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2024 DIGILAW 204 (KAR)

A. H. Makandar v. State Of Karnataka Represented By Its Secretary Department Of Power

2024-03-11

M.NAGAPRASANNA

body2024
ORDER : The petitioner is before this Court calling in question orders dated 29-07-2021 and 16-10-2017 passed by the 6th respondent and the 3rd respondent respectively imposing huge recovery upon the petitioner and denial of complete pension. 2. The facts, in brief, germane are as follows :- The petitioner was an employee of the Hubli Electricity Supply Company Limited (‘the Company’ for short). The date of joining of the petitioner or his service conditions or even promotions granted to him from time to time is not germane to be noticed. It would suffice if the story would commence from the date on which the issue in the lis has emerged. Between 2005 and 2007, the petitioner was working as a Section Officer at Hidkal in Raibag Taluk. During the said period, it is alleged, that the petitioner had failed to return 69 failed transformers to the stores and had thereby caused loss to the Company to the tune of Rs.20,03,952/-. An explanation was sought from the hands of the petitioner, after which, it appears the petitioner was placed under suspension on 11-04-2011. On the same cause of action the petitioner submitted a representation that after his transfer from Hidkal Sub-Division, the Assistant Executive Engineer has in fact sent all the failed transformers to the stores under D-6 accounts against an acknowledgment. The representation further requested that an amount of Rs.8,000/-is being deducted from the salary of the petitioner from 2008 and sought restoration of the deduction. The issue did not stop there. The petitioner was again directed to verify records and submit an explanation with regard to the receipt of failed transformers at the stores. 3. It appears that on the basis of the report of the 5th respondent dated 22-02-2012 reporting that there was no proof for the failed transformers received at the stores on 20-07-2007 as claimed by the petitioner, the 4th respondent directed imposition of recovery of Rs.20,03,952/-and reduced the pay of the petitioner to the lowest scale of pay in the cadre of Junior Engineer. 4. After the said event, a notification comes to be issued on the strength of an Annual Store Count report that there was shortage of 36 store materials amounting to Rs.66,23,333/-out of which 11 items were valued at Rs.7,70,381/-which was invoiced by the petitioner and a direction was issued to recover the said amount. 4. After the said event, a notification comes to be issued on the strength of an Annual Store Count report that there was shortage of 36 store materials amounting to Rs.66,23,333/-out of which 11 items were valued at Rs.7,70,381/-which was invoiced by the petitioner and a direction was issued to recover the said amount. This was without holding any inquiry or hearing the petitioner. During the pendency of all these proceedings, the petitioner retires on attaining the age of superannuation on 31-05-2013. Pension to the petitioner was not settled despite passage of 3 years and repeated representations. It is then, the Superintending Engineer of the Division orders release of only 25% of pension to be the provisional pension, 50% of DCRG amount and no commutation. The recovery thus was 75% of pension, 50% of DCRG and 100% of commutation towards loss caused on account of alleged acts of the petitioner. This is again without holding any inquiry. 5. An internal report comes to be submitted by the 5th respondent/Executive Engineer which results in another order of recovery being passed by the 7th respondent on 18-12-2019 in a sum of Rs.50,30,087/-. The recovery was on the basis of a report of the Committee appointed by the 3rd respondent to ascertain shortage of materials in Jamakhandi stores where the petitioner had worked subsequent to Hidkal Sub-Division. Thereafter, again on a detailed deduction statement proposal sent by 7th respondent on 29-06-2021, the 6th respondent proposes to effect recovery of Rs.86,52,163/-from the hands of the petitioner by order dated 29-07-2021, thereby no pension be granted to the petitioner. All these happen without holding any departmental inquiry against the petitioner. 6. On 04-12-2021, comes a correspondence between the Controller (Accounts and Finance) of the Company pointing out that no departmental proceedings or penalty orders are issued against the petitioner for recovery of several amounts. Therefore, the Accounts Department of the Company sought a consent letter from the hands of the petitioner for recovery of amounts from out of pension of the petitioner. This was not consented to but several correspondences were made that no deduction be made from pension account of the petitioner. 