IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN TUESDAY, THE 24TH MARCH 2009 / 3RD CHAITHRA 1931 OP.No. 21331 of 2001(M) ----------------------- PETITIONER(S): --------------- M.A. RAMAKRISHNAN, ASST. MANAGER, PHARMACEUTICAL CORPORATION, MANAMPILLY PARAMBIL HOUSE, CHETTUPUZHA, THRISSUR DIST. BY ADV. SRI.N.P.SAMUEL SRI.B.K.PURUSHOTHAMAN RESPONDENT(S): --------------- 1. THE PHARMACEUTICAL CORPORATION (INDIAN MEDICINES) KERALA LTD., SHORNUR ROAD, THRISSUR, REP. BY ITS MANAGING DIRECTOR. 2. THE MANAGING DIRECTOR, THE PHARMACEUTICAL CORPORATION (INDIAN MEDICINES), KERALA LTD., SHORNUR ROAD, THRISSUR. ADV. SRI.U.K.RAMAKRISHNAN, SENIOR ADVOCATE APPEARING WITH SRI.E.K.MADHAVAN SRI.P.V.LOHITHAKSHAN SMT.P.VIJAYAMMA SMT.UMA GOPINATH SRI.SAJEEV ASOKAN THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 24/03/2009, THE COURT ON THE SAME DAY, DELIVERED THE FOLLOWING: PETITIONER'S EXHIBITS: O.P.NO. 21331/2001. -------------------------------------------------------------- EXT.P1 TRUE COPY OF MEMO OF CHARGES DT. 4-7-2000. EXT.P2 MEMO OF CHARGES DST. 17-7-2000. EXT.P3 ENQUIRY REPORT DT. 22-11-2000. EXT.P4 MEMO DT. 19-12-2000. EXT.P5 NOTE SHEET DT. 22-3-2000. EXT.P6 APPEAL DT. 17-1-2001. EXT.P7 MEMO DT. 7-4-2001. [TRUE COPY] P.S TO JUDGE. S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= O.P. No. 21331 of 2001 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 24th March, 2009. J U D G M E N T The petitioner was an employee of the 1st respondent -Company as a store keeper. He was proceeded against for allegations of misconduct. An enquiry was conducted. Ext. P3 report was submitted in which the petitioner was found guilty of one charge for which by Ext. P4 order, a punishment of withholding of one increment with cumulative effect was imposed on the petitioner. He filed an appeal to the Board of Directors of the Company who, by Ext. P7, reduced the punishment to one of withholding of one increment without cumulative effect. The petitioner is challenging Exts.P4 and P7 orders. 2. The petitioner does not challenge the validity of the enquiry itself. His only contention is that the findings are perverse. According to the petitioner, the duties and functions of the petitioner are laid down in the manual prepared by the 1st respondent themselves. The petitioner's contention is that the act alleged against the petitioner is not pertaining to one of those duties assigned to the petitioner. Therefore, the finding that the petitioner was guilty of the misconduct in respect of a duty which was not assigned to the petitioner is clearly perverse, is the contention raised. 3. This is strongly opposed by the counsel for the respondents who would submit that the petitioner never had any such contention either before the enquiry officer or in this original petition. He has raised this contention only in the reply affidavit. Further, it was found on evidence that it was the petitioner's duty which he had not carried out properly, for which only the punishment had been imposed. 4. I have considered the rival contentions in detail. 5. There were four charges against the petitioner which were : O.P. No. 21331/2001. -: 2 :- “1. You have purchased 240 gms., each of Krishnamrigakombu and Anakombu without obtaining prior sanction from the office, at an excessive rate. 2. You have wilfully purchased and recommended very high rate for the above items. Had the purchase Department did not scrutinise the purchase documents the company should have incurred a loss to the tune of Rs.4875/- and it is alleged that you have made the above purchase to financial gain to the purchaser and to share the spoils. 3. You have recommended for the purchase of the raw materials referred supra and stocked the same far in excess of actual requirement which resulted in a blockage of company's fund to the extent of rs.24,85,828.35 which adversely affected the financial discipline and management of the funds of the Corporation. 4. Due to the purchase and stocking of Pushkaramoolam, Athividayam and Dry Ginger as stated above in excess quantity, the company have incurred a loss of Rs. 3,60,125.55 since the rate of the above items has come down drastically during the financial year 2000-2001. The suppliers have made financial gain from your aforesaid acts amount to dereliction of duty and misappropriation of funds, causing willful loss to the company and acts subversive of discipline.” Out of the above, only one charge was found to have been proved against the petitioner. The finding on that charge is as follows: “Charge No. 3 On this Charge the Management has produced copies of relevant pages of the stock Register during the period from 1-4-99 to 29-2-2000 (ext.M2) and the same is not disputed by the C.O. In the M1 Charge Memo a statement showing the purchases done on various dates during the above period also is attached and the same also is not disputed. In the M1 Charge Memo the stock in hand as on 29-2-2000 of the six raw materials is mentioned and the same also is not disputed. MW2, the Production Manager in evidence has given a correct account of the stock position as on 29-2-2000 vis a vis the actual stock that would have been kept, which is as follows: O.P. No. 21331/2001. -: 3 :- Srl. Name of the stock as Actual stock No. Material on 29.2.2000 that would have been kept --------------------------------------------------------------------------------------------------------- 1. Pushkaramoolam 2432 Kg 300 kg 2. Athividayam 69 Kg 10 kg 3. Cheenathippali 3662 Kg 1000 kg 4. Chukku 7954 Kg 2500-3000 Kg 5. Rakthachandanam 10790 Kg 1000 Kg 6. Kachoorikizhangu 2733 Kg 800-1000 Kg The C.O. in para 4 of his reply explains the reasons for the excess stock. But the total consumption of the disputed items of raw materials for the period from 1-4-99 to 29-2-2000 (10 months) is detailed in the charge memo. Te average consumption for one month can be easily assessed. As per the evidence of MW2, the production manager even in cases when