Allowed

U.K.Assainar v. Director of Local Fund Audit Department

Kerala HC21 Jun 2024WP(C)/10515/2018

Case brief

AI extract

What is this about?

Petitioner challenged a surcharge certificate issued for alleged loss in local fund audit. Court found audit authority failed to consider that the work estimate was approved by technical committee. Writ allowed; orders setting aside certificate remitted for reconsideration with opportunity of hearing within three months.

What did the court decide?

Exts.P3 (surcharge certificate) and P6 (District Court order) set aside. Liberty granted to first respondent to reconsider issue after notice. Further coercive measures stayed for three months.

U.K.Assainar Vs Director of Local Fund Audit… — Pension and Retirement Benefits | Kerala HC (2024)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR. JUSTICE EASWARAN S.

¶4

FRIDAY, THE 21ST DAY OF JUNE 2024 / 31ST JYAISHTA, 1946

¶5

WP(C) NO. 10515 OF 2018

¶6

PETITIONER:

¶7

U.K.ASSAINAR
AGED 64 YEARS
S/O.ABDURAHMAN, RESIDING AT "CHERIYA KURUNGOT",
SIVAPURAM AMSOM, DESOM, IYYAD P.O.,UNNIKULAM,
KOZHIKODE DISTRICT-673574.

¶8

BY ADVS.
SRI.R.PARTHASARATHY
SMT.SEEMA

¶9

RESPONDENTS:

¶10

1DIRECTOR OF LOCAL FUND AUDIT DEPARTMENT,
VIKAS BHAVAN, THIRUVANANTHAPURAM-695033.

¶11

2 THE SECRETARY NOCHAD GRAMA PANCHAYATH, CHENOLI P.O., KOZHIKODE-673525.

¶12

BY ADVS.

¶13

SRI. BINOY DAVIS, GOVERNMENT PLEADER
SRI.P.V.ANOOP

¶14

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
21.06.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶15

WP(C) NO. 10515 OF 2018 -2-

¶16

JUDGMENT

¶17

The petitioner was visited with a surcharge certificate amount to Rs.1,24,389/- (Rupees One lakh twenty four thousand three hundred and eighty nine only) issued by the first respondent on 27.09.2014. The said certificate was challenged before the District Court, Kozhikode in O.P.No.1 of 2015 and it entered in dismissal. The first respondent had conducted an audit of accounts of Nochad Grama Panchayath for the year 2007-2008 and issued an audit report to the second respondent on 30.03.2010. In the audit report various payments were objected. It was alleged that Nochad Grama Panchayath had lost an amount of Rs.1,24,389/(Rupees One lakh twenty four thousand three hundred and eighty nine only) on account of the illegal estimate made by the petitioner and hence directed the amount to be recovered.

¶18

According to the petitioner the work was sanctioned for formation of a road of 1.1 Kilometer

¶19

WP(C) NO. 10515 OF 2018 -3-

¶20

length from Muniyangad to Mayancherry Kovil Road through the land surrendered by the local beneficiaries. The work to be undertaken by the petitioner in the estimate was prepared by the petitioner, as per the Standard Data Book, 1965 issued by the Chief Engineer PWD (Buildings and Roads). It is also contended that the said estimate was approved as evident from Ext.P7. Notwithstanding these facts, by Ext.P1 dated 21.10.2013 the first respondent issued a surcharge notice to the petitioner. By Ext.P2 the petitioner had submitted his objection. It is notwithstanding the contention raised in the said objection that the first respondent proceeded to issue the surcharge certificate on 27.09.2014 as evident from Ext.P3. The said surcharge certificate was subject matter of challenge in terms of Section 16(3) of the Kerala Local Fund Audit Act, 1994 before the District Court, Kozhikode. By Ext.P6 order, the District Court, Kozhikode dismissed the Original Petition. Thereafter, the proceedings for revenue recovery was initiated

¶21

WP(C) NO. 10515 OF 2018 -4-

¶22

against the petitioner which prompted the petitioner to approach this Court.

¶23

A counter affidavit has been filed on behalf of the first respondent contending among others that the surcharge certificate was issued after due notice to the petitioner and therefore the same does not call for interference in exercise of the power under Article 226 of the Constitution of India. It was contended that the Original Petition was rightly dismissed by the District Court and therefore the writ petition is not maintainable.

¶24

I have heard Sri.Parthasarathi, learned counsel for the petitioner and Sri.Binoy Davis, learned Government Pleader appearing for the respondents.

¶25

The prime contention raised by the petitioner is with regard to the approval of the estimate by the technical committee. Ext.P7 is the approved estimate which is produced before this Court. The perusal of Ext.P7 shows, that the Assistant Executive Engineer of District Rural Development Agency as well as the

¶26

WP(C) NO. 10515 OF 2018 -5-

¶27

Assistant Engineer of the Local Self Government Department had approved the same. It is based on the said estimate that the petitioner had undertaken the work. Had the estimate be not in terms of the PWD manual, the technical committee would not have approved the estimate. In short, the contention of the learned counsel for the petitioner is that neither the first respondent nor the District Court has considered the said issue is trait perspective. It is also contended that in terms of Section 215(9) of the Kerala Panchayath Raj Act, 1994, the surcharge proceedings cannot be initiated beyond the period of four years. Therefore, the District Court well drawn in dismissing the original petition filed by the petitioner.

¶28

On the other hand, the learned Government Pleader appearing for the respondents would contend that the contention of the petitioner that the provisions of section 215(9) of the Panchayath Raj Act would apply and the proceedings for issuance of the surcharge are barred by

¶29

WP(C) NO. 10515 OF 2018 -6-

¶30

limitation cannot be countenance in the light of the bench decision of this Court in State of Kerala and Another Vs. P.D.Raveendran and Another 2020 (4)

¶31

KHC 201 (DB) . It is also submitted that the petitioner was given due notice before the surcharge proceedings were finalized and therefore Ext.P3 is validly issued and no interference is called for.

