The Managing Committee Of Mitra ... vs Dr. Anisur Rahman And Others
2022 Latest Caselaw 5048 Cal

                         In the High Court at Calcutta
                         Civil Appellate Jurisdiction
                                Appellate Side



The Hon'ble Justice Subrata Talukdar
               And
The Hon'ble Justice Lapita Banerji


                               M.A.T No.516 of 2022

                                         With

                                IA No. CAN 1 of 2022



           The Managing Committee of Mitra Institution (Main)
                                 Vs.
                     Dr. Anisur Rahman and others

     For the appellant               :     Mr. Soumya Majumder,
                                           Ms. Mayuri Ghosh
     For the
     respondent/writ petitioner      :     Mr. Sakti Pada Jana,

Mr. Subhajyoti Das

For the proforma respondents : Mr. Rajib Roy, Ms. Sohini Kundu

For the State : Mr. Malay Kumar Singh, Mr. Rajaram Banerjee

Hearing concluded on : 18.07.2022 Judgment on : 03.08.2022

1. Lapita Banerji, J:- This appeal and application arises out of a

judgment and order dated March 8, 2022 (impugned order) passed by

an Hon‟ble Single Bench of this High Court. By the impugned order,

the Hon‟ble Single Bench allowed the writ petition and directed the

Headmaster of the school to issue and send a „No Liability Certificate‟

in favour of the petitioner to the Treasury Officer concerned, Barasat-

II, through District Inspector of Schools (SE), Kolkata. The said „No

Liability Certificate‟ was to be issued for the purpose of disbursement

of pensionary benefits and all the other post retirement benefits to the

writ petitioner/private respondent No.1/Retired Headmaster as per

Pension Payment Order (for short „the PPO‟) dated February 24, 2021.

2. Being aggrieved by and dissatisfied with the impugned order, the

Managing Committee of the school in issue/respondent no.5 in the

writ petition, preferred the present appeal being MAT No.516 of 2022.

3. The principle grounds of challenge in the appeal are that, after the

discovery of serious financial irregularities committed by the writ

petitioner/Headmaster, subsequent to his retirement on June 30,

2020, „No Liability Certificate‟ could not have been issued by the

appellant/Managing Committee of the school in issue. Various illegal

activities/financial irregularities for the year 2017-18 have been

discovered against the writ petitioner post his retirement. The writ

petitioner appointed a private auditor for the school for two years

prior to his retirement, excluding the empanelled auditors appointed

by the Commissioner of School Education which is impermissible in

law. Hence, the Managing Committee of the school passed a

resolution to scrutinize the accounts for the years 2017-18 by an

accountant.

4. The Hon‟ble Single Bench without considering the report by the said

independent accountant wrongly described as „independent auditor‟

in paragraph no.8 of the stay petition being CAN No.1 of 2022

directed the Headmaster of the school in issue to release the „No

Liability Certificate‟ in favour of the writ petitioner.

5. Furthermore, in Paragraph no.8 of the stay petition the years of

scrutiny by the "said auditor" have been stated to be for the years

2017-18, 2018-19 and 2019-20 where as the report at pages 242-246

is only for the year 2017-18.

6. The admitted facts before this Court are that:

i. The writ petitioner joined the service as a Headmaster of the

school on May 14, 2004;

ii. The writ petitioner retired from service on June 30, 2020 after

rendering 33 years of service as an Assistant Teacher and

thereafter 16 years of service as the Headmaster of the school

without any break in service;

iii. There were no disciplinary proceedings pending against the writ

petitioner at the time of his retirement;

iv. The President of the school issued a „No Liability Certificate‟ in

favour of the writ petitioner on August 2, 2020;

v. The writ petitioner filed all the pension papers offline to the

District Inspector of Schools (SE) on August 13, 2020;

vi. The Director of Pension, Provident Fund and Group Insurance,

West Bengal issued a PPO in favour of the writ petitioner vide

Memo No.SEC/BRS/21/F/1631 dated February 24, 2021;

vii. Despite several representations „No Liability Certificate‟ was not

issued by the Teacher-in-Charge/respondent no.6 in the writ

petition pursuant to the PPO dated February 24, 2021.

