The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.25024 of 2021 BiswaRanjanPattnaik …. Petitioner Dr. Jitendra Kumar Lenka, Advocate being assisted by Mr. P.K. Behera, Advocate -versus- The Managing Director, Odisha Small Industries Corporation Ltd., Industrial Estate, Cuttack &another …. Opposite Parties Mr. Jatindra Kumar Mohapatra, Advocate Order No. 09. CORAM: HON’BLE MR. JUSTICE MURAHARI SRI RAMAN ORDER 17.09.2024 This matter is taken up through Hybrid Mode. 2. Writ of mandamus is sought for by the petitioner while questioning the propriety of order dated 28.07.2021 issued by the Managing Director, Odisha Small Industries Corporation Limited, opposite party no.1 vide Annexure-9, whereby direction has been given for recovery of an amount of Rs.23,22,118.10 paise towards quantum of shortage of 30.745 Mt. of Tata Tiscon material found at the time of physical stock verification for the financial year 2020-21 of B.O., Rasulgarh, from the petitioner. Invoking extraordinary jurisdiction of this Court under Articles 226 & 227 of the Constitution of India the following prayer(s) is made: “The Petitioner, therefore, most humbly prays that your Lordship would be graciously pleased to issue Rule NISI calling upon the Opp. Party to show cause as to why the impugned recovery order dated 28.07.2021 at Annexure-9 should not be quashed and further be pleased to declare that Page 1 of 11 the petitioner is entitled for weighment variance of 0.25% on total quantity sold in the B.O., Rasulgarh for the period pertaining to the petitioner from 01.04.2020 to 09.06.2021 and further be pleased to declare that petitioner is not liable to pay the same as the alleged shortage is within the permissible limit as per 140th Board Proceedings held on 29.03.2003. And as to why the Opp. Party should not be directed to release the retirement benefits i.e. the gratuity amount, unutilised leave salary, etc. as due and admissible to the petitioner with interest and cost within a reasonable period. And issue any order or orders and direction as this Hon’ble Court deemed fit and proper in the facts and circumstances of the case. And if the Opp. Party fails to show cause or sufficient cause the rule be made absolute. And for this act of kindness the petitioner as in duty bound shall ever pray.” 3. Facts as adumbrated in the writ petition reveal that the petitioner was initially appointed as Junior Assistant on 28.01.1986 in the Odisha Small Industries Corporation Limited (OSIC) on regular basis. While continuing in the said post, because of outstanding performance and on the recommendation of the Departmental Promotion Committee (DPC), petitioner was promoted to the next rank of Senior Assistant and he joined in the said promotional post on 28.01.1991. 3.1. Thereafter, the petitioner was again promoted on the recommendation of DPC to the next higher rank, i.e., Junior Manager and he joined in the said post on 23.12.2017 and against promoted to the post of Assistant Manager on 05.02.2021. 3.2. Before promotion to the post of Assistant Manager, the petitioner was posted as Area Manager-cum-Stock-in-charge of Page 2 of 11 B.O. Rasulgarh, OSIC Ltd., Bhubaneswar vide order No.445/OSIC dated 24.01.2020 and he retired on attaining the age of superannuation on 31.05.2021.
