IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 311 of 2008(K)
1. V.L. INDIRAKUMARI ,CHNADRALAYAM,
... Petitioner
Vs
1. STATE OF KERALA REPRESENTED BY ITS
... Respondent
2. ACCOUNTANT GENERAL OF KERALA
3. ARUVAPPULAM GRAMA PANCHAYAT
For Petitioner :SRI.T.M.ABDUL LATHEEF
For Respondent :SRI.GEORGE VARGHESE(PERUMPALLIKUTTIYIL)
The Hon'ble MR. Justice T.R.RAMACHANDRAN NAIR
Dated :30/08/2010
O R D E R
T.R.RAMACHANDRAN NAIR,J.
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W.P.(C)No.311 of 2008
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DATED THIS THE 30th DAY OF AUGUST, 2010
JUDGMENT
The petitioner is aggrieved by Exhibit P1 notice issued by
the Secretary of the Panchayat directing the petitioner to remit
an amount of Rs.10.43 lakhs with interest, which represents the
alleged loss caused in the auction to collect river sand, held
during the year 1999-2000.
2. Heard the learned counsel for the petitioner, the
learned Government Pleader and the learned counsel appearing
for the Panchayat.
3. The petitioner’s case is that after four years of her
retirement, Exhibit P1 notice was issued to her based on the audit
report. It is explained that for the period 1999-2000, one
B.Raguhunathan Nair purchased the right to collect river sand
from the area Konnonmoozhy-Thottummoozhy kadavu for an
amount of Rs.27,00,050/-. He had deposited Rs.2 lakhs on
4.3.1999 and the auction was conducted on 6.2.1999. The
auction purchaser had remitted 25% of the auction amount; i.e.,
Rs.4,75,013/- making a total amount of Rs.6,75,013/-.
W.P.(C)No.311/08 -2-
4. There was a Writ Petition before this Court challenging
the auction itself and ultimately the said auction was cancelled by
this Court directing to give the right by issuing permit after
inviting quotations. Accordingly, the Panchayat cancelled the
auction and the petitioner refunded the amount to the auction
purchaser also.
5. Exhibit P2 is the copy of the reply submitted by the
petitioner wherein the above aspects have been pointed out.
She was not the Secretary when the auction was conducted and
she took charge only in 6/99. It is evident from the proceedings
Exhibit P3 that the audit objection is on the basis of the alleged
lapse in returning Rs.6,75,013/- to the Contractor and in not
collecting the proportionate amount for the period from 1.4.1999
to 19.9.1999. Evidently, the audit objection is based on the
assumption that the contractor had collected sand during this
period.
6. My attention was invited to Exhibit P4 and Exhibit P5
resolutions of the Panchayat. Exhibit P4 shows that the
Committee of the Panchayat had appointed a Sub Committee
with regard to the collection of sand in the ‘kadavus’ in question.
W.P.(C)No.311/08 -3-
It is mentioned in Exhibit P4 that even though the contract was
given to Shri Raguhunathan Nair, he has not started collection of
sand yet. There were objections with regard to the collection of
sand and finally accepting the report of the Sub Committee, the
auction was cancelled and the method of collecting sand by
issuance of permit was approved. Exhibit P5 is the earlier
resolution of the Committee dated 11.6.1999 wherein a
resolution was taken to cancel the auction also. Therefore,
evidently, the petitioner’s case is that the petitioner has only
acted based on the resolutions of the Committee.
7. The learned counsel for the Panchyat submitted that
there was no decision to return back the amount to the
Contractor and therefore, it was improper on the part of the
petitioner in returning an amount of Rs.6,75,013/-.Significantly,
in the resolutions, there is no mention about the requirement to
retain this amount with the Panchayat.
8. The learned Government Pleader submitted that the
proportionate amount had to be realised and the failure to realise
the same has caused loss to the Panchayat.
W.P.(C)No.311/08 -4-
9. On behalf of the 1st respondent, a counter affidavit has
been filed. In paragraph 8 it is stated that it is upto the
Panchayat to take remedial action to make good the loss. The
audit has not demanded recovery of amount from the petitioner.
It has only pointed out the loss to the Panchayat. It is upto the
Panchayat to realise the amount from the persons responsible.
Evidently, in the light of the above position, the action of the
present Secretary of the Panchayat in directing the petitioner to
return Rs.10.43 lakhs is not correct. The question is whether
the contractor had collected sand during the period 1.4.1999 till
cancellation of the contract. The audit report mentions the
failure of the Panchayat to realise the proportionate amount. The
resolution of the Panchayat shows that he had not collected the
sand also. Therefore, it may not be possible to hold finally as on
today, as to whether the sand was actually collected by the
Contractor and whether the return of the amount of Rs.6.75
lakhs by the then Secretary, namely the petitioner to the
Contractor is unauthorised.
10. Evidently, in the light of the stand taken by the 1st
respondent in the counter affidavit that the audit observation was
W.P.(C)No.311/08 -5-
to inform the Panchayat about the loss and has not demanded to
recover the amount from the petitioner, the Panchayat will have
to realise the amount from responsible persons, if they actually
hold the view that any loss has been caused. If the contractor
had collected the sand for the disputed period, then he is
primarily liable to recoup the amount to the Panchayat, if actually
he had not remitted proportionate amount. In that view of the
matter also, the action now taken to impose the entire liability on
the petitioner cannot be supported. Evidently, the petitioner was
acting in the light of the resolutions made by the Panchayat
Committee.
In that view of the matter, the Writ Petition is allowed.
Exhibit P1 is quashed. But, this will not stand in the way of the
Panchayat taking any steps to realise the loss, if any, from the
Contractor or such other persons, if it is legally permissible. No
costs.
T.R.RAMACHANDRAN NAIR, JUDGE.
dsn