T. Abraham v. State of Kerala and Kerala Khadi and Village Industries Board

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **FRIDAY, THE 6TH DAY OF APRIL 2018 / 16TH CHAITHRA, 1940** **WP(C).No. 13033 of 2013** **PETITIONER(S) :** **T.V.ABRAHAM, AGED 52 YEARS, S/O.KURIAN VARGHESE, THARAYATH HOUSE, VAYALATHALA P.O, RANNI, PATHANAMTHITTA-689 672.** **BY ADVS.SRI.K.S.MADHUSOODANAN SRI.THOMAS CHAZHUKKARAN SRI.M.M.VINOD KUMAR SRI.P.K.RAKESH KUMAR SRI.K.S.MIZVER** ## **RESPONDENT(S) :** **1. STATE OF KERALA, REP. BY THE SECRETARY, DEPARTMENT OF KHADI, VILLAGE INDUSTRIES AND CO-OPERATION, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM-695 001.** **2. KERALA KHADI AND VILLAGE INDUSTRIES BOARD, VANCHIYOOR THIRUVANANTHAPURAM-695 035, REP. BY SECRETARY** **R1 BY GOVERNMENT PLEADER SRI.JESTIN MATHEW R2 BY ADV. SRI.M.SHARAFUDHEEN, S.C** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06-04-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Msd.** **27.04.2018** **WP(C).No. 13033 of 2013 (D)** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** |**EXT.P1:**|**PHOTOCOPY OF THE ENQUIRY REPORT DATED 9/10/2006.**| |---|---| |**EXT.P2:**|**PHOTOCOPY OF THE ORDER DATED 7/11/2006 ISSUED BY**| ||**THE 2ND RESPONDENT BEARING NO. K.B.10360/05/E4.**| |**EXT.P3:**|**PHOTOCOPY OF THE MEMO OF CHARGE BEARING NO.KB 10360/05/E4**| ||**DATED 12/12/2006.**| |**EXT.P4:**|**PHOTOCOPY OF THE REPORT DATED 14/07/2009.**| |**EXT.P5:**|**PHOTOCOPY OF THE NOTICE DATED 15/10/2009.**| |**EXT.P6:**|**PHOTOCOPY OF THE REQUEST DATED 25/09/2012.**| |**EXT.P7:**|**PHOTOCOPY OF THE NOTICE BEARING NO.KB.10360/05/E4**| ||**DATED 08/05/2013.**| |**EXT.P8:**|**PHOTOCOPY OF THE REPLY DATED 11/04/2013**| ||**BEARING NO KB.2703/2013/E8/RTI.**| |**EXT.P9:**|**PHOTOCOPY OF THE REPRESENTATION TO THE 2ND RESPONDENT**| ||**DATED 21/5/2012 THROUGH PROPER CHANNEL.**| ## **RESPONDENT(S)' EXHIBITS :** **EXHIBIT R2(A): TRUE COPY OF FIR NO.1337 DATED 18.10.2014 OF ARANMULA POLICE STATION.** **//TRUE COPY//** **P.S.TO JUDGE** **Msd.** **27.04.2018** ## **ALEXANDER THOMAS, J.** ================== W.P.(C).No. 13033 of 2013 ================== Dated this the 6[th] day of April, 2018 **J U D G M E N T** The prayers in this Writ Petition (Civil) filed under the enabling provisions contained in Art.226 of the Constitution of India are as follows: - _'i. Call for the records connecting Exts.P1 to p9 from the respondent concerned._ - _ii. Call for Exts.P3, P-4, P-5 and P7 from the 2[nd] respondent and issue Writ of Certiorari to quash the same._ - _iii. Issue a Writ of Mandamus directing the respondents to confine the liability under Exts.P1 and P-2 memo of charges read along with rate of interest at 5[1] /2 % under Art.303 A(3) (c) Note of Kerala Financial Code Vol.I,_ - _iv. Issue a Writ of Mandamus directing the 2[nd] respondent to pass orders on regularization of the suspension period of the petitioner from 12.12.05 to October 2009 and all consequential service benefits;”_ 2. Heard Sri.K.S.Madhusoodanan, learned counsel appearing for the petitioner, Sri.M.Sharafudheen, learned Standing Counsel for the Kerala Khadi & Village Industries Board, appearing for the 2[nd] respondent Board and Sri.Jestin Mathew, learned Government Pleader appearing for the 1[st] respondent State. 3. The petitioner had joined service of the 2[nd] respondent Kerala Khadi & Village Industries Board (hereinafter referred to as “ _Khadi Board_ ”) as Bee Keeping Field Man on 9.4.1997. While working at Bee Processing Unit at Neriyamangalam, he was suspended from service on 12.12.2005 on the allegations regarding adulteration of honey. According to the respondent Khadi Board, they conducted an enquiry in respect of the said allegations and had issued Ext.P-1 enquiry report dated 9.10.2006 W.P.