2018 Supreme(P&H) 2764

IN THE HIGH COURT OF PUNJAB AND HARYANA
Before
Hon’ble Mr. Justice Arvind Singh Sangwan
CRM-M-33778 of 2015
Naresh Kumar & Ors v. State of Haryana
{Decided on 19/11/2018}

Panchayati Raj—Recovery from Sarpanch—Order of BDPO for recovery of loss or misapplication of panchayat funds—Until and unless the concerned person has availed his right of appeal, against said order, no criminal liability can be fastened on an Ex Sarpanch.
Panchayati Raj—Misapplication of Panchayat Funds—Recovery from Sarpanch—Sarpanch is entitled to protection against civil and criminal liability in respect of an act done in good faith under the Act

Headnote:(A) Indian Penal Code, 1860, S.409—Criminal Breach of Trust by Public Servant—Misuse of funds by Sarpanch—Mis-appropriation of amount—Quashing—On report of BDPO, police was directed to recover the amount misused in development work—Sarpanch filed appeal against said order—During pendency of appeal FIR was lodged against Sarpanch—FIR and supplementary challan against Sarpanch and Panches quashed being abuse of process of law—Held;

       (i) Persual of the FIR, which is registered on the complaint of BDPO, shows that the police was directed to recover the amount for the irregularites and not for illegality or misconduct committed by Sarpanch;

       (ii) Against the notice, the Sarpanch has filed a statutory appeal and therefore the impugned FIR which was registered in a haste for recovering the amount from him, is not sustainable as again, it is undisputed that during the appeal, the appellate authority/Government has directed him to deposit 50% of the amount by granting him interim relief and after the final decision he has deposited the balance amount and thus had paid the total amount. (Para 37)

       (iii) In such circumstances, if there is an irregularity, it is a liability for civil actions for recovery of the amount and it already stands recovered from Sarpanch.

       (iv) While performing their duties, Panches have signed the cheques/resolution of the Gram Panchayat—There is no allegations against them and therefore, no mens rea is proved on record against them—FIR qua them is also liable to be quashed.

       (v) In view of the fact that the supplementary challan was presented against the petitioners in separate proceedings initiated by the Crime Branch, without obtaining prior permission of the Court and without collecting any fresh evidence against them to show their involvement or any entrustment to commit offence under Section 409 IPC, their prosecution otherwise is not maintainable—Criminal Procedure Code, 1973, S.482—Haryana Panchayati Raj Act, 1994, S.53 and S.254. (Para 37)

       (B) Haryana Panchayati Raj Act, 1994, S.53 and S.204—Misapplication of Panchayat Funds—Recovery from Sarpanch—Sarpanch is entitled to protection against civil and criminal liability in respect of an act done in good faith under the Act if:

       (a) By way of an order of assessment in writing, passed by the competent authority under Section 53(2) or by the Appellate Authority under Section 53(4) of the Act, holding that the concerned Panch or Sarpanch is liable to pay the assessed amount due on account of loss, waste or misapplication of Gram Fund after affording an adequate opportunity of hearing and thereafter steps for recovery are taken and;

       (b) The Sarpanch or Panch, in pursuance to the recovery notice has deposited the amount due.

       (c) The competent/ Appellate Authority has passed an order under Section 53 of the Act holding that the liability so assessed is a consequence of his neglect causing loss, waste or misapplication of Gram Fund which may not amount to misconduct and may be termed as misapplication of Gram Fund as per Section 52(3) of the Act as every such act may not amount to misconduct.

       (d) As per Section 175(1)(i) if a Sarpanch or a Panch fails to pay any sum recoverable from him in accordance with Chapter and Provisions of the Act [including an order under Section 53 of the Act as per Anguri Devi’s case (supra)], within a period of three months, after a special notice in accordance with law is served upon him and if the amount is paid, there cannot be a disqualification. Therefore, in the light of the same, if a Sarpanch/Panch deposits the amount in pursuance to the special notice, it cannot be termed as misconduct unless it is so held specifically by the competent/Appellate Authority.

       (e) On both counts (b) and (d), giving of a notice for recovery is mandatory and it is only after the service of the notice if the amount due is not deposited within a stipulated time given in notice, it would be termed as misconduct as per Section 204 of the Act for which an FIR may also be registered. (Para 37)

       (C) Haryana Panchayati Raj Act, 1994, S.53 and S.175—Misconduct by Sarpanch—Disqualification—Misconduct does not mean misconduct of every kind and literally means wrong or incorrect application which can be innocent application—Hence, the interpretation of ‘misconduct’ committed by a Sarpanch or a Panch is to be seen strictly as per provisions of the Act. (Para 36)

       (D) Haryana Panchayati Raj Act, 1994, S.204—Bar of Action—Recovery from Sarpanch—Order of BDPO for recovery of loss or misapplication of panchayat funds—Until and unless the concerned person has availed his right of appeal, against said order, no criminal liability can be fastened on an Ex Sarpanch.