Pallothu Pattabhiramaiah vs Extension Officer (Panchayats), Panchayat Samithi

A. Hanumanthu, J.—This revision is directed against the order dated 23-4-1991 passed by the I Addl. District Munsiff, Guntur in E.P. No. 258/85 in S.E.L.F. No. 4/1980-81.

The facts leading for filing of this revision petition are as follows: The revision petitioner P. Pattabiramaiah worked as Sarpanch of Visadala Gram Panchayat from 1956 to 1964 and again from 1970 to 1981. One Guduru Lakshmnarayana was Sarpanch of that Gram Panchayat from 1964 to 1970. An audit was effected with regard to the accounts of that Gram Panchayat as per the Rules of the Gram Panchayats Act, 1964 and that audit was completed on 28-10-1978. The Audit Officer based on audit report issued the Surcharge Certificate 4/80-81 on 4-4-1980 against the revision-petitioner for a sum of Rs. 7937/- representing the loss caused to the funds of that Gram Panchayat. Ex. A-1 is the said Surcharge Certificate, dated 4-4-1980. The revision-petitioner is alleged to have caused loss to the Gram Panchayat in a sum of Rs. 7,937/- towards the works like side drain works, removal of trees and jungles from the road side as detailed in the Surcharge Certificate during the period he worked as Sarpanch and executive authority of the said Gram Panchayat from 17-10-1970 to 31-3-1979. In execution of that Surcharge Certificate, E.P. No. 37/84 was filed and it was dismissed on 20-2-1985. Again, E.P. 258/85 has been filed by the Extension Officer of Nallapadu Panchayat Samithi and sought for attachment of the immovable property of the revision-petitioner who is the judgment-debtor. On receipt of the notice in the execution petition, the revision-petitioner-judgment-debtor filed a counter resisting the execution petition. It is averred in the counter that the earlier E.P.37/84 was dismissed on 20-2-1985 and that the present execution petition is barred by the principles of res judicata, that the Surcharge Certificate is not valid and not enforceable under law, that the Surcharge Certificate issued three years after the audit is barred by time, that the decree-holder has not issued a notice at the time of issuing Surcharge Certificate or filing of the execution petition and that, the execution petition is not maintainable. During the enquiry, P.Ws. 1 and 2 were examined on behalf of the decree-holder and Exs.A-1 to A-3 were marked. The judgment-debtor got examined himself as R.W.1 and Ex.B-1 was marked. On a consideration of the oral and documentary evidence placed before him, the learned District Munsiff held that the Surcharge Certificate issued by the Audit Officer, Local Funds, Guntur can be executed against the judgment-debtor and consequently, overruling the objections raised by the judgment-debtor, ordered for further steps in the execution petition. Aggrieved of that order, the judgment-debtor has come up with this revision.

Heard the learned Counsel for the revision-petitioner and the respondent and perused the lower Court records and the impugned order.

The learned Counsel for the revision-petitioner contends that the Surcharge Certificate which is being sought for execution, was issued on 4-4-1980 which is beyond the period of limitation of 3 years from the completion of the audit i.e., 28-10-1976 and as such, it is barred by time. The learned Counsel for the revision-petitioner further contends that mandatory procedure was not followed while issuing the Surcharge Certificate and that no enquiry was held and no notice was given to the revision-petitioner. It is further contended that the Gram Panchayat ought to have filed a suit against the revision-petitioner u/s 150 of A.P. Gram Panchayats Act, 1950 (sic. 1964) for recovery of the Surcharge amount within the period of limitation and as no suit has been filed for the recovery of the surcharge amount, the present execution petition is not maintainable. The learned Counsel for the respondent submits his arguments in support of the impugned order.