(C).13033/13 - : 2 :- ordering that liability fixed against him for the alleged loss comes to Rs. 3,76,258/-. The details of the computation for arriving at the said figure Rs. 3,76,258/- are mentioned in the penultimate paragraph of page 2 of Ext.P-1 report, which reads as follows: |_Variety_|_Rate_||_Quantity_|_Value_| |---|---|---|---|---| |_Raw Honey_|_Rs. 62/-_||_1661 Kg._|_1,02,982/-_| |_Pre-processed Honey_|_Rs. 90/-_||_1403 Kg._|_1,26,270/-_| |_Balance_<br>_taken_<br>_as_<br>_processed honey_|_Rs. 143.50_|<br>|_722.912 Kg._<br>_3782 Kg._|_1,03,738/-_| |_Equipments_||||_43,268/-_| ||||_Total_|_3,76,258/-_| Thereafter, it appears that the 2[nd] respondent Board had accepted the findings in Ext.P-1 enquiry report and had issued Ext.P-2 letter dated 7.11.2006 ordering that the liability so fixed against the petitioner for the abovesaid allegations comes to Rs. 3,76,258/- and that he should pay the said amount within one month from the date of receipt of Ext.P-2 proceedings dated 7.11.2006. 4. It appears that the petitioner raised objections regarding Ext.P-2 before the 2[nd] respondent Board and thereupon, the 2[nd] respondent Board had issued Ext.P-3 memo of charges dated 12.12.2006 on the self same allegations as the one already covered in Exts.P-1 and P-2. In Ext.P-3 memo of charges dated 12.12.2006 also, the 2[nd] respondent Board is of the considered view that the total liability fixed against the petitioner is only Rs. 3,76,258/-. It appears that second enquiry was conducted against the petitioner on the very same allegations pursuant to Ext.P-3 memo of charges and very strangely, the enquiry officer has come to the considered W.P.(C).13033/13 - : 3 :- conclusion therein that the actual total liability incurred by the petitioner is more than what has already been fixed at Rs. 3,76,258/- in Exts.P-1 and P-2, and has found that the total liability incurred by the petitioner comes to Rs.7,45,504/-. Without serving a copy of Ext.P-4 enquiry report to the petitioner and without affording a reasonable opportunity to the petitioner to submit his objections regarding the findings in Ext.P-4 (second enquiry report), the 2[nd] respondent Board has issued Ext.P-5 order dated 15.10.2009 unilaterally accepting the findings in Ext.P-4 enquiry report and has ordered that the total liability incurred by the petitioner actually comes to Rs. 7,45,504/-and that he is bound to pay the said amount along with interest thereon @ 12% p.a. According to the petitioner, he raised his objections against Ext.P-5, but was constrained to pay the amount of Rs. 7,45,504/- covered by Ext.P-5 order to the 2[nd] respondent Board in six instalments. The details of the payment made by the petitioner for the amount of Rs.7,45,504/- are mentioned in Ext.P-6 dated 25.9.2012, which are as follows: - “1. രസ�ത നമർ 156 ത�യത� 11-11 -2011 ബ��ർഡ�ൽ ബനര�ട� - 1,50,000.00 ര�പ ഒട�ക�യത - 2 രസ�ത നമർ 162 ത�യത� 31-05-2011 ബ��ർഡ�ൽ ബനര�ട� - 1,00,000.00 ര�പ ഒട�ക�യത - 3 ഡ�. ഡ� നമർ 395311716 ത�യത� 04-06 -2012 - 1,00,000.00 ര�പ 4 ഡ�. ഡ� നമർ 395312309 ത�യത� 04-07 -2012 - 1,00,000.00 ര�പ 5 ഡ�. ഡ� നമർ 395312507 ത�യത� 23-07--2012 - 1,00,000.00 ര�പ 6 ഡ�. ഡ� നമർ 650992234 ത�യത� 04-08 -2012 - 1,95,504.00 ര�പ ആക� - 7,45,504 ര�പ" 5. Thereafter, yet another strange twist has happened in this case W.P.(C).13033/13 - : 4 :- inasmuch as the 2[nd] respondent Board has issued Ext.P-7 order dated 8.5.2013 calling upon the petitioner to pay an extra amount of Rs. 8,64,993/- being the interest @ 18% p.a. on the amount of Rs.7,45,504/- covered by Ext.P-5. It is interesting to note that in the original order issued as per Ext.P-2 dated 7.11.2016, the clear and categorical stand of the 2[nd] respondent Board is that the petitioner need to pay only an amount of Rs.3,76,258/- and that too, without any interest. In Ext.P-5 dated 15.10.2009, the 2[nd] respondent has altered their stand by stating that the amount is actually being a liability of Rs. 7,45,504/- and that the petitioner is bound to pay interest thereon @ 12% p.a. In Ext.P-7 the stand of the 2[nd] respondent is that the said amount of Rs. 7,45,504/- is to carry interest @ 18% p.a. and the amount accordingly comes to Rs.8,64,993/-. The petitioner objected to the abovesaid decisions and later, the petitioner was appraised by Ext.P-8 proceedings dated 11.4.2013 that there is provision for the 2[nd] respondent Board to charge