GOVERNMENT
OF ANDHRA PRADESH
ABSTRACT
Misappropriation
cases - Consolidated Guidelines - Issued.
GENERAL
ADMINISTRATION (SER.C) DEPT.
G.O.Ms.No.25 Dated:03-02-2004
Read the
following:
1.Memo.No.3000/Ser.C/76-4, GA(Ser.C) Dept., dt.28.6.1977.
2.Memo.No.2106/Ser.C/77-1 , GA(Ser.C) Dept., dt.27.10.1977.
3.
Memo.No.2261/Ser.C/79-2, GA (Ser.C) Dept., dt.23.10.1979.
4.
U.O.Note.No.646/Ser.C.80, GA (Ser.C) Dept., dt.21.7.1980.
5. U.O.Note
No.32/Ser/C/81-2, GA (Ser.C) Dept., dt.9.2.1981.
6. G.O.Ms.No.260,
GA (Ser.C) Dept., dt.24.4.1984.
7. U.O.Note
No.463/Ser.C/85-4, GA (Ser.C) Dept., dt.23.12.1985.
8.
Cir.Memo.No.l00/Ser./93-22, GA (Ser.C) Dept., dt.23.12.1995.
9. G.O.Ms.No.2,
G.A. (Ser.C) Dept., dt.21.9.1999.
10. Memo.No.44391 /Ser.C.99/GA
(Ser.C) Dept., dt.21.9.1999.
11. U.O.Note No.1067/L&O-J/A1/2000-4,
GA (L&O) Dept., dt.30.12.2000.
12.
Memo.No.51375/Ser.C/2002-2, G.A(Ser.C) Dept., dt.28.11.2002.
-
- -
ORDER:
Apart
from the instructions issued on the subject matter, a critical study of cases
of misappropriation of Government funds undertaken by the Andhra Pradesh
Vigilance Commission revealed that many of these cases are handled ineptly and
with prolonged delay without (I) being reported to the Head of the Department
and to the Accountant General, (2) finalisation of the total amount misappropriated
through a thorough verification or audit of the accounts, (3) earnest efforts
to realise the misappropriated amount, (4) immediate suspension and effective
prosecution of the officers who have indulged in misappropriation (5)
simultaneous initiation of timely disciplinary action against the accused
officers, and the officers whose supervisory negligence lead to the
misappropriation. Where action has been taken, attempt is often made to show
the embezzlement as temporary diversion of funds particularly where the amount
has been remitted back upon detection or where the amount involved is small
thereby reducing the gravity of the offence and facilitating the culprits being
let off with minor penal689 ty. Some departments / Heads of offices have been
found to address the superintendent of Police wrongly without a formal criminal
complaint being filed before the Station House Officer having jurisdiction, as
soon as the case of mis.1ppropriation come to notice without internal audit to
finalise the amount misappropriated and without identifying the persons
responsible. Such complaints lie there for want of basic information and
records necessary to finalise the quantum of misappropriation and to identify
the accused officers. There are cases where those responsible for
misappropriation were not even suspended and allowed to continue in the same
post giving them an opportunity to destroy the records and evidence and to
obstruct smooth conduct of investigation.
2. The Report of the
Comptroller and Auditor General of India for the year ended 31.3.2002 refers to
605 misappropriation cases reported to it as pending at the end of the year
involving a sum of Rs. 1062.69 lakhs as pending in different Departments.
According to the Vigilance commission this does not reflect the correct position
of pendency of such cases due to serious omissions in reporting of misappropriation
cases to the Accountant General as provided in the A.P. Financial code. According
to the Commission the number appear to be several times more. As a case in
point, the Commission has brought to the notice of the government that the
number of misappropriation cases shown as pending in the treasuries and
Accounts Department in the above list of misappropriation cases was 12, whereas
Commission came across 10 More cases of misappropriation in that Department
which had not been reported. Information elicited from the Commissioner and
Registrar of Co-operative Societies shows that there were 2314 misappropriation
cases in the various Co-operative institutions in the State involving a sum of Rs.49.86
crores of which only Rs.7.05 crores have so far been recovered in which
criminal action was initiated in 945 cases. The Commissioner, Panchayat Raj has
reported that there were 940 cases of misappropriation involving a sum of Rs.15
Crores in which criminal action was initiated in 517 cases where recovery
effected was Rs.1.59 crores. The above figures indicate the magnitude of the
problem of misappropriation in Government institutions.