7. Mr. Majumder, appearing for the appellant/Managing Committee of

the school in issue argued that it was not possible for the Teacher-in-

Charge (for short, as „the TIC‟) of the School to issue a „No Liability

Certificate‟ in favour of the writ petitioner/retired Headmaster since

he, while discharging his duties, completed audit of the accounts for

the years 2017-18, 2018-19, 2019-20 through a private auditor,

which was not permissible under the law. He argued that the

resolution taken by the School on 29th June, 2020, just a day prior

the retirement of the petitioner was an illegal resolution. The „No

Liability Certificate‟ issued by the President of the Managing

Committee on August 2, 2020 was not permitted under the law as the

same was issued prior to date of PPO.

8. He relied on the Memo dated September 15, 2021 passed by the

Commissioner of School Education (CSE) whereby he has held :

"2. The action of the Headmaster in auditing school accounts through

his own appointed auditor is to fulfil his vested interest and hence the

Commissioner of School Education, West Bengal is not in a position to

ratify this action.

3. The Headmaster himself has to bear the cost of this audit. In case it

is paid out of school-fund then school authority has to recover the

amount from him. "

9. Since the CSE held that the Headmaster acted in his vested interests

in appointing his own auditor and the said appointment was not

ratified, the present Headmaster/Teacher-in-Charge of the School

was directed to recover the amount so spent out of the school fund

from the terminal benefit of the writ petitioner/retired Headmaster in

the event he was unable to recoup such expenses to the School. The

present Managing Committee of the School/appellant by a resolution

passed in November, 2021 appointed an accountant, Mr. Debdas

Mitra to scrutinize and give a report regarding the audited accounts

relating to the financial years 2017-18 and the said accountant found

several discrepancies/financial irregularities in the audit for the year

2017-18. The said irregularities were all enunciated in his report

dated November 10, 2021. On the basis of such report not only the

„No Liability Certificate‟ was not issued but also an FIR was lodged in

December, 2021 to investigate such illegalities.

10. Mr. Sanyal, Learned Counsel, along with Mr. Jana, appearing for the

private respondent/writ petitioner argued that no disciplinary

proceeding was ever initiated against the writ petitioner and he has

served the School as the Headmaster for 16 long years. Referring to

the Memo dated September 15, 2021, he submitted that the

Commissioner of School Education in no uncertain terms directed the

Headmaster/Teacher-in-Charge to make necessary arrangement for

issuing of „No Objection/No Liability Certificate‟ in favour of the

retired Headmaster.

11. Clause 4 of the Memo dated September 15, 2021 reads as thus:

"4. While issuing No Objection / No Liability Certificate in favour of

Dr. Anisur Rahaman, Retired Headmaster of the School the amount

so spent out of school fund has to show as liability recoverable from

terminal benefit of Dr. Anisur Rahaman, Retired headmaster of the

School, if he is unable to recoup such expenses to the school."

12. The Headmaster/TIC was further requested "to make necessary

arrangement accordingly in the light of above observation and opinions.

Since a writ petition (WPA No.97writ petition (WPA No.9745 of 2021)

has already been filed in the Calcutta High Court regarding this matter

he is requested to do needful at the earliest to avoid further legal

complications and hazards.

An "Action taken report" shall be sent this Directorate accordingly

and this may be treated as extremely urgent."

13. Giving a go-bye to the directions passed by the Commissioner of

School Education the TIC/Respondent No.6 not only refused to

issue a „No Liability Certificate‟ but also lodged an FIR basing on

a purported report by an accountant who was appointed by the

appellant for the purpose of scrutinizing the accounts for the

years 2017-18. The TIC had no authority in law to do the same

in the teeth of the directions given by the Commissioner of School

Education. The appellant lodged an FIR in December, 2021

almost one and a half years after the retirement of the writ

petitioner/Headmaster from the School on June 30, 2020.

14. Mr. Sanyal further submits that the appellant refused to issue

the „No Liability Certificate‟ despite the order passed by the

Hon‟ble Single Bench and illegally withheld the same, thereby

preventing the disbursement of the legitimate post retiral benefits

of the petitioner.

15. Mr. Sanyal further submitted that two years prior to his

retirement when the writ petitioner was the Headmaster of the

said School, he was constrained to appoint a private auditor since

there was no empanelled auditors attached to the Office of the

Commissioner of School Education during the pandemic period.