interest @ 18% p.a. on the basis of the provisions contained in Art.303 A(3) (C) Note to the Kerala Financial Code Part I. According to the petitioner, the said provision of the Kerala Financial Code Part I, which existed at the time of the demand as per Ext.P-2 dated 7.11.2006, authorised the 2[nd] respondent Board to charge interest only upto 5.5% p.a. from the date of demand. It appears that, later an amendment by the Government was made on 16.11.2013 to the said provision contained in Kerala Financial Code Part I, by which the interest rate @ 5.5 p.a. was enhanced to 18% p.a. It is to be noted that even W.P.(C).13033/13 - : 5 :- if interest otherwise is justifiable in the facts of this case, still only the authorised interest rate applicable at the time of Ext.P-2 demand dated 7.11.2006 could have been imposed on the petitioner. Therefore obviously, the direction in the impugned Ext.P-7 order dated 8.5.2013 demanding the petitioner to pay interest @ 18% p.a is illegal and arbitrary. 6. On analysis of the facts and circumstances of this case, it seen that initially the 2[nd] respondent Board had issued Ext.P-2 order dated 7.11.2006 on the basis of Ext.P-1 enquiry report dated 9.10.2006 on the very same allegations, wherein the clear finding of the 2[nd] respondent Board was to the effect that the petitioner is liable to pay only Rs. 3,76,258/- and that too, without any interest. The petitioner happened to object to the said decision in Ext.P-2. After affording a reasonable opportunity of being heard to the petitioner, the 2[nd] respondent Board could have either set aside Ext.P-2 or reduced the liability rate or could have confirmed the liability as fixed in Ext.P-2. Even in Ext.P-3 fresh memo of charges dated 12.12.2006, the stand of the 2[nd] respondent is only that the petitioner is liable to pay only a liability of Rs. 3,76,258/- as already found in Exts.P-1 and P-2. Thereafter, the 2[nd] respondent has taken the view, on the basis of Ext.P-4 enquiry report, that the actual liability against the petitioner was Rs.7,45,504/-. This obviously is illegal and improper. Exts.P-3 to P-5 have been issued by the 2[nd] respondent only on the basis of the request made by the petitioner that the liability in Exts.P1 and P-2 are not correct. Further the petitioner has raised a specific W.P.(C).13033/13 - : 6 :- allegation that the copy of the second enquiry report as per Ext.P-4 has never been issued on the petitioner before the adverse imposition of Ext.P-5 order dated 15.10.2009. On the other hand, the 2[nd] respondent has furnished a copy of Ext.P-4 enquiry report to the petitioner only along with Ext.P-5 order dated 15.10.2009, whereby it has been ordered that the total liability to be paid by the petitioner is Rs.7,45,504/- and that too, with interest thereon @ 12% p.a. It is now too well established that the employer is duty bound to serve a copy of the enquiry report on the delinquent employee on the allegations raised against him before the imposition of the adverse order/penalty order. The position has been settled beyond the pale of doubt by the Apex Court in the celebrated judgment in the case _**Managing Director, Electronics Corporation**_ _**of India Ltd. v. B. Karunakar,**_ reported in (1993) 4 SCC 727. The abovesaid ground specifically urged by the petitioner that he has not been served with a copy of the Ext.P-4 enquiry report before the infliction of Ext.P-5 order, has not been denied in the counter affidavit of the 2[nd] respondent. Therefore the impugned Ext.P-5 order dated 15.10.2009 is clearly illegal, ultra vires and improper. Ext.P-5 order is liable to be quashed on that ground alone in view of the dictum laid down by the Apex Court in _**Electronics Corporation of India Ltd's case**_ supra. 7. The do ecision in Ext.P-5 to charge interest @ 12% and subsequent decision in Ext.P-7 that petitioner is liable to pay interest on the higher liability amount @ 18% p.a. are also illegal and improper for W.P.