1 2026:CGHC:8204 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPS No. 4020 of 2023 Ram Kumar Bareth S/o Late Gopi Ram Bareth Aged About 55 Years Presently Posted As Revenue Sub-Inspector Nagar Panchayat Bodari, District : Bilaspur, Chhattisgarh ... Petitioner versus 1 - State of Chhattisgarh Through The Secretary Urban Administration And Development Department, Mantralaya, Naya Raipur, District : Raipur, Chhattisgarh 2 - Joint Director Directorate Of Panchayat Vikas Bhawan, Ground Floor, Nawa Raipur, District : Raipur, Chhattisgarh 3 - Zone Commissioner Zone No.02 Municipal Corporation Bilaspur, District : Bilaspur, Chhattisgarh 4 - Chief Municipal Officer Nagar Panchayat Bodri, District : Bilaspur, Chhattisgarh 5 - Chief Executive Officer Zila Panchayat Bilaspur, District : Bilaspur, Chhattisgarh ... Respondents (Cause-title taken from Case Information System) For Petitioner : Mr. Topilal Bareth, Advocate For State/Respondents No.1 and 2 : Mr. Ashutosh Shukla, Panel Lawyer For Respondent No.3 : Mr. Bharat Sharma, Advocate For Respondent No.4 : Mr. Shivam Mishra, Advocate YOGESH TIWARI Digitally signed by YOGESH TIWARI Date: 2026.02.17 11:12:25 +0530 2 Hon’ble Shri Amitendra Kishore Prasad, Judge Order on Board 13.02.2026 1. By filing the present petition, the petitioner assails the order dated 23.05.2023 issued by respondent No.3, whereby the petitioner has been directed to deposit an interest amount of Rs.61,596/- in the name of the Chief Executive Officer, Zila Panchayat, Bilaspur. The petitioner further assails the order dated 24.05.2023 issued by respondent No.4, whereby the petitioner has been instructed to deposit the aforesaid amount of Rs.61,596/- within a period of three days. The petitioner also calls in question the order dated 26.05.2023 issued by respondent No.4, whereby it has been intimated that the said recovery shall be effected in four installments. By the same order, it has further been mentioned that a communication has been sent to the Directorate, Urban Administration & Development Department, Raipur for initiating disciplinary enquiry against the petitioner, without affording any opportunity of hearing, with the following reliefs :- “10.1) The Hon'ble Court may kindly be pleased to quash/set-aside the impugned order/notice dated 23.05.2023 issued by the respondent No. 3 (Annexure P/1). 10.2) The Hon'ble Court may kindly be pleased to quash/set-aside the impugned order/notice dated 24.05.2023 issued by the respondent No. 4. (Annexure P/2). 3 10.3) The Hon'ble. Court may kindly be pleased to quash/set-aside the order dated 26.05.2023 issued by the respondent No. 4 (Annexure P/3). 10.4) The Hon'ble Court may kindly be pleased to direct the respondent No. 3 & 4 to return the recovered amount of Rs. 15,399/- to the petitioner. 10.5) Any other relief which this Hon'ble Court deems fit and proper may also kindly be granted to the petitioner, in the interest of justice.” 2. Mr. Topilal Bareth, learned counsel for the petitioner submits that the petitioner is presently working as Revenue Sub-Inspector at Nagar Panchayat Bodari, Bilaspur and has been discharging his duties with utmost sincerity and diligence. There is no complaint whatsoever against the petitioner in his entire service career. He further submits that while the petitioner was working as Accountant In-charge at Nagar Panchayat Tifra in the year 2012, a written complaint dated 16.05.2012 was lodged by respondent No.4 before the SHO, Civil Line, Bilaspur alleging that cheque No. 133271 belonging to Nagar Panchayat Tifra had been fraudulently stolen by one Raja Pandey on 27.04.2012 and encashed at ICICI Bank, Bilaspur Branch, resulting in withdrawal of Rs.9,00,000/- from Account No. 31033091671 of SBI, Bilaspur, maintained by Nagar Panchayat Tifra. It was requested therein that an FIR be registered and appropriate action be taken against the accused persons. It is submitted that since the petitioner was posted as 4 Accountant In-charge at the relevant time, a show-cause notice dated 17.05.2012 was issued to him by the Chief Executive Officer, Nagar Panchayat Tifra, calling for his reply. The petitioner submitted a detailed and reasoned reply on 18.05.2012 before respondent No.4, which was thereafter forwarded to the Joint Director, Urban Administration & Development Department, Bilaspur. 