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Judgment
P. Jyothimani, J.—The writ petitioner was originally appointed as Bill Collector in the Tamil Nadu Civil Supplies Corporation and thereafter
promoted as Junior Assistant and further promoted as Assistant on 20.3.2000. The petitioner was permitted to go on retirement under Voluntary
Retirement Scheme (VRS) with effect from 31.3.2004 and he was also relieved on the same date by the Senior Manager (Audit), Tamil Nadu
Civil Supplies Corporation Limited, by order dated 31.3.2004.
It is stated that when the petitioner was working in the non-grocery section in Gopalapuram Mini Godown as a Point Clerk (Issues), he
discharged his functions as per the instructions of the Godown Superintendent Mr. Ettibaba. The second respondent issued show-cause notice on
1.3.1995 informing about the shortage to the value of Rs. 2,36,209.55 stated to have been found on physical verification in the said godown.
Thereafter, a charge memo was issued on 10.3.1995 and explanation was submitted by the petitioner on 17.4.1995, denying all the charges.
2(a). Mr. Rajasekaran, Manager (Bills) was appointed as enquiry officer, who, after conducting enquiry, found that the charges are not proved,
however, the second respondent, differing from the view of the enquiry officer, asked for further explanation from the petitioner, which was
submitted on 20.9.1996 and ultimately, the second respondent passed the orders on 28.10.1996, imposing penalty by treating the suspension
undergone by the petitioner as substantive punishment.
2(b). The appeal filed by the petitioner to the first respondent was also dismissed on 3.2.1999. The second respondent in the proceedings dated
10.5.1997 passed an order of recovery of Rs. 25,148.35 towards shortage from the petitioner without any details and without any enquiry. The
writ petition filed by the petitioner in W.P. No. 8877 of 1997 was allowed on 30.1.2004 setting aside the order of recovery, however, giving
liberty to the respondents to hold enquiry in accordance with law, if so required.
2(c). Thereafter, the second respondent directed one Mr. M. Narayanamoorthy, Manager (Accounts), Tamil Nadu Civil Supplies Corporation to
hold an enquiry on the original charges framed on 10.3.1995, who called for the enquiry, in which the petitioner appeared and after the enquiry, the
enquiry officer submitted his findings on 29.3.2004, holding that the charges against the petitioner are not proved. Again, the second respondent
differing from the findings of the enquiry officer, directed the petitioner to submit a reply and thereafter the second respondent passed orders on
31.5.2004, imposing the penalty of withholding increment for a period of six months without cumulative effect and directing to treat the suspension
period as duty period by canceling the earlier order dated 28.10.1996. Before the final order was passed as stated above, the petitioner was
permitted to retire on 31.3.2004.
2(d). In addition to that, it is stated that the second respondent passed another order on 11.8.2004 for recovery of shortage of Rs. 25,148.35 out
of the terminal benefits payable to him without enquiry. Against that, the petitioner filed an appeal before the first respondent, which was dismissed
on 22.6.2007.
The above said impugned orders are challenged by the petitioner on various grounds that the respondents have no jurisdiction to pass orders
after permitting the petitioner to retire; that the second recovery order was passed without any enquiry and in violation of the principles of natural
justice; that the respondents have acted vindictively by passing many orders against the petitioner, one for recovery and another for withholding
increment without cumulative effect for six months; and that many other persons who were the staff involved in the same godown were let off.
In the counter affidavit filed by the respondents, it is stated that the following charges were framed on 10.3.1995:
Charge 1: That as stated above he has miserably failed to discharge his legitimate duties entrusted to him as a point clerk in the godown and
thereby responsible for the huge shortages in the Corporation. Stocks to the tune of Rs. 2,36,209.55 in the mini godown.
Charge 2: That as stated above paras, he has misused his position as point-clerk and thereby misappropriated the corporation stocks for his
personal gains.
Charge 3: That by his action, he has not only failed to discharge his legitimate duties but also showed his carelessness in the discharge of his duties.
4(a). The petitioner submitted his explanation and it is stated that the enquiry officer found that the charges are proved, based on which a
punishment by treating the period of suspension as substantive punishment was passed on 28.10.1996. It is stated that on 10.5.1996, the second
respondent Corporation passed an order initiating proceedings to recover a sum of Rs. 25,148.35, being the loss suffered by the Corporation. It is
stated that out of total amount of Rs. 2,26,235.10, the remaining amount was directed to be recovered from Mr. S. Ettibaba.
4(b). It is stated that the recovery order was passed as per the directions of this Court giving liberty to pass orders after giving opportunity and the
recovery order was passed as per regulations governing the Corporation.
On the face of the contents of the counter affidavit, it is clear that the specific stand of the petitioner that the impugned order came to be passed
after the petitioner was allowed to retire is not disputed. The proceedings of the Senior Manager (Audit) of the respondent Corporation dated
31.3.2004 is as follows:
In pursuance of the orders cited, Thiru T.G. Govindarajan, Assistant is relieved on the afternoon of 31.3.2004.
