Lokayukta Empowered To Decide Contract Cases Having Commercial Relations If Complainant Alleges Harassment: Kerala High Court

The Kerala High Court on Monday dismissed the pleas filed by Regional Cancer Centre (RCC) Employees Co-operative Society challenging the order of the Lokayukta that had ruled in favour of certain low paid Class-IV employees working as cleaners at the RCC.

The complainants before the Lokayukta, who were employees of RCC had stood as sureties to one of the employees for a loan of Rs.3 lakh. When the loanee defaulted in repayment of the loan, the Society started to recover the money from the monthly salary of the complainants that stood as sureties. This was challenged by the complainants before the Lokayukta.

A division bench comprising of Chief Justice S.Manikumar and Justice Murali Purushothaman was hearing the pleas filed by the RCC Co-operative Society against the order of the Lokayukta.

It was argued by the Society that the Lokayukta had no jurisdiction to pass the order under Section 8 (1) read with Clause (c) of the Second Schedule to the Kerala Lok Ayukta Act according to which the Lok Ayukta has no power to look into cases of grievances in respect of administrative action in matters arising out of contracts having commercial relations.

The court observed that clause (c) of the said section had carved out an exception for complainants that allege harassment or gross delay in meeting contractual obligations which would apply to the case at hand. Holding that the Lokayukta had the powers to adjudicate the said issue and affirming the order of the Lokayukta in the matter, the court said that:

“The specific case of the complainants before the Lok Ayukta was regarding the harassment meted out to them by the Society by ordering recovery from their salary, in the name of a liability to which they are not liable. The Lok Ayukta found that the complainants, who were working as cleaners in the lowest rung of categories of employees in the RCC, had been subjected to undue hardships by the Society and the complainants had been made scapegoats of the machinations of the Society, its Board members and employees.”

The complainants had approached the Lok Ayukta alleging mal-administration by the Society and stated that they were being subjected to misery and hardship. The Lokayukta directed the Society to refund the amount taken from the complainants and to stop further recovery proceedings. The Lokayukta noted that the Society had come with unclean hands and had disregarded their statutory functions and responsibilities. The Court observed that Lok Ayukta had found that the actions of the Society amounted harassment and hence the exception under clause(c) would apply.

“It has to be remembered that they had been working as cleaners at the lowest rung of the categories of employees in the Regional Cancer Centre. They had obviously been asked to sign in some papers which they obligingly did. They were not capable of putting any questions to their masters who asked them to do so.” the Lokayukta had observed in its order.

The court refused to interfere with the findings of the Lokayukta and reaffirmed its order that found the actions of the Society to be harassment and  ordered the Society to refund the recovered amount to the complainants and to stop further recovery proceedings.

Case Title: The Regional Cancer Centre Employees Co-Operative Society Ltd V Pushpa and Others

Citation: 2023 LiveLaw (Ker) 118

Click here to read/download judgment