Wednesday, September 14, 2016

TA No.381 of 2011 on ??????????



TODAY, THIS THE ................. DAY OF ..........., 2013




Hon'ble Smt. Leena Mehendale, Member (A) :

This is a batch of ...... people filing the applications between OA No.359/2011 to 392/2011, all filed in and around August, 2011 and all having a common issue, namely, a huge fraud amounting to more than Rs.1.00 crore in the respondent Postal Department under the Head Post Office of Raichur and in the Sub-Post Office of Shaktinagar, in the matter of NSC Certificates and S.B. Accounts committed during the period 2003 to 2006 in which the applicants have been held responsible for contributory negligence and charged under Rule 16 of the CCS (CCA) Rules, 1965, for a minor penalty and the actual penalty imposed is of recovery of varying amounts which could be attributed to those applicants in view of their period of holding the post connected with the fraud.

2. Since all these applicants have a common grievance, for the sake of convenience, we take up the matrix of OA No. 381/2011 and decide all the other cases by a common order. The following table broadly shows the list of such applicants.

3. The main kingpin of all these frauds is one Shri N. Rakesh Kumar, working as Sub-Postmaster of Shaktinagar SO. His modus operandi was by using the NSCs from the stock on hand y making fictitious entries of transfer of those certificates from one person to another without actually transferring those certificates from person to person. The fraudster used to place indents on Raichur HPO for suppy of huge number of certificates, which he would use for the purpose of creating fictitious accounts as well as for showing transfer of accounts from one person to another person. These frauds were noticed by Audit party and first Police complaint was lodged under CR No.40/2006 dated 30.05.2006 at Shaktinagar Police Station reporting frauds amounting to Rs.7,97,070/-. Charge sheet for this complaint has been filed by Police in Raichur JMFC Court under CC No.118/2008. A second complaint was lodged under CR No.71/2010 dated 17.06.2010 at Shaktinagar Police Station reporting frauds amounting to Rs.9,45,549.70. Police have filed charge sheet in respect of second complaint also and 4 CC Nos. were allotted separately yearwise as 276,277,278 and 279. Shri N. Rakesh Kumar has already been dismissed from service by conducting disciplinary proceeding against him and he has not challenged the same anywhere.

3. All the 14 applicants have been held responsible for contributory negligence. It is not the case of the respondents that they have actually committed the fraud or have actively abatted the fraud. The respondents have taken an apparently lenient view to hold all of them responsible only for passive negligence and hence, issued charge sheet for minor penalty under Rule 16 of CCS (CCA) Rules.

4. As could be seen from the above chart, 10 applicants out of 14 have worked as NSC PA for some time or the other on the concerned counter of NSC-II at Raichur Head Post Office. Hence, they fall in one category. In the second case, the applicants were working at Shaktinagar Sub Office itself and they formed the second category. The basic theme of minor penalty charge against them is similar.

5. In the case on hand, i.e., OA No.381/2011, a charge memo was served on the applicant on 23.3.2010 (Annexure-A/1) along with the statement of imputation of mis-conduct. It gives all the detaisl fo the period or the duties on which he worked as NSC PA at Raichur Head Post Office. The period of fraud is stated to be between 10.6.2003 to 16.1.2006 and the details of NSC Certificates improperly handled by him are given.

6. The applicant has pointed out by way of 3 charts in para 4 of the OA that instead of recovering the total amount of fraud from the fraudster himself, the respondents have sought to recover it from 29 various officials working either at Head Post Office at Raichur or at the Sub-office at Shaktinagar, by holding them as responsible for the loss through their negligence. It is seen from the chart that 4 officials mentioned at Chart-I have not been issued the charge memo as they have volunteered to credit the amount of loss attributed to them. Another 5 officials mentioned at Chart-II were charged and the amount of loss attributed to them has been recovered. Yet 17 other officials as shown at Chart-III are also issued the charge memo and recovery was ordered from their salary in monthly instalments commencing from July, 2010. 14 out of them are before us through these O.As. The applicant also claims that 2 other connected officials, viz., Shri Sadashivappa and Shri Venkobpol , who also worked as NSC-II PA have escaped action.

