Karnataka HC Orders Refund Of ₹89,474 To Retired Assistant Recovered For Missing Library Books Without A Show-Cause Notice

The petitioner, a First Division Assistant who retired on 31 December 2018, was alleged to be responsible for a shortage of 605 library books and two laptops.

The respondent institution sought to recover ₹1,50,000 from him and withheld his terminal benefits pending payment.

The petitioner challenged the recovery before the Karnataka State Administrative Tribunal, which dismissed his application, reasoning in part that he had voluntarily paid ₹89,474 and had not established payment of ₹1,50,000.

The petitioner then brought this writ petition under Articles 226 and 227 of the Constitution, challenging the Tribunal’s decision.

The Court exercised its jurisdiction under Articles 226 and 227 of the Constitution.

It held that an employee’s accountability for an alleged loss cannot be fixed without a departmental inquiry, and that recovery cannot be imposed without, at minimum, issuing a show-cause notice and giving the employee an opportunity to respond.

The Court also held that the State cannot use the withholding of retirement benefits to coerce a retired employee into paying a disputed amount.

No statute or precedent was cited in the order.

The respondents attributed the alleged shortage to the petitioner but had neither conducted a departmental inquiry nor issued him a show-cause notice concerning the proposed recovery.

The Court therefore found the demand and recovery of ₹1,50,000 unlawful, particularly because payment had been pressed by linking it to release of the petitioner’s retirement benefits.

It also found the Tribunal’s reasoning unsustainable and described its order as perverse and contrary to law.

The High Court directed the institution or State to refund the amount received, referring expressly to the admitted receipt of ₹89,474, and separately directed refund of the amount taken from the petitioner without notice, with interest at 6% per annum within eight weeks of receipt of the order.

If the refund was not made within that period, interest at 10% per annum was directed from the date the amount was taken until repayment.

The order thus refers to both ₹89,474 and the amount taken without notice; it does not clearly reconcile those figures.