(C).13033/13 - : 7 :- reasons for more than one. Ext.P-2 order had become final and conclusive as regards the 2[nd] respondent Board. Based on the request of the petitioner the 2[nd] respondent Board could have either revised that order so as to set aside Ext.P-2 order or could have lowered the liability or could have confirmed the liability amount of Rs.3,76,258/-. Under the guise of the objection raised by the petitioner, it will be too far fetched to permit an employer like the 2[nd] respondent Board to increase the liability figure, as has been done in Ext.P-5 and other orders. The stand taken by the 2[nd] respondent Board that they are empowered to charge interest @ 18% p.a. on the basis of the abovesaid provisions contained in Kerala Financial Code Part I is also untenable. At the time of demand as per Ext.P-2 dated 7.11.2006, the maximum interest that could have been charged by the employer was only upto 5.5% p.a. No order from the Government has been produced by the respondent Board to show that as on 7.11.2006 (date of Ext.P-2) the 2[nd] respondent has been legally empowered to charge interest over and above 5.5% p.a. The varying stand of the 2[nd] respondent Board regarding the claimed rate of interest is also arbitrary and improper. Initial stand of the respondent Board is that no interest is called for in the facts of this case. In Ext.P-5 the stand was that the petitioner should pay interest @ 12% p.a. When it came to Ext.P-7, they revised their stand and demanded interest @ 18% p.a. This itself shows that such varying stand of the 2[nd] respondent Board is vitiated by arbitrariness and unreasonableness. Moreover, it is not in dispute that the petitioner, in spite of his objections, W.P.(C).13033/13 - : 8 :- has paid the abovesaid amount of Rs.7,45,504/- in 6 instalments as stated herein above. In view of abovesaid reasons, Ext.P-5 order and the consequential orders thereafter are illegal and improper and are liable to be quashed. It is accordingly so ordered. 8. More crucially it is to be noted that even in Ext.P-3 memo of charges, which led to Ext.P-5 order, the stand of the 2[nd] respondent Board was that the total liability incurred by the petitioner comes only to Rs. 3,76,258/- as earlier ordered in Ext.P-2. Therefore, it is highly illegal and improper on the part of the respondent Board to order as per Ext.P-5 for a liability amount, which is much higher than the one that is raised in the memo of charges as per Ext.P-3. On that ground also, Ext.P-5 order is liable to be quashed. In the light of these aspects, it is ordered that the liability incurred by the petitioner could only be Rs.3,76,258/- as stated in Exts.P-3, P-2 and P-1. Now the petitioner has been compelled to pay an amount of Rs.7,45,504/-, as clearly made out in Ext.P-6, which is not disputed. Accordingly, Exts.P-5 and P-7 will stand quashed. Therefore, as the petitioner has already paid the amount of Rs. 7,45,504/- as covered by Ext.P-5 order and as the liability incurred by the petitioner is only Rs. 3,76,258/-, the 2[nd] respondent Board will have to refund to the petitioner an amount of Rs. 3,69,246/-. As a matter of fact, the said amount of Rs. 3,69,246/- ought to have been refunded to the petitioner along with interest. However, taking into consideration the peculiar facts and circumstances of this case this Court is desisting from ordering to grant W.P.(C).13033/13 - : 9 :- any interest on the said amount to be refunded by the employer. If at all the employer is otherwise justified to demand interest @ 5.5% p.a. on the amount of Rs. 3,76,258/- from the date Ext.P-2 dated 7.11.2006, it is to be noted that the petitioner has already paid Rs. 7,45,504/- in 6 instalments. Therefore, the said amount refundable to the petitioner coming to Rs. 3,69, 246/- which has been lying with the respondent Board for quite a long time. Therefore, the interest could be claimed by the petitioner as against the said amount of Rs. 3,69,246/-. Assuming that the employer is entitled to claim any interest, they could have only claimed interest @ 5.5 % p.a on the amount of Rs. 3,76,258/- from 7.11.2006 (date of Ext.P-2) upto 4.6.2012, by which day the petitioner had almost cleared the original liability amount. Therefore, the amount payable by interest by the employer to the employee and the amount payable as interest by the employer to the employee as stated herein above, could be more or less offset. In the light of these aspects, this Court is not giving any direction to the 2[nd] respondent Board to grant interest to the petitioner on the abovesaid refundable amount of Rs. 3,69,246/-. 