Therefore, the writ petitioner had no option but to appoint an

auditor to maintain the regularity of the accounts of the School in

issue and as such the auditor who was appointed was none other

than the earlier empanelled auditor of the Commissioner of

School Education, whose term had, however, expired.

16. During the course of hearing of the appeal being MAT No.516 of

2022 and the connected application being CAN No.1 of 2022, it

came to the notice of This Court that the accountant, Mr. Debdas

Mitra appointed by the appellant to scrutinize the accounts of a

qualified chartered accountant and auditor was not a qualified

chartered accountant himself. The eligibility of the purported

accountant to issue such a report at pages 242 to 246 of the stay

application was prima facie in doubt. In order to clarify the

eligibility of the purported accountant This Court directed the

appellant to implead the Institute of Chartered Accountants of

India as a proforma respondent and file its comments on the

report given by the accountant appearing at pages 242 to 246 of

the stay petition.

17. During the course of hearing on July 5, 2022 a communication

was produced on behalf of the Institute of Chartered Accountants

of India which clearly reads thus:-

"Mr. Debdas Mitra is not a member of the Institute and therefore,

does not hold the Qualification of Chartered Accountancy.

Therefore, it is to be submitted that Mr. Debdas Mitra, Auditor in

the above mentioned matter (MAT 516 OF 2020 with IA No. CAN 1

of 2022) is not a Chartered Accountant.

Further, it is stated that while verifying the credentials of Mr.

Debdas Mitra, it was found that a student namely Mr. Debdas

Mitra (Student Registration Number ERO0072966) was registered

with the Institute. However, he did not clear the Final Examination

of Chartered Accountancy."

18. Having considered the rival submissions of the parties and the

materials placed on record this Court finds:-

(i) The writ petitioner/private respondent joined service as a

Headmaster of the School on May 14, 2004.

(ii) As the Headmaster of the School he rendered uninterrupted

service till the date of his retirement on June 30, 2020.

(iii) Reference was made by the appellant to a Resolution of

2010 taken for the purpose of suspending the retired

Headmaster/writ petitioner for purported commission of

financial and academic irregularities. During the pendency

of litigation, challenging the said Resolution of 2010, the

West Bengal Board of Secondary Education (for short „the

Board‟) by its order dated March 12, 2015 decided to

disapprove the proposal of disciplinary proceedings against

the Retired Headmaster. The writ petitioner/Retired

Headmaster was reinstated to the services immediately and

the period of suspension was treated as "period spent on

duty".

(iv) Such a fact of a proposed disciplinary proceeding was

pleaded by the appellant only to cause confusion and

tarnish the reputation of the writ petitioner/retired

Headmaster.

(v) By a resolution dated June 29, 2020 taken by the

Managing Committee of the School, it was unanimously

resolved that the prayer for writ petitioner‟s Provident Fund

amount would be sent by the President to the DI(SE) for its

approval and release.

(vi) Furthermore, by the said Resolution dated June 29, 2020,

it was also unanimously resolved that the TIC/respondent

no.6 would be appointed to perform his duties from July 1,

2020 and he will issue "No Liability Certificate" to the

retired Headmaster as and when required by him for

getting his retiral benefits including pension and gratuity

from the Treasury Office.

(vii) Immediately, upon being appointed as the Teacher-in-

Charge, the respondent no.6 by his letter dated July 2,

2020 informed the DI that the retired Headmaster did not

hand over his total charge to him and, therefore, the

liability of official papers was still on the shoulders of the

retired Headmaster.

(viii) On the following day i.e. July 3, 2020, the respondent

no.6/TIC vide GD No.179 informed the Officer-in-Charge,

Amherst Street Police Station that, by virtue of the total

charge not being handed over to him, the liability of the

official papers were still on the shoulder of the retired

Headmaster. The contents of this letter are similar to the

contents of the letter dated July 2, 2020.

(ix) Several documents annexed to the writ petition evidence

the handing over of the charge by the retired Headmaster to

the Teacher-in-Charge on July 10, 2020. Such documents

contain a chart showing the audited reports of the School

from the year 1997-98 till 2019-20. From the said chart, it

will unequivocally appear that the accounts of the school

have been audited by M/s. M.C. Som & Company from the

year 2014-15 till 2019-20 (retirement of the Headmaster).