11 years passed by after his superannuation but no pension in its entirety or retirement benefits are extended, all for acts alleged to have been done by the petitioner for which departmental inquiry was never conducted but directed recovery to be made. 11 years passed by after his superannuation but no pension in its entirety or retirement benefits are extended, all for acts alleged to have been done by the petitioner for which departmental inquiry was never conducted but directed recovery to be made. The aforesaid are the averments in the petition seeking annulment of all orders of recovery and directing release of pension. 7. Heard Sri Ramachandra A. Mali, learned counsel appearing for the petitioner, Sri V.S. Kalsurmath, learned High Court Government Pleader appearing for respondent No.1 and Sri B.S.Kamte, learned counsel appearing for respondents 2 to 7. 8. The learned counsel Sri Ramachandra A. Mali, appearing for the petitioner would vehemently contend that the respondents have time and again unilaterally directed recovery of amounts from the petitioner right from 2008 till 2013 i.e., up to his superannuation for 5 years, which recoveries are made without holding any inquiry. Even after retirement of the petitioner, recoveries are made from out of pension account without holding any inquiry. The only proceeding that began was invoking Rule 12 of the Karnataka Electricity Board Employees’ (Classification, Disciplinary Control & Appeal) Regulations, 1987 (‘the Regulations’ for short) for imposition of minor penalty. The petitioner had preferred an appeal against the order of recovery of Rs.20/-lakhs and reduction of pay to the lowest scale of pay in the cadre of Junior Engineer. This was set aside by the Appellate Authority by modifying the penalty with imposition of stoppage of one increment. After the said order, huge recoveries are directed without even affording an opportunity of hearing to the petitioner. He would therefore, seek quashment of entire proceedings and consequent release of all terminal benefits. 9. Per-contra, the learned counsel Sri B.S. Kamte, representing the Company would submit that inquiry was initiated by drawing up charges on 26-12-2011 and reply from the petitioner was sought and penalty was imposed on 05-04-2012. It was recovery of Rs.20/-lakhs and reduction in basic pay to the lowest scale of pay in the cadre of Junior Engineer. An appeal was preferred and the Appellate Authority modifies the order, after which a Special Inquiry Committee was constituted to find out shortages in store materials which submitted its report on 05-10-2019. It is after this, the petitioner was held guilty and recovery to tune of Rs.50/-lakhs was directed. An appeal was preferred and the Appellate Authority modifies the order, after which a Special Inquiry Committee was constituted to find out shortages in store materials which submitted its report on 05-10-2019. It is after this, the petitioner was held guilty and recovery to tune of Rs.50/-lakhs was directed. It is admitted by the respondents that only departmental inquiry that was initiated was in the year 2011 which also culminated in imposition of penalty on 05-04-2012. Rest of the recoveries made is without holding any inquiry. It is the submission of the learned counsel that when loss is found on account of acts of the petitioner, the Company is entitled to recover and not pay any terminal benefits to an employee who has indulged himself in grave acts of misconduct. He would seek dismissal of the petition. 10. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record. 11. The afore-narrated facts though not in dispute would require to be deciphered threadbare. The saga against the petitioner commences from the time when he was functioning as Section Officer in Hidkal. That was between 2005 and 2007. The allegation comes about in the year 2008 wherein it is alleged that the petitioner was responsible for non-return of 69 failed transformers to the stores which has caused loss to the tune of Rs.20/-lakhs and an order of recovery of Rs.5000/-from out of the salary of the petitioner was imposed on 18-02-2008. The official memorandum imposing recovery from salary reads as follows: The aforesaid official memorandum is clear that it was not a product of any determination of loss against the petitioner as no inquiry was conducted to fix the responsibility. Long after imposition of penalty of Rs.5,000/-, comes another official memorandum on 15-01-2010, to continue recovery of the loss caused. The official memorandum reads as follows: Those recoveries are initiated against the petitioner without divulging determination of the amount of loss. This is the first blush of illegality committed by the Company. 