IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN THURSDAY, THE 13TH AUGUST 2009 / 22ND SRAVANA 1931 WP(C).No. 34780 of 2004(M) -------------------------- PETITIONER: ------------- V.SIDHARTHAN (RTD. SPECIAL GRADE SECRETARY), ELOOR GRAMA PANCHAYAT, KEERACKAL VEEDU, PATTANAKKAD P.O., CHERTHALA. BY ADV. SRI.V.J.JOHN SRI.JOSEPH A.VADAKKEL SRI.GEORGE KARITHANAM VARGHESE SRI.C.I.ABRAHAM SRI.JOSE KURIAKOSE (VILANGATTIL) RESPONDENT(S): --------------- 1. STATE OF KERALA, REP. BY ITS SECRETARY, LOCAL ADMINISTRATION LAD, SECRETARIAT, THIRUVANANTHAPURAM. 2. DEPUTY DIRECTOR OF PANCHAYAT, OFFICE OF THE DEPUTY DIRECTOR, ERNAKULAM. 3. ACCOUNTANT GENERAL, OFFICE OF THE ACCOUNTANT GENERAL, TRIVANDRUM. GOVERNMENT PLEADER SHRI ANTONY MUKKATH FOR R1 TO 3 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13/08/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX IN W.P.(C)No.34780/04 PETITIONER'S EXTS: EXT.P1: TRUE COPY OF LETTER DATED 24.9.03 EXT.P2: TRUE COPY OF REPLY DATED 27.10.03 EXT.P3: TRUE COY OF LETTER NO.E.512407/98 DATED 31.7.04 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT. EXT.P4: TRUE OCPY OF LETTER NO.E5 12407/98 DATED 30.10.04 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT. P.N.RAVINDRAN, J. --------------------------- W.P.(C) No. 34780 OF 2004 -------------------------- Dated this the 13th day of August, 2009 J U D G M E N T Heard Sri. V.J.John, the learned counsel appearing for the petitioner and Sri. Antony Mukkath, the learned Government pleader appearing for the respondents. 2. The petitioner is a pensioner. He retired from service on 30.9.1999 while he was working as Special Grade Secretary of Eloor Grama Panchayat. After the petitioner retired from service, the pensionary benefits including DCRG were sanctioned by order dated 28.1.2000. Though the monthly pension and commuted value of pension were disbursed, the DCRG was not paid immediately thereafter. Later, 75% of the DCRG was disbursed after withholding the sum of Rs. 24,049/- as per order dated 3.10.2000 issued by the respondents. Long thereafter, by Ext.P1 letter dated 24.9.2003, the petitioner was called upon to show cause why the sum of Rs.2,64,627.66 held under objection by the Auditor should not be fixed as his liability. On receipt of the Ext.P1, the petitioner submitted Ext.P2 reply. One year later, the petitioner was informed by Ext.P4 letter dated 30.10.2004 sent by the Deputy Director of Panchayats, Ernakulam that the sum of Rs.2,64,627.66 has been fixed as his liability. A liability certificate for the said amount was also forwarded to the Accountant General with a request to adjust the unpaid portion of the DCRG (Rs.24,049/-) against the W.P.(C) No. 34780/04 2 amounts due from the petitioner. This writ petition was thereupon filed challenging Exts.P1, P3 and P4 and seeking a writ in the nature of mandamus commanding the respondents to disburse the balance amount of DCRG together with interest thereon at the rate of 18% per annum. The petitioner has also prayed for a direction to the respondents to disburse the amounts standing to his credit in the Family Benefit Scheme. 3. The petitioner contends that as he retired from service on 30.9.1999 no liability could have been fixed against him and the DCRG could not have been withheld after 30.9.2002. He also contends that the procedure prescribed in the rules was not followed before the liability was fixed. The second respondent has filed a counter affidavit wherein it is contended that the amount fixed as the petitioner’s liability represents the amounts held under objection by the local fund audit. As regards payment of amounts standing to the credit of the petitioner in the Family Benefit Scheme, it is stated that since the petitioner did not maintain a pass book, steps have been taken by the second respondent to obtain the details regarding the remittances made by him in various offices and as soon as the details are received, steps will be taken to disburse the same to the petitioner. 4. From the pleadings and the materials produced in this writ petition, it is evident that the competent authority has not initiated proceedings under Rule 3 of Part III of the KSR to fix any amount as petitioner’s liability. This Court has in a series of decisions including the decision in Kolappa Pillai v. State of Kerala W.P.