Kerala State Financial Enterprises Ltd. v Lok Ayukta (W.P.(C). Nos. 7371/2018, 7625/2018, and 23025/2018)

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **WEDNESDAY, THE 29TH DAY OF JANUARY 2020 / 9TH MAGHA, 1941** **WP(C).No.7371 OF 2018(V)** ## **PETITIONER:** **KERALA STATE FINANCIAL ENTERPRISES LTD. "KSFE BHAVAN", MAVELIPURAM, KAKKANAD (PO), ERNAKULAM-682 030 REPRESENTED BY ITS LIAISON OFFICER (LEGAL), SHRI. UNNIKRISHNAN M.** **BY ADVS. SRI.E.K.NANDAKUMAR (SR.) SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH (SR.) SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.JAI MOHAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM** ## **RESPONDENTS:** **1 LOK AYUKTA, LEGISLATURE COMPLEX, VIKAS BHAVAN, THIRUVANANTHAPURAM-695 033, KERALA. 2 K.KRISHNA KUMAR, S/O M.R. NAIR, TC 12/414, LATHA BHAVAN, THOMAS LANE, PLAMOODU, PATTOM P.O., THIRUVANANTHAPURAM-695 004, KERALA.** **R1 BY ADV. SRI.J.HARIKUMAR R2 BY ADV. SRI.K.ARJUN VENUGOPAL R2 BY ADV. SMT.V.A.HARITHA R2 BY ADV. SRI.JEEVAN RAJEEV R2 BY ADV. SMT.MARY RESHMA GEORGE R2 BY ADV. SRI.R.NANDAGOPAL R2 BY ADV. SRI.P.SREEKUMAR** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29.01.2020, ALONG WITH WP(C).7625/2018 & WP(C).23025/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.P.(C)Nos.7371,7625 & 23025 of 2018** **2** **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **WEDNESDAY, THE 29TH DAY OF JANUARY 2020 / 9TH MAGHA, 1941 WP(C).No.7625 OF 2018** ## **PETITIONER/S:** **KERALA STATE FINANCIAL ENTERPRISES LIMITED "KSFE BHAVAN", MAVELIPURAM, KAKKANAD (PO), ERNAKULAM - 682 030, REPRESENTED BY ITS LIAISON OFFICER (LEGAL),SHRI UNNIKRISHNAN M.** **BY ADVS. SRI.E.K.NANDAKUMAR (SR.) SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH (SR.) SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.JAI MOHAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM** ## **RESPONDENT/S:** **1 LOK AYUKTA, LEGISLATURE COMPLEX, VIKAS BHAVAN, THIRUVANANTHAPURAM - 695 033, KERALA. 2 VENUGOPAL S, VRA 178/8, MANNAMMOOLA, TC 10/910/7, PEROOR P.O., THIRUVANANTHAPURAM - 695 005, KERALA. R1 BY ADV. SRI.J.HARIKUMAR R2 BY ADV. SRI.M.RAJENDRAN NAIR R2 BY ADV. SMT.M.SANTHY** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29.01.2020, ALONG WITH WP(C).7371/2018 & WP(C).23025/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.P.(C)Nos.7371,7625 & 23025 of 2018** **3** **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **WEDNESDAY, THE 29TH DAY OF JANUARY 2020 / 9TH MAGHA, 1941** **WP(C).No.23025 OF 2018** ## **PETITIONER/S:** **KERALA STATE FINANCIAL ENTERPRISES LTD "KSFE BHAVAN", MAVELIPURAM, KAKKANAD(PO), ERNAKULAM-682 030,REPRESENTED BY ITS LIAISON OFFICER(LEGAL),SHRI UNNIKRISHNAN.M.** **BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH (SR.) SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.JAI MOHAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM** ## **RESPONDENTS:** **1 LOK AYUKTA LEGISLATURE COMPLEX, VIKAS BHAVAN, THIRUVANANTHAPURAM-695 033,KERALA. 2 SURESH.S S/O.SHIVDAS, HOUSE NO.IV/475, VALIYA KULANGARA HOUSE, VALAVANAD, POLLETHAI.P.O, ALAPPUZHA-688 522, KERALA. R1 BY ADV. SRI.J.HARIKUMAR R2 BY ADVS. SRI.K.ARJUN VENUGOPAL KUM.GAYATHRI MURALEEDHARAN SMT.V.A.HARITHA SRI.R.NANDAGOPAL SRI.SIDHARTH B PRASAD SRI.P.SREEKUMAR** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29.01.2020, ALONG WITH WP(C).7371/2018, WP(C).7625/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.P.(C)Nos.7371,7625 & 23025 of 2018** **4** ## **JUDGMENT** [ WP(C).7371/2018, WP(C).7625/2018, WP(C).23025/2018 ] Dated this the 29[th] day of January, 2020 ## **S. Manikumar, C.J.** In W.P.