S.Gunasekaran vs. The District Manager

Facts

The petitioner, S. Gunasekaran, a Supervisor at a TASMAC shop, was directed by the respondent, the District Manager of TASMAC, Karur, to shift liquor bottles to a marriage hall due to the COVID-19 lockdown. Subsequently, the respondent informed the petitioner of a stock deficit of Rs. 4,19,030/- 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 with 24% interest, calculated as Rs. 2,37,139/-, 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.

Held

The Court held that the respondent authority failed to adhere to the mandatory procedural requirement of providing an opportunity of personal hearing to the petitioner before imposing the penalty and directing recovery of Rs. 2,37,139/-. The judgment explicitly referred to Rule 6(n) of the Code of Prevention and Detection of Fraudulent Acts in TASMAC, which mandates that a delinquent must be given an opportunity to make a representation against the proposed punishment after charges are proved in an enquiry. The Court found that this opportunity of personal hearing was not provided, and the respondent directly imposed the punishment, demanding payment within three days and threatening disciplinary action if not complied with. Consequently, the impugned order was set aside. The Court directed the respondent to issue a fresh show-cause notice to the petitioner and initiate appropriate proceedings only after providing a proper opportunity of hearing, in accordance with the Rules.

Key Issues

1. Whether the respondent authority followed the mandatory procedure of providing an opportunity of personal hearing before imposing a penalty and directing recovery of amounts from the petitioner, as stipulated under Rule 6(n) of the Code of Prevention and Detection of Fraudulent Acts in TASMAC? Petitioner's Contention: The petitioner argued that the respondent failed to provide a personal hearing before imposing the penalty and directing recovery. The impugned order directly imposed a recovery of Rs. 2,37,139/- without affording the petitioner an opportunity to be heard, violating Rule 6(n) of the Code of Prevention and Detection of Fraudulent Acts in TASMAC. Respondent's Contention: The respondent contended that only a penalty was imposed, and the shortage amount was paid voluntarily by the petitioner. They asserted that the penalty amount was to be paid as per prevailing Rules within three days, after which appropriate orders would be passed.