Tomy Pallippadan Pallippadath and Others v. Deputy Director of Panchayath, Alappuzha and Others

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN`** ## **`FRIDAY, THE 7[TH] DAY OF JULY 2023 / 16TH ASHADHA, 1945`** ## **`WP(C) NO. 2991 OF 2014`** ## **`PETITIONERS:`** - `1 TOMY PALLIPPADAN PALLIPPADATH, ARTHUNKAL P.O., CHERTHALA.` - `2 P.S.KUNJAPPAN PALIYATHTHAYYIL, THAIKAL P.O., CHERTHALA.` - `3 P.S.VENUGOPAL SOROJINI MANDIRAM, MAYITHARA MARKET P.O., CHERTHALA.` - `4 JOSE VINAMCY KALKARAYIL, ARTHUNKAL P.O., CHERTHALA.` - `5 BOBBY JOHNY KURISHINKAL, DO. DO.` - `6 P.L.MATHAN PALLIPPARAMBIL, DO. DO.` - `7 K.B.PUSHPANGADHAN KALATHIL, DO. DO.` - `8 M.G.PURHSHAN KARTHIKA, DO. DO.` - `9 T.T.SATHEESAN THAIKOOTTATHIL, KURUPPAMKULANGARA P.O., CHERTHALA.` - `10 T.VIDYA RANI PAREMADATHIL, DO. DO.` - `11 REETHAMMA JOSEPH KURISHINKAL, THAIKKAL P.O., CHERTHALA.` - `12 MINI USHAPPAN KAVUMKOOTTATHIL, DO. DO.` - `13 K.P. ASHOKAN THEKKEVELI, CHERTHALA SOUTH P.O., CHERTHALA.` - `14 BINESH BAHULEYAN KALARIVELI, DO. DO.` - `15 KOUSALYA SANTHOSH VELIKKAKATHU CHIRA, DO. DO.` - `16 CHANDRIKA MULAKKAL, MAYITHARA P.O., CHERTHALA.` - `17 P.K.PARAMESWARA KURUP PAVAMGATT, KRUPPAMKULANGARA, P.O.CHERTHALA.` ``` BY ADV SRI.J.OM PRAKASH ``` ``` WP(C) NO. 2991 OF 2014 ``` ``` 2 ``` ## **`RESPONDENTS:`** - `1 THE DEPUTY DIRECTOR OF PANCHAYATH ALAPPUZHA P.O.` - `2 THE DEPUTY T AHSILDAR REVENUE RECOVERY TALUK OFFICE, CHERTHALA P.O., PIN-688524.` - `3 THE VILLAGE OFFICER CHERTHALA SOUTH VILLAGE, CHERTHALA SOUTH P.O., CHERTHALA, PIN-688552.` - `4 THE CHERTHALA SOUTH PANCHAYATH REPRESENTED BY ITS SECRETARY, CHERTHALA SOUTH P.O., CHERTHALA, PIN-688552. BY ADVS. GOVERNMENT PLEADER SMT.C.K.LEKHAMMA GOVERNMENT PLEADER SMT.C.K.LEKHAMMA SMT.SHAHNA KARTHIKEYAN` ## **`OTHER PRESENT:`** ``` SRI.APPU.P.S-GP ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) NO. 2991 OF 2014 ``` ``` 3 ``` ## **JUDGMENT** Dated this the 7[th] day of July, 2023 This writ petition is filed seeking the following - reliefs: (i) Issue a writ of certiorari calling for the records relating to Ext.P6 and P7 and quash the same. (ii) Declare that the petitioners are not liable to pay any amount as per the Ext.P6 order. (iii) Direct the 2[nd] respondent to pay cost to the petition. 2. Heard the learned counsel for the petitioners , the learned Government Pleader as well the learned Standing Counsel appearing for the 4[th] respondent. 3. It is submitted by the learned counsel for the petitioners that the petitioners, seventeen in number were the elected members of the Cherthala South Grama Panchayat during the period from 2000-2005. It ``` WP(C) NO. 2991 OF 2014 ``` ``` 4 ``` is submitted that Ext.P1 resolution was passed by the Panchayat on 29.09.2001 deciding to urgently purchase Tube lights, bulbs etc for the street lights without inviting tenders, in view of the extreme urgency of the situation. It is submitted that after negotiation with the Kerala State Co-operative Consumer Federation, the necessary articles were purchased from the Thrissur Wholesale Co-operative Consumer Stores Ltd. for an amount Rs.2,03, 902/-(Rupees Two Lakhs Three Thousand Nine Hundred and two only). It is stated that in the year 2006 in the audit conducted, it was reported that the purchase was made in violation of the store purchase laws and further enquiry was conducted. The relevant portion of the audit report for the period 20012002 is produced as Ext.P5. Later, it is submitted that after conducting an enquiry the 1[st] respondent required the petitioners to remit an