(x) Upon consideration of the application by the writ

petitioner/retired Headmaster, the Directorate of Pension,

Provident Fund and Group Insurance issued the PPO on

February 24, 2021.

(xi) Immediately upon receipt of the PPO the writ petitioner

made a representation before the School for issuance of a

„No Liability Certificate‟.

(xii) Upon receipt of the said request/representation, the

TIC/respondent no.6 by his letter dated February 27, 2021

informed the writ petitioner that „No Liability Certificate‟

could not be issued since the audit for financial years

2017-18 and 2018-19 was to be done by M/s. Gupta

Chanda & Company (Government empanelled auditor) in

respect of the School and not by M/s. M.C. Som &

Company. Furthermore, no panel of auditors was

published by the School Education Department for the

financial year 2019-20 and, therefore, the petitioner had

acted beyond his financial power and paid professional fees

to an unauthorized agency from the School fund for

auditing the accounts. Therefore, the matter was referred

to the Commissioner of School Education, Government of

West Bengal for seeking his advice.

(xiii) The TIC/respondent no.6 on the very same date i.e.

February 27, 2021 communicated the allegations against

the writ petitioner to the Commissioner of School

Education.

(xiv) The TIC/respondent no.6 again wrote to the District

Inspector of School on April 19, 2021 enumerating the

reasons for which the Managing Committee in its meeting

dated February 26, 2021 decided not to issue the „No

Liability Certificate‟ to the retired headmaster after PPO

dated February 24, 2021. The only reason for the non-

issuance as per the said communication related to illegal

appointment of M/s. M.C. Som & Company to audit the

records of the School from 2017-18 till 2019-20.

(xv)    Upon    adjudicating    the        complaints       made        by     the

        TIC/respondent    no.6,      the       Commissioner        of    School

        Education     came      to       the      finding     vide           Memo

No.1C/373/LS/2021 dated September 15, 2021 (supra)

that while issuing „No Objection/No Liability Certificate‟ in

favour of the retired Headmaster, the School authority

would be allowed to show the amounts spent by him as the

cost of the audit, as a liability, recoverable from his

terminal benefits. The TIC was requested to do the needful

at the earliest to avoid "further legal complications and

hazards" especially in the eye of law since a writ petition

being WPA No.9745 of 2021 was pending before the Hon‟ble

High Court at Calcutta.

(xvi) Immediately upon receipt of the said Memo dated

September 15, 2021, the appellant took a resolution in

November, 2021 by which the purported accountant, Mr.

Debdas Mitra was appointed to scrutinize the accounts of

2017-18. TIC/respondent no.6 lodged an FIR on December

7, 2021 basing on the purported report instead of

complying with the Memo dated September 15, 2021.

Overzealousness of the Teacher-in-Charge/respondent no.6

is not a fact lost upon This Court and the same has been

ratified by the appellant/Managing Committee. The TIC was

acting hand in gloves with the managing committee.

(xvii) The TIC acted beyond the scope of his duties and sought to

give a go-bye to the Memo dated September 15, 2021.

(xviii) The appellant has sought to rely on a part of the Memo

dated September 15, 2021 (supra) which read that the

"retired Headmaster in order to fulfill his vested interest

has appointed his own auditor and the said position was

not ratified by the Commissioner of School Education". The

part of the Memo requiring the TIC to issue the „No Liability

Certificate‟ at the earliest was given a complete go-bye by

the TIC as well as the appellant.

(xix) It is a well-settled principle of law and a canon of

construction that no document can be read in part. The

entire document is to be read as a whole. Significantly, the

appellant has been silent as to the reason behind it not

following the directions issued by the CSE. It failed to

explain its conduct. No authority in law permitted the

Teacher-in-Charge to give a go-bye to the CSE‟s directions

and suo moto initiate a process of investigation.

(xx) The action and/ conduct of the appellant in ratifying the

action of TIC smacks of mala fides, arbitrariness,

highhandedness and is in colourable exercise of power.

(xxi) Instead of acting upon the recommendations/directions

given by the CSE, the appellant by a Resolution dated

November, 2021 decided to appoint one Mr. Debdas Mitra

(B.Com Hons.), C.A. (Inter) to scrutinize the audited

accounts for the year 2017-18. No approval has been

taken either from the DI or the CSE for the said scrutiny.