Legal Reasoning
3.3. Consequent upon retirement of the petitioner, Sri Santosh Kumar Kar, Joint Manager was directed to take over the charges of B.O., Rasulgarh, Bhubaneswar from the petitioner as per the order dated 31.05.2021. 3.4. Although the petitioner got retired from service on 31.05.2021 on attaining the age of superannuation, he was physically present in the office till 09.06.2021 and handed over the charges of Tata Tiscon (moving materials) on 10.06.2021 to Sri Santosh Kumar Kar after selling the Tata Tiscon (moving materials) as on 09.06.2021. 3.5. For the period from 01.04.2020 till handing over of stock, i.e., upto 09.06.2021, the petitioner sold the materials to the dealers and retailers which came to 12,914.944 M.T. As per the relevant extract of the OSIC 140th Board of Directors meeting held on 29.03.2003, it has been decided that weighment variance of 0.25% (permissible shortage) will be allowed on the total quantity sold in the depot of particular group of steel item. It is further revealed from the statement prepared for purchase and sale to the dealers and retailers for the period from 01.04.2020 to 09.06.2021 that the petitioner sold 12,914.944 M.T. and as per the Board proceedings/meeting the total allowable shortage is 0.25% which comes to 32.287 M.T. Page 3 of 11 3.6. The actual shortage on the total sale for the period from 01.04.2020 to 09.06.2021 is 30.745 M.T. which is much less than the allowable shortage. 3.7. The opposite party no.1 did not allow the weighment variance of 0.25% (permissible shortage) as per the Board proceedings and taken into account the sale made from 01.04.2020 to 31.03.2021 instead of the period from 01.04.2020 to 09.06.2021 pertaining to the petitioner and issued notice for shortage and recovery thereof. 3.8. On the day of joining at B.O., Rasulgarh, the petitioner had received 3.500 M.T. of binding strips / cut piece from the predecessor. But, after selling the Tata Tiscon (moving materials) for the period from 01.04.2020 to 09.06.2021, the total binding strips / cut piece including the old stock would be approximately around 14.000 M.T. Hence, 14.000 M.T. minus 3.500 M.T. i.e. 10.500 M.T. of Tata Tiscon (moving materials) falls within the period during which the petitioner was in service. The said 14.000 M.T. includes the previous stock kept in the B.O./Stockyard was handed over with lock and key to Sri Kar. Had the Authority measured and included the said binding strips/cut piece of in Tata Tiscon moving materials while calculating the shortage, there would not have any shortage. 3.9. The opposite party no.1 as per letter dated 13.07.2021 vide Annexure-7 without allowing the limit of shortage as per Board Resolution/proceedings dated 29.03.2003 for the transactions pertaining to the period of the petitioner from 01.04.2020 to 09.06.2021 and without deduction of the actual quantity of binding Page 4 of 11 strips/cut pieces available in the B.O/stockyard from the alleged shortage, asked the petitioner to proffer reply with respect to contemplation of action to recover for the alleged shortage of 30.745 M.T. 4. Dr. J.K. Lenka, learned counsel appearing for the petitioner pointed out that after receiving the notice dated 13.07.2021 vide Annexure-7 from the Managing Director, Odisha Small Industries Corporation Limited, opposite party no.1, the petitioner by his e- mail/letter dated 16.07.2021 has sought for certain documents. He further submitted that the petitioner was allowed to retire on 31.05.2021 on attaining the age of superannuation, but he continued till 10.06.2021, i.e., the date on which he has handed over charge to Sri Santosh Kumar Kar after determining the stock position as on 09.06.2021 and he continued to certify authenticity of sale from 31.05.2021 till 09.06.2021. Dr. J.K. Lenka, learned counsel has also drawn notice of this Court to paragraphs-6 and 7 of the counter affidavit, paragraph-6 of the rejoinder affidavit and the impugned order, which reads as thus:- “6. That the averments made in para-7 & 8 of the writ petition are not correct. As stated in para-6 of counter that Mr.Kar was selling the materials from 01.06.2021 to 09.06.2021, but not the petitioner. It is a fact that 0.25% of shortage comes under permissible limit but it is applicable to each financial year only. Though the petitioner has relied upon the decision of 140th Board meeting, but he has not interpreted properly. The claim of the petitioner for allowing him shortage of 0.25% for entire period of transaction i.e. from 01.04.2020 to 09.06.2021 on total sale of materials is not permissible in view of the decision of 140th& 154th Board meeting. It has been clarified in 154th Page 5 of 11 board meeting that the