12. On 26-12-2011, a kind of charge sheet is drawn up against the petitioner invoking Rule 12 of the Regulations which deals with procedure for imposition of minor penalty. This results in a penalty being imposed against the petitioner which was reduction to lowest scale of pay in the cadre of Junior Engineer. 12. On 26-12-2011, a kind of charge sheet is drawn up against the petitioner invoking Rule 12 of the Regulations which deals with procedure for imposition of minor penalty. This results in a penalty being imposed against the petitioner which was reduction to lowest scale of pay in the cadre of Junior Engineer. The subject matter was the same that had led to imposition of recovery of Rs.5,000/-i.e., loss of 69 transformers in Hidkal. 13. The petitioner was later placed under suspension pending initiation of regular departmental inquiry which never came about, but what comes about is a penalty i.e., imposition of Rs.20/-lakhs and reduction to the lowest scale of pay in the cadre of Junior Engineer on 05-04-2012. The penalty so imposed reads as follows: The petitioner prefers an appeal against the order of penalty. During the pendency of the appeal, the petitioner was to attain the age of superannuation on 31-05-2013. Then comes a notice dated 28-05-2013 three days prior to the date of superannuation of the petitioner. The notice reads as follows: The notice mentions irregularities committed in the stores when the petitioner was working as a Section Officer at Jamkhandi. The observation in the notice was that Rs.7,70,381 which was the responsibility fixed against the petitioner was yet to be reconciled by the petitioner. Therefore, three days time was granted for such reconciliation. The petitioner pending submission of the reply attains the age of superannuation. Pension was not paid on account of non-reconciliation of the aforesaid amount as observed in the notice. 14. As noticed supra, the petitioner had preferred an appeal to the Appellate Authority against an order of recovery dated 05-04-2012 and the Appellate Authority entertaining the appeal modifies the penalty on 16-10-2017 by the following order: The appeal was accepted and recovery is restricted for one year of annual increment prior to the date of his superannuation to be made from pensionary benefits and also to recover the entire loss of Rs.20,03,952/-caused to the Company from out of terminal benefits and if it falls short thereof to attach movables and immovables of the petitioner. 15. After the said order it appears that the petitioner again represented to the respondents seeking release of terminal benefits. Pending grant of complete terminal benefits to the petitioner, the Company appoints a Special Inquiry Committee to inquire into the alleged loss caused by several officers in the stores. 15. After the said order it appears that the petitioner again represented to the respondents seeking release of terminal benefits. Pending grant of complete terminal benefits to the petitioner, the Company appoints a Special Inquiry Committee to inquire into the alleged loss caused by several officers in the stores. The Committee so constituted appears to have submitted a report on 18-12-2019. The result of the findings of the Committee is again an order of recovery of Rs.50,30,087/-against the petitioner and one other officer Sri A.R. Patthar. The order pursuant to the recommendation of the Committee reads as follows: Pursuant to the aforesaid order, recovery is again initiated from out of the pension of the petitioner on three scores. The order of recovery reads as follows:- Then comes an Official Memorandum dated 29-07-2021 which directs recovery from out of pension of the petitioner which reads as follows: The amount is now projected at Rs.86,52,163/-. This results in another communication to the Executive Engineer to recover the same from the hands of the petitioner. The relevant observation in the communication reads as follows: This results in a subsequent communication to the petitioner communicating the aforesaid amounts of recovery by alleging shortage at the time when the petitioner was functioning as Section Officer and two Official Memoranda are issued on 14-03-2022 which read as follows: It is then the petitioner has preferred the subject petition seeking the aforesaid prayer of quashment of all the orders of recovery. All the recovery orders passed against the petitioner have resulted in ordering recovery of Rs.86,52,163/-from the petitioner. 