9. It is submitted by the petitioner's counsel that this Court had earlier passed an interim order dated 24.5.2013, which reads as follows: > _“Government Pleader takes notice for 1[st] respondent. Standing Counsel appears for 2[nd] respondent. Respondents seek time._ > _Heard learned counsel for petitioner. Having regard to the contentions advanced it is directed that recovery of interest in excess of 5[1] /2% on the total sum of Rs.7,45,504/- from the date of Ext.P-4 will stand in abeyance for a period of two weeks from this day._ _But it is made clear that this order will not stand in the way of_ W.P.(C).13033/13 - : 10 :- _respondents recovering interest at the rate of 5[1] /2% on the total sum of Rs. 7,45,504/- from the date of Ext.P-4, subject to the result of this Writ Petition.”_ It is further submitted that the petitioner had in fact had paid interest @ 5.5% p.a. on the amount of Rs.7,45,504/- from the date of Ext.P-4 order dated 14.7.2009 upto date of actual payment. The learned Standing Counsel for the 2[nd] respondent Board submits that he has no instructions on that aspect. If, as a matter of fact, the petitioner had also paid interest @ 5.5% p.a. on the higher liability amount of Rs. 7,45,504/- from 14.7.2009 (date of Ext.P-4) upto date of actual payment, then the said interest amount is also to be refunded by the 2[nd] respondent Board to the petitioner. 10. In the light of the abovesaid directions of this Court quashing the impugned orders, it is also ordered that the 2[nd] respondent Board will have to refund to the petitioner the amount of Rs.3,69,246/- (Rs.7,45,504/- - Rs.3,76,258/- = Rs.3,69,246/-) and the abovesaid amount of Rs.3,69,246/- should be refunded to the petitioner by the 2[nd] respondent Board within a period of two months from the date of production of a certified copy of this judgment. The abovesaid interim order dated 24.3.2013 issued by this Court in this Writ Petition is an interlocutory order and is subject to the final outcome of this petition. Since this Court has already held that the impugned orders are illegal, the 2[nd] respondent is bound to refund the abovesaid interest amount already paid by the petitioner, if the said amount has already been paid in compliance with the abovesaid interim order dated 24.5.2013 rendered in this W.P.(C). W.P.(C).13033/13 - : 11 :- 11. The learned Standing Counsel for the 2[nd] respondent submits that this Court may not issue directions in the matter of refund of the amount to the petitioner inasmuch as the petitioner has already been dismissed from service for serious allegations and further that serious allegations have also been made against the petitioner as evident from Ext.R2(a) FIR registered against him. There are no pleadings in this Writ Petition regarding the alleged dismissal of the petitioner from service and as to the nature of the allegations raised against him. Irrespective as to the nature of the proved allegations raised in the alleged dismissal proceedings or in Ext.R-2(a) FIR, the said allegations raised against the petitioner in the alleged dismissal proceedings or in Ext.R- 2(a) FIR can have no bearing or relevance as to the legality and propriety of the impugned orders issued in this case. No employer can be permitted to act on the basis of illegalities and arbitrariness on the premise that the employee is otherwise lacking integrity or honesty. It is further submitted by the 2[nd] respondent that the petitioner has admitted the liability in Ext.P-6, etc. A reading of Ext.P-6 would make it clear that all what has been stated by the petitioner therein is that he has already paid the amount of Rs.7,45,504/- through 6 instalments and that therefore further adverse proceedings may be closed. Merely because the petitioner has raised such a submission in Ext.P-6, will not amount to an estoppel on his part to raise the present contentions in this W.P.