7. The applicant has stated the facts in his OA as below:

The applicant was issued a memo dated 23.3.2010 alleging that while he was working as NSC-II Posta Assistant in Raichur Head Post Office certificatres were supplied to Shakthinagar SO without ensuring the credits of certificates supplied previously and also without ensuring the authorized limit of Shakthinagar SO. It is also alleged that due to non-maintenance of NC-12(A) register, the stock certificates held at Shakthinagar SO on day to day basis not made known and it resulted in excess holding of certificates and thereafter, utilization of amount of certificates by Sri N. Rakesh Kumar for his personal use. By these acts, it was alleged that the applicant has failed to observe the provisions of Rule-5(2), Rule-6, Rule-7, Rule-20, Rule-33(2) and Rule-51 of Post Offices Savings Bank Manual Volume-II and exhibited lack of devotion to duty, contravening the provisions of Rule 3(1)(ii) of CCS (Conduct) Rules, 1964 (Annexure-A/1). The applicant submitted his explanation to the above charge memo on 17.06.2010 stating that so far as the allegation of supply of NSC to Shakthinagar was concerned it was the duty of the APM (NSC) Raichur, he is not responsible for the same. On every day he was asked to attend NSC-II branch in addition to his NSC counter. The Divisional administration has committed the mistake in transferring Shri N. Rakesh Kumar to Shakthinagar SO which led to fraud. The applicant explained in detail the true facts and denied the charge with a request to drop the proposed action. (Annexure-A/2). However, the Respondent No.4, without considering the explanation submitted by the applicant properly, passed an order dated 18.06.2010 holding that the applicant has failed to maintain the NC-12(a) register and in watching the prompt receipt of monthly statement of stock of unsold certificates from Shakthinagar SO and also submit the monthly returns to audit. It was held that the fraud could have been detected at initial stage itself. Accordingly, the Respondent No.4 held that there existed good and sufficient reason for ordering a recovery of Rs.5,00,000/- from the salary of the applicant in 80 equal instalments at the rate of Rs.5000/- commencing from July, 2010 (Annexure-A/3). Thereafter the applicant preferred an appeal to Respondent No.3, raising several grounds to hold that the recovery ordered against him is unjustified. In particular, the applicant has stated that:
  • there has been explained delay in initiating disciplinary action
  • lack of fairness on the part of the disciplinary authority;
  • vague allegations;
  • failure to observe the instructions issued by the DoP&T vide memo dated 09.01.1971 and 11.11.1998
  • lack of supervision over the discharged NSC certificates;
  • inaction of the authorities to transfer Shri N. Rakesh Kumar from Raichur as per rotation transfer guidelines;
  • lack of control by the supervisory officers and their failure to check the irregularities, etc. (Annexure-A/4).

However, the Respondent No.3, dismissed the same by an order dated 14.02.2011 (Annexure-A/5). The applicant's gross salary salary is Rs.29,983/- per month and in view of the above recovery, his take home pay is Rs.15,962/- per month. He therefore, prays for the following:

  1. To quash (a) the memo No.F5/1/2005-2006 dated at Raichur, the 18.06.2010, issued by the Respondent No.4 (Annexure-A/3) and (b) Memo No. NKR/STA-4/768/10/11, dated at Dharwad the 14.02.2011, issued by the Respondent No.3 (Annexure-A/5);

  1. Direct the respondent No.4 to refund the amount recovered from the applicant in pursuance of the Memo No.F5/1/2005-2006 dated at Raichur, the 18.06.2010, issued by the Respondent No.4 (Annexure-A/3), with interest at 12% p.a. From the date the same was recovered till the date of payment.
    8. Briefly, he has taken the following grounds:
  • The applicant has worked for short spells of time from 02.06.2003 to 26.05.2004 as NSC-II PA in Raichur HO.
  • He had nothing to do with the allegation and
  • he was not responsible for supply of certificates as it was the duty of the APM (NSC), Raichur. As he had to discharge the duties of NSC-II PA in addition to his other duties, he is not responsible for other allegations. In any event, the alleged lapses on the part of the applicant does not call for a recovery of Rs.5,00,000/- as the alleged loss is too remote to attribute it to failure in making entries in the register and verification of stock certificates.

