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Judgment
Rama Jois, J.—The petitioner has presented this petition questioning the legality of the order passed by the Divisional Commissioner, Gulbarga, under Sub-section (2) of Section 182 of the Karnataka Village Panchayat and Local Boards Act, 1959 (''the Act'' for short) as also the order of the Civil Judge, Gulbarga, dismissing the appeal presented by the petitioner u/s 183 of the Act.
The facts of the case are these: During the period commencing from 26th November 1972 to the 10th April 1974 the petitioner was working as a Chief Executive Officer of the Taluk Development Board, Afzalpur, Gulbarga district. He was a Block Development Officer in the service of the State Government, who had been deputed and appointed as the Chief Executive Officer of the Taluk Development Board. He was re-transferred as Block Development Officer. He retired from service from 1-7-1977. On 28th November 1978 a notice was Issued to the petitioner u/s 182(2) of the Act calling upon him to give his explanation for the allegation that he had either misappropriated or mis utilized the funds of the Taluk Development Board amounting to Rs. 3,13,243.43 ps. The petitioner submitted his reply on 2-1-1979 (Annexure-B). The petitioner strongly refuted the allegation that he has misappropriated or mis utilized any part of the amount. He said there might have been some irregularities, but there was absolutely no truth in the allegation that any amount had been misappropriated or mis utilized by the petitioner. He specifically stated that the period during which he had incurred several expenditure was a period during which the area was affected by the worst drought and instructions had been issued by the Deputy Commissioner that there should be no delay in carrying out any work for incurring any expenditure for the benefit of the people on technical grounds and the whole object with which he and other Officers should work was to give relief to the people affected by the drought. He also stated that he along with the Tahsildar and the Assistant Engineer had worked day and night and had rendered service to the people and it was unfortunate that the petitioner has been subjected to such serious allegations though he had rendered yeoman service during the drought period.
Thereafter, the Divisional Commissioner proceeded to pass the order dated 15-1-1979 rejecting the explanation of the petitioner and holding that the petitioner is liable to pay a sum of Rs. 3,13,243.43. Aggrieved by the said order, the petitioner preferred an appeal before the Civil Judge, Gulbarga u/s 183 of the Act. The learned Civil I Judge considered that the the Divisional Commissioner had passed orders in accordance with the provisions of Sub-section (2) of Section 182 of the Act after giving an opportunity to the petitioner to give his explanation and the order of the Divisional Commissioner was a speaking order and therefore there was no ground to interfere. Accordingly, the appeal was dismissed. Aggrieved by both the orders, the petitioner has presented this petition.
Sri Prasad, learned Counsel for the petitioner urged the following contentions:-
(1) Having regard to the facts and circumstances of the case it was obligatory for the Divisional Commissioner to have held an enquiry and as he passed the order without holding any such enquiry, the order was liable to be set aside.
(2) Sub-section (3) of Section 182 of the Act requires the Divisional Commissioner to give reasons in respect of each of the charges and in the present case he has not assigned reason for any of the charges and therefore the order is illegal.
(3) Having regard to the facts and circumstances of the case, it was obligatory on the part of the learned Civil Judge to have called upon the Divisional Commissioner to adduce evidence and the dismissal of the appeal without holding such enquiry was illegal.
(4) The learned Civil Judge ought to have set aside the order of the Divisional Commissioner, as the Divisional Commissioner had failed to hold an enquiry as required under Sub-section (2) of Section 182 of the Act and he had failed to record reasons in respect of each of the items in respect of which liability was fixed against the petitioner.
In order to appreciate the contention, it is necessary in the first instance to set out the provisions of Sections 182 and 183 of the Act. They read:-
"182. Disallowance by Government Auditor and order by Commissioner:-
(1) The Government Auditor shall disallow every item of payment contrary to law and report the same to the Commissioner with particulars as regards the person making or authorising the making of such payment.
(2) The Commissioner may, on the report of the Auditor or on his own motion and after taking the explanation of the person concerned or making such further enquiry as he may consider necessary, charge any person responsible therefore the amount disallowed under Sub-section (1) or the amount of any deficiency or loss caused by the negligence or misconduct of such person or any sum received which ought to have been, but is not brought into account by such person, and shall, in every such case, certify the amount due from such person.
(3) The Commissioner shall in writing state the reasons for his decision in respect of every charge and send a copy thereof to the person against whom it is made.
Appeal against the order: Any person aggrieved by the order of the Commissioner u/s 182 may, within thirty days of the receipt by him of a copy of the decision of the Commissioner, either -
(a) apply to the Civil Court having jurisdiction to set aside such order; and the Court after taking such evidence as it considers necessary, may confirm, modify or remit such charge, and make such orders as to costs as it deems proper in the circumstances; or
(b) in lieu of such application, appeal to the Government which shall pass such orders as it thinks fit."
