K.P. Saraswathi Amma vs State of Kerala

A.K. Jayasankaran Nambiar, J.—The petitioner retired as a Principal of N.S.S. College, Nenmara on 31.3.2011. She held the post of Principal in the said college during the period from 15.6.2009 till the date of her retirement on 31.3.2011. Subsequent to her retirement, when the payment of Death-cum-Retirement Gratuity was made to her it was noticed that an amount of Rs. 2,15,411/- was withheld therefrom allegedly on the ground that a liability to the said extent was fixed on her in connection with non-recovery of fine from staff and students of the college who had availed loans of books from the libraries attached to the college. Ext. P2 is the liability certificate that is relied upon by respondents 1 to 3 for the purposes of withholding the amounts from the Death-cum-Retirement Gratuity payable to the petitioner. The facts stated in the writ petition would reveal that the audit, that was conducted in the college while fixing the liability on the petitioner, was during the period from 6.6.2011 to 17.6.2011, much after the petitioner had retired from the post of Principal of the college. No doubt, the audit that was conducted pertained to the period from 1.6.2009 to 31.5.2011 but the actual conduct of audit was only on the dates mentioned above. Ext. P3, which is the audit report, would also indicate that the persons who had occupied the post of Principal during the period covered by the audit, were four in number and the petitioner was only one among them and she was Principal for the period from 15.6.2009 to 31.3.2011.

Aggrieved by the action of the respondents in withholding the amounts from the Death-cum-Retirement Gratuity that is payable to her, the petitioner took up the matter with the respondents and that eventually led to the passing of Ext. P8 order by the second respondent whereby the second respondent reduced an amount of Rs. 71,100/- from the total amounts withheld from the Death-cum-Retirement Gratuity payable to the petitioner. This reduction from the amount withheld was on account of the fact that, subsequently, there were recoveries effected from the staff of the college which was made over to the department and hence the benefit of this recovery was passed on to the petitioner. The petitioner, however, was aggrieved by the withholding of the balance amount of Rs. 1,44,311/- from the Death-cum-Retirement Gratuity amount that was due to her and it is under these circumstances that she approached this Court through the present writ petition.

A counter affidavit has been filed on behalf of the second respondent. Therein it is stated that the audit that was conducted in the college was for the period from 1.6.2009 to 31.5.2011 although the audit itself was conducted during the period from 6.6.2011 to 17.6.2011, after the petitioner had retired from service. It is pointed out that the liability was fixed on the petitioner based on the audit report that was drawn up pursuant to the audit that was conducted in the college. It is contended that the Principal being the authority responsible for the affairs of the college, had necessarily to be in charge of the libraries in the said college and accordingly if there were any dues or fines that had to be collected in connection with the use of the libraries by the staff and students, that had to be the responsibility of the Principal of the college. The petitioner in her capacity as Principal of the college could not therefore escape from the liabilities. It is also pointed out that the fixation of liability against the petitioner is not final and the counter affidavit indicates that the final liability will be fixed only after providing the audit report to the college concerned and after obtaining remarks from the persons concerned. It is admitted, however, that there was no notice or hearing given to the petitioner before taking the decision to withhold amounts from the Death-cum-Retirement Gratuity amounts that were payable to her. A counter affidavit has also been filed by the fourth respondent stating the sequence of events that led to the issuance of Ext. P2 liability certificate as also the passing of Ext. P8 order by the second respondent.

I have heard Sri. B. Unnikrishna Kaimal, learned counsel appearing for the petitioner, the learned Government Pleader appearing on behalf of respondents 1 to 3 and the learned counsel appearing on behalf of the fourth respondent Principal of the college.

On a consideration of the facts and circumstances of the case and also the submissions made across the Bar, I am of the view that the writ petition must succeed. The Death-cum-Retirement Gratuity amounts that were due and payable to the petitioner have been withheld only on the basis of an audit objection that was brought to the notice of the respondents. Ext. P2 liability certificate that was drawn up based on Ext. P3 audit report was drawn up without hearing the petitioner or affording the petitioner an opportunity of commenting upon the audit report. It is also significant to note that the audit itself was conducted during the period from 6.6.2011 to 17.6.2011, much after the petitioner had retired from the services under the N.S.S. College, Nenmara. The relevant provisions of the Kerala Service Rules, that have been relied upon by learned counsel appearing for the petitioner, are required to be noted at this stage. Note 2 under rule 3 of Part III of Kerala Service Rules clearly indicates that liabilities fixed against an employee or pensioner can be recovered from the Death-cum-Retirement Gratuity payable to him without departmental/judicial proceedings referred to in the rule only after giving the employee or pensioner concerned a reasonable opportunity to explain. This procedure admittedly has not been followed in the instant case. No doubt, the learned Government Pleader would rely on Rule 116 of Part III of Kerala Service Rules which deals with anticipatory pension. Although it is contended, by placing reliance on Rule 116 (5), that it is open to the Government to recover unassessed liabilities from the Death-cum-Retirement Gratuity payable to the employee subject to the particulars of recoveries being indicated in the authorisation by the Accountant General or the sanction from the head of office or department, I feel that on a reading of the rule in its entirety, the rule would apply only to a case where there is at least a preliminary enquiry or assessment done, as regards the liabilities due from an employee, prior to his retirement from service. In the instant case, as already noted, while the petitioner was in service there was no enquiry or assessment with regard to the liabilities to be fixed against the petitioner. That apart, even after her retirement, and prior to fixing the liability against her, there was no notice issued to the petitioner or any opportunity afforded to her to comment upon the audit report that was sought to be relied against her while fixing the liability. I am of the view that such a procedure, which militates against the concepts of fairness in action, cannot be adopted for the purposes of depriving a retired employee of the gratuity amounts that are due to him/her. In that view of the matter I quash Ext. P2 liability certificate to the extent it fixes a liability of Rs. 2,15,411/- against the petitioner. Consequently, the petitioner will be entitled to receive the balance amount of Death-cum-Retirement Gratuity that is due to her namely, the sum of Rs. 1,44,311/- (after discounting the amount of Rs. 71,100/- that was already paid to her pursuant to Ext. P8 order of the second respondent). This amount shall be paid to the petitioner, with interest at the rate of 6% per annum from 31.3.2011, within a period of one month from the date of receipt of a copy of this judgment.

The writ petition is accordingly allowed.