    1. There has been inordinate delay in initiating the disciplinary proceedings against the applicant. The allegeations pertain to the period from 2003 to 2006 and the charge memo has been issued in March, 2010. The imputation of misconduct disclose the lapses attributed to Sri N. Rakesh Kumar, for which the applicant is not at all responsible. The apportionment of the loss has been made against the officials arbitrarily, without any basis. The Respondent No.4 has not taken action against the said Sri N. Rakesh Kumar to recover the loss. The Postal Department noticed the fraud committed by Sri N. Rakesh Kumar in 2006. If the concerned supervisory officers were vigilant and careful in their duties the entire fraud could have been unearthed in 2006 only. Now, the supervisory officers want to find some scapegoats to cover up their lapses. The lapses against the applicant pertain to not ensuring proper supply of certificates to Shakthinagar SO and comparison of the balance of the certificates with the stock, in addition to not maintaining NC-12(a) register, which are minor in nature. Initiating action for these minor lapses after lapse of 5-6 years is not at all justified. The appellate authority has failed to consider the appeal in accordance with Rule 27 of the CCS (CCA) Rules, 1965. The respondents have failed to hold an enquiry and fix the responsibility on the concerned officials after affording them a reasonable opportunity of being heard.

  1. The learned counsel for the applicant has relied on the following judgments in support of his claim:
    1. State of Madhya Pradesh Vs. Bani Singh & Anr. - 1990 II LLJ 529 – on the ground of inordinate delay.