3. The Commission
therefore, emphasised the need to lay down streamlined procedure to facilitate
effective handling of misappropriation cases with particular attention to (1)
prompt reporting (2) quick finalisation of amounts misappropriated (3)
Immediate identification of the persons responsible for the crime (4) tool
proof handling of records (5) speedy recovery of funds misappropriated (6) prompt
criminal prosecution of the accused (7) pinpointing responsibility for failure
of supervision (8) timely disciplinary action against the accused officers and those
whose supervisory negligence lead to the misappropriation (9) streamlining procedures
to prevent recurrence of similar cases in future and (10) finally laying down
strict guidelines for statutory penalties to the officers found guilty of
misappropriation in Government Departments, Local bodies, Co-operatives, Autonomous
Grant Receiving Institutions and Public Undertaking etc.
4. Articles 5, 273,
294, 300, 301 and 302 of the Andhra Pradesh Financial Code lays down the
responsibilities of Government Servants in dealing with Government money, the
procedure to fix responsibility for any Joss sustained by the Government, the
procedure to be followed and the action to be initiated for recovery. In
addition to the instructions laid down in the Andhra Pradesh Financial Code,
the Government have from time to time, issued executive instructions regarding
misappropriation cases. It is now felt necessary to plug the loopholes in the
management of Government money and to give clear and comprehensive instructions
on all aspects of misappropriation cases. Accordingly, the following
consolidated instructions are issued.
5. Standards of financial responsibility:
Article
5 of the A.P. Financial Code casts an obligation on every Government servant to
see that proper accounts are maintained for all Government Financial
transaction with which he is concerned and to render accurately and promptly
all such accounts and returns relating to them as may have been prescribed by
Government, the Accountant General or the competent departmental authorities.
He is required to check the accounts, as frequently as possible, to see that
his subordinates do not commit fraud, misappropriation, or any other irregularity.
The Government holds him personally responsible for any loss that may be found
to be due to any neglect of the duties laid upon by him by the relevant
provisions made by the Government. The fact that a government servant has been
misled or deceived by a subordinate will in no way mitigate his personal
responsibility.
6. Assessment of responsibility for loss of public funds.
Article
273 of A.P. Financial Code makes every Government servant personally responsible
for any loss sustained by the Government through fraud or negligence on his
part and also for any loss through fraud or negligence on the part of any other
Government Servant to the extent to which it may be shown that he contributed
to the loss by his own action or negligence. The cardinal principle governing
assessment of responsibility for such losses is that every Government Servant
should exercise the same diligence and care in respect of all expenditure from
public funds under his control as a person of ordinary prudence would exercise in
respect of the expenditure of his own money.
7. Reporting of loss of public money & sending factual report of Government
When
any facts indicating that defalcation or loss of public money, stamps, stores or
other movable or immovable property has occurred or that a serious account of
irregularity has been committed come to the notice of any Government Servant,
he should in terms of Article 294 of the Financial Code inform the head of the
office immediately. If it appears to the head of the office, prima facie that there
has been any such occurrence which concerns his office or in which a Government
Servant subordinate to him is involved, he should send a preliminary report
immediately to the Accountant General and through the proper channel, to the
head of the department. On receipt of the information, the head of the Department
should report the matter to the Government without delay. These reports should
be sent even when the loss has been made good irrespective of the amount
involved.
8. Finalisation of quantum of loss and audit of accounts:
Article
300 of the Financial Code lays down the following general principles in
enforcing personal responsibility of the Government servant for a loss
sustained by the Government through fraud or negligence on his part and also
for loss through fraud or negligence on the part of any other Government
servant to the extent to which it may be shown that he contributed to the loss
by his own action or negligence. The head of the office or other appropriate
authority should investigate the matter fully without delay. When necessary,
the administrative authority may ask the Accountant General to furnish all
vouchers and other documents in his possession that may be relevant to the
investigation. If the investigation is so complex as to require the assistance
of an expert audit officer, the administrative authority should report the
facts to the Government and request them to depute an audit officer for the
purpose. The administrative authority and the audit officer will each be
personally responsible within their respective spheres, for completing the
investigation expeditiously.
