Allowed

Duryodhan Nayak v. State and Ors.

Orissa HC1 Mar 2023WP(C)/2098/2013

Case brief

AI extract

What is this about?

This court allowed a writ petition filed by a retired educationist seeking release of his pension and retirement benefits. The court held that recovery of funds based solely on an Audit Report without formal procedural steps to establish liability is illegal, quashing the order seeking such recovery.

What did the court decide?

The impugned order was quashed; the respondent directed to release the petitioner's retirement benefits and pension within three months with interest at 12% per annum for delay.

Duryodhan Nayak Vs State and Ors. — Pension and Retirement Benefits | Orissa HC (2023)

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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W.P.(C) No.2098 OF 2013

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(An application under Articles 226 and 227 of the Constitution of India)

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Duryodhan Nayak … Petitioner - versus-

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State of Odisha & others … Opposite Parties
Advocates appeared in the case through hybrid mode:
For Petitioner : Mr. Abinash Routray,
Advocate
- versus-
For Opposite Party
Nos.1 & 2 : Mr.B.P.Tripathy,
Addl. Govt. Advocate
For Opp.Party No.3 : None
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CORAM:

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JUSTICE SASHIKANTA MISHRA

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JUDGMENT

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01.3.2023.

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Sashikanta Mishra,J . The Petitioner has approached this Court

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seeking the following relief;

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“The Petitioner, therefore, prays that this Hon’ble Court may be graciously pleased to admit the writ application issue a Rule Nisi calling upon the opp.parties to show

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Page 1 of 8

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cause as to why direction will not be issued to the Opp.Parties to release the retirement benefit of the Petitioner and up-to-date pension and if the opp.parties fail to show cause and/or show insufficient cause, the said Rule be made absolute directing the opp.parties to release the pension of the Petitioner within a time fix by this Hon’ble Court and direct the opp. parties to re-audit the matter in presence of the Petitioner.”

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2. The brief facts of the case are that the Petitioner, while working as a Reader in Political Science in Pattamundai College, Pattamundai, an Aided Educational Institution within the meaning of Section 3(b) of the Orissa Education Act, was appointed as Principal of the said College on 12^th October, 2004. He continued as such till 2^nd September, 2009 when he was transferred to Derabis College, Derabis in the district of Kendrapara as Principal. Subsequently, he was transferred as Principal, U.K. Mahavir College, Madanpur from where he retired on attaining the age of superannuation on 30^th June, 2011. On 4^th January, 2011, a certificate was issued by the Principal of the

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Pattamundai College (copy of which is enclosed as

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W.P.(C) No. 2098 of 2013 Page 2 of 8

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Annexure-1 to the Writ Petition) purporting to be a No Dues Certificate, Departmental Proceeding Clearance Certificate and Criminal/Vigilance Case pending Clearance Certificate. However, by a subsequent letter issued on 20^th October, 2012, the Principal of Pattamundai College informed the Petitioner of the decision to recover a sum of Rs.13,60,708/- from him as suggested in the Audit Report for the year 2007-08 and 2008-09. The Petitioner was called upon to comply with Paras-14-20 of the said report and Para-15 of the Audit Report for the year 2009-10. The Petitioner submitted a reply on 29^th November, 2012 explaining his position and by taking the stand that the audit had wrongly suggested recovery of the dues. Since no action was taken on his reply, the Petitioner has approached this Court seeking the aforesaid relief.

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2. Despite repeated opportunities, no Counter was filed by the Opposite Parties.

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3. Heard Mr. Abinash Routray, learned counsel for the Petitioner and Mr. B.P.Tripathy, learned Addl.

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W.P.(C) No. 2098 of 2013 Page 3 of 8

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Government Advocate appearing for Opp. Parties 1 and

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None appears for the Opp.Party No.3.

