IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC TUESDAY, THE 13TH JULY 2010 / 22ND ASHADHA 1932 WP(C).No. 20899 of 2010(J) -------------------------- PETITIONER(S): --------------- MR.ZANU ZACHARIAS, IYRAMANA, 21D, THOPPIL NAGAR, MUTTADA P.O., THIRUVANANTHAPURAM-25. BY ADV. SRI.JOSEPH KODIANTHARA, SENIOR ADVOCATE SRI.V.ABRAHAM MARKOS SRI.MATHEWS K.UTHUPPACHAN SRI.BINU MATHEW SRI.TERRY V.JAMES SRI.B.J.JOHN PRAKASH SRI.TOM THOMAS (KAKKUZHIYIL) RESPONDENT(S): --------------- 1. THE PRINCIPAL SECRETARY TO GOVERNMENT VIGILANCE (D) DEPARTMENT, THIRUVANANTHAPURAM. 2. THE ADDITIOAL CHIEF SECRETARY (FINANCE), FINANCE (PU-A) DEPARTMENT THIRUVANANTHAPURAM. 3. THE MANAGING DIRECTOR KERALA FINANCIAL CORPORATION VELLAYAMBALAM, THIRUVANANTHAPURAM. ADV. SRI.M.K.CHANDRA MOHANDAS FOR R3 MR.P.NANDAKUMAR, SR. GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13/07/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. ------------------------- W.P.(C.) No.20899 of 2010 (J) --------------------------------- Dated, this the 13th day of July, 2010 J U D G M E N T The petitioner is working as a General Manager under the 3rd respondent. In this writ petition he is challenging Ext.P7 order issued by the 3rd respondent on 01/07/2010 placing him under suspension. 2. Facts of the case show that in regard to a loan that was sanctioned to M/s.Five Star Rubber Industries Private Ltd., Edayar, the application was processed by the petitioner and the loan was sanctioned and disbursed to the loanee. It is alleged that collateral security offered by the loanee was over valued by the petitioner resulting in grant and disbursement of a loan of Rs.1,50,00,000/- to the loanee. According to the Corporation, ultimately it resulted in a financial loss of Rs.8,85,94,621/-. 3. Vigilance enquiry was caused into the aforesaid issue. The Vigilance and Anti Corruption Bureau submitted its report to the Government. The Government considered the report and issued Ext.P5 to the 3rd respondent enclosing an extract of the allegations WP(C) No.20899/2010 -2- and the findings of the VACB. The extract of the allegations and the findings of the VACB as enclosed in Ext.P5 shows that the VACB recommended to suspend the petitioner with immediate effect till the completion of investigation, as according to them, there is every possibility of the petitioner using his official position to impair the fair investigation of the case. 4. Accepting the said recommendation of the Vigilance, the 2nd respondent issued Ext.P5 to the 3rd respondent directing to take immediate action on the recommendations of the VACB and to intimate the action taken thereon. On receipt of Ext.P5, the 3rd respondent issued Ext.P7 order, which reads as under :- “The Vigilance and Anti-Corruption Bureau which conducted an enquiry into the allegations against officials of Kerala Financial Corporation in sanctioning loan to M/s.Five Star Rubber Industries Private Ltd., Edayar during 1995-96 has submitted a report along with recommendations to the Vigilance Department in Government. The Vigilance Department, after examining the matter in detail has accepted the recommendations and has requested Government to initiate steps to suspend Sri.Zanu Zacharias, General Manager-I, KFC with immediate effect. Government vide letter No.19972/PU-A1/2010/Fin. Dated 25/06/2010 has directed to take immediate action on the recommendations of the report accepted by Government. In the above circumstances, Sri.Zanu Zacharias, General Manager-I, Kerala Financial Corporation, Head Office is placed under suspension with immediate effect. He will be eligible for subsistence allowance as per rules. An extract of the allegations and findings of the Vigilance and Anti-Corruption Bureau received is enclosed.” WP(C) No.20899/2010 -3- It is this order which is under challenge. 5. Main contention raised by the learned Senior counsel for the petitioner is that the recommendation of the VACB was accepted by the Government and the Government issued Ext.P5 requiring the Corporation to implement the directions. According to the petitioner, acting upon Ext.P5 without any application of mind, the Corporation issued Ext.P7 placing the petitioner under suspension, and for that reason, Ext.P7 is illegal. The learned Senior counsel for the petitioner placed considerable reliance on Ext.P8 judgment dated 10/02/2003 rendered by this Court in O.P.No.988/2003. 6. A statement has been filed on behalf of the 3rd respondent. The main thrust of the averments in the statement is that the past history of the petitioner is not free from blame. It is also stated therein that the findings of the VACB as disclosed in Ext.P5 shows that grave misconducts were committed by the petitioner. It is stated that it was because of the gravity of the misconducts, the Government issued Ext.P5 recommendation and ordered its implementation which was accepted by the 3rd respondent. It is contended that it was thereafter that by Ext.P7, the petitioner was ordered to be placed under suspension. Learned Government Pleader supported Ext.P5 issued by the Government. WP(C) No.20899/2010 -4- 7. In this writ petition, this Court is not concerned with the gravity of the offences alleged against the petitioner. This is a matter for the disciplinary authority to enquire and finalise the proceedings. All that this Court is concerned is whether Ext.P7 order placing the petitioner under suspension is justified or not. 8. A reading of Ext.P7 order shows that the VACB conducted enquiry and submitted report to the Government with its recommendations to place the petitioner under suspension. The Government accepted the recommendations and by Ext.P5, directed the 3rd respondent to take immediate action on the recommendations of the VACB. In pursuance thereof, and without anything more, Ext.P7 order has been issued placing the petitioner under suspension. 9. Although, the disciplinary authority of the petitioner is entitled to take disciplinary action against the petitioner and also to place the petitioner under suspension in an appropriate case, it is for the disciplinary authority to apply its mind to the facts of the case and to decide as to whether in the circumstances, as disclosed from the materials, it is necessary or desirable to place the delinquent under suspension. For this, independent application of mind is inevitable and should be reflected in the order placing the WP(C) No.20899/2010 -5- delinquent under suspension or at least in the files. In this writ petition, neither the statement filed on behalf of the 3rd respondent nor Ext.P7 discloses such application of mind. Therefore, Ext.P7 order cannot be sustained and is accordingly quashed. 10. It is clarified that this judgment will not stand in the way of the 3rd respondent in passing fresh orders in the matter, if on examination of the facts of the case, the 3rd respondent is satisfied that the petitioner should be placed under suspension pending disciplinary action against him. At this stage, learned Senior counsel for the petitioner submits that the petitioner is due to retire from service on 31/07/2010 and in order to avoid the stigma of having retired while on suspension, he is willing to go on leave. Whether the petitioner should be placed under suspension or should be allowed to go on leave pending retirement, are matters for the Corporation to decide and this Court cannot issue any directions in this behalf. This writ petition is disposed of as above. (ANTONY DOMINIC, JUDGE) jg