As can be seen from Sub-section (1) of Section 182 of the Act, it requires the Government Auditor to disallow every Item of payment made contrary to law, and to make a report to the Divisional Commissioner with particulars as regards the person making or authorising the making of such payment contrary to law. Sub-section (2) of Section 182 of the Act prescribes the procedure for taking further action on the basis of the audit report. It provides that the Commissioner on the basis of the report or even suo moto call for the explanation of the person concerned or make such further enquiry as he might consider necessary, charge any person responsible for the amount disallowed and issue a certificate to the effect that the amount is due from such person. Sub-section (3) of Section 182 of the Act makes it obligatory for the decision in respect of every charge and to send a copy thereof to the person concerned. Section 183 of the Act gives a right of appeal to the person aggrieved by the order of the Divisional Commissioner made u/s 182 of the Act either to the Civil Court or to the State Government. Section 183(a) provides that whenever an appeal is filed before the Civil Court, it should proceed to decide the case after taking such evidence as it considers necessary and may confirm, modify or remit such charge. After the order made u/s 182 of the Act becomes final either by its confirmation or modification by the order of the Civil Court u/s 183 of the Act or by its not being challenged before the Civil Court or the Government u/s 183, Section 184 of the Act provides for recovery of the said amount as arrears of land revenue.
It is true that Sub-section (2) of Section 182 provides that the Commissioner may proceed to pass orders after taking explanation of the person concerned or making such further enquiry as he may consider necessary. The clear meaning of the provision is that if in a given case the matter is simple and it can be decided on consideration of the explanation offered by the official concerned, the Divisional Commissioner can proceed to pass the final orders. To illustrate, if in a given case the drawing of the amount for any particular purpose is not disputed and it was not disputed that it was not spent for the purpose, there is nothing further to enquire. But there might be cases in which it is not possible to fix the responsibility on the person concerned without recording evidence. In such cases it is obligatory on the part of the Divisional Commissioner to hold an enquiry and record a finding on the basis of the evidence so recorded. The fact that the Section provides that the Commissioner may make such further enquiry as he may consider necessary, only means, he has the power to hold further enquiry if it becomes necessary and not that even if in a given case no liability can be fixed without holding further enquiry he can still dispense with the holding of enquiry. The Section cannot be interpreted as giving a discretion to the Divisional Commissioner either to hold an enquiry or not to hold an enquiry even if the situation demands the holding of an enquiry. Such would not be the intention of the Legislature. On the other hand, the power conferred to hold enquiry under the Section is coupled with the duty to hold inquiry if the facts and circumstances of a given case calls for an inquiry. The provisions of Sub-section (3) reinforces the above construction of Sub-section (2), for Sub-section (3) requires the Divisional Commissioner to state in writing the reasons for his decision in respect of every charge. When a particular charge is made and it is refuted in the explanation furnished by the person concerned and in the nature of things, it is not possible to give reasons for fixing the liability on the person concerned without recording evidence, it makes the holding of enquiry obligatory.
Similarly, u/s 183(a) also the power is conferred on the Civil Court to decide an application presented to it for setting aside the order made by the Divisional Commissioner u/s 182 and decide the matter after taking such evidence as it considers necessary. Therefore, even under this provision if the evidence In support of the charge has been recorded in full In an enquiry held by the Divisional Commissioner u/s 182 of the Act, it might not be necessary for the Civil Court to record evidence and it can decide as to whether the finding recorded by the Divisional Commissioner was based on the evidence on record, but If In a given case the Civil Court finds that no evidence was recorded before fixing the liability and no reasons were given or the entire evidence available has not been recorded, it is the duty of the Civil Court to call upon the parties to adduce evidence and to decide the matter only after considering the evidence adduced by both the parties.
In the light of the above discussion regarding the scope and content of the provisions of Sections 182 and 183, I shall now proceed to consider the facts of this case. The notice was given to the petitioner u/s 182(2) on 28-11-1978 (Annexure-A). It reads:-
"Government of Karnataka
No. DEV.TDB. 187/78-79 Office of the Divisional Commissioner, Gulbarga R.S. 585102.
Dated 28-11-1978.
NOTICE
Sub: Audit report on the account of Taluk Development Board Afzalpur for the year 1-4-1971 to 31-3-1974.
Ref: Government letter No. RDC. 35 . BDB 78 dated 12-4-1978.