(C) No.7371 of 2018, Kerala State Financial Enterprises Limited has challenged the order made in a Complaint No.747 of 2017-C dated 13.12.2017, by which Kerala Lok Ayukta has, at paragraph No.9, ordered thus: “9. In the result, I recommend to the competent authority namely the Additional Chief Secretary to Government, Taxes Department, Govt. Secretariat, Thiruvananthapuram to give appropriate direction to the respondents/Kerala State Financial Enterprises Ltd. represented by its Managing Director to disburse to the complainant the withheld portion of his Terminal Leave Surrender Value amounting to Rs.2,19,828/- with interest thereon @ 8.5% from 01.05.2014 till date of disbursement of the afore said amount and also to pay interest at the same rate on the released portion of his Terminal Leave Surrender Value amounting to Rs.4,77,921/- from 01.05.2014 to 18.03.2016 as the said portion of the surrender value was released only on 19.03.2016 and to redress the grievance of the complainant who has retired as Senior Manager of the Kerala State Financial Enterprises Ltd. on 30.04.2014 which harassment, loss and grievance has been caused to him on account of mal administration from **W.P.(C)Nos.7371,7625 & 23025 of 2018** **5** the part of the respondents herein namely the Managing Director; Deputy General Manager (P&HR) and General Manager (Business) KSFE Ltd., Head Office, Thrissur. Posted for Action Taken Report to 09.02.2018.” 2. In W.P.(C)No.7625 of 2018, Kerala State Financial Enterprises Limited has challenged the order made in Complaint No.639 of 2016-D dated 25.1.2018, by which Kerala Lok Ayukta has, at paragraph No.7, ordered thus: “7. It has been noticed already that the complainant retired from service on May 31, 2015. Admittedly the first instalment of Rs.6,76,536/- out of Rs.7 lakhs ordered to be paid to him towards DCRG was released only on May 15, 2017. In my view the complainant is entitled to get interest for the above sum of Rs.6,76,536/- at the rate of 9% per annum from September 1, 2015 till May 15, 2017. Similarly, interest at the rate of 9% shall be paid on the sum of Rs.23,464/- from September 1, 2015 till July 4, 2017. The respondents shall also release the sum of Rs.3,34,138/with 9% interest thereon from September 1, 2015 till the date of payment. The respondents shall make the payment as directed above and file an Action Taken Report before this Forum on or before March 6, 2018.” 3. In W.P.(C) No.23025 of 2018, Kerala State Financial Enterprises Limited has challenged the order made in Complaint No.875 of 2017 D dated 29.5.2018, by which Kerala Lok Ayukta has ordered thus: “The amount so due to the complainant and withheld by KSFE as stated above amounts to Rs.21,02,522/-. According to **W.P.(C)Nos.7371,7625 & 23025 of 2018** **6** the counsel for KSFE a few items of pensionary benefits are already disbursed and that the balance is withheld as the complainant has caused some loss to KSFE by commencing chitties without sufficient number of subscribers. It is seen that the complainant has obtained details of tickets kept blank in chitties started during the period from July 2011 to March 2015 by making application under Right to Information Act and that is Ext.P4. It shows that number of blank tickets as on 31.05.2017 in chitty No.173/17 is three numbers and that is in relation to chittal Nos.54, 55 & 60. This means that those three subscribers with chittal Nos.54, 55 & 60 have defaulted subscribing and that tickets are shown as “blank”. In chitty No.56/15 number of blank tickets as on 31.10.2017 is shown as 3 and the chittal Nos. are 16, 27 and 47. In chitty No.93/15 number of blank tickets