M. Santhanam vs. The District Manager

Held

The Court held that the impugned order of punishment was improper. While the respondent contended that the petitioner admitted guilt, the Court noted that no separate statement or letter from the petitioner admitting guilt was produced. The respondent's counsel referred to the District Manager's proceedings recording an admission, but this was denied by the petitioner. The Court emphasized that if guilt was admitted, a separate statement or letter should have been obtained. In the absence of such documentary evidence of admission, imposing a penalty under Clause 7(b) of the Code without conducting a proper enquiry, especially when the petitioner denied the admission, was deemed incorrect. The Court reasoned that a proper enquiry should have been conducted when imposing punishment for selling liquor at an excess price. Consequently, the impugned order was set aside. The respondent was directed to conduct an enquiry and pass orders after providing the petitioner with an opportunity of hearing. The writ petition was disposed of in terms of this direction.

Facts

The petitioner, a salesman at a TASMAC outlet, filed a writ petition challenging an order of punishment dated 02.11.2019 passed by the District Manager of TASMAC, Tirunelveli. The order imposed a penalty of Rs. 10,000/- plus GST of Rs. 1,800/- on the petitioner. This penalty was imposed following a surprise inspection on 22.10.2019, where the petitioner was found to have sold Royal Accord Beer for Rs. 130, exceeding the MRP of Rs. 120. The petitioner contended that the punishment was imposed without issuing a charge memo, conducting an enquiry, or providing an opportunity for a hearing. The respondent, TASMAC, argued that the petitioner had admitted guilt during an enquiry, justifying the penalty under Clause 7(b) of the Code of Prevention and Detection of Fraudulent Acts in Tamil Nadu State Marketing Corporation Limited – 2014.

Key Issues

1. Whether the penalty imposed on the petitioner by the District Manager, TASMAC, is vitiated by the absence of a formal charge memo, enquiry, and opportunity of hearing, contrary to principles of natural justice? (Question of law and fact, concerning principles of natural justice and procedural fairness). Petitioner's arguments: The petitioner argued that the punishment was illegally imposed as no charge memo was issued, no enquiry was conducted, and no opportunity to be heard was provided. This procedural deficiency, according to the petitioner, renders the order unsustainable. Respondent's arguments: The respondent contended that a surprise inspection revealed the misconduct. They further argued that the petitioner admitted guilt during an enquiry, which empowered the District Manager to impose a penalty as per Clause 7(b) of the Code of Prevention and Detection of Fraudulent Acts in Tamil Nadu State Marketing Corporation Limited – 2014. The respondent relied on this clause to justify the direct imposition of penalty based on an admitted offense.