the new tenders are invited only 1 ½ months requirement is sufficient. The contentions of the charge sheeted officer in the reply that the estimate of requirement of raw materials is a guess work and very often the materials supplied will prove insufficient, the store Keeper will prepare a short list for 4 months and placing orders for supply to the tenderer and paying its price are all duties of the purchase Manager and store Keeper has no role in it is negatived by the evidence of MW2, the production manager. MW2 stated that the materials are purchased based on the shortage list submitted by the Store-Keeper. The argument raised by the C.O that these lists are being verified by the Production Manager and Purchase Manager will not itself absolves the liability of the store keeper. The C.O is holding a responsible post and he must be prudent enough to see that there is no stock accumulation. Since the storekeeper is well aware of the average consumption of each item of the raw materials it is his primary responsibility to see that no material is stocked in excess quantity. He is not supposed to prepare a requirement list on any guesswork. In case any material is coming to the stores in excess quantity than the normal production requirement the duty of the storekeeper is to report the matter to the higher authorities concerned. The CO. has not made any attempt to show that some body else was responsible for the excess stock of the materials. His contention is that whatever stock of the materials had in stores was required for production. But, this is not supported by any evidence. On this question, I do not find any reason to disbelieve the version of MW2 Production Manager. He categorically explained the excess stock kept in the stores during the period 1-4-99 to 29-2-2000. However MW2 had admitted that 1 ½ months stock is required to be kept for the smooth functioning of the factory. The fact that the requirement lists were to be scrutinized by the production and purchase department is also has to be considered. The actual split figures after deducting the required stock are not available and hence I am not fixing the actual amount that has been blocked. On appraisal of the oral and the documentary evidence I agree with the statement of the Production Manager (MW2) and hold the Charge sheeted Officer caused to stock excess quantity of raw materials during the period 1-4-99 to 29-2- O.P. No. 21331/2001. -: 4 :- 2000 than that of the actual requirement which resulted in blockage of company's funds.” 6. The petitioner himself admits in his reply affidavit that the following are among the petitioner's duties: “(a) He shall arrange all purchase of Raw Materials, Packing Materials, Stores and Spares, Plant and Machinery, Furniture and Equipments and all other items required for the Corporation after taking approval from the competent authorities and observing necessary rules and formalities. xx xx xx (c) He shall ensure that the store keepers are preparing and forwarding the shortage list of materials in time . . . . . . . . . .” Therefore, admittedly, it was the duty of the petitioner to prepare and forward shortage list of raw materials also. That means the petitioner has to forward a shortage list of raw materials which is required for production in the factory. Conversely, if the petitioner submits a shortage list far in excess of the actual quantity required for production, naturally, the same would be purchased and would be kept in the store, which would result in stocking of raw materials far in excess of the required quantity. In turn, it would result in blocking of the funds of the Company which can be used for other purposes without any corresponding benefit to the Company. If in the meantime the prices of that raw material goes down, then the Company would suffer loss also since, if the petitioner had not submitted shortage list of excess quantum, they would have been able to purchase the same raw material for a lesser price at a time when the quantity was actually required. In fact, as is clear from Ext. P3, MW1 had specifically stated thus: O.P. No. 21331/2001. -: 5 :- “MW1 continued that there is no arrangement to verify whether the requirement for raw materials placed from stores is in excess quantity than required to meet the production demand. The Company's funds to the extent of Rs. 24.85 Lakhs were blocked due to excess stock of raw materials of Pushkara-moolam Athividayam Cheenathippali, Chukku, Pakthachandanam and Kachoorikizhangu stocked in the Stores. The Company also suffered a loss of Rs.3,60,000 due to the fall in price of Pushkaramoolam, Athividayam and Chukku. Storekeeper Ramakrishnan is responsible for keeping the above materials in excess quantity. Based on the shortage list submitted by the storekeeper only, the Purchase Dept. arranged the purchase of the said items. It is not correct to say that preparation of the requirement of raw materials is a guess work and that the Storekeeper is sending the requirement of raw materials for 4 months to Production Manager and thereafter based on the orders from the purchase Manager, the tenderor supplies the materials. The Purchase Dept. places orders for the raw materials only on the basis of the shortage list received from the stores. It is not correct to say that Kachoorikizhangu is not an item included in the tender and the same is arranged for supply through quotation. For this item also there is existing practice to send shortage list.” 7. I do not find any merit whatsoever in the contention of the petitioner that the findings in the enquiry report in respect of Charge (3) is perverse. The punishment of barring of one increment without cumulative effect cannot be termed as disproportionate also. It is also submitted that the petitioner has already retired from service. In the above circumstances, there is no merit in the original petition and accordingly the same is dismissed. Sd/- S. Siri Jagan, Judge. Tds/