amount of Rs.11,111/- each to the Panchayat by Ext.P6 proceedings. ``` WP(C) NO. 2991 OF 2014 ``` ``` 5 ``` 4. Ext.P6 is challenged by the petitioners on the ground that the 1[st] respondent does not have the power or the jurisdiction to issue an order in the nature of Ext.P6. It is submitted that if the liability is sought to be fixed on the basis of an audit report, the procedure as provided either under Section 215 of the Kerala Panchayat Raj Act, 1994 or the provisions of the Kerala Local Fund Audit Act, 1994 are to be fully complied with. It is submitted that in both situations it is for the auditor concerned to issue a notice to the persons who are found to have expended amounts causing loss to the local authority and to decide on their objections and to issue surcharge certificates and required payments from the erring persons. It is submitted that if a surcharge certificate is duly issued as provided under the statutes, the petitioners has an efficacious remedy of approaching the District Court. It is submitted that in the instance case, without following any such ``` WP(C) NO. 2991 OF 2014 ``` ``` 6 ``` procedure, the 1[st] respondent has issued Ext.P6, that too, without considering the contentions of the petitioners. 5. A counter affidavit has been placed on record by respondents 2 and 3 stating that Revenue Recovery proceedings had been initiated on the basis of Ext.P6, order issued by the 1[st] respondent. No counter affidavit has been placed on record by the 1[st] respondent. 6. The 4[th] respondent has placed a counter affidavit on record stating that pursuant to the resolution passed by the Grama Panchayat with the approval of the District Planning Committee for the urgent replacement of street lights, the decision was taken to purchase the required materials from reputed Co-operative institutions in Thrissur District. It is submitted that after due negotiations, the required materials were purchased from the Thrissur Wholesale Co-operative ``` WP(C) NO. 2991 OF 2014 ``` ``` 7 ``` Consumers’ Stores Ltd. whose quotation was the lowest. It is stated that the expenditure for required lighting materials after negotiation was Rs.2,03,902/thus incurring only an additional expenditure of Rs.3,902/-. It is further stated that the damaged street lights were replaced/repaired with the help of the Kerala State Electricity Board and that all the materials purchased were actually used for repairing/replacing street lights and therefore the 4[th] respondent has not incurred any loss in this regard. But the utility certificate was not obtained from the Kerala State Electricity Board, as required. 7. Having considered the contentions advanced, I notice that Section 215 of the Kerala Panchayat Raj Act, 1994 provides for the procedure for the audit of the accounts of the Panchayat. The Examiner of Local Fund Accounts and his nominees are designated as auditors ``` WP(C) NO. 2991 OF 2014 ``` ``` 8 ``` of the Panchayat under Section 215(3). Section 215(9) provides that the auditors shall, after giving a reasonable opportunity to the person concerned to explain his case, disallow every item of expenditure incurred contrary to law and surcharge the same on the person incurring, or authorising the incurring of, such expenditure and may charge against any person responsible, the amount of any deficiency, loss or unprofitable outlay occasioned by the negligence or misconduct of that person or of any sum which ought to have been but is not brought into account by that person and shall, in that