V. Sadanandan v. State of Kerala and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **WEDNESDAY, THE 20TH DAY OF AUGUST 2014/29TH SRAVANA, 1936** ## **WP(C).No. 1933 of 2012 (N)** **--------------------------------------** ## **PETITIONER:** - **-------------------** **V.SADANANDAN, S/O. G.VASUDEVAN, AGED 64 YEARS SPECIAL GRADE SECRETARY (RETIRED), THENMALA GRAMA PANCHAYAT AND RESIDING AT CHAITRAM, CHETHADY, CHENGAMANADU P.O., KOTTARAKKARA TALUK, KOLLAM DISTRICT-691 557.** **BY ADV. SRI.N.UNNIKRISHNAN.** ## **RESPONDENTS:** **-----------------------** **1. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO THE GOVERNMENT, LOCAL SELF GOVERNMENT INSTITUTIONS, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.** **2. THE DIRECTOR OF PANCHAYATH, THIRUVANANTHAPURAM-695 001.** **3. THE ACCOUNTANT GENERAL, KERALA, THIRUVANANTHAPURAM-695 001.** **4. THE DEPUTY DIRECTOR OF PANCHAYATH, CIVIL STATION, KOLLAM-691 001.** **5. THE DEPUTY TAHSILDAR (R.R.), TALUK OFFICE, KOTTARAKKARA-691 506.** **6. THENMALA GRAMA PANCHAYATH, THENMALA P.O., REP. BY ITS SECRETARY, KOLLAM-691 308.** **7. THE DIRECTOR OF LOCAL FUND AUDIT DEPARTMENT, VIKAS BHAVAN, THIRUVANANTHAPURAM-695 033.** **R1 TO R5 & R7 BY SR.GOVERNMENT PLEADER SRI. P.V. LONACHAN, R6 BY ADV. SRI.C.JAYACHANDRAN (KAYAMKULAM).** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Prv.** ## **W.P.(C).NO.1933/2012 - N:** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P1 : A TRUE COPY OF PENSION PAYMENT ORDER NO.27989204, DTD.13.4.2004. EXT.P2 : A TRUE COPY OF DEMAND NOTICE NO.D7.1549/11, DTD. 20.12.2011. EXT.P3 : A TRUE COPY OF DEMAND NOTICE NO.D7.1550/11, DTD.20.12.2011. EXT.P4 : A TRUE COPY OF LETTER NO.T1-6653/10, DTD.18.5.2011. EXT.P5 : A TRUE COPY OF LETTER DTD.9.1.2012. EXT.P6 : A TRUE COPY OF ORDER NO.H4-22215/09, DTD.9.8.2011.** ## **RESPONDENTS' EXHIBITS:** **EXT.R6.(A): A TRUE COPY OF LETTER DTD. 28/12/2011. EXT.R6.(B): A TRUE COPY OF EXPLANATION DTD. 21/02/2012.** ## **//TRUE COPY//** **P.S. TO JUDGE.** **Prv.** **K. VINOD CHANDRAN, J - - - - - - - - - - - - -- - - - - - - - - - - - - - - - W.P(C) No. 1933 of 2012 - - - - - - - - - - - - - - - - - - - - - - - - - - - -** ## **Dated this the 20[th] day of August, 2014** ## **J U D G M E N T** The petitioner a retired Secretary, challenges revenue recovery proceedings initiated by Exts.P2 and P3 notices under the Kerala Revenue Recovery Act, 1968. Admittedly, the petitioner retired on 30.04.2003 as the Secretary of the 6[th] respondent. He was paid the entire pensionary benefits on retirement. The demand notice issued under the Revenue Recovery Act, is after about eight years demanding an amount of Rs.38,98,946/-. The contention of the petitioner is that prior to or after retirement, no such demand was raised or notice issued. The petitioner was first issued with the demand imposing the liability on the petitioner. Though Ext.P5 objection was filed, no decision has been taken by the respondent. 2. The petitioner has produced Ext.P4 notice dated 18.05.2011, which he received in the year 2011; WPC.1933/2012 : 2 : which presumably led to the revenue recovery proceedings. A reading of Ext.P4 would indicate that while the petitioner was employed in the 6[th] respondent Society, certain objections were raised on audit, with respect to the expenditure incurred by the Co-operative Society and it is that liability, which is sought to be mulcted on the petitioner. The petitioner, admittedly, was promoted to the post of Secretary on 23.09.1997. 3. Ext.P4 would indicate that there were two sets of liabilities; one with respect to the audit reports for the years 1997-1998, 1998-1999 and 1999-2000 and the other with respect to the years 2000-2001, 2001-2002 and 2002-2003, which are respectively referred to herein, as the earlier and latter audit reports. Nothing is stated as to what were the subject of objections made by the auditors. With respect to the earlier reports, the petitioner does not seem to have been issued with any notice. In the circumstance the contention raised in Ext.P4 that the petitioner failed to respond to such audit WPC.1933/2012 : 3 : objection notified to him cannot be countenanced. 3. With respect to the latter years, obviously, the petitioner had filed reply to the audit objections raised. There was no consideration of such reply when the petitioner was in service or immediately after he retired. As was noticed, the petitioner was allowed to retire without any liability being fixed on him and the petitioner had obtained the entire retirement benefits. 4. The respondent Panchayat has filed a counter affidavit, wherein again the proceedings are seen initiated only from 2011 onwards as is disclosed in the date indicated in Ext.R6(a)which, even according to the respondent Panchayat is a letter dated 28.08.2011 issued for the first time to the petitioner. Ext.R6(b) is the reply filed to Ext.R6(a). The order passed at Ext.P4 also does not indicate any consideration of the reply filed by the petitioner. 