3. Mr. Bareth submits that during the course of investigation, the police arrested the accused persons including Raja Pandey on 21.05.2012 and recovered Rs.7,50,000/- in cash. Further, an amount of Rs.1,00,000/- lying in an account at ICICI Bank belonging to one of the accused was also seized. After completion of investigation, the learned First Class Judicial Magistrate, Bilaspur, by order dated 20.09.2012, directed that the recovered amount of Rs.7,50,000/- be handed over to the Chief Municipal Officer, Nagar Panchayat Tifra. In compliance thereof, the said amount was received and deposited on 21.09.2012 in the SBI account of Nagar Panchayat Tifra. It is further submitted that thereafter, vide letter dated 02.08.2021, respondent No.3 informed the petitioner that out of the total amount of Rs.9,00,000/- fraudulently withdrawn, Rs.7,50,000/- had been recovered and the balance amount of Rs.1,50,000/- remained outstanding. It was mentioned that recovery proceedings had been initiated against the accused Raja Pandey, who had a balance of Rs.1,41,689/- in his ICICI Bank account, and that the remaining amount of 5 Rs.8,311/- would be recovered from the petitioner. Pursuant thereto, respondent No.4 issued letter dated 04.08.2021 directing the petitioner to deposit Rs.8,311/- within three days, failing which it would be deducted from his salary. As the petitioner could not deposit the amount, the same was deducted from his salary on 12.08.2021 while he was posted at Nagar Panchayat Bodari. 4. It is contended by Mr. Bareth that subsequently and without any justification, respondent No.3 issued order dated 23.05.2023 directing the petitioner to deposit an interest amount of Rs.61,596/- in the name of the Chief Executive Officer, Zila Panchayat, Bilaspur, and respondent No.4, by order dated 24.05.2023, directed the petitioner to deposit the said amount within three days. It is contended that there is no statutory provision or service rule empowering the respondents to recover interest from the petitioner once the principal amount of Rs.9,00,000/- has already been recovered through seizure, bank attachment and salary deduction. He further submits that the petitioner requested the authorities to keep the recovery proceedings in abeyance as he intended to submit a representation before the superior authority. However, ignoring his request, respondent No.4 issued another order dated 26.05.2023 directing that the amount be recovered in four instalments, with 25% of the petitioner’s salary to be deducted commencing from May–June 2023, and further intimated that a letter had been sent to the Directorate, Urban Administration & Development 6 Department, Raipur for initiation of disciplinary enquiry against the petitioner. It is submitted that the petitioner thereafter submitted detailed representations dated 29.05.2023 before the Joint Director, C.G. Directorate of Panchayat, and on 30.05.2023 before respondent Nos.4 and 5, placing all factual aspects on record and requesting reconsideration of the matter as well as deferment of the recovery. Despite the same, an amount of Rs.15,399/- was arbitrarily deducted from his salary. 5. Mr. Bareth draws attention to the letter dated 16.06.2023 issued by ICICI Bank Ltd. to respondent No.3 stating that a demand draft for Rs.1,41,689/- had already been issued in the name of Aayukt, Nagar Palik Nigam, Bilaspur and that the relevant bank statement had been annexed for verification. Thus, it is submitted that the entire disputed amount of Rs.9,00,000/- stands fully recovered— Rs.7,50,000/- seized and handed over pursuant to judicial order, Rs.1,41,689/- recovered from the bank account of the accused, and Rs.8,311/- recovered from the petitioner. It is lastly submits that once the entire principal amount has been recovered, the impugned action seeking recovery of interest amounting to Rs.61,596/- from the petitioner is wholly illegal, arbitrary and dehors any statutory authority. The impugned orders have been passed without affording proper opportunity of hearing and in complete violation of principles of natural justice, and therefore deserve to be quashed. 7 6. Per contra, Mr. Ashutosh Shukla, learned State counsel, appearing for the State/respondents No.1 and 2 opposes the submissions of learned counsel for the petitioner and submits that the petitioner was admittedly posted as Accountant at Nagar Panchayat, Tifra during the relevant period of the year 2012–13 and was entrusted with the custody and security of official records, bank accounts and cheque books, including Cheque No. 133271 pertaining to Account No. 31033091671 maintained with State Bank of India, Tifra Branch. It is submitted that the misappropriation of Rs.9,00,000/- was made possible due to negligence in maintaining proper security of the cheque book, which was in the control of the petitioner. He further submits that immediately upon detection of the incident, the Chief Municipal Officer, Nagar Panchayat, Tifra lodged a written complaint on 16.05.2012 before the SHO, Civil Line, Bilaspur and an FIR was registered. The matter was duly investigated and the accused persons were prosecuted under various provisions of the Indian Penal Code. During investigation, a substantial amount of Rs.7,50,000/- was recovered and subsequently handed over to the Chief Municipal Officer, Nagar Panchayat, Tifra pursuant to the order passed by the learned Judicial Magistrate First Class, Bilaspur. 