In the High Court of Judicature at Madras Date :: 08..03..2011 Coram :: THE HON'BLE MR.JUSTICE V.DHANAPALAN Writ Petition No: 734 of 2007 P. Nagarathinapandian Formerly Superintending Engineer (Retd.) Vellore Circle, Vellore. ... Petitioner -vs- 1. The Accounts Officer Tamil Nadu Housing Board 493 Anna Salai Nandandam Chennai – 600 035. 2. The Executive Engineer and Administrative Officer Vellore Housing Unit Vellore. ... Respondents .. .. .. Writ petition under Article 226 of the Constitution of India praying for issuance of a writ of certiorarified mandamus calling for the records relating to the letter No: Pension 5/8455/06 dated 23.10.2006 issued by the Accounts Officer, Tamil Nadu Housing Board, Chennai – 35, the first respondent herein and the proceedings of the Executive Engineer and Administrative Officer, Vellore Housing Unit, Vellore, the 2nd respondent herein made in No: TI/5935/01 dated 15.05.2006, quash the same in so far as the petitioner is concerned and forbear the respondents herein from in any manner effecting the order of recovery from the pension of the petitioner and consequently disburse the amounts withheld by the respondents within a short date that may be fixed by the Hon'ble Court. For petitioner : M/s. K. Rajkumar For 1st respondent : Mr. A. Vijayakumar For 2nd respondent : Mr. R. Girirajan https://hcservices.ecourts.gov.in/hcservices/ .. .. .. O R D E R The prayer in the writ petition is for issuance of a writ of certiorarified mandamus calling for the records relating to the letter No: Pension 5/8455/06 dated 23.10.2006 issued by the Accounts Officer, Tamil Nadu Housing Board, Chennai – 35, the first respondent herein and the proceedings of the Executive Engineer and Administrative Officer, Vellore Housing Unit, Vellore, the 2nd respondent herein made in No: TI/5935/01 dated 15.05.2006, quash the same in so far as the petitioner is concerned and forbear the respondents herein from in any manner effecting the order of recovery from the pension of the petitioner and consequently disburse the amounts withheld by the respondents within a short date that may be fixed by this Hon'ble Court. 2. The brief facts necessary for disposal of this writ petition are, petitioner was appointed as Junior Engineer in March 1965. He was promoted to the post of Assistant Executive Engineer, Executive Engineer and finally to the post of Superintending Engineer. He retired on 30.11.1998 on reaching the age of superannuation and has been getting his pension regularly. Suddenly, there was a short remittance of Rs.2,862/- in his pension and when he sent a representation questioning the short remittance, the 1st respondent wrote back on 23.10.2006 stating that a sum of Rs.86,743/- has been ordered to be recovered from the pension of the petitioner in 30 installments at the rate of Rs.2,862/- and enclosed the copy of the proceedings dated 15.05.2006. Thus, the letter dated 15.05.206 was communicated to the petitioner only on 17.10.2006. From the order of the 2nd respondent petitioner understood that while selling the dead stock materials in public auction in the Vellore Housing Unit at Vellore, the Housing Board has sustained notional loss and the same has been ordered to be recovered from various officials who worked during the relevant period. Challenging such recovery petitioner has approached this Court with the present writ petition. 3. Mr. K.Rajkumar, the learned counsel appearing for the petitioner contended that the impugned order of recovery has been made without issuing any show cause notice to the petitioner and without affording an opportunity to the petitioner and without holding an enquiry and thus, there is clear violation of principles of natural justice. He would further contend that the impugned order of recovery has been effected after 30 years of the alleged loss which took place between 1974 to 1977 and therefore, the order of recovery is barred by limitation also. Learned counsel in his submissions pointed out that audit checking of the accounts in every office is being conducted every financial year and if at all there was dead stock, by clubbing all such dead stocks notional loss should have been calculated https://hcservices.ecourts.gov.in/hcservices/ in the next financial year or within a reasonable time. In such a case, the respondents cannot be allowed to proceed with the recovery for the alleged loss caused after 30 years that too without due enquiry and in violation of the principles of natural justice. 