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4. Mr. Routray has contended that the action of the Opposite Party No.3 in issuing the letter under Annexure-2 seeking recovery of the amount from the Petitioner is entirely illegal inasmuch as the said amount has never been crystallized as an amount due against the Petitioner. Moreover, the aforesaid action is sought to be taken against the Petitioner long after his retirement and despite the fact that No Dues and clearance certificates were issued by the same authority at the time of his retirement. Mr. Routray has relied upon a decision of this Court in the case of Manoranjan Khadenga v. Chairman, Orissa Forest Development Corporation Ltd., Bhubaneswar,

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Khurda and others ; reported in 2016(1) OLR-651 and a decision of the Apex Court in the case of Thomas

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Daniel vs. State of Kerala and Ors .; reported in AIR 2022 SC 2153. Mr. Rourtray has also referred to an

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Office Memorandum of the Government in Finance

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W.P.(C) No. 2098 of 2013 Page 4 of 8

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Department dated 22^nd August, 1991 wherein it has been laid down that any amount arising out of Audit Report/Para which has not been termed as ‘Government dues’ cannot be recovered from D.C.R. Gratuity and can be realised provided the responsibility is fixed by following the appropriate procedure.

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5. Mr. B.P. Tripathy, learned Addl. Government Advocate fairly submits that no action for recovery

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could have been taken against the Petitioner only on the basis of the Audit Report.

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6. A perusal of the Audit Report enclosed as Annexure-

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2 to the Writ Petition shows that a total sum of

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Rs.26655/- and Rs.313475/- is held under objection in view of Paras-14 to 20. Further, the audit suggested recovery of Rs.13,60,708.00 as per Para-15. In this regard it would be relevant to note that the findings of the audit as above was not followed by any proceeding to determine whether the amount projected as due by the auditor(s) was correct or not. In other words, no

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W.P.(C) No. 2098 of 2013 Page 5 of 8

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proceeding was conducted to crystallize the amount actually due against the Petitioner as suggested in the audit report.

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7. Law is well settled that the findings of the Audit Report, per se , cannot be the basis for recovery of any amount from an employee much less a retired employee. In the case of Manoranjan Khadenga v.

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Chairman, Orissa Forest Development Corporation

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Ltd., (supra), a co-ordinate bench of this Court, while dealing with a similar case held that withholding the retirement benefits admissible to the Petitioner such as gratuity as well as leave salary without initiating any disciplinary proceeding to determine the liability, only on the basis of the audit report after his retirement is

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without authority of law. This Court is in respectful agreement with the ratio decided as above. Further, a perusal of the Audit Report does not conclusively reveal that the amount in question was ‘Government dues’. In the Finance Department Office Memorandum

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dated 22^nd August, 1991 the expression, ‘Government

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W.P.(C) No. 2098 of 2013 Page 6 of 8

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dues’ has been held to include ‘only arrears of rent and other charges pertaining to occupation of Government accommodation, balance of house building or conveyance advance, overpayment of pay and allowances or leave salary and arrears of Income Tax deductible at source under the Income Tax Act, 1961’. The Office memorandum further states as under;

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“As such the amount arising out of Audit report/Para which has not been termed as ‘Government dues’ cannot be recovered from D.C.R. Gratuity. Such dues can, however, be realized provided the responsibility is fixed by following the appropriate procedure.”

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8. Coming to the facts of the present case, it is undisputed that no procedure has been followed to fix responsibility on the Petitioner on the basis of the Audit Report.

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9. In view of what has been discussed hereinbefore, there is hardly any doubt that the impugned order under Annexure-2 cannot be sustained in the eye of law and therefore, warrants interference by this Court.

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W.P.(C) No. 2098 of 2013 Page 7 of 8

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The Writ Petition is therefore, allowed. The impugned order under Annexure-2 is hereby quashed. The Opposite Party-authorities are directed to release the retirement benefit of the Petitioner and his up-to-date pension as early as possible, preferably within a period of three months from the date of communication of this order or on production of certified copy thereof by the Petitioner. It is made clear that if the order is not carried out within the period stipulated, the amount as due to the Petitioner shall carry interest @ 12% per annum till the date of actual payment.

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………..…….…………….
Sashikanta Mishra,
Judge

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