7. It is submitted by Mr. Shukla that the matter was also raised in the Chhattisgarh Vidhan Sabha in the year 2013. Thereafter, pursuant to deliberations and directions issued at the level of the State 8 Government, the Under Secretary, Chhattisgarh Government issued communication dated 29.03.2023 directing recovery of the interest component of the loss caused to the public exchequer. In compliance thereof, the Joint Director, Panchayat Directorate, Raipur and subsequently the Chief Executive Officer, Zila Panchayat, Bilaspur, as well as the Zone Commissioner, Zone-02, Municipal Corporation, Bilaspur, issued consequential communications directing recovery of the interest amount from the petitioner. He contends that although the principal amount of Rs.9,00,000/- was eventually recovered partly through police seizure and partly through other modes, the Government audit had raised objections under the concerned scheme (BRGF), pointing out that loss of public funds had occurred and that interest liability had accrued due to delayed recovery and misappropriation. Therefore, the direction to recover the interest amount of Rs.61,576/- from the petitioner is stated to be in furtherance of the audit objection and governmental decision taken at the competent level. 8. It is further submitted by Mr. Shukla that the petitioner, being the officer responsible for safeguarding financial instruments of the Nagar Panchayat at the relevant time, cannot escape liability merely because part of the amount was recovered from the accused persons. According to the State, the recovery of interest is a consequential administrative action arising out of financial irregularity and audit compliance, and the same has been 9 undertaken in accordance with the directions issued by the competent authorities. Hence, the impugned communications dated 23.05.2023, 24.05.2023 and 26.05.2023 are legal, justified and do not warrant interference by this Court. 9. Mr. Bharat Sharma, learned counsel appearing for respondent No.3 submits that the present writ petition is devoid of merits and has been filed with an intention to evade lawful recovery initiated in pursuance of audit objections and governmental directions. It is submitted that the undisputed facts reveal that the petitioner was posted as Accountant at Nagar Panchayat, Tifra during the financial year 2012–13 and was the custodian of the official cheque book and bank records. A complaint dated 16.05.2012 was lodged by the Chief Municipal Officer, Nagar Panchayat, Tifra before the police authorities alleging that Cheque No. 133270/133271 pertaining to the SBI account of the Nagar Panchayat had been stolen and forged by one Raja Pandey, who withdrew an amount of Rs.9,00,000/- and misappropriated government funds. Immediately thereafter, the Bank Manager, SBI, Tifra was informed to stop further transactions, and an FIR was registered. 10. Mr. Shrama submits that in view of the petitioner being the custodian of the cheque book, a show-cause notice was issued to him, to which he submitted a reply. During investigation, Rs.7,50,000/- was seized and handed over pursuant to orders of 10 the learned Judicial Magistrate First Class, Bilaspur. However, the remaining amount of Rs.1,50,000/- continued to reflect as loss to the State exchequer for several years. It is contended that during audit conducted by the office of the Accountant General under the BRGF (Backward Regions Grant Fund) scheme, an audit objection bearing No. 4.1.9.12 was raised noting that although Rs.7,50,000/- had been recovered, the balance amount remained unrecovered and constituted financial loss. Thereafter, correspondence ensued between the Municipal Corporation, Zila Panchayat and other competent authorities, and eventually the remaining principal amount was recovered—Rs.1,41,689/- from the account of Raja Pandey and Rs.8,311/- from the salary of the petitioner. However, he submits that the recovery of principal amount after a delay of nearly nine years resulted in accrual of interest as calculated during audit. It is submitted that the Chhattisgarh Vidhan Sabha Secretariat, vide communication dated 29.03.2023, sought clarification with regard to the pending audit objection, particularly regarding non-recovery of interest amounting to Rs.61,596/-. Thereafter, the Joint Director and other superior authorities directed respondent No.3 to ensure compliance and recovery of the interest component. 