4. In support of his contention, learned counsel for the petitioner relied on the decision of the Hon'ble Supreme Court reported in 2007 (10) S.C.C. 88 [ Madhya Pradesh State Agro Industries Development Corporation Ltd. and another vs. Jahan Khan ] and also a decision of a Division Bench of this Court reported in 2008 (1) MLJ 358 in the case of R.Prem Kumari vs. State of Tamil Nadu and others. Further, counsel also placed reliance upon the decision rendered in the case of P. Lingan vs. Union of India, rep. by the Secretary, Ministry of Defence Production and Supply, New Delhi and others reported in 2008 (5) M.L.J. 1331. 5. On the other hand, Mr. A.Vijaya Kumar, learned counsel for the 1st respondent submits that the alleged irregularity was detected only in the year 2006 when the dead stock materials were sold in open auction. He would submit that the case of the Housing Board was that the writ petitioner while working as Assistant Executive Engineer in Vellore Housing Unit of Tamil Nadu Housing Board has procured materials. But due to non utilization of such procured materials, some of the materials have become dead stocks. Those dead stocks have been disposed of by open auction and the difference between the book value and the auction value was ordered to be recovered from the persons responsible and thus, recovery proceedings were issued to the persons responsible for the loss including the petitioner herein. He would further submit that it is an admitted fact that in respect of the petitioner, the actual loss between the book value and the account value of the materials is only a sum of Rs.8,643/- and due to a typographical error it was noted as Rs.86,743/- instead of Rs.8,643/- and when the writ petitioner brought this mistake to the notice of the authorities concerned, the Executive Engineer and Administrative Officer, Vellore Housing Unit, has given a revised proceedings and had ordered to recover only a sum of Rs.8,643/- instead of Rs. 86,743/- and accordingly, the excess amount recovered from petitioner's pension was also refunded to the petitioner. As regards the right of the Housing Board to order recovery from the pension, Mr.Vijaya Kumar submits that G.O. Ms. No: 702, Finance (Pension) Department dated 07.10.1988 provides for recovering the Government dues if any including over payment of pension, etc. from the D.A. / A.D.A. on Pension/ Family Pension without the consent of the pensioner and that in the present case, in fact, the petitioner has also given a consent letter for recovery to the effect that he is willing to make good the loss if any caused to the Tamil Nadu Housing Board as a result of negligence while in service and therefore, the order of recovery cannot be held to be unsustainable. 6. I have heard the learned counsel on either side and perused the materials available on record and the decision relied on by the counsel. The circumspection of facts would reveal that the petitioner was appointed https://hcservices.ecourts.gov.in/hcservices/ as a Junior Engineer in March 1965 in the respondent Tamil Nadu Housing Board, hereinafter referred to as T.N.H.B.; he was promoted to the posts of Assistant Executive Engineer, Executive Engineer and finally to the post of Superintending Engineer; he reached the age of superannuation on 30.11.1998 and he had been regularly receiving a sum of Rs.11,657/- per month as pension till August 2006; when petitioner went to draw his pension for the month of September 2006 he was shocked to find that a sum of Rs. 8,795/- alone has been remitted in his account instead of Rs.11,657/- which fell short of Rs. 2,862/- and he later came to know that there was a short remittance. 7. It is seen that the petitioner had approached the respondent T.N.H.B., by a representation dated 17.10.2006, to know about the short remittance. The respondent by its letter in Ref. No: Pension 5/8455/06 dated 23.10.2006 replied that a sum of Rs.86,743/- has been ordered to be recovered from the pension of the petitioner in 30 installments at the rate of Rs. 2,862/- each by the Executive Engineer, Vellore Housing Division, Vellore, and enclosed the copy of the proceedings issued by him in his reference No: 11/5935/01 dated 15.05.2006. Petitioner is before this Court challenging the above said proceedings on the ground that the order of recovery has been effected without notice and without providing an opportunity and that the respondent has not even held an enquiry to determine the liability of the petitioner. 