16. What shocks the conscience of the Court is that the Company has behaved as if it is the personal fiefdom of the officers manning the office. They appear to have blissfully forgotten that there are Rules and Regulations to be followed before imposing any penalty. The petitioner who was an employee regularly appointed, is treated as a chattel and is imposed penalty after penalty of recovery of amounts initially from the salary of the petitioner, and the latest from the pension of the petitioner. No inquiry worth the name has ever been conducted against the petitioner. The glaring illegalities are that recovery was initially ordered in the year 2008 for the alleged loss of 69 faulty transformers. The recovery was from the salary of the petitioner to the tune of Rs.5,000/-. No inquiry is conducted. No inquiry worth the name has ever been conducted against the petitioner. The glaring illegalities are that recovery was initially ordered in the year 2008 for the alleged loss of 69 faulty transformers. The recovery was from the salary of the petitioner to the tune of Rs.5,000/-. No inquiry is conducted. After three years of recovery, the so called charge memo invoking Rule 12 of the Regulations is issued for which recovery had started three years ago. This results in imposition of penalty, all over again that is recovery of moneys which had already been started three years ago and reduction of petitioner’s scale to the lowest in the cadre of Junior Engineer. With all these the petitioner retires on attaining the age of superannuation. The recovery did not stop and no pension is paid to the petitioner. The recovery again goes on increasing from year to year, investigation to investigation, discreet enquires and appointment of Special Committee for inquiry into shortage of transformers and to none of these, the petitioner is privy. No notice even issued to the petitioner seeking to show cause as to why recovery should not be made. This is the least expected of any employer either private or public; in the case at hand, it is a State under Article 12 of the Constitution of India. 17. If huge recoveries are to be effected from the salary/pension of the employee it ought to precede by a regular departmental inquiry; fixing of accountability, determination of loss and hearing the petitioner as to why recovery should not be made on such determination after following due procedure in law. None of these necessary procedures for initiating recovery are even followed by the Company against the petitioner. There cannot be better illustration of the employer taking the employee’s rights for a ride and imposing huge recovery of Rs.86,52,163/-against the petitioner. The petitioner who has retired on attaining the age of superannuation on 31-05-2013 is fighting for grant of pension even as on today after 11 years of superannuation. It is not paid on account of recoveries against the petitioner all of which have been ordered in blatant violation of the principles of natural justice. The petitioner who has retired on attaining the age of superannuation on 31-05-2013 is fighting for grant of pension even as on today after 11 years of superannuation. It is not paid on account of recoveries against the petitioner all of which have been ordered in blatant violation of the principles of natural justice. The case at hand appears to be sui generis as constitutional Courts would rarely come across such grossly arbitrary action by the employer, against its employee, the petitioner therefore, becomes entitled to restitution for all the illegal acts of the Corporation. It becomes apposite to refer to the judgment of the Apex Court in the case of MANOJ KUMAR Vs. UNION OF INDIA AND OTHERS, 2024 SCC Online SC 163. The Apex Court has held as follows: “17. Judicial review of administrative action in public law is qualitatively distinct from judicial remedies in civil law. In judicial review, constitutional courts are concerned with the exercise of power by the State and its instrumentalities. 18. Within the realm of judicial review in common law jurisdictions, it is established that constitutional courts are entrusted with the responsibility of ensuring the lawfulness of executive decisions, rather than substituting their own judgment to decide the rights of the parties, which they would exercise in civil jurisdiction (Sir Clive Lewis, Judicial Remedies in Public Law (5th edn, Sweet and Maxwell 2015). It has been held that the primary purpose of quashing any action is to preserve order in the legal system by preventing excess and abuse of power or to set aside arbitrary actions. Wade on Administrative Law states that the purpose of quashing is not the final determination of private rights, for a private party must separately contest his own rights before the administrative authority (HWR Wade and CF Forsyth, Administrative Law (11th edn, Oxford University Press 2014) 596-597. Such private party is also not entitled to compensation merely because the administrative action is illegal (Peter Cane, ‘Damages in Public Law’ (1999) 9(3) Otago Law Review 489). A further case of tort, misfeasance, negligence, or breach of statutory duty must be established for such person to receive compensation (Henry Woolf and others, De Smith's Judicial Review (8th edn, Sweet and Maxwell 2018) 1026-1027). 