11. It is argued by Mr. Sharma that respondent No.3 has merely acted in compliance with the directions issued by the higher authorities and in light of the audit objection raised by the Accountant General’s office. The impugned orders have not been passed 11 arbitrarily, but only after receiving written instructions from competent authorities directing recovery of the outstanding interest amount attributable to delayed restitution of public funds. He further submits that the petitioner, being the custodian of the cheque book, owed a duty of care in safeguarding financial instruments of the Nagar Panchayat. Due to his negligence in maintaining custody of the cheque, the misappropriation occurred. Even though the criminal court acquitted the accused persons, departmental liability and audit accountability operate on a different footing. Financial negligence resulting in loss to the public exchequer justifies administrative recovery. It is, therefore, contended that the impugned orders directing recovery of Rs.61,596/- towards interest are legal, bona fide, and in consonance with audit compliance and administrative discipline. As such, learned counsel prays that the writ petition be dismissed with costs. 12. Mr. Shivam Mishra, learned counsel appearing for respondent No.4, concurs with the submissions advanced on behalf of respondent No.3 and adopts the same in toto. He submits, in brief, that the petitioner was admittedly the Accountant and custodian of the official cheque book of Nagar Panchayat, Tifra at the relevant time and, therefore, bore responsibility for ensuring safe custody of the cheques. Due to negligence in maintaining proper security of official financial instruments, the cheque in question was stolen and misused, resulting in withdrawal and 12 misappropriation of Rs.9,00,000/- of public funds. He further submits that although the principal amount was subsequently recovered in phases Rs.7,50,000/- pursuant to criminal proceedings and the remaining amount through bank attachment and salary deduction, the delay of several years in recovery resulted in accrual of interest as pointed out in the audit objection raised by the office of the Accountant General. Pursuant to the directions issued by the competent authorities and communications received following deliberations at the level of the State and departmental hierarchy, respondent No.4 was bound to implement the recovery of the interest component amounting to Rs.61,596/-. It is contended that respondent No.4 has not acted independently or arbitrarily, but has merely complied with the directions of superior authorities in discharge of official duties. The impugned communications were issued strictly in administrative compliance of audit objections and governmental instructions. Therefore, the writ petition, being devoid of merits, deserves to be dismissed. 13. I have heard learned counsel for the parties and also perused the documents annexed with this writ petition. 14. The recovery of an amount has civil consequence and it is well settled principle of law that no order of civil consequence can be passed without compliance of Principle of Natural Justice. The 13 Hon'ble Supreme Court in case of Bhagwan Shukla v. Union of India and Other, (1994) 6 SCC 154 has held as follows : “3. We have heard learned counsel for the parties. That the petitioner's basic pay had been fixed since 1970 at Rs, 190 p.m. is not disputed. There is also no dispute that the basic pay of the appellant was reduced to Rs.181 p.m. from Rs. 190 pan. in 1991 retrospectively w.e.f. 1812.1970. The appellant has obviously been visited with civil consequences but he had been granted no opportunity to show cause against the reduction of his basic pay. He was not, even put on notice before his pay was reduced by the department and the order came to be made behind his back without following any procedure known to law. There, has, thus, been a flagrant violation of the principles of natural justice and the appellant has been made to suffer huge financial loss without being heard. Fair play in action warrants that no such order which has the effect of an employee suffering civil consequences should be passed without putting the concerned to notice and giving him a hearing in the matter. Since, that was not done, the order (memorandum) dated 25.7.1991. which was impugned before the Tribunal could not certainly be sustained and the Central Administrative Tribunal fell in error in dismissing the petition of the appellant. The order of the Tribunal deserves to be set aside. We, accordingly, accept this appeal and set aside the order of the Central Administrative Tribunal 14 dated 17.9,1993 as well as the order (memorandum) impugned before the Tribunal dated 25.7.1991 reducing the basic pay of the appellant From Rs. 190 to Rs. 181 w.e.f. 18.12,1970.” 