case certify the amount due from such person. It is stated that the auditors shall state in writing, the reasons for their decision in respect of any disallowance, surcharge or charge and a copy of such decision shall be served on the person against whom it is made in the manner laid down for the service of summons in the Code of Civil Procedure, 1908. Sub ``` WP(C) NO. 2991 OF 2014 ``` ``` 9 ``` Section 11 provides that any person aggrieved by any disallowance, surcharge or charge may, within fourteen days make an application to the District Court to set aside such disallowance, surcharge or charge and an appeal is provided from any decision of the District Court to the High Court under Section 215(13). 8. In view of the fact that detailed procedure has been laid down in the Act for the preparation of the audit report the consideration of the objections thereto and for the imposition of surcharge and the remedies available to the persons served with surcharge, I am of the opinion that the contentions of the learned Government Pleader that the procedure followed by the 1[st] respondent is permissible under Section 189 which is the general power of the Government to issue guidelines and to conduct enquires cannot be accepted. 9. The learned counsel for the respondents relies on ``` WP(C) NO. 2991 OF 2014 ``` ``` 10 ``` a decision of a Division Bench of this Court in **State of Kerala and another v P.D.Raveendran and another [2020 (4)KHC 201]** to contend that the time limit as provided in Section 215(9) of the Kerala Panchayat Raj Act, 1994 cannot apply in the case of an audit conducted under the Local Fund Audit Act which does not provide for any period within which an order of surcharge can be issued. 10. Having regard to the facts and circumstances of the instant case and the contentions raised by the 4[th] respondent that no loss has actually occurred to the Panchayat, I am of the opinion that the question whether further proceedings are liable to be taken against the petitioners is to be examined by the auditors in accordance with provisions of the Act. In view of the fact that Ext.P6 is passed by the 1[st] respondent and since the auditors had not applied their ``` WP(C) NO. 2991 OF 2014 ``` ``` 11 ``` mind to the question whether any proceedings are required to be taken against the petitioners in terms of the provisions either of the Kerala Local Fund Audit Act or Section 215 of the Panchayat Raj Act, I am of the opinion that Ext.P6 is unsustainable, the same is accordingly set aside. All the contentions of the parties are left open to be decided in other appropriate proceedings, if any, initiated. The Revenue Recovery proceedings initiated on the basis of Ext.P6 also shall stand set aside. Sd/- **ANU SIVARAMAN JUDGE** ska ``` WP(C) NO. 2991 OF 2014 ``` ``` 12 ``` ## **`APPENDIX OF WP(C) 2991/2014`** ``` PETITIONER EXHIBITS ``` ``` P1: COPY OF THE RESOLUTION DATED 29.9.2001. ``` ``` P2: COPY OF THE FORM SHOWING THE RECOMMENDATION AND SANCTION TO PROJECT NO.49 PASSED BY THE DISTRICT PLANNING OFFICER, ALAPPUZHA DATED 10.8.2007. ``` ``` P3: COPY OF THE PROJECT REPORT SUBMITTED BY THE PRESIDENT, CHERTHALA SOUTH PANCHAYATH. ``` ``` P4: COPY OF THE RECEIPT DATED 6.11.2001 ISSUED BY THE MANAGING DIRECTOR. ``` ``` P5: COPY OF THE RELEVANT PARTS OF THE AUDIT REPORT DURING 20.1.2002 RELATING TO THE CHERTHALA SOUTH GRAMA PANCHAYATH. ``` ``` P6: COPY OF THE ORDER OF THE FIRST RESPONDENT DATED 17.7.2011. ``` ``` P7: COPY OF THE NOTICE ISSUED TO THE FIRST PETITIONER BY THE 3RD RESPONDENT. ```