shortage/excess of raw material in one year found on physical verification shall not be adjusted against the excess / shortage of previous year to find out net percentage of shortage/ excess. In view of the decision of 140th Board meeting 0.25% is permissible other than direct dispatches to the customer and stock transfer to different depots, hence the petitioner is entitled 0.25% variance of quantity over the quantity of 11,248.738 Mt. besides 757.40 Mt. of direct dispatch and 307.91 Mt. of stock transfer. Hence allowable shortage of materials over 11,248.738 Mt. @ 0.25% comes to 28.12 Mt. but on verification shortage was found for an quantity of 30.745 Mt. which is verified in presence of the petitioner and he has accepted and signed in the verification report. The copy of the extract of 148th& 154th Board meeting and verification report are filed herewith as Annexure-B/1 & C/1 respectively. 7. That the averments made in para-9 & 10 are not correct. The variance of 0.25% has been allowed considering the financial year i.e. from 01.04.2020 to 31.03.2021 in view of 154th Board meeting. It is pertinent to mention here that the petitioner is well versed with the allowing limit in view of 154th Board meeting and on that basis the verification was conducted in the previous year i.e. for the financial year 2019-20, when the petitioner was in charge of Rasulgarh Depot. It is pertinent to mention here that the binding strips so generated while dismantling of the straight length materials coming in bundles includes the allowable variation of 0.25% of the materials sold along with weighment variations and other parameters attributing to the shortage of materials. In no case allowable limit should not be excess of 0.25% of the materials handled and sold in that particular branch.” “6. That, the averment made by the Opposite Parties in Para-6 of the counter affidavit is not correct. As per the Page 6 of 11 that
Decision
140th Board of Directors’ meeting, it has been clearly mentioned the weighment variance of 0.25% (permissible shortage) will be allowed on the total quantity sold in the depot of particular group of steel material. It is humbly submitted that the last physical verification of stock was made as on 31.03.2020 & physical quantity of different items were taken in the stock book as opening balance as on 01.04.2020. Thereafter the petitioner received & sold the stock of different items from 01.04.2020 to 09.06.2021 i.e. till his handing over of charges to his successor. During the above period, the petitioner was the custodian of stock all along & effecting the transactions. During the above period i.e. from 01.04.2020 to 09.06.2021, the actual sales quantity was 12914.944 M.T. & the allowable shortage as per 140th Board decisions comes to 32.287 M.T. i.e. (12914.944 x 0.25%) whereas the actual shortage was 30.745 M.T. All these facts have been clearly mentioned in the writ petition at Para – 7 & 8 as at Annexure 5 & 6. In order to give the coverage to the illegal & unlawful action of Opposite Party No.1, the opposite parties have taken stand to calculate the shortage for the entire period i.e. from 01.04.2020 to 09.06.2021 but illegally taken into account the period of is not sales permissible under the RTI It communication dtd. 28.02.2022 vide Annexure-13 that the Opp. Parties have calculated allowable shortage taking into account the period of sales from 1.4.2020 to 31.3.2021 although, total quantity of TATA TISCON sold from 1.4.2020 to 9.6.2021.” to 31.03.2021 which from 01.04.2020 reveals from law. Date:28/07/2021 “Order No.3138/OSIC 1. The explanation submitted by Sri BiswaRanjanPattnaik, B.O., Ex-Area Rasulgarh on dtd. 16.07.2021 received by OSIC on dt. 19.07.2021, in reply to letter No.2980/OSIC/Comml. Dtd. Manager-cum-Stock-in-Charge, Page 7 of 11 13.07.2021 w.r.t. shortage of stock found during Annual Physical Stock Verification of B.O., Rasulgarh during FY: 2020-21 and recovery thereof, has not been considered. 2. It is hereby ordered that a sum of Rs.23,22,118.10 (Rupees Twenty three lakh twenty two thousand one hundred eighteen and ten paisa only) towards value of shortage of 30.745 Mt. of Tata Tiscon material found at the time of physical stock verification for the FY: 2020- 21 of B.O., Rasulgarh pertaining to his period shall be recovered as per rules. This order will come into force with immediate effect. Sd/- Managing Director Date:28/07/2021 Memo No.3139/OSIC CC to Sri BiswaRanjanPattnaik, Ex-Area Manager-cum- Stock-in-Charge, B.O., Rasulgarh, Plot No.