The execution petition is filed for the recovery of the surcharge amount from the revision-petitioner who worked as Sarpanch of the Gram Panchayat. Section 150 of A.P. Gram Panchayats Act (hereinafter called Act) lays down that a suit for compensation for loss, wastge or mis-application of the property of the Gram Panchayat occasioned as a direct consequence of the neglect or mis-conduct of the Sarpanch or executive authority may be instituted against him in any Court of competent jurisdiction by the Gram Panchayat with the previous sanction of the Commissioner: Section 139 of the Act prescribes the period of three years limitation for recovery of the dues to the Gram Panchayat. Clause (viii) of sub-sec. (2) of Section 217 of the Act empowers the Government to frame rules as to the powers of Auditors to disallow and surcharge items and as to appeals against order of disallowance or surcharge and also as regards the recovery of sums disallowed or surcharged. In exercise of these powers, the Government of A.P. has issued G.O.Ms. No. 569, Panchayat Raj, dated 30-5-1965. Rule 5 thereof empowers the Auditors to disallow every item contrary to law and surcharge the same on the person making or authorising the making of the illegal payments and may charge against any person responsible therefor, the amount of any deficiency, loss or unprofitable outlay incurred by the neglience or misconduct of that person or of any sum which ought to have been, but is not, brought to account by that person and shall, in every such case certififying the amount due from such person. Under Sub-rule (2) of Rule 5, the Auditor shall state in writing the reasons for his decision in respect of every disallowance, surcharge or charge, and furnish by registered post a copy thereof to the person against whom it is made. Under Sub-rule (3) of Rule 5, if the person to whom a copy of the Auditor''s decision is so furnished, refuses to receive it, he shall nevertheless be deemed to have been duly furnished with the copy of such decision within the meaning of Sub-rule (2). Under Rule 6, any person aggrieved by disallowance or surcharge made may within 90 days after he has received or served with the decision of the Auditor either apply to the Principal Civil Court of original jurisdiction to set aside such allowance (sic. disallowance), surcharge or charge and the Court after taking evidence as is necessary to confirm, modify or remit such allowance (sic. disallowance), surcharge or charge with such orders as to cause as it may think proper in the circumstances, or in lieu of such application to the Principal Civil Court, appeal to the authorities as mentioned in that rule. Rule 7 thereof declares that every sum so certified to be due from any person by the auditor, shall be paid by such person into the nearest Government Treasury or in the Office of the Gram Panchayat within 90 days after intimation to him of the decision of the auditor, unless within that time, such person has appealed to the authorities specified in Rule 6 against such decision and such sum, if not paid or such sum as the authorities apportioned, shall be declared to be due, shall be recoverable on application made by the Extension Officer, Panchayat to the Government in the same way as an amount decreed by the Court. Under the priviso to Rule 7 where the amount covered by the Surcharge Certificate is Rs. 500/- or less, the same shall be recoverable by the Divisional Panchayat Officer having jurisdiction over the Panchayat concerned.

As stated earlier, the execution petition has been filed for recovery of the specific amount certified to be due by the Auditor under Ex.A-1. Rule 7, quoted above, treats the Surcharge Certificate as a decree. Hence, provisions u/s 139 and Section 150 of the Act are clearly inapplicable to the recovery of surcharge amount. Rule 7 declares that after issue of the surcharge certificate by the auditor, the Extension Officer, Panchayat is entitled to recover the same on an application made to the Court in the same way as an amount decreed by the Court. Therefore, the Surcharge Certificate is a decree for the purpose of Article 137 of the Limitation Act for execution and it is executable within 12 years from the date of issue of the Surcharge Certificate. I am fortified in my opinion by a decision of this Court in "S. Satyanarayana Reddy v. Gram Panchayat, Pekeru" 1986 (2) ALT 55 wherein Justice K. Ramaswamy (as he was then) observed thus;

"Section 139 of the Gram Panchayat Act is clearly inapplicable to the recovery of surcharge amount. A conjoint reading of Rule 7 mentions that after the issue of certificate the Gram Panchayat is entitled to recover the same on an application made by the Gram Panchayat in a Court in the same way an amount decreed by the Court. Rule 7 treats the Surcharge Certificate to be a decree. Therefore, it is the decree for the purpose of Art.137 of Limitation Act for execution. Accordingly, the decree is executable within 12 years from the date of issue of Surcharge Certificate."