It is observed by the Assistant Controller Local Audit Circle, Gulbarga, through his report No. 3732-AR-GUL-74-75 dated 24-12-1974 that during the tenure of Shri T. Ramachandra former Block Development Officer and the Chief Executive Officer, TDB, Afzalpur w.e.f. 26-11-1972 to 10-4-1974, has committed grave irregularities including misappropriation of amount on the basis of self cheques drawn in connection with food distribution during the drought period and the amount so drawn on D.C. Bills without counter signature of the controlling authority under the people Housing Programme and misappropriation of TDB funds of Rs. 3,13,243.43 which were noticed during the course of audit of the account of TDB, Afzalpur.
The details of cases irregularities observed in the expenditure of money due to the Taluk Board and loss of money and other property referred to in clause (b) and (c) of Section 18(i) of the Karnataka Village Panchayats and Local Boards Act, 1959 proposed amount for recovery by the Assistant Controller Local Audit Circle, Gulbarga as detailed below:
Audit note part No.
Para No.
Nature of amount involved
Amount proposed for recovery
III
9
No physical stock
104.00
"
10
-do-
1031.25
"
10(h)(ii)
Loading and unloading charges off
105.00
"
10(b)(iii)
Balance amount not credited
600.00
"
11
Non realisation of cost of information boards.
1000.00
"
12
Short collection towards sale proceeds of foodgrains
5274.00
"
13
-do-
3676.75
IV
7
Without collection cost
648.00
"
13
Shortage of foodgrains
167586.10
"
14(2)
Short collection
2940.00
"
5
Not a legitimate charges
999.00
"
9
Irregular payment of TA
20001.80
V
V
Advance drawn not adjusted fully
488.56
"
B(i)(b)
Cost of cement was not collected by cash or
by deduction in C.C. bills even in final bills
2610.00
"
(i)(c)
Less collection in cost of cement
100.00
"
(C)
Want of stock account of cement
3880.20
"
(2)
False adjustment of advance drawn
6500.00
"
(3)
Advance remained unadjusted
8680.00
"
(14)
Short account of cheque
281.00
V
(15)
Non accounted of self challan
14140.37
"
(16)
Twice debiting the same challen
7287.60
"
(17)
Excess debits of challans
1800.00
"
(18)
Unnecessary debit without any relevant support of receipt etc.
3000.00
"
(19)
Double debit in respect of advance
165.00
"
(22)(b)
Excess payment in
purchase of drugs
50
"
(C)
Claiming the amount even for material not supplied
387.18
VI
(29)
Excess payment in purchase of foodgrain
6173.27
"
(31)(b)
Unnecessary and false adding account in adjustment of advance
1440.00
VII
(1)
Outstanding advances excess payment
23500.00
"
(2)
Excess payment
3000.00
"
(3)
12% P.C. not deducted which is resulted in excess payment
51.11 4573.68
(c)
Excess payment in C.C. No. 3
569.00
"
(d)
Excess payment due alteration MBs. without attestation
335.50
"
(6)(a)
Penalty not levied
3264.00
"
(8)
Royalty deducted but not credited
24007.59
"
(10)
Income tax not deducted from contractors
943.00
Total
3,13,243.43
In view of the above he is hereby directed to explain why the misappropriated and mis utilized TDB. Afzalpur funds to a tune of Rs. 3,13,243.43 would not be certified as due against him, as per Section 182(2) of the Karnataka Village Panchayat and Local boards Act 1959 and recovered as an arrears of Land Revenue along with the necessary expenses of such recovery as per Section 184(2) of the said Act. His explanation should reach the undersigned within a week on receipt of this notice, failure to submit his explanation within the stipulated time it will be presumed that nothing to say in this matter and action will be take as per Sections 182(2) and 184(2) of the Karnataka Village Panchayat and Local Boards Act, 1959.
Please take copy of this notice and return the same.
Sd/- for Divisional Commissioner, Gulbarga."
As can be seen from the show cause notice, there are innumerable items in respect of which recovery was sought to be made from the petitioner. The petitioner submitted his reply totally refuting all the charges levelled against him and expressly stating that he has not misappropriated any of the amount. The reply given by him reads:-
He not only refuted the allegations levelled against him, but also stated that he had worked day and night during very difficult circumstances. He also further stated that though on the receipt of audit report the petitioner had been placed under suspension by the State Government the disciplinary proceedings were dropped and he was further promoted as Assistant Commissioner and after discharging duties for 2 1/2 years as Assistant Commissioner he retired from 1-7-1977.
