THE HON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY W.P.Nos.14738, 14764, 14765, 14766, 14767 & 14828 of 2010 Date : 23-12-2010 W.P.No.14738/2010 Between : Kotteti Rani w/o.Rayudu .. Petitioner And The District Collector and District Programme Co-ordinator, NREGS, A.P., East Godavari, Kakinada and others .. Respondents Counsel for petitioners (in all cases) : Sri K.V. Seshagiri Rao Counsel for respondents (in all cases) : Government Pleader for Panchayat Raj The Court made the following: COMMON ORDER: All these Writ Petitions raise common issues of law and facts and therefore they are heard and being disposed of together at the admission stage after hearing the learned counsel for the petitioners and the learned Government Pleader for Panchayat Raj. The petitioners are Sarpanches of various Gram Panchayaths. Certain works under National Rural Employment Guarantee Scheme (NREGS) were undertaken by the Gram Panchayaths. As certain allegations were levelled in connection with the execution of these works, respondent No.1 has appointed respondent No.3 as enquiry officer to conduct enquiries into the said allegations. The petitioners averred that no notices were issued to them and they were not given opportunity to participate in the enquiry. Obviously, on the basis of the enquiry report submitted by respondent No.3, respondent No.1 has passed the impugned proceedings whereby each of the petitioners is saddled with certain amounts which represent the alleged misappropriated amounts. The main ground of challenge to these orders in these Writ Petitions is that neither the petitioners were given an opportunity in the enquiry nor they were put on notices raising specific allegations framing specific charges against them. It is their further case that respondent No.1 has not called for any explanation from the petitioners and that on the basis of the reports submitted by respondent No.3 behind the petitioners’ back, the impugned orders have been passed. In the counter affidavits filed by respondent No.3 it is inter alia stated that under Clause-11(e) of NREGS-A.P. Social Audit Rules 2008, notified in G.O.Ms.No.98, dated 9-3-2010, wherever in the course of Social Audit, if evidence through written and oral testimonies against those who have misappropriated money is established, action shall be initiated for recovery and that the said action for recovery shall be without prejudice to the action to be taken against the person under the relevant laws. Respondent No.3 further stated that Social Audit was conducted in Prathipadu Mandal from 2-10-2009 to 12-10-2009, that as part of the process a team of Social Audit members visited the Gram Panchayaths and for ascertaining facts from wage seekers, local people etc., and noted down their findings and that the team also has collected written statements from the villagers wherein the wage seekers/villagers stated in categorical terms that drinking water was not supplied to them by engaging bullock carts. It is further stated that all the peoples’ representatives were invited and the petitioners were also present during the Social Audit and that as found in the reports filed by him, different amounts were found misappropriated by each of the Gram Panchayaths and that as the Sarpanches are drawing authorities, they were made equally liable to pay these amounts. While this Court appreciates the move of the respondents to find out whether any misappropriation of NREGS funds has taken place and if so to identify the persons responsible for such misappropriation and recovery of the same, it is however of the opinion that the respondents have not followed the procedure prescribed in accomplishing the task undertaken by them. While Social Audit can serve the purpose of fact finding, that cannot be treated as be-all and end-all. The report submitted by respondent No.3 after conclusion of Social Audit can only be taken as the basis by the competent authority to proceed further in fastening the liability on the persons who misappropriated the amounts. The provisions of Rule 11(e) which envisage action for recovery following Social Audit require to be interpreted in conformity with the principles of natural justice. Though the said rule does not in express terms provide for a prior opportunity, as held by the Supreme Court in Swadeshi Cotton Mills Vs. Union of India [1] where the provision does not expressly provide for a prior notice, the requirement thereof shall be read into such provision wherever any order is proposed to be passed by invoking such a provision resulting in likelihood of causing adverse civil consequences to such persons. In such view of the matter, I am of the opinion that the impugned orders which were passed without prior notice and an opportunity of being heard to the petitioners solely on the basis of the Social Audit report submitted by respondent No.3 cannot be sustained. The impugned orders are accordingly quashed and the Writ Petitions are allowed. Respondent No.1 is directed to issue show cause notices containing specific allegations against the petitioners and supply all the material forming basis for such allegations. If respondent No.1 receives explanations from the petitioners within the stipulated time, he shall consider the same in detail and pass appropriate orders containing reasons in support of his conclusions with reference to the explanation offered and material if any submitted by the petitioners. __________________________ C.V. NAGARJUNA REDDY.,J Date: 23-12-2010 AM [1] AIR 1981 SC 818