shown is one and the defaulted subscriber is chittal No.39. In chitty No.94/15 blank tickets are shown as 3 and the chittal Nos. are 36, 39 and 40. It is worthy to note that statements so given is showing altogether 10 tickets as blank as on 31.10.2017. This is not a case in which the chitty was commenced without sufficient number of subscribers. It is only that subscribers defaulted payment and KSFE has falsely shown those tickets as blank tickets and is accusing the complainant of having commenced the chitties without sufficient number of subscribers. The Manager cannot be held responsible even if any loss is caused to KSFE consequent on subscribers defaulting payment subsequent to their joining the chitty as it is not within his control. Though respondents have stated that there are several other chitties which was commenced by the complainant without sufficient number of subscribers, the details thereof are not furnished. Consequently therefore I have to find that there is no justifiable reason for KSFE to withhold the various amounts due to the **W.P.(C)Nos.7371,7625 & 23025 of 2018** **7** complainant as stated above which amounts to more than Rs.21 lakhs. Counsel for the complainant submits that the complainant is entitled to interest also on the amounts that are yet to be disbursed till the actual date of disbursement from the respective dates on which the concerned items of amounts have fallen due. The question of interest can be considered later. I direct respondents to make payment of the balance amount due to the complainant under items mentioned above which in all works out to Rs.21,02,522/-. Counsel for the respondents submits that in view of transfers taking place in KSFE at present at least three weeks time be granted to enable KSFE to make payment of the afore said amounts. Make payment and report on 25.06.2018.” 4. In all the three writ petitions, the common ground taken by Kerala State Financial Enterprises Limited, the petitioner, is that Lok Ayukta has no power to issue the positive directions to make payment. But, Lok Ayukta is empowered to adjudicate and make recommendations. 5. Learned counsel for the party respondents in all the three writ petitions submitted that though the respondents retired long ago and representations were made for disbursement/encashment of the leave benefits, the same has been denied. He prayed for interest on the delay caused by Kerala State Financial Enterprises Limited. 6. Per contra, Mr. E.K.Nandakumar, learned Senior Counsel appearing for the petitioner, submitted that in the case on hand payment of interest on the delayed encashment of leave benefits has been sought **W.P.(C)Nos.7371,7625 & 23025 of 2018** **8** for before Lok Ayukta. Referring to a decision of the Hon'ble Division Bench of this Court in **State of Kerala** v. **Bernard** reported in [2002 (3) KLT 254], he submitted that Lok Ayukta has no power to order interest. 7. Answering a query as to whether Section 12(1) of the Lok Ayukta Act confers any power on Lok Ayukta to issue any positive directions or to make only recommendations, a Hon'ble Division Bench of this Court in **Sudha Devi** v. **District Collector, Tvm. and others** reported in [2017 (2) KLT 1127] held thus: “.......In our view, a plain reading of S.12(1) of the Act makes this position clear. He can only make a report to the concerned authority with recommendations. But, no positive directions much less peremptory in nature can be issued by the Upa Lok Ayukta as they are not such a statutory authority. They have only recommendatory jurisdiction.” 