M.S.Kaliamurthy vs. The District Manager

Facts

The petitioner, M.S. Kaliamurthy, a Supervisor at TASMAC Shop No. 10521, was directed by the respondent, the District Manager of TASMAC, Trichy District, to shift liquor bottles to a marriage hall due to a nationwide lockdown caused by COVID-19. Subsequently, the respondent informed the petitioner of a stock deficit and demanded payment of Rs. 5,50,790/- along with interest and GST. The petitioner paid this amount. Thereafter, the respondent issued an impugned order dated 20.05.2020, demanding an additional Rs. 3,24,966/- as 50% penalty with 24% interest on the stock shortage amount, to be paid within three days. This order was treated as a charge memo, requiring the petitioner to submit an explanation within three days, failing which disciplinary proceedings would be initiated.

Held

The Court held that the respondent authority failed to follow the mandatory procedure prescribed under Rule 6(n) of the Code of Prevention and Detection of Fraudulent Acts in TASMAC. This rule mandates that before imposing any punishment upon charges proved in an enquiry, the delinquent employee must be given an opportunity to make his representation against the punishment proposed. The Court found that the respondent directly imposed a recovery of Rs. 3,24,966/- without providing the petitioner with an opportunity of hearing. Consequently, the impugned order was set aside. The Court directed the respondent to issue a fresh show-cause notice to the petitioner, provide an opportunity of hearing as per the rules, and then initiate appropriate proceedings.

Key Issues

1. Whether the respondent authority followed the mandatory procedure of providing an opportunity of hearing to the petitioner before imposing a penalty and ordering recovery of amounts, as stipulated by Rule 6(n) of the Code of Prevention and Detection of Fraudulent Acts in TASMAC? Petitioner's arguments: The petitioner contended that the respondent directly imposed a penalty and recovery amount without affording him a personal hearing or an opportunity to make a representation against the proposed punishment, which violates Rule 6(n). The petitioner argued that the impugned order should be set aside due to this procedural lapse. Respondent's arguments: The respondent argued that only a penalty was imposed, and the stock shortage amount was paid voluntarily by the petitioner. The respondent stated that the penalty amount was to be paid as per prevailing rules, and thereafter, appropriate orders would be considered. The respondent did not explicitly address the procedural fairness argument regarding the hearing.