In fact, the said Resolution of November, 2021 was taken in

the teeth of the directions/recommendations issued by the

CSE.

(xxii) Paragraph No. 8 in the stay petition wrongly describes Deb

Das Mitra as an „independent auditor‟ and also wrongly

describes the number of years of scrutiny. It has been

affirmed by the present „Headmaster‟ and secretary of the

school-in-issue as true to his knowledge and the same

tantamounts to misstatement on oath.

(xxiii) The eligibility of a C.A. (Inter) to scrutinize the audited

report of a qualified Chartered Accountant who was a

Government empanelled auditor for the years 2014-15,

2015-16 and 2016-17 was also doubted by this Court.

Therefore, this Court directed the Institute of Chartered

Accountant of India to be added as a proforma party

respondent.

(xxiv) The conduct of the purported accountant, Mr. Debdas

Mitra in giving a purported report, scrutinizing the report of

an erstwhile empanelled auditor and chartered accountant

without being a qualified chartered accountant himself is

not appreciated by This Court. The authority of Mr. Debdas

Mitra is held to be undoubtedly questionable, relying on the

communication issued by the Institute of Chartered

Accountants of India.

(xxv) This Court feels that Mr. Mitra being a student of chartered

accountancy should have known the appropriateness of his

conduct and behaved accordingly. The irresponsible

behaviour on his part is deprecated. A copy of this

judgment and order passed by This Court is to be

accordingly forwarded by the Registry to the Institute of

Chartered Accountants of India for their reference and

record.

(xxvi) It is also not lost upon This Court that instead of getting

the correctness/validity of the audit report of 2017-18

scrutinized by M/s. Gupta & Chandan Co. who was

admittedly the Government empanelled auditor for the

said year, the Management of the school sought to get the

audit report scrutinized by a student of accountancy.

(xxvii) Basing on the said purported report dated November 10,

2021, the appellant with mala fide intent lodged the FIR

dated December 7, 2021.

(xxviii) Pursuant to this Court calling for comments by the

Institute of Chartered Accountant of India/added

Respondent No.5, regarding the eligibility of Mr. Debdas

Mitra to give a report, a „No Liability Certificate‟ was issued

by the appellant and the retiral dues were also released to

the respondent no.1/Retired Headmaster.

19. In the light of the discussions above, it is held that the TIC has

acted in gross abuse of power. He withheld the „No Liability

Certificate‟ and ordered scrutinization of an audited report for

the year 2017-18in the teeth of the order dated September 15,

2021 passed by the CSE. The TIC had no authority to act in such

abuse of process of law.

20. Admittedly, there was no disciplinary proceeding or criminal

proceeding pending against the writ petitioner and the TIC had no

legal right to withhold the issuance of „No Liability Certificate‟ in

favour of the writ petitioner/retired headmaster.

21. This Court has no hesitation to hold that the TIC acted with mala

fide intent and the action of the TIC is deprecated. The

appellant‟s conduct in ratifying the actions of the

TIC/Respondent No.6 is also deprecated. This Court agrees with

the finding of the Hon‟ble Single Bench insofar as the

action/conduct of the appellant/school authorities was held to be

unjust, unfair, mala fide, arbitrary and illegal.

22. Therefore, the appeal being MAT No.516 of 2022 and the

application being CAN No.1 of 2022 are dismissed with costs

assessed at Rs.1,00,000/- (Rupees One Lakh). 50 per cent of the

said costs would be payable to the respondent no.1/writ

petitioner within two weeks from the date of passing of this order

considering the harassment suffered by a retired Headmaster in

the hands of the appellant after serving the School for 16 long

years. 50 per cent of the awarded costs would be payable to the

Law Clerks‟ Association, High Court, Calcutta within two weeks

from date. In the event the said costs are not deposited within

the stipulated time, then the monthly salary of the

TIC/Respondent No.6 will be stopped from the month of August,

2022 till the entirety of such costs are recovered from his salary.

23. All parties to act on the downloaded server copy of this order from

the website.

24. Urgent certified photocopy of this judgment, if applied for, be

supplied to the parties upon compliance of all the requisite

formalities.

I agree.

(Subrata Talukdar, J.) (Lapita Banerji, J.)