(C). Moreover, it can be seen that in spite of Ext.P-6 dated 25.9.2012 submitted by the petitioner, the 2[nd] respondent has proceeded to issue W.P.(C).13033/13 - : 12 :- Ext.P-7 dated 8.5.2013, wherein a still further higher amount is demanded from the petitioner by way of interest coming to Rs. 8,64,993/- which is @ 18% p.a. on the alleged higher liability amount of Rs.7,45,504/-. In the light of these aspects, it can only be said that the illegality and arbitrariness committed by the respondent in the issuance of the impugned Exts.P-5 and P-7 orders cannot be condoned merely on account of the submission made by the petitioner in Ext.P-6. 12. The subsisting prayer made by the petitioner is for a direction to the 2[nd] respondent Board to pass orders on regularization of the suspension period of the petitioner from 12.12.2005 to October, 2009, with all consequential benefits. The petitioner was initially suspended from service on 12.12.2005 and he was later reinstated in service on 20.9.2009. It appears that even till date, the 2[nd] respondent Board has not regularised the said period of suspension of the petitioner from 12.12.2005 to 20.9.2009, in accordance with the rules governing the field. The nonregularization of the said period for such a long time can only be said to be arbitrary and improper. 13. It is now submitted by the learned Standing Counsel for the 2[nd] respondent Board that the petitioner was later dismissed from service for allegations of misconducts and that it is due to those circumstances that the 2[nd] respondent could not so far regularise the suspension period of the petitioner. The learned counsel for the petitioner submits that he has no instructions as to whether the petitioner has been dismissed from service W.P.(C).13033/13 - : 13 :- and as to whether the petitioner had challenged the said dismissal order. This Court need not detain its consideration as to whether the petitioner has been dismissed or not. However, suffice to hold that the 2[nd] respondent Board is duty bound to ensure that orders are passed in accordance with the applicable rules governing the field in the matter of regularization of service of the petitioner for the period of suspension from 12.12.2005 to 20.9.2009 in accordance with the rules governing the field and necessary action in that regard should be completed by the 2[nd] respondent Board within two months from the date of production of a certified copy of this judgment and, before orders in that regard are passed, the petitioner should be given a reasonable opportunity of being heard. The petitioner will submit necessary representation before the 2[nd] respondent in aid of his plea as to the manner, in which the said period is to be regularized. The said representation should be submitted by the petitioner along with a certified copy of this judgment within three weeks from the date notified for receiving the certified copy of this judgment. Thereafter, the 2[nd] respondent Board will afford a reasonable opportunity of being heard to the petitioner either in person or through his authorised representative/ counsel, and then will take a decision on the matter and pass orders regarding the regularization of the said period in accordance with the rules, as directed herein above. It is also ordered in the interest of justice that the abovesaid amount of Rs.3,69,246/- and the further interest amount, if any, paid already should be refunded by the 2[nd] respondent W.P.(C).13033/13 - : 14 :- Board to the petitioner within a period of two months from the date of production of a certified copy of this judgment. With these observations and directions, the above Writ Petition (Civil) stands finally disposed of. Sd/sdk+ **ALEXANDER THOMAS, JUDGE** ///True Copy/// P.S. to Judge