In the said letter a reference to the proceedings dated 29.3.2004 is made, based on which the relieving order is stated to have been given. The said
proceeding dated 29.3.2004 was issued by the Chairman and Managing Director of the Tamil Nadu Civil Supplies Corporation Limited, wherein
the first respondent permitted the petitioner and other employees to be relieved without prejudice to the recovery if any due from them and the said
proceedings reads as follows:
Accordingly, the employees mentioned in the Annexure are ordered to be relieved from the services of the Tamil Nadu Civil Supplies Corporation
Limited in the A.N. of 31.3.2004 without prejudice to the recovery if any due from them, disciplinary cases if any, criminal case if any and Audit
Objection if any pending against them as the case may be.
Therefore, it is clear that based on the directions of the first respondent, the petitioner was permitted to be relieved on 31.3.2004 and thereafter,
the impugned order of recovery came to be passed.
A reference to the undisputed facts show the clumsy conduct of the respondent Corporation in this case. Originally, on enquiry a punishment of
treating the period of suspension as substantive punishment was imposed by order dated 28.10.1996 and there is absolutely nothing to show that
any enquiry was conducted by the second respondent and any witness was examined in respect of the charges, even when the petitioner was in
service. Admittedly, that order came to be cancelled by the second respondent by a subsequent order dated 31.5.2004, imposing a penalty of
withholding increment for a period of six months without cumulative effect and by that time when the second respondent passed the said order
dated 31.5.2004, the petitioner was already relieved on 31.3.2004 as per the above said proceedings of the Chairman, wherein the petitioner was
directed to be relieved without prejudice to the recovery of shortage if any.
It is very strange that after the petitioner was allowed to retire, as stated above, the punishment of withholding of increment for a period of six
months was imposed on him. It is the case of the petitioner that even for that there was no enquiry conducted and the second respondent passed
the order in a casual manner on 10.5.1997 for recovery of shortages to the extent of Rs. 25,148.35 from the petitioner. After the petitioner
approached this Court, by filing the writ petition in W.P. No. 8877 of 1997, this Court by order dated 31.1.2004 set aside the order, however,
with a liberty to hold enquiry in accordance with law and the said order reads as follows:
The punishment, therefore, cannot be sustained and is set aside. The writ petition is allowed. Connected miscellaneous petition is closed. Liberty
is however reserved to the employer to hold an enquiry in accordance with law if the gravity of the charge requires such an enquiry at this distance
of time.
It is stated that pursuant to the said order, the impugned order of recovery has been passed. As stated above, after the order of this Court dated
31.1.2004, the petitioner was allowed to retire on 31.3.2004 and the impugned order came to be passed on 11.8.2004 for recovery, while the
punishment of withholding of increment as stated was passed on 31.5.2004. It is the case of the petitioner that no enquiry was conducted while
passing the recovery order. There is absolutely nothing on record to show that any enquiry was conducted. Even assuming that any such enquiry
was conducted, such order of recovery cannot be sustained.
A similar issue was considered by this Court in S. Panneerselvam v. Tamil Nadu Civil Supplies Corporation Ltd., Chennai-86 in W.P. Nos.
36027 of 2007 and 31151 of 2003. In the said case, the petitioner therein was allowed to retire while in the present case the petitioner was
allowed to be relieved on voluntary retirement. On behalf of the management it was contended that the employee was allowed to retire without
prejudice to the continuation of the proceedings and therefore, the relieving of the petitioner cannot stand in the way of the employer''s right to
continue the proceedings and the said contention was dealt with by relying upon the judgment of the Division Bench of this Court in W.A. Nos.
3055 to 3058 of 2003 dated 15.3.2005, and Prabha Sridevan, J. held as follows:
Learned Counsel for the petitioner produced the judgment of a Division Bench of this Court made in W.A. No. 3055 to 3058 of 2003 filed by
the respondent-Civil supplies corporation against one other employee. The said employee was also allowed to leave the service on voluntary
retirement and the respondent contended before the Division Bench that the employee was allowed to retire without prejudice to the right of the
respondent-Corporation to continue the proceedings and therefore the fact that he was permitted to retire cannot come in the way of the
employer''s right to continue the proceedings. This was rejected outright by the said Division Bench and the relevant portion is extracted hereunder:
...Regulation 13 of the Tamil Nadu Civil Supplies Corporation Ltd., employees service Regulations, 1989, which reads as follows:
An employee under suspension on disciplinary proceedings shall not be permitted to retire as contemplated in Regulation 12 above but should be
retained in service until a final order is passed on the disciplinary proceedings by the competent authority. He/she shall be considered to have been
on extension of service for the period from the date normally due for his/her retirement to the date of final orders on the disciplinary proceedings.
During such an extension of service, the service right which would have accrued to the employee shall freeze at the level reached on the date of
his/her normal date of retirement.
