P.K.Mahalingam vs. The District Manager

Facts

The petitioner, P.K. Mahalingam, a Supervisor at TASMAC Shop No. 5002, Karur District, was directed by the respondent, the District Manager of TASMAC, to shift liquor stock to a marriage hall due to the COVID-19 nationwide lockdown. Subsequently, the respondent informed the petitioner of a stock deficit of Rs. 8,89,430/- and directed payment of this amount along with interest and GST. The petitioner paid this sum. Thereafter, the respondent issued an impugned order dated 21.05.2020, demanding an additional 50% penalty on the stock shortage amount, calculated as Rs. 5,24,764/-, to be paid within three days, treating the order as a charge-memo and requiring an explanation within the same period, failing which disciplinary proceedings would be initiated. The petitioner filed a writ petition challenging this order.

Held

The Court held that the respondent authority failed to follow the mandatory procedure stipulated under Rule 6(n) of the Code of Prevention and Detection of Fraudulent Acts in TASMAC. This rule clearly mandates that before imposing any punishment upon charges proved in an enquiry, the delinquent must be given an opportunity to make their representation against the proposed punishment. The Court found that this opportunity of personal hearing was not provided to the petitioner. Instead, the respondent directly imposed the punishment, demanding payment of Rs. 5,24,764/- within three days and treating the order as a charge-memo. The Court reasoned that the respondent was supposed to provide an opportunity of hearing before passing any order of recovery. Therefore, the impugned order was set aside. The respondent was directed to issue a fresh show-cause notice to the petitioner, providing an opportunity of hearing, and thereafter initiate appropriate proceedings.

Key Issues

1. Whether the respondent authority followed the mandatory procedure of providing an opportunity of personal hearing before imposing a penalty on the petitioner, as stipulated by Rule 6(n) of the Code of Prevention and Detection of Fraudulent Acts in TASMAC? The petitioner contended that the respondent failed to provide an opportunity of personal hearing before imposing the penalty and directly issued an order for recovery, treating it as a charge-memo. The petitioner argued that this violated Rule 6(n) of the Code of Prevention and Detection of Fraudulent Acts in TASMAC, which mandates giving the delinquent an opportunity to make a representation against the proposed punishment. The respondent argued that only a penalty has been imposed and the shortage amount was paid by the petitioner voluntarily, not under compulsion. The respondent stated that the penalty amount was to be paid as per prevailing rules, and thereafter, appropriate orders would be passed.