BY AD v. GEORGE ABRAHAM

BY ADVS. DR.GEORGE ABRAHAM SRI.DOMINIC JOSE RESPONDENTS: 1 2 3 SULTHAN BATHERY MUNICIPALITY REPRESENTED BY ITS SECRETARY, SULTHAN BATHERY P.O., WAYANAD DISTRICT - 673 592, (FORMERLY SULTHAN BATHERY GRAMA PANCHAYATH, SULTHAN BATHERY P.O., WAYANAD DISTRICT) SECRETARY SULTHAN BATHERY MUNICIPALITY, SULTHAN BATHERY, WAYANAD DISTRICT - 673 592. DEPUTY DIRECTOR LOCAL FUND AUDIT DEPARTMENT, WAYANAD DISTRICT - 673 121. WP(C) NO.35010 OF 2015 3 BY ADVS. SRI.B.S.SYAMANTAK, GP SMT.KAVERY S THAMPI SRI.K.M.SATHYANATHA MENON THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO.35010 OF 2015 4 P.V.KUNHIKRISHNAN, J. ------------------------------------ W.P.(C)No.35010 of 2015 ------------------------------------- Dated this the 22nd day of January, 2024 JUDGMENT The above writ petition is filed with the following prayers; “i) to issue a Writ of Certiorari; or any other appropriate writ, order or direction quashing Ext.P2 to P13 issued by the respondents. ii) to declare that the 3rd respondent has no authority to issue an order in the nature of Ext.P2, especially when the 1st respondent taken Ext.P1 decision as per the rules. iii) to grant such other and further reliefs as this Hon'ble Court may consider just and proper in the facts and circumstances of the case.” (SIC) WP(C) NO.35010 OF 2015 5

2. The petitioners are the tenants of the rooms owned by the 1st respondent Municipality. It is the case of the petitioner that, the erstwhile Grama Panchayath, as per Ext.P1, took a decision to reduce the room rent to the tune of 20% due to recession happened in Wayanad District. It is submitted that the Panchayath has taken decision based on the report of the sub committee and also in tune with the statutory rules regarding remission. The audit department has issued Ext.P2 audit objection without complying the principles of natural justice, is the submission. On the basis of Ext.P2 audit objection, Ext.P3 to P13 recovery notices were issued by the respondents. Aggrieved by the same, this writ petition is filed.

3. Heard the learned counsel appearing for the petitioners and the learned Government Pleader.

4. The learned counsel for the petitioners relied the judgment of this Court in Philomma George & WP(C) NO.35010 OF 2015 6 Others v. Secretary to the Government & Others (2021 ICO 1985). The learned Government Pleader submitted that a counter is filed and the Government Pleader takes me through the counter.

5. This Court considered the contention of the petitioners and the Government Pleader. This Court also considered the judgment relied by the petitioners. It will be better to extract the relevant portion of Philomma George’s case (supra); “26. Therefore, it can be seen that if and when the auditor finds any loss caused by negligence or misconduct, the surcharge is to be made against the person responsible in the matter of loss caused by negligence or misconduct. However, that can never be a lessee of the premises of the building owned by the local body. Rules, 1996 prescribes the manner in which the audit is to be done and to call for necessary details for completion of the audit. Rule 20 thereto stipulates the procedure for charge/surcharge proceedings, which reads thus: "20. Procedure for charge/surcharge WP(C) NO.35010 OF 2015 7 proceedings.- (1) The officer authorised to issue the report on the audit of accounts of a local authorities/local funds shall while issuing the further remarks under sub-rule (3) of rule 23 of these rules forward to the Director a proposal for charge/surcharge action in respect of the pending cases of losses pointed out in the audit report concerned. The charge/surcharge proposal shall be in Form VIII appended to these rules. (2) On receipt of the proposals for charge/surcharge proceedings from the officer authorised to issue the auditors report, the Director shall as early as practicable but before the completion of four month from the date of receipt of such proposals, issue, charge/surcharge notices to the officer(s) held responsible for the losses detected by the auditors. (3) The charge/surcharge notices shall be in Form IX and IX(A) appended to these Rules."