A reading of the above regulation show that in the event the employee is allowed to retire, no disciplinary proceedings consequent therein pending
can continue. The learned Counsel for the appellants would submit that the respondent was allowed to retire without prejudice to the right of the
Corporation to continue the proceedings. From the above regulation we see that there is no provision for the Corporation to allow the employee to
retire without prejudice to their right to continue the proceedings. The law is well settled that in the event there is no specific provision to the
regulation to allow the employee to go on voluntary retirement or to retire from service without prejudice to the right of the employer to continue
proceedings, the proceedings cannot continue once the retirement takes effect.
Our attention is not drawn to any of the regulation giving right to the Corporation to reserve their right to continue the proceedings even after the
employee is allowed to retire and that too without prejudice to their right. In the absence of such a provision we must hold that after the respondent
was allowed to retire voluntarily, the appellant Corporation cannot continue the proceedings.
The only difference between that case and this case on facts is that there the employee left his service on voluntary retirement, in this case, the
petitioner retired on superannuation on 31.5.2001.
In the above circumstances, both these writ petitions are disposed of holding that the respondent-Civil Supplies Corporation is not entitled to
recover any amount from the petitioner as being due based on the ""Recovery Details"", unless an enquiry had been conducted prior to the date of
retirement and orders had been passed. If there is any order of recovery pending on the date of retirement, it is open to the respondent to adjust
that amount. Otherwise, the respondent is bound to pay the terminal benefits expeditiously without adjusting any recovery.
Considering the fact that for recovery proceedings there was no enquiry, but the employee retired was only given a personal hearing, it is only
a mere formality and that cannot be considered to be a real opportunity to resist the recovery proceedings. The judgment in W.A. Nos. 3055 to
3058 of 2003 was again reiterated by this Court in W.A. No. 215 of 2007, etc. wherein the Division Bench consisting of Prabha Sridevan, J. and
K.K. Sasidharan, J. by judgment dated 10.2.2009 held as follows:
The writ appeals are therefore, allowed. ""The respondents shall release the amounts withheld. We have also made it clear that if any orders had
been passed pursuant to the order that is now reviewed those orders will have no effect."" The said amount shall be released within the period of six
weeks from the date of receipt of a copy of this order.
While dealing with departmental proceedings under the Tamil Nadu Co-operative Societies Act, 1983, a Division Bench of this Court
consisting of P.D. Dinakaran, J. (as He then was) and R. Regupathi,J. in N. Kunnai Gowder Vs. The Coimbatore District Co-op. Milk
Producers'' Union Ltd., held that in the absence of any enabling provision in the Tamil Nadu Co-operative Societies Act and the Rules framed
there under, the action of the employer reserving a right to continue disciplinary proceedings after superannuation is illegal and without jurisdiction.
Another Division Bench in The Superintending Engineer (Civil) Hydro Project, T.N.E.B. Urachikottai Bhavani, Periyar District and Ors. v. S.
Sivamani 2005 WL.R. 494 held that in the disciplinary proceedings, any recovery order can be passed only after issuing show-cause notice and
giving opportunity to the employee to submit his explanation before arriving at the quantum. The relevant portion is as follows:
It is trite law that the employee is entitled to have a notice before the employer comes to the conclusion as to (i) the quantum of recovery
proposed to be made; and (ii) the procedure of recovery to be adopted. This becomes irresistible to the instant case, as even in the charge memo
dated 18.7.1989, the Board had observed that there was a loss of Rs. 20,000/- only, but in the impugned recovery proceedings dated 21.6.1993,
the Board proposed to recover a sum of Rs. 26,628.30. Therefore, the impugned recovery could not be proceeded with automatically based on
the findings of the enquiry officer and the finality reached pursuant to the charge memo dated 18.7.1989, as contended by the learned Counsel
appearing for the Board, unless a show cause notice is given to the employee in this regard, giving him an opportunity to submit his explanation
before arriving at the quantum and also before recovering the amount quantified as loss.
It is also relevant to point out that the Apex Court in Bhagirathi Jena Vs. Board of Directors, O.S.F.C. and Others, , considered the issue in
the following manner:
In view of the absence of such a provision in the above said regulations, it must be held that the Corporation had no legal authority to make any
reduction in the retiral benefits of the appellant. There is also no provision for conducting a disciplinary enquiry after retirement of the appellant and
nor any provision stating that in case misconduct is established, a deduction could be made from retiral benefits. Once the appellant had retired
from service on 30.06.1995, there was no authority, vested in the Corporation for continuing the departmental enquiry even for the purpose of
imposing any reduction in the retiral benefits payable to the appellant. In the absence of such an authority, it must be held that the enquiry had
lapsed and the appellant was entitled to full retiral benefits on retirement.
In such view of the matter, the impugned orders of the respondents suffer from basic illegality and such powers are not available even in
respect of recovery of dues if any, as per the regulations, as interpreted by this Court as illustrated above. Therefore, the impugned orders are set
aside and the writ petition stands allowed with direction to the respondents to refund the amount of Rs. 25,148.35 stated to have been recovered
from the pensionary benefits of the petitioner with interest at the rate of 9% p.a. from the date of recovery till the date of repayment. The amount
shall be repaid within a period of four weeks from the date of receipt of a copy of this order. No costs. Connected miscellaneous petitions are
closed.