(C) No. 34780/04 3 (1982 KLT 551) held that the Government can recover only the pecuniary loss caused by the Government servant and Rule 3 of Part III of the KSR cannot be invoked, unless loss has been caused and found to have been caused. In Shamsudheen v. Secretary to Government (2008 (4) KLT 133) I have after a detailed analysis of the case law on the point held that while the Government have the right to recover the pecuniary loss caused to it by the employee or the pensioner, it must be established that the misconduct or negligence of the employee/pensioner has resulted in pecuniary loss to the Government and the fact that the Government have suffered pecuniary loss has to be established in a disciplinary enquiry, if such enquiry was initiated while the employee was in service or in proceedings initiated against the pensioner under Rule.3 of Part III, K.S.R. 5. In the instant case, apart from the fact that no such proceedings was ever initiated against the petitioner either while he was in service or within three years after his retirement, even the materials relied on by the respondents to fix the liability or the grounds on which the petitioner was held liable are not disclosed. There is no finding that by reason of the petitioner’s misconduct or negligence, the Government had suffered any pecuniary loss. Ext.P1 notice and Ext.P4 letter are silent on this aspect. Apart from stating the six Panchayats where the petitioner had worked had reported various amounts as his liability, there is no material to establish that the amounts mentioned in Ext.P1 and Ext.P4 represent the pecuniary W.P.(C) No. 34780/04 4 loss caused to the Government due to the petitioner’s misconduct or negligence. I am therefore persuaded to hold that the fixation of the sum of Rs.2,64,627.66 as the petitioner's liability cannot be sustained. The respondents cannot therefore withhold payment of the DCRG due to the petitioner. 6. As regards payment of the monies due under the Family Benefit Scheme, the second respondent has in the counter affidavit dated 17.6.2005 stated that as soon as details regarding the remittances made by the petitioner in the Family Benefit Scheme are ascertained from the various offices where he had worked, the amounts standing to his credit in the Family Benefit Scheme will be disbursed. Nearly three years have passed after the counter affidavit was filed. Till date, the respondents have not disclosed to this Court the amounts standing to the credit of the petitioner in the Family Benefit Scheme. The Apex Court has in the decision reported in Dua v. State of Haryana (2008 (3) KLT 58) held that where payment of terminal benefits is withheld for no justifiable reason, the pensioner is entitled to be compensated by award of interest either under the rules governing payment of pension and in their absence applying Article 14 of the Constitution of India. In the instant case, the petitioner retired from service on 30.9.1999. While he was in service, no proceedings were initiated against him to recover the pecuniary loss caused to the Government. Even after his retirement within a period of three years no proceedings were initiated under Rule 3 of Part III of the KSR. Ext.P1 letter was send to the petitioner only on 24.9.2003. In such circumstances, I am of the W.P.(C) No. 34780/04 5 opinion that the petitioner is entitled to be compensated by award of interest for the delayed payment of a portion of the DCRG. However, having regard to the fact that 75% of DCRG was disbursed to the petitioner in October 2000 within one year of his retirement, I hold that the petitioner is entitled to interest on the unpaid portion of the DCRG only with effect from 1.11.2004, the date immediately following the date on which Ext.P4 letter and the liability certificate accompanying the same were issued. I accordingly dispose of the writ petition with the following directions. The respondents shall within one month from the date on which the petitioner produces a certified copy of this judgment before the second respondent disburse to the petitioner the sum of Rs.24,049/- withheld from his DCRG together with interest thereon at the rate of 6.5% per annum from 1.11.2004. It will be open to the Government to recover the interest thus paid to the petitioner from the officers responsible for withholding payment of DCRG to the petitioner. The second respondent shall within a period of three months from the date of production of a certified copy of this judgment also disburse to the petitioner, the amounts standing to his credit in the Family Benefit Scheme. P.N.RAVINDRAN, JUDGE vps W.P.(C) No. 34780/04 6