¶32

In so far as the contention of the learned counsel for the petitioner that the surcharge proceedings are read by the proviso to Section 215(9) of the Act is concerned, the said contention cannot be sustained in view of the specific findings of the Division Bench in P.D.Raveendran (supra). Therefore, this Court has no hesitation to reject the contention of the learned counsel for the petitioner that the surcharge proceedings are barred by limitation.

¶33

Be that as it may, the pointed question raised by the learned counsel for the petitioner is that the estimate based on which the work was

¶34

WP(C) NO. 10515 OF 2018 -7-

¶35

conducted by the petitioner has been approved by the technical committee consisting of Assistant Executive Engineer, District Rural Development Agency as well as the Assistant Engineer of Local Self Government Department, Water Resources. Apparently, this point has not gained the attention of neither the first respondent nor the District Court when Ext.P6 order was passed. No doubt, the contention was raised by the petitioner before the District Court. When the said contention was pressed into service, the District Court in Ext.P6 order has simply found that the mere approval of the estimate by the Assistant Executive Engineer cannot be a reason to absolve the petitioner from the liability.

¶36

The question as to whether the petitioner could be visited with a surcharge proceedings assume significance in the context where the estimate is approved by the departmental authorities. The further questio n would be whether those estimates are in terms of the PWD manual or not. The power of the local fund

¶37

WP(C) NO. 10515 OF 2018 -8-

¶38

audit to initiate surcharge proceedings cannot be disputed but since such proceedings visits the petitioner with adverse civil consequences, necessarily the first respondent should have looked into the issue raised by the petitioner. Since this Court is of the definite view that this point has not been addressed by the first respondent, the entire proceedings should fail on that account. Therefore, this Court has no other alternative but to set aside Exts.P3 and P6 orders. However, since this Court has found that the issue as to whether the estimate having been approved by the aut horities has not gained attention of the frst respondent, the f i rst i respond ent should be definitely given a liberty to reconsider the entire issue after notice to the petitioner.

¶39

Accordingly, the writ petition is allowed. Exts.P3 and P6 orders are set aside. The first respondent would take up the matter for consideration again based on Ext.P1 notice and afford an opportunity of hearing to the petitioner and reconsider the entire issue for issuance of

¶40

WP(C) NO. 10515 OF 2018 -9-

¶41

surcharge certificate by specifically adverting to the contention raised by the petitioner that Ext.P7 estimate was approved by the technical committee and therefore no proceedings against him could be taken under the provisions of the Local Fund Audit. Needful in this regard shall be done, at any rate, within a period of three months from the date of receipt of the copy of the judgment. Till such time, the decision is stated by the first respondent, further coercive measures against the petitioner as per Ext.P1 shall be kept in abeyance. Writ petition is ordered accordingly.

¶42

 Sd/-

¶43

EASWARAN S.
JUDGE

¶44

¶45

WP(C) NO. 10515 OF 2018 -10-

¶46

APPENDIX OF WP(C) 10515/2018

¶47

PETITIONER EXHIBITS

¶48

`EXHIBIT P1`	`TRUE COPY OF THE SURCHARGE NOTICE` `DATED 6.11.2013.`
`EXHIBIT P2`	`TRUE COPY OF THE REPLY SUBMITTED BY` `THE PETITIONER TO THE SURCHARGE NOTICE` `DATED 26.12.2013.`
`EXHIBIT P3`	`TRUE COPY OF THE SURCHARGE CERTIFICATE` `ISSUED TO THE PETITIONER DATED` `27.9.2014.`
`EXHIBIT P4`	`TRUE COPY OF THE ORIGINAL PETITION` `FILED BEFORE THE DISTRICT COURT` `KOZHIKODE DATED 14.7.2016.`
`EXHIBIT P5`	`TRUE COPY OF THE DEPOSITION OF THE` `PETITIONER BEFORE THE DISTRICT COURT,` `KOZHIKODE AS PW1 DATED 1.12.2015.`
`EXHIBIT P6`	`TRUE COPY OF THE ORDER PASSED BY THE` `DISTRICT COURT IN OP 1/2015 DATED` `14.7.2016.`
`EXHIBIT P7`	`TRUE COPY OF THE SANCTION ACCORDED BY` `THE ASSISTANT EXECUTIVE ENGINEER DRDA` `DATED 28.2.2016.`
`EXHIBIT P8`	`TRUE COPY OF THE LETTER ISSUED BY THE` `SENIOR DEPUTY DIRECTOR, LOCAL FUND`
	`AUDIT, KOZHIKODE TO THE LOCAL FUND` `AUDIT DIRECTOR, THIRUVANANTHAPURAM` `DATED 5.5.2014.`
`EXHIBIT P9`	`TRUE COPY OF THE REVENUE RECOVERY`
	`NOTICE ISSUED TO THE PETITIONER DATED` `10.1.2018.`

U.K.Assainar v. Director of Local Fund Audit Department

Case brief

What is this about?

What did the court decide?

U.K.Assainar v. Director of Local Fund Audit Department

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

K. Sivadasa Warrier Vs Travancore Devaswom Board

A.P. Beenamma Vs Kerala State Co-Operative Employee Pension Board

A.K.Ashraf Vs the State of Kerala

T.P. Vinayan Vs Kerala State Electricity Board

The Assistant Engineer Vs the Kerala State Electricity Appellate Authority

G. Biju Vs State of Kerala