9. Recovery:
Whenever
an administrative authority holds that a Government servant is responsible for
a loss sustained by the Government, it should consider both whether the whole
or any part of the loss should be recovered from him in money and whether any
other form of disciplinary action should be taken. Whenever a loss is held to
be due to fraud on the part of Government Servant or servants, every endeavour
should be made to recover the whole amount lost from the guilty persons. If the
failure of a superior officer to exercise proper supervision and control has
facilitated the fraud, he should be called strictly to account and suitably dealt
with after carefully assessing his personal liability in the matter. The pension
of a retiring Government Servant who is involved in any loss or irregularity which
is under investigation should on no account be sanctioned until his responsibility
in the matter has been finally determined. Whenever a competent authority
orders that any amount should be recovered from the Government Servant,
otherwise than by forfeiture of his security deposit, if any, on account of a
loss sustained by the Government through fraud or negligence on his part and he
is about to retire from service the amount should be recovered, as far as
possible, by deduction from the last pay or leave salary due to him. If any
amount still remains to be recovered, the Government Servant should be asked to
give his written consent to the recovery of the remaining amount from his
pension. When a retired Government servant whose pension has already been
sanctioned is held to have caused a loss to the Government by his fraud or
negligence while in service and it appears that the amount could be recovered
by bringing a suit against him, the matter should be reported to the Government
for orders. Any fraud or negligence found to have been committed by him while
in service, should not be made an excuse for absolving any other Government
servants who are also responsible for the loss and are still in service.
10. A clear
distinction should be drawn between cases of "delayed remittance" and
misappropriation. The cardinal test to prove a case as a case of
misappropriation rather than temporary misappropriation would be whether the
amount has been put to use for the benefit of the person who has
misappropriated it. It is the intention and purpose that should be the
criterion and not whether the amount has been ultimately made good voluntarily.
11. If there is a
reasonable suspicion that a loss sustained by the Government is due to the
commission of a criminal offence, the procedure prescribed in Article 301 and 302
should be followed.
12. An officer
accused of misappropriation shall be suspended forthwith under Rule 8 (1) (c)
of the Andhra Pradesh Civil Services (CC&A) Rules, 1991 pending investigation
or trial of the offence till he is dismissed or removed from service upon
conviction or conclusion of disciplinary proceedings as the case may be.
13. Initiation of Departmental inquiries and Criminal proceedings:
Article
301 lays down that, departmental proceedings should be instituted at the
earlier possible moment against all the Government servants involved in any loss
sustained by the Government on account of fraud, embezzlement or any similar offence
and conduct with strict adherence to the rules, up to the point at which prosecution
or any one of them begins. The Departments should ensure that charges are
framed by the disciplinary authority in accordance with the procedure prescribed
under the rule 20 of Andhra Pradesh Civil Services (CC&A) Rules, 199 l and
action is completed expeditiously observing the prescribed procedure to ensure
that there are no procedural infirmities. The criminal proceedings and departmental
action should be processed without loss of time with a view to avoiding
manipulations and loss of evidence. Departmental officers should obtain Photostat
copies of documents and handover the original to Police so that simultaneous
action in regard to criminal proceedings and disciplinary action can be taken.
Departmental action should be completed within 3 to 4 months. At this stage it
may be specifically considered whether it is practicable to carry the departmental
proceedings without waiting for the result of the prosecution, if it is so,
they should be carried out as far as possible but not as a rule, to the stage
of finding and sentence. If the accused is convicted, the departmental
proceedings against him should be resumed and formally completed. If the
accused is not convicted, the authority competent to take disciplinary action
should examine whether the facts of the case disclose adequate grounds for
continuing departmental action against him. Simultaneous disciplinary and
criminal proceedings can be initiated by the Department against the persons
responsible for misappropriation and supervisory officers whose failure led to
the offences. Following the decision of the Himachal Pradesh High Court in
Khushiram Vs. Union of India (11973)(2) SLR.PP.564-565) it is not obligatory
that the departmental proceedings should be stayed when the case is pending in
a court of law, except when "it is expedient to do in the interest of fair
play.
14. Procedure for filing of complaints with local police or the Crime Investigation Department:
Prosecution
for embezzlement of public money or property is laid down in Article 302.
Whenever the head of an office finds that there is a reasonable suspicion that
a criminal offence has been committed in respect of public money or property,
he should as a general rule report the matter at once to the Police and the
head of his Department that he has laid an information before the police. When
the case is heard by the Court, the head of the office concerned should see that
all the witnesses serving in his department and all documentary evidence in the
control of his department are punctually produced. He should also appoint a Government
servant of the Department to attend the proceedings in the court and assist the
prosecuting staff. If prosecution for an offence of this kind results in the
discharge or acquittal of any person, or in the imposition of any sentence which
appears to be inadequate, the head of the office concerned should at once send
a full statement of the facts of the case. If it is considered that further
proceedings should be taken in revision or appeal, he should proceed
accordingly.