8. However, on the facts and circumstances of the case, we deem it fit to construe the directions of Lok Ayukta as recommendatory in nature. 9. Notwithstanding the above, Mr.E.K.Nandakumar, learned Senior Counsel for the petitioner, submitted that the entire amounts ordered by Lok Ayukta would be paid to the respondents, within three weeks from today. Submission of the learned Senior Counsel for the petitioner is placed on record and the writ petitions are disposed of with a direction to Kerala State Financial Enterprises Limited to pay the amounts ordered to **9** ## **W.P.(C)Nos.7371,7625 & 23025 of 2018** the respondents in the writ petitions, within three weeks from today, failing which, Kerala State Financial Enterprises Limited shall pay interest at 9% per annum on the amounts due. Sd/- **S.Manikumar, Chief Justice** Sd/- **Shaji P.Chaly Judge** vpv **/TRUE COPY/** **P.A. TO JUDGE** **W.P.(C)Nos.7371,7625 & 23025 of 2018** **10** ## **APPENDIX OF WP(C) 7371/2018** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1: TRUE COPY OF THE COMPLAINT NO.747/2017-C DATED 5.4.2017 (WITHOUT THE EXHIBITS/ ANNEXURES) PREFERRED BY THE 2ND RESPONDENT BEFORE THE HON'BLE LOK AYUKTA. EXHIBIT P2: TRUE COPY OF THE STATEMENT FILED ON 8.6.2017 BY THE PETITIONER AGAINST COMPLAINT NO.747/2017-C (WITHOUT THE EXHIBITS) BEFORE THE IST RESPONDENT. EXHIBIT P3: TRUE COPY OF THE NOTE DATED 29.4.2014 SUBMITTED TO THE MANAGING DIRECTOR OF THE PETITIONER BY THE DGM (INTERNAL AUDIT & VIGILANCE). EXHIBIT P4: TRUE COPY OF THE LETTER DATED 25.11.2015 ISSUED BY THE BRANCH MANAGER, FORT BRANCH, THIRUVANANTHAPURAM TO THE SENIOR MANAGER (IV&A) BEARING REF.NO.027/2015. EXHIBIT P5: TRUE COPY OF THE ORDER DATED 13.12.2017 ISSUED BY THE HON'BLE LOK AYUKTA IN COMPLAINT NO.747/2017-C. EXHIBIT P6: TRUE COPY OF THE PERSONAL LEGER OF CHITTY NO.129/10 OF FORT BRANCH.** **W.P.(C)Nos.7371,7625 & 23025 of 2018** **11** ## **APPENDIX OF WP(C) 7625/2018** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE LETTER DATED 02/05/2013 BEARING REF. NO.12401 ISSUED BY THE MANAGING DIRECTOR OF ALL BRANCHES.** **EXHIBIT P2 TRUE COPY OF THE LETTER DATED 19/02/2014 BEARING REF.NO.6901/4/2013/IA & V/HO SENT TO THE 2ND RESPONDENT BY DGM (IA&V).** - **EXHIBIT P3 TRUE COPY OF THE COMPLAINT NO.639/2016-D DATED 29/02/2016 PREFERRED BY THE 2ND RESPONDENT BEFORE THE 1ST RESPONDENT.** - **EXHIBIT P4 TRUE COPY OF THE AFFIDAVIT FILED ON 17/03/2017 BY THE PETITIONER BEFORE THE 1ST RESPONDENT IN COMPLAINT NO.639/2016-D.** **EXHIBIT P5 TRUE COPY OF THE ORDER DATED 30/03/2017 PASSED BY THE 1ST RESPONDENT IN COMPLAINT NO.639/2016-D.** **EXHIBIT P6 TRUE COPY OF THE STATEMENT OF ACCOUNT DATED NIL FILED ON 12/2017 BY THE PETITIONER BEFORE THE 1ST RESPONDENT IN COMPLAINT NO.639/2016-D.** **EXHIBIT P7 TRUE COPY OF THE ORDER DATED 25/01/2018 PASSED BY THE 1ST RESPONDENT IN COMPLAINT NO.639/2016-D.** **W.P.(C)Nos.7371,7625 & 23025 of 2018** **12** ## **APPENDIX OF WP(C) 23025/2018** ## **PETITIONER'S/S EXHIBITS:** **EXHIBTI P1 TRUE COPY OF THE RELEVANT PAGES OF THE PETITIONER'S MANUAL OF PROCEDURE.** **EXHIBIT P2 TRUE COPY OF THE CIRCULAR NO.103/2002(BD) DATED 16.05.2002 ISSSUED BY THE PETITIONER** **EXHIBIT P3 TRUE COPY OF THE COMPLAINT NO.875 OF 2017(D) DATED 12.07.2017 FILED BY THE 2ND RESPONDENT BEFORE THE 1ST RESPONDENT, HON'BLE LOK AYUKTA(WITHOUT THE ENCLOSURES)** **EXHIBIT P4 TRUE COPY OF THE WRITTEN STATEMENT FILED ON SEPTEMBER,2017 BY THE PETITIONER BEFORE THE 1ST RESPONDENT IN COMPLAINT NO.875 OF 2017.** **EXHIBIT P5 TRUE COPY OF THE PETITIONER'S LETTER DATED 31.10.2017 TO THE 2ND RESPONDENT** **EXHIBIT P6 TRUE COPY OF THE ORDER DATED 29.05.2018 OF THE 1ST RESPONDENT IN COMPLAINT NO.875/2017.**