5. The specific contention raised by the learned counsel for the petitioner is the lack of jurisdiction to WPC.1933/2012 : 4 : consider such objection for which the petitioner would rely on the provisions of the Kerala Panchayat Raj Act. The specific contention taken by the learned counsel for the petitioner is that in fact, it was the duty of the auditor to have initiated proceedings with respect to imposition of liability, as per subsection (9) of Section 215. Subsection (9), and (10) are extracted hereunder:- “(9)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 therefor 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 very such case, certify the amount due from such person: provided that no surcharge under this sub-section shall be made after a period of four years from the date on which the expenditure in question was incurred. Explanation: It shall not be open to any person whose negligence or misconduct as caused or contributed to any such deficiency or loss, to contend that notwithstanding his negligence or misconduct the deficiency or loss would not have occurred, but for the negligence or misconduct of some other person. (10)The auditors shall state in writing, the reasons for their decision in respect of every 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 (Central Act 5 of 1908).” ## 6. When an audit is conducted under section ## 215; which audit is conducted by the officers of the Local WPC.1933/2012 : 5 : Self Government Department, the auditor exercises functions of a civil court under the Code of Civil Procedure, 1908 and is conferred with the specific authority to proceed for imposing liability on any person with respect to the disallowance or objection raised on an item of expenditure incurred by the Panchayat. Sub section(9) as extracted herein above clearly indicate such proceedings to be done with due notice to the person who is sought to be imposed with the liability and proper surcharge proceedings initiated thereunder. Admittedly, no such proceedings have been initiated. In fact, the counter affidavit filed by the 7[th] respondent dated 02.05.2012 specifically avers as follows:- All the above mentioned paragraphs have been referred to the Administrative Department/Secretary, Thenmala Grama Panchayath for necessary action and no charge/surcharge action has been initiated by this department against the petitioner. ## 7. When a statute confers specific powers on an WPC.1933/2012 : 6 : authority, it is not for that authority to delegate such powers to the Administrative Department. Reference to the Administrative Department is the LSGI Department and not the Panchayat. Though going by the statute the Administrative Department also could not have taken any proceedings; herein the Panchayat has issued the demand without any enquiry being conducted and without even considering the reply of the petitioner. The petitioner's contention that the Secretary of the Panchayat had acted totally without jurisdiction has to be accepted. 8. The learned counsel for the petitioner also raises a further question of limitation relying on Section 243 of the Panchayat Raj Act as also a decision of the Hon'ble Supreme Court in **199(2) KLT 146 (SC) [State of Kerala v. V.R. Kaliyanikutty].** Section 243 of the Panchayat Raj Act also provides three years period for recovery of money; as has been provided under the Limitation Act, 1963. The decision of the Hon'ble Supreme Court has been cited to contend that even when WPC.1933/2012 : 7 : revenue recovery proceedings are initiated recovery cannot be beyond the limitation period provided under an enactment. Though speedy recovery is possible with respect to the dues of the Government, when carried out under the Kerala Revenue Recovery Act, it can only be within the limitation period, provided as per law The Revenue Recovery Act does not efface limitation or provide a method of recovery after the period of limitation. 9. Further, it has to be noticed the the Revenue Recovery Act, provides for recovery of arrears due on land. There is nothing on record to show that the liability mulcted on the petitioner is arrears due on land. In such circumstance, it is a moot question whether even if the surcharge proceedings were initiated or concluded against the petitioner, revenue recovery proceedings under the Kerala Revenue Recovery Act could have been proceeded with. 10. In any event, writ petition is to be allowed WPC.1933/2012 : 8 : on the short ground of lack of jurisdiction on the Secretary, to issue an order mulcting liability on the petitioner, on the basis of the objections raised on audit. The Secretary cannot usurp the powers of the auditor specifically conferred under sub section (9), nor can the auditor delegate such powers to the Secretary. 11. For all the reasons stated above this Court is inclined to set aside Ext.P4 and also the demand raised under the Revenue Recovery Act as evidenced by P2 and P3. No proceedings can be initiated against the petitioner for recovry of the amounts mulcted on the basis of Ext.P4. Writ petition allowed. Sd/- ## **(K. VINOD CHANDRAN, JUDGE)** jma //true copy// P.A to Judge