time which the poor citizens of this state have to pay is on account of increase in the W.P(C) Nos.32275, 32396 of 2007 & 26127 of 2008 -12- cost of generation of electricity as such. Cases of these kind would prompt one to think that it is more because of mismanagement by the electricity Board, of its affairs. It is also not the first time that I am coming across such mismanagement. I recollect another case where the Chief Engineer filed an affidavit before this court justifying payment of project allowance to employees, where it was not payable at all, that too against the earlier pleading of the Board in that case to the contrary. I am of opinion that it is high time that somebody bestows their serious attention to this malady affecting the Kerala State Electricity Board and finds creative solution for the same so that the consumers of electricity would not have to shell out more money as electricity charges on account of such mismanagement as well. With this solemn hope I remain. S. SIRI JAGAN, JUDGE rhs