8. To examine the challenges made by the petitioner it has to be seen whether the order of recovery has been effected after issuing a notice to the petitioner and holding an enquiry thereof. An analysis of the entire proceedings would reveal that there was no notice neither before taking a decision to recover nor before effecting the recovery of Rs.86,743/-. It is a cardinal principle that before proceeding to order recovery of money from an employee's salary or pension as the case may be, he must be put on notice to show cause as to why recovery should not be ordered in respect of the alleged loss which took place in the year 1974 to 1977 due to non utilization of procured materials till it became dead stocks and, thereafter, they must proceed to hold an enquiry, provide due opportunity to the employee and if the alleged irregularity is proved then the department can proceed to order recovery. It is not in dispute that the alleged loss which took place in the year 1974 to 1977 came to be noticed when the dead stocks materials were disposed of in open auction on 15.05.2006. Therefore, it is clear that the respondent has proceeded after 30 years. If that being the case, the respondent should follow the procedure contemplated under law namely issue notice to the petitioner, give him an opportunity of hearing and thereafter proceed to recover the amount. 9. In the case of M.P. State Agro Industries Development Corporation Ltd. and another vs. Jahan Khan [ 2007 (10) S.C.C. 88 ], cited supra, the Hon'ble Supreme Court has categorically held that when an allegation is made against an employee only after holding an enquiry the respondent can proceed to recover the amount and or inflict any punishment. Those principles cannot be dispensed with when the order of punishment will have civil https://hcservices.ecourts.gov.in/hcservices/ consequences and, therefore, the procedure contemplated under the law has to be adhered to. In the case of R. Prem Kumari vs. State of Tamil Nadu, the Division Bench of this Court had laid down a law that when recovery is ordered the authorities should follow the principles of natural justice and, therefore, the employee is entitled for notice and in view of the ratio laid down by the Supreme Court in Sahib Ram vs. State of Haryana reported in 1995 Supp (1) S.C.C. 18, the Division Bench directed the respondents to pass a speaking order, after hearing the objection of the appellant/petitioner, and communicate the same to the appellant / petitioner. Therefore, the order passed by the respondents are in gross violation of the principles of natural justice and the same cannot be sustained. 10. Another contention of the learned counsel for the petitioner is that after 30 years of the alleged loss, it is inequitable to effect recovery of the amount. It is true that when an error in the amount to be recovered was pointed out by the petitioner, the respondent had accepted the mistake and had reversed the order to recover only a sum of Rs. 8,643/- and not Rs. 86,743/- as ordered earlier. Therefore, at this distance point of time, if the respondent Board can proceed to recover the amount, it will have a serious implication especially when the petitioner is a senior citizen languishing survival at this old age and would cause mental agony to him. However, this issue has been opposed by the learned counsel appearing on behalf of T.N.H.B. on the ground that the petitioner himself had given a letter of consent stating that if there is any loss caused to the Board, the Board can recover that amount. Considering this submission, in my considered opinion, it would be appropriate for the respondent to decide the matter afresh after providing an opportunity of hearing to the petitioner. 11. In the light of the above and on considering the circumstances and the law laid down by the Apex Court, the impugned proceeding of the respondent Housing Board is set aside. The matter is remanded back to the respondent Tamil Nadu Housing Board for fresh consideration in accordance with law. Taking into account the age of the petitioner, the respondents are directed to complete the entire exercise of giving notice, holding an enquiry and then passing final orders within a period of twelve (12) weeks from the date of receipt of a copy of this order. The writ petition stands allowed with the above directions. Consequently, connected miscellaneous petition is closed. There shall be no orders as to the costs. Gp Sd/ Asst. Registrar /True Copy/ Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To 1. The Accounts Officer Tamil Nadu Housing Board 493 Anna Salai Nandandam Chennai – 600 035. 2. The Executive Engineer and Administrative Officer Vellore Housing Unit Vellore. WP No: 734 of 2007 NSM (CO) VS / 21.04.2011 https://hcservices.ecourts.gov.in/hcservices/