19. A further case of tort, misfeasance, negligence, or breach of statutory duty must be established for such person to receive compensation (Henry Woolf and others, De Smith's Judicial Review (8th edn, Sweet and Maxwell 2018) 1026-1027). 19. We are of the opinion that while the primary duty of constitutional courts remains the control of power, including setting aside of administrative actions that may be illegal or arbitrary, it must be acknowledged that such measures may not singularly address repercussions of abuse of power. It is equally incumbent upon the courts, as a secondary measure, to address the injurious consequences arising from arbitrary and illegal actions. This concomitant duty to take reasonable measures to restitute the injured is our overarching constitutional purpose. This is how we have read our constitutional text, and this is how we have built our precedents on the basis of our preambular objective to secure justice (The Preambular goals are to secure Justice, Liberty, Equality, and Fraternity for all citizens). 20. In public law proceedings, when it is realised that the prayer in the writ petition is unattainable due to passage of time, constitutional courts may not dismiss the writ proceedings on the ground of their perceived futility. In the life of litigation, passage of time can stand both as an ally and adversary. Our duty is to transcend the constraints of time and perform the primary duty of a constitutional court to control and regulate the exercise of power or arbitrary action. By taking the first step, the primary purpose and object of public law proceedings will be subserved. 21. The second step relates to restitution. This operates in a different dimension. Identification and application of appropriate remedial measures poses a significant challenge to constitutional courts, largely attributable to the dual variables of time and limited resources. 22. The temporal gap between the impugned illegal or arbitrary action and their subsequent adjudication by the courts introduces complexities in the provision of restitution. As time elapses, the status of persons, possession, and promises undergoes transformation, directly influencing the nature of relief that may be formulated and granted.” (Emphasis supplied) The aforesaid observation of the Apex Court is completely applicable to the case at hand. 18. It is trite that penalty can be imposed against an employee and the said penalty unless it shocks the conscience of the Court would not be interfered in the normal circumstance. 18. It is trite that penalty can be imposed against an employee and the said penalty unless it shocks the conscience of the Court would not be interfered in the normal circumstance. Here is a case where without holding an inquiry orders of recovery are slapped against the petitioner time and again during his service and post retirement. Therefore, for the reasons that recoveries are effected without even conducting a departmental inquiry worth the name in tune with the Regulations, the orders impugned would fly on the face, for it being passed in blatant violation of every known cannon of law and the petition deserves to succeed with a direction that all terminal benefits that the petitioner is entitled to shall be released to the petitioner without any loss of time, including the costs of litigation and payment of interest for withholding the terminal benefits, failing which, the petitioner who has been left bleeding; would never see the wound healing. 19. For the aforesaid reasons, I pass the following: ORDER (a) Writ Petition is allowed with costs of Rs.1/-lakh to be paid by the Corporation, to the petitioner within 4 weeks from the date of receipt of a copy of the order. (b) All recoveries in terms of the Order dated 29-07-2021, passed by the 6th respondent/Superintending Engineer (Ele.), HESCOM and also the order dated 16-10-2017, passed by the 3rd respondent/Chief Engineer (Ele.), HESCOM stand quashed. (c) Mandamus issues to the respondents to settle and pay pension and all terminal benefits to the petitioner on his superannuation with effect from 31-05-2013 along with interest at the rate of 6% p.a. from the date they became due – date of superannuation, till the date of payment. (d) This order shall be complied with by the respondents within a period of four weeks from the date of receipt of a copy of this order, failing which, the petitioner would be entitled to an interest at 12% per annum from the date of superannuation, till the date of its payment.