-K7-755, Kalinga Nagar, Ghatikia, Bhubaneswar-751029 for information. CC to G.M. (Admin.) / G.M. (Fin.) for information and necessary action. Sd/- Managing Director” 5. Mr. Jatindra Kumar Mohapatra, learned counsel appearing for the opposite parties drew attention of this Court to Annexure- D/1 which forms a part of the counter affidavit showing that by letter dated 23.09.2021 the petitioner was supplied with desired documents. He has referred to Annexure-4, i.e., the document showing the stock handed over by the petitioner to Sri S.K. Kar, who had taken over charge on 10.06.2021. The petitioner has not disputed such document which clearly indicates that physical balance being at “0.000 mt.”, book balance showed existence of Page 8 of 11 certain stock. Therefore, it is clear admission of the petitioner that there was stock remained in his possession which has remained out of account. Therefore, this Court need not interfere with the notice. 6. Admittedly, the supply of documents, which were utilized against the petitioner for the purpose of ascertaining the stock shortage, was made after determination of the amount to be recovered. Glance at impugned letter of demand dated 28.07.2021 indicates that the explanation dated 16.07.2021 of the petitioner is stated to be considered by the Managing Director of OSIC Ltd. This is apparent non-application of mind inasmuch as it is the stand of the petitioner, which this Court finds force in the submission of the counsel, that by way the letter dated 16.07.2021 he sought for supply of material documents. The letter dated 16.07.2021 clearly reveals the following fact: “If the above noted documents are not supplied to me, I may not be in a position to submit my explanation appropriately. I am ready to pay if any amount is chargeable to obtain the photocopies of the required documents. Only after receipt of the documents, I will furnish my explanation without any delay. Therefore, I request your kindself to do the needful to supply of the above referred documents to me as soon as possible and allow me one month time from the date of receipt of the above documents to submit my explanation in response to the captioned letter otherwise, I will be prejudiced.” 7. As the petitioner before lapse of period stipulated in the show cause notice dated 13.07.2021 sought for certain material documents for the purpose of preparing possible reply in his defense Page 9 of 11 against completed action for recovery by the opposite parties, i.e., 16.07.2021, without supplying such documents to enable him to file appropriate reply, the Managing Director taking the Letter dated 16.07.2021 as if explanation could not have passed the final orders raising demand of sum of Rs.23,22,118.10 towards value of shortage of 30.745 MT. of Tata Tiscon material alleged to have been found at the time of physical stock verification for the financial year 2020-21 of B.O., Rasulgarh pertaining to his period. This Court, taking note of the fact that the petitioner has been supplied with desired documents as enumerated in Letter Ref. No.4136/OSIC : Comml., dated 23.09.2021 (Annexure-D/1 of the counter affidavit) after the order No.3138/OSIC, dated 28.07.2021 (Annexure-9) is made. Therefore, this Court, being convinced that there has been clear violation of principles of natural justice by the opposite parties, feels it appropriate to set aside said order. 8. Under the aforesaid premises, the demand vide order No.3138/OSIC, dated 28.07.2021 raised by the Managing Director of the OSIC (Annexure-9) is not sustainable in the eye of law and accordingly the same is set aside. For availing the opportunity of participating in the recovery proceeding by furnishing explanation it is apt to pass following directions: i. The petitioner shall appear before the opposite party No.1 with a copy of this order on 30th September, 2024; and furnish explanation which he wishes to submit; ii. The opposite party No.1 may proceed to decide the matter upon hearing the petitioner and/or taking into account documents Page 10 of 11 which he wishes to adduce and any explanation/written reply which he seeks to furnished. iii. The opposite party No.1 may proceed as aforesaid on the date of appearance of the petitioner or on such other date to be scheduled by him; iv. The opposite party No.1 shall conclude the proceeding within a period of eight weeks from the date of appearance of the petitioner as aforesaid, and pass appropriate order within a period of fifteen days from the date of conclusion of hearing and communicate the same to the petitioner forthwith. 9. With the aforesaid observations and directions, the writ petition stands disposed of. (M.S. Raman) Judge MRS Signature Not Verified Digitally Signed Signed by: MANORANJAN SAMAL Designation: PERSONAL ASSISTANT Reason: Authentication Location: Orissa High Court, Cuttack Date: 17-Sep-2024 18:48:12 Page 11 of 11