As regards the validity of the Surcharge Certificate the contentions raised by the learned Counsel for the revision-petitioner are two-fold. Firstly, that the mandatory procedure was not followed in issuing the Surcharge Certificate, i.e., no enquiry was held and no notice was given to the revision-petitioner. Secondly, the issuance of the Surcharge Certificate on 4-4-1980 is beyond the period of limitation of three years from the date the audit was completed i.e., 28-10-1976. As earlier stated, the Government framed the rules as to the power of the auditors to disallow or surcharge and appeals by issuing the G.O.Ms. No. 565, Panchayat Raj, dated 30-5-1965. The auditor will audit all the accounts of the Gram Panchayat submitted to him by the executive authority. After audit, ha shall report to the Gram Panchayat material impropriety or material irregularity etc., which he may observe in the expenditure or in the recovery of money due to the Panchayat or in the accounts of the Gram Panchayat. Under Rule 5 as already referred, the auditor may disallow every item contrary to law and surcharge the same on the person making or authorising the making of the illegal payments and may charge the same against any person responsible therefor, and he has to state in writing the reasons for his decisions in respect of every disallowance, surcharge or charge and he must also furnish by a registered post a copy thereof to the person against whom it is made. No provision is made in these rules to the effect that before conducting such audit of the accounts of the Gram Panchayat, the auditor should issue a notice to the concerned person. Moreover, the auditor will be conducting audit of the accounts of the Gram Panchayat as such and he is not expected to conduct an enquiry against any particular individual. If in course of his audit of the accounts he may disallow every item contrary to law and surcharge the same on the person making or authorising the making of the illegal payments and charge against such person responsible therefor. After surcharging such person responsible for it, such person shall be furnished a copy thereof by registered post. If such person is aggrieved by such disallowance or surcharge, he may apply to the Principal Civil Court having the original jurisdiction or appeal to the authorities as mentioned in Rule 6. In the instant case, it is in the evidence of P.W.2 , that the copy of the Surcharge Certificate was sent to the revision-petitioner by registered post acknowledgement due and the same was received by the revision-petitioner and he acknowledged the same under Ex.A-2 dt. 8-5-1980. The revision-petitioner examined as RW.1 admits his signature on Ex.A-2 and he further states that he received the audit report and Surcharge Certificate. In his cross-examination also he admits that he received two covers one in his personal capacity and the other as Sarpanch. Thus, Ex.A-2 and the evidence of P.W.2 and R.W.1 conclusively prove that the revision-petitioner was furnished with a copy of the Surcharge Certificate. But, he failed to make any application to the Principal Civil Court to set aside that surcharge order. He also failed to prefer any appeal against such order to the authorities as mentioned in Rule 6. Thus, the Surcharge Certificate has become final. Hence, the first contention of the learned Counsel for the revision-petitioner has to be rejected.

As regards the second contention, the learned Government Pleader for Panchayat Raj submits that proviso to Sub-rule 1 of Rule 5 prescribing the period of limitation as three years for issuing the surcharge proceedings from the date of completion of the audit was deleted by G.O.Ms. No. 943, Panchayat Raj (Samithi-I) dated 6th September, 1976 and as such, by the date of issuing the Surcharge Certificate dated 4-4-1980, there was no time limit and as such, Ex.A-1 is not barred by time. It is also in the evidence of P.W.2 that there was no time limit from 1976 to 6-2-1991 for issuance of the Surcharge Certificate from the date of completion of the audit, but later on, the time limit was fixed at 6 years. The learned Government Pleader also submits that by G.O.Ms. No. 70,PanchayatRaj (Samithi-I),dated 7-2-1991 a proviso has been introduced to Sub-rule 1 to Rule 5 fixing up the period of limitation as 5 years for issuance of surcharge proceedings from the date of completion of the audit. The learned Government Pleader also made available the copies of the said G.Os. for perusal. It is clear from these G.Os. that there was no limitation for issuance of the surcharge proceedings during the period from 16-2-1976 to 7-2-1991. The present Surcharge Certificate Ex.A-1 was issued on 4-4-1980. Admittedly, the audit was completed by 28-10-1976. There was no time limit by then. Hence, the Surcharge Certificate Ex.A-1 issued on 4-4-1980 is not barred by time. Therefore, the second contention of the learned Counsel for the revision-petitioner is also rejected.

In the light of my above discussion, I do not find any merits in this revision. The learned District Munsiff has given cogent and convincing reasons for overruling the objections raised by the revision-petitioner. The impugned order docs not suffer from any illegality or irregularity. Hence I do not find any reason to interfere with the said order.

In the result, the revision petition is dismissed as it is devoid of merits. No costs.