Thereafter, the Divisional Commissioner passed the impugned order dated 15-1-1979 (Annexure-C). In order to demonstrate that the order is not in conformity with Section 182(2) and (3) of the Act, all that is necessary is to set out the order itself:
"PROCEEDINGS OF THE DIVISIONAL COMMISSIONER, GULBARGA
Sub: Departmental enquiry against Shri T. Ramachandra Rao, former Block Development Officer, Afzalpur, District Gulbarga.
Ref: Government letter No.RED. 35 BDB 78 dated 12-4-1978.
Preamble:
The Assistant Controller, Local Audit Circle, Gulbarga, through his report No. 3732 AR GUC 74-75 dated 24-12-1974 has reported that during the tenure of Shri T. Ramachandra Rao, former Block Development Officer and the Chief Executive Officer, Taluk Development Board, Afzalpur with effect from 26-11-1972 to 10-4-1974, has committed grave irregularities Including misappropriation of Taluk Development Board funds and proposed for recovery of misappropriated Taluk Development Board fund amounting to Rs. 3,13,243.43 from the person concerned.
As contemplated u/s 182(2) of the Karnataka Village Panchayats and Local Boards Act 1959 a notice under No. DEV.TDB.187/ 78-79 dated 28-11-1978 was issued to Sri. T. Ramachandra Rao, former Block Development Officer and Chief Executive Officer, Taluk Development Board, Afzalpur calling upon as to why the misappropriated and misutilised TDB Afzalpur funds should not be certified as due against him. In his explanation dated 2-1-1979 in response to above notice he stayed that he had worked for the benefit of the public and not misappropriated the amount during the course of famine period etc. He has not given any credit particulars (which was furnished in the above notice itself) for having credited the amount. This clearly shows that he is responsible for the irregularities committed by him and misappropriated public funds. Therefore his explanation is not convincing and not acceptable. Hence the following:
ORDER
No. DEV.TDB. 187/78-79
Dated: 15-1-1979
In exercise of the powers conferred u/s 182(3) of the Karnataka Village Panchayats and Local Boards Act 1959, I, A.S. Melkote, Divisional Commissioner, Gulbarga is hereby certify that a sum of Rs. 3,13,243.43 (Rupees three lakhs thirteen thousand two hundred forty three and paise forty three only) is due from Sri T. Ramachandra Rao former Block Development Board, Afzalpur, District: Gulbarga being the misappropriated TDB, Afzalpur funds.
Sd/- (A.S. Melkote) IAS Divisional Commissioner, Gulbarga."
As can be seen from the above order, after referring the service of notice and the explanation submitted by the petitioner, the Divisional Commissioner proceeded to state that the explanation was unsatisfactory and therefore he was fixing the liability on the petitioner. In respect of such a serious charge no finding could have been recorded against the petitioner without recording evidence. Having regard to the facts and circumstances of the case, it was obligatory for the Divisional Commissioner to have held an enquiry under Sub-section (2) of Section 182 of the Act. Further, in respect of each of the items of Misappropriation or mis- utilization of funds, it was necessary for the Divisional Commissioner to have recorded a finding giving reasons, which could have been done only after recording the evidence. Therefore, it is clear that the order of the Divisional Commissioner is plainly contrary to Section 182(2) and (3) of the Act.
Aggrieved by the said order, the petitioner preferred an application u/s 183(a) of the Act. In the order, the learned Civil Judge sets out the history of the case and facts upto paragraph-5 and in paraqraph-6 of the order he proceeded to hold that as the petitioner did not furnish any convincing or acceptable evidence, the Divisional Commissioner proceeded to pass the order and therefore there was no infirmity in the order of the Divisional Commissioner. In fact, one of the contentions of the petitioner before the Civil Judge was that the order was not a speaking order. It is well-settled position in taw that every administrative order which fixes any liability on any individual must be a speaking order. Moreover, the passing of a reasoned order in respect of each of the charge is a statutory requirement prescribed under subsection (3) of Section 182 of the Act. That provision had not been complied with in the present case. This aspect was totally overlooked by the learned Civil Judge. Apart from that in the nature of things it was obligatory for the learned Civil Judge to have decided the case only after calling upon the parties to adduce evidence as the case was such which could not be decided without recording the evidence,
The learned Counsel for the respondents submitted that if the impugned orders were to be quashed by this Court, liberty may be given to the respondents to hold a de novo enquiry. There is no question of this Court giving liberty to the respondents to do so, for if in law they are entitled to do so, they are at liberty to do so.
In the result, I make the following order:
(i) The Writ Petition is allowed;
(ii) The order of the Divisional Commissioner (Annexure-C) and the order of the learned Civil Judge, Gulbarga in Misc.Case No. 12/79 (Annexure-D) are set aside.