  1. State of Punjab & Ors. Vs. Chaman Lal Goyal – SLJ 1995 (2) SC 126 – again on the ground of inordinate delay.

  1. We have heard both the counsels at length and gone through the pleadings as well as the cited judgments.

  1. The issue involved is of ciphoning of public money to a huge extent. The person who sits at the headquarters as the dealing PA (Postal Assistant) is at the cutting edge of the transaction. The fraud to the extent of Rs.1.00 crore in National Savings Certificates is equivalent to mis-handling of more than thousand such certificates. Maintaining the NC-12(a) register is the crux of such transactions. The register has to be written and maintained not on a monthly or weekly basis, but on daily and perhaps, on hourly basis, in fact, as and when any issuance of new certificate to a valid customer occurs or as soon as a transfer from one depositor to another occurs. The first act by any Postal Assistant is to make an entry in the NC-12(a) register. How the Raichur Head Post Office could do without proper maintenance of NC-12(a) register for more than 3 years and also how they could not keep a track of blank certificates issued to Shakthinagar SO for huge batches of stock is beyond anybody's imagination. These two irregularities are bound to be noticed by any ordinary Postal Assistant with ordinary knowledge and vigilance at the time of very first entry that he/she is required to make. We therefore, find absolutely no logic in the contention of the applicant that he was there only for a short period or as an occassional occurrence or was looking after the work only as an additional work. The ground of delay in issuing the charge memo is also rejected in view of the fact that the department has initiated action against the said N. Rakesh Kumar in 2006. When the amount of fraud involved is more than Rs.1.00 crore, it does take time to make complete inquiry and to cull out the contributory responsibility of all the associated persons. The amount of recovery fixed also does not appear to be arbitrary. The applicant has not been able to pin-point clearly any mistake in the details furnished in the charge memo. Moreover, as a huge fraud occurred over a large period and with large number of officials to whom contributory negligence can be attributed, the department has to go by certain thumb rules or fixed some slabs for the recovery. Unless there are specific instances of discrimination with malafide intentions amongst the 29 officials held responsible for contributory negligence, the plea of arbitrariness in the amounts recovered has to be rejected.
    12. A close reading of the CCS (CCA) Rules shows that recovery of financial loss of Government is the first priority in any case of fradulant or negligent loss to Government. This is so because the money thus lost is a loss to the public in general. Since the recovery is the first priority, the Rule 14 and Rule 16 of the CCS (CCA) Rules, which deal with major penalty and minor penalty respectively have clearly differentiated. Rule 14 for major penalty do not incude recovery as a penalty and expects the Disciplinary Authority to recover the loss as a first step without waiting for the process of major penalty. Hence, the major penalty can be given even after recovery of the amounts. Rule 16 for minor penalty, however, incudes recovery as one of the penalties. The principle behind minor penalty is that a loss may have occurred through negligence but not through deliberate intention. In such a case, a senior officer has to look at the erring junior official as one of the team members and hence, if the senior officer and particularly the Disciplinary Authority feels that the erring officers can be trusted not to make a similar mistake in future, then, it is upto the Disciplinary Authority to let the matter rest by merely ensuring recovery for the loss of the Government. The present case appears to be a case where in view of the obligation that speedy recovery of money lost to Government, and may for the reason of mutual trust and faith the senior officers of the Postal Department have decided not to take recourse to major penalty. That is the reason why only a minor penalty charge sheet has been issued to the applicant. Therefore, there seems to be no reason to stop recovery.
    13. Although, the OA mentions perfunctorily that it was the responsibility of the supervisory officers to be vigilant and careful and they should nt have made the present applicant as one of the scapegoats, we find it necessary to mention that the burden of vigilance and proper supervision lies as much on the present applicant as on the senior officers. As already explained, the applicant is working at the cutting edge of the transaction and would be the first to notice the irregularity and discrepancy on the ordinary vigilance. Therefore, there cannot be any denial that he is responsible for contributory negligence. At the same time, we feel that it is the occassion for the higher autorities in the Postal department to take note of the fact that their senior and very senior supervisory officers have also been negligent in their role of supervision. We notice that the present bunch of 14 applicants is not the only set of such fraud. Similarly, frauds have also occurred under the Chitradurga Head Post Office, Haveri Head Post Office and the Jayanagar Post Ofice of Bangalore Head Post Office as is seen from the various O.As filed before this Bench. Surely, the seniormost officers of the department have to revamp their registers, revamp the procedure for maintaining the registers and also set up adequate monitoring machinery. The present case appears to us as a classic case where the supervisory officers have abdicated their role and left everything for the Audit party to unearth by way of a post mortem only after a huge sum of public money has been fraudulantly taken away.

  1. We therefore, direct Respondents No.1 and 2 to address these issues and frame necessary guidelines within a period of six months if they have not already do so far.
    15. The respondents also cite by way of Annexure-R/3, the judgment of this Tribunal in OA No.411/2007, wherein a similar case had come up from Raichur Head Post Office. There also, the main kingpin of fraud was one Basavarajappa, SPM, Balaganur, who had committed a series of SB/RD/NSC fraud amounting to several lakhs of rupees and the applicant was charged with contributory negligence and was given a minor penalty of recovery of the money attributable to the applicant of the said act. While dismissing the said OA, this Bench has also observed the following:
    "5. It is settled position that in disciplinary proceedings the Court/Tribunal has very limited scope to interfere. It is not the case of the applicant that the authorities which passed the orders are not competent to do so. It is also settled position that each disciplinary case is to be decided on the facts and the circumstances of each case and they cannot be compared with one another. The learned counsel for the respondents submitted on instructions across the Bar that disciplinary proceedings under Rule 14 of the CCS (CCA) Rules have been initiated against the said Shri Basavarajappa.

6. In view of the above facts and circumstances and admittedly the respondents have not violated the procedure laid down under the CCS (CCA) Rules, imposing minor penalty and the applicant had availed of all the opportunities available to her including personal hearing, as discussed above, we are of the view that the Tribunal has no scope of interfering with the orders passed by the competent authorities in the disciplinary proceedings against the applicant. We, therefore, find no merit in the O.A. and the same is accordingly dismissed with no order as to costs."
    15. In view of the foregoing discussions, the OA is dismissed. No order as to costs.


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