15. The recovery of any amount from an employee entails civil consequences, and it is a settled principle of law that no such order can be passed without adhering to the principles of natural justice. The Hon’ble Supreme Court in Bhagwan Shukla (supra), held that any reduction of pay or financial detriment imposed without notice or opportunity of hearing is a flagrant violation of natural justice and unsustainable in law. 16. In the present case, it is an admitted position that the entire principal amount of Rs.9,00,000/-, which was alleged to have been misappropriated, stands fully recovered—Rs.7,50,000/- pursuant to the order of the learned Judicial Magistrate First Class, Bilaspur, Rs.1,41,689/- from the bank account of the accused person, and the remaining Rs.8,311/- through deduction from the petitioner’s salary. Thus, no part of the principal sum remains outstanding. The controversy now sought to be raised by the respondents is confined only to the recovery of interest amounting to Rs.61,596/-, which has been directed to be recovered from the petitioner nearly nine years after the occurrence, solely on the basis of an audit objection and inter- departmental communications, without any independent adjudication of liability in accordance with law. 15 17. It is also evident from the record that before directing recovery of the said interest amount, no regular departmental enquiry was initiated against the petitioner, nor was any finding recorded after affording him reasonable opportunity of hearing so as to establish negligence or financial liability in accordance with law. The impugned orders dated 23.05.2023, 24.05.2023 and 26.05.2023 have been issued in a mechanical manner on the basis of directions received from higher authorities and audit objections, without independently determining the liability of the petitioner in a duly constituted proceeding. 18. The recovery of money from an employee unquestionably entails civil consequences. As held by the Hon’ble Supreme Court in Bhagwan Shukla (supra), any order resulting in financial prejudice cannot be sustained if passed without prior notice and opportunity of hearing. In the present case, though communications were issued directing the petitioner to deposit the amount, the impugned action was taken without holding any disciplinary proceeding fixing responsibility and without adjudicating whether the petitioner was personally liable to pay interest on the alleged delayed recovery. 19. Further, the record reveals that even after the petitioner submitted detailed representations placing all material facts before the authorities, the same were not considered in a reasoned manner. Instead, a portion of the salary to the tune of Rs.15,399/- was 16 deducted, clearly demonstrating that the authorities proceeded with recovery despite the pendency of representation and without passing any speaking order. Such action is arbitrary and violative of the principles of natural justice. 20. The reliance placed by the respondents on audit objection and directions issued at the administrative level cannot, by itself, fasten pecuniary liability upon the petitioner in the absence of statutory authority or a duly conducted enquiry. Audit objections may justify administrative scrutiny, but recovery from an employee must be founded upon a lawful determination of liability. In the absence of such determination, the impugned recovery is dehors the service rules and unsustainable in law. 21. In view of the aforesaid facts and circumstances, and in light of the law laid down by the Hon’ble Supreme Court in Bhagwan Shukla (supra) and other binding precedents, this Court is of the considered opinion that the impugned orders dated 23.05.2023, 24.05.2023 and 26.05.2023 cannot be sustained. 22. Accordingly, the writ petition is allowed. The impugned orders/communications dated 23.05.2023 (Annexure P/1), 24.05.2023 (Annexure P/2) and 26.05.2023 (Annexure P/3) are hereby quashed and set aside. 23. The respondents are directed to refund the amount as already deducted from the salary of the petitioner, within a period of 60 days from the date of receipt of a certified copy of this order. 17 24. It is, however, observed that this order shall not preclude the competent authority from proceeding against the petitioner in accordance with law, if so advised, by initiating appropriate disciplinary proceedings and fixing responsibility in a manner known to law, after affording due opportunity of hearing. 25. No order as to costs. Sd/- (Amitendra Kishore Prasad) Judge Yogesh