27. As per Rule 21, the auditor has to name the WP(C) NO.35010 OF 2015 8 persons responsible for the loss detected and the extent of responsibility of such person. There is no case for the Panchayat that the auditor, in accordance with Rule 21, has named the petitioner and other occupants of the shopping complex of the local body in the audit report. This is exactly the rule position also in subsections (5) and (7) and other provisions of Section 215 of he Act, 1994. Subsection (9) therein clearly specifies that the auditor shall give a reasonable opportunity to the person concerned to explain his case before disallowing every item of expenditure incurred contrary to law etc. Above all, subsection (10) thereto stipulates that 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 for the service of summons in the code of civil procedure, 1908. There is no case for the Panchayat that such an opportunity was given to the petitioner by the auditors or the Panchayat before raising the demand as per Exhibit P4 notice. So also, on a perusal of Ext. P4 impugned order issued by the Secretary of the Grama Panchayat, it is clear that the auditor has raised objection, since the auditor WP(C) NO.35010 OF 2015 9 has found that the Panchayat has granted remission illegally and it was accordingly that the auditor has directed to recover the amount from the responsible persons. As I have pointed out earlier, in order to grant remission, there is a clear rule prescribed as per the Rules, 1998. The Panchayat/ Municipality has no case that it was due to any coercion or influence exerted by the petitioner and others that remission was granted.

34. I am also of the view that if at all any amounts were to be recovered on the basis of the remission granted, the Panchayat ought to have given sufficient opportunity to the petitioner to contest the proceedings and then arrive at the conclusions. Such an opportunity was not given to the petitioner. Therefore, the entire action is violative of the principles of natural justice and therefore, arbitrary and illegal.”

6. In the light of the above principle, I am of the considered opinion that the 1st respondent Municipality has to reconsider the matter, in the light of the principle laid down by this Court in the above judgment. WP(C) NO.35010 OF 2015 10 Therefore, this writ petition is disposed of with the following directions;

2. Ext.P3 to P13 notices are set aside. The 1st respondent is directed to reconsider the matter, in the light of the principle laid down by this Court in Philomma George’s case (supra), after giving an opportunity of hearing to the petitioners, as expeditiously as possible.

3. All the contentions of the petitioners and the respondents are left open. Sd/- P.V.KUNHIKRISHNAN JUDGE WP(C) NO.35010 OF 2015 11 APPENDIX OF WP(C) 35010/2015 PETITIONER EXHIBITS P1 - TRUE COPY OF THE DECISION PANCHAYAT SUB-COMMITTEE NO. 124/04 DT. 01.10.2004. P2 - TRUE COPY OF THE AUDIT OBJECTION OF THE AUDIT DEPARTMENT. P3 - TRUE COPY OF THE NOTICE ISSUED TO THE 1ST PETITIONER DT. 20.8.2015. P4 - TRUE COPY OF THE NOTICE ISSUED TO THE 2ND PETITIONER DT. 20.8.2015. P5 - TRUE COPY OF THE NOTICE ISSUED TO THE 3RD PETITIONER DT. 20.8.2015. P6 - TRUE COPY OF THE NOTICE ISSUED TO THE 4TH PETITIONER DT. 20.8.2015. P7 - TRUE COPY OF THE NOTICE ISSUED TO THE 5TH PETITIONER DT. 20.8.2015. P8 - TRUE COPY OF THE NOTICE ISSUED TO THE 6TH PETITIONER DT. 20.8.2015. P9 - TRUE COPY OF THE NOTICE ISSUED TO THE 7TH PETITIONER DT. 20.8.2015. P10 - TRUE COPY OF THE NOTICE ISSUED TO THE 8TH PETITIONER DT. 20.8.2015. P11 - TRUE COPY OF THE NOTICE ISSUED TO THE 9TH PETITIONER DT. 20.8.2015. P12 - TRUE COPY OF THE NOTICE ISSUED TO THE 10TH PETITIONER DT. 20.8.2015. P13 - TRUE COPY OF THE NOTICE ISSUED WP(C) NO.35010 OF 2015 12 TO THE 11TH PETITIONER DT. 20.8.2015. RESPONDENTS EXHIBITS : NIL //TRUE COPY// PA TO JUDGE