The petitioner is challenging Ext.P5 notice and Ext.P6 order issued by the 2nd respondent. The petitioner, who is now retired from the Municipal service was officiating as Assistant Municipal Secretary of the Thrissur Corporation during the period 1999-2000. In the year 2003 the 3rd respondent had issued Ext.P1 'surcharge notice' to the petitioner under Rule 20 (3) of the Kerala Local Fund Audit Rules, 1996, imposing surcharge to the tune of Rs.1,30,019/- based on the audit objection, extract of which is appended along with Ext.P1 notice. The surcharge was proposed based on findings contained in paragraphs 14, 19, 28, 29, 47 and 48 of the audit report. The petitioner submitted explanations to Ext.P1 notice, as per Ext.P2. After adjudicating the matter based on the explanations, the 3rd respondent finalised the matter and issued surcharge certificate as contemplated under Rule 20 (7). The petitioner was found liable to be surcharged with respect to the audit objections mentioned in paragraphs 14 and 29 and the loss was reduced and refixed as Rs.64,917/-. Presumably, the explanations submitted by the petitioner with respect to the liability proposed based on other counts mentioned in the audit report was accepted and the petitioner was exonerated from such liabilities. With respect to Ext.P3 surcharge certificate, the petitioner had invoked appellate remedy as provided under Section 16 (3) of the Kerala Local Fund Audit Act, 1994. It is stated that O.P. No.207/2004 filed in this regard before the District Court, Thrissur is pending disposal. Meanwhile, the 2nd respondent had issued Ext.P5 notice directing the petitioner to remit a sum of Rs.22,361/- being the proportionate loss directed to be recovered from the petitioner based on the report of the 11th Kerala Legislative Assembly Local Fund Accounts Committee. In Ext.P5 it is mentioned that the alleged loss was sustained with respect to purchases of Aluminium conductors, Sodium Vapour lamps and lamp ignators etc.
made by the Corporation during the time when the petitioner was working there. Subsequently the 2nd respondent had issued Ext.P6 proceedings directing recovery of the amounts from the petitioner and others, as proposed in Ext.P5.
2. The petitioner is challenging Exts.P5 & P6 mainly based on the legality and sustainability of the procedure followed by the 2nd respondent. It is contended that the amounts sought to be realised by virtue of the impugned proceedings pertains to audit objections noticed in paragraphs 48 and 49 of Ext.P1 notice. It is submitted that the 3rd respondent while issuing Ext.P3 surcharge certificate had exonerated the petitioner from any such liability and surcharge was fixed only with respect to the audit objections contained in paragaphs 14 and 29. Therefore the recovery now sought to be effected by the 2nd respondent, without following procedure contemplated under the Kerala Local Fund Audit Act or the Rules made thereunder, cannot be sustained. It is further contended that the Local Fund Accounts Committee constituted by the legislative assembly has no jurisdiction to issue any surcharge certificate fixing liability on the petitioner. According to learned counsel for the petitioner, going by provisions contained in the statute the 3rd respondent alone has power to fix surcharge on the petitioner. Further it is contended that the 2nd respondent has no jurisdiction or competence to initiate any recovery steps against the petitioner. Attention of this court drawn to Section 49 of the Kerala Municipality Act, 1994 which enumerates functions of the Secretary of a Municipality. It is contended that there is no specific power conferred on the Secretary with respect to fixation of liability on any of the employees or for recovery of the same. It is also contended that before fixing any liability as mentioned in Exts.P5 and P6 the petitioner was not afforded to any opportunity to object such proposal nor any opportunity of personal hearing was afforded.
3. In the counter affidavit filed by the 2nd respondent it is admitted that the Kerala Local Fund Accounts Committee has not issued any notice to the petitioner. But the committee directed the Secretary to submit the report by realizing the loss from the petitioner and others. It is further admitted that no surcharge notice was issued by the Local Fund Audit Department regarding paragraphs 48 & 49 of the audit report i.e. with respect to purchase of the electrical goods. But it is mentioned that the recovery steps was initiated only because the Local Fund Accounts Committee of the legislator had directed the 2nd respondent to recover the loss from the persons concerned.
4. Considering the factual situations and contentions narrated above, this court is inclined to accept the contention that recovery steps initiated through the impugned proceedings are not legally sustainable. Evidently there is no surcharge fixed against the petitioner with respect to the amounts mentioned in Exts.P5 & P6, by applying the procedure contemplated in the Kerala Local Fund Audit Act or the Rules framed thereunder. No competent authority had fixed liability on the petitioner.
With respect to the surcharge certificate issued, the petitioner had already invoked statutory remedy.
5. Learned counsel for the petitioner had pointed out that with respect to the audit objection contained in paragraphs 48 the petitioner was already exonerated from the liability. He had produced for perusal of this court a letter issued by the Deputy Director of Local Fund Audit to the effect that a letter was issued to the petitioner intimating that the petitioner is not held liable for any surcharge based on the audit report contained in paragraph 49.
6. Under the above mentioned circumstances the writ petition is allowed and Exts.P5 & P6 proceedings issued by the 2nd respondent is hereby quashed.
AMG Sd/-
C.K. ABDUL REHIM JUDGE True copy P.A. to Judge