15. In order to
reduce the number of cases of misappropriation sent for investigation by the
Police and prosecution thereafter, a monetary limit of Rs.1000/- is fixed below
which the cases will be handled departmentally only. The Department should
ensure that all material needed for investigation is made available to the
Station House Officer of the Police Station having jurisdiction. In the event
Crime Investigation Department investigation is considered essential in view of
the quantum of money involved or the complexity of the misappropriation case
action should be taken by the Secretariat Department concerned to refer the
case to the criminal investigation department at Hyderabad in consultation with
Home Department in accordance with the procedure laid down by the Director
General, Crime Investigation Department. If in the course of any investigation into
corruption, misappropriation is noticed by the Anti-Corruption Bureau in such a
case the Anti-Corruption Bureau itself will initiate action for prosecution of
that case.
16. The Departments
of Secretariat should consult the Home Department before entrusting any Crime
Investigation Department for investigation. To establish the offence of
misappropriation, cheating / forgery and use of forged documents utilisation of
fake certificate etc., it is essential that:
i) The
complaint lodged by competent authority should contain specific information regarding
details of crime and persons responsible, amount involved and the matter or
mode of commission of offence.
ii) The
details of crime should contain essential ingredients of cognizable crime.
iii) Whenever complaint involving misappropriation of public funds is preferred, it should be mandatory to initiate departmental audit to establish the instances and amounts of misappropriation. Steps will be taken by the concerned officers to ensure preservation of original documents i.e., bills, vouchers etc., Requisitions should be sent to the Pay and Accounts Officer, Treasury authorities / Accountant General Office with a specific request to preserve the documents which would prove the culpability of persons responsible for such frauds / misappropriation. Specimen signatures and admitted handwritings of persons responsible for misappropriation, fraud etc. Should be made available to the investigating agency.
iv) For expeditious and proper investigation, it is also imperative that relevant records of the case, like forged documents duplicate copies of vouchers, audit report, preliminary enquiry report conducted by the respective department, note files, registers etc. are handed over (in original) to the Crime Investigation Department with xerox copies being retained by the Department concerned for the' purpose of disciplinary action and for record.
17. It should be
ensured therefore that a comprehensive complaint should be lodged with Crime
Investigation Department containing details of the crime / persons responsible
for the Commission of such offences that complaints should be lodged with
original signature of the officers who are fully acquainted with the facts of
the case and have been associated with the preliminary enquiry or departmental enquiry.
Copies of relevant documents should also be enclosed along with the complaint.
The departments preferring complaints should also ensure collection and safe
custody of original document relating to the offence.
18. Handing over of records / sending necessary assistance to Investigating Agencies: -
All
Heads of Offices should hand over the records requisitioned by the local Police
Officers of the Bureau or the Crime Investigation Department as the case may be
and render all necessary assistance to Investigating Officers in either case.
Senior Civil Servants who are defacto complainants in Criminal cases or who are
intimately acquainted with the facts and circumstances of the cases and whose
evidence is relevant and material to prove the case in a court of law should tender
their evidence when examined by the Investigation should not normally take more
than one year after it is entrusted to the Crime Investigation Department / Anti-Corruption
Bureau however complicated the case may be.
19. The Government
have decided that special cells will be created in the investigating agencies
for departments where the number of misappropriation case• are large and
persons from these cells, and the Investigating Agency would maintain close
liaison with the departments so that they can tender necessary guidance to
expedite cases.
20. In all cases of
misappropriation, after investigation is completed by the Police and charge
sheets filed, such cases should be pursued effectively to ensure that there is
no let-up in prosecuting the cases effectively and that there is no failure on
the part of the Assistant Public Prosecutor, etc. in conducting the prosecution
properly. In case, where the trial ultimately ends in acquittal, immediate action
may be taken to file appeals, after obtaining legal opinion. In cases, where it
is felt that the prosecution was conducted improperly and the prosecuting
officers have not taken adequate interest, responsibility must be fixed for
their failure to conduct the prosecution successfully. To ensure a proper
watch, the Departments should review all such cases periodically for the half
years ending 30/6 and 31/12 of every year and furnish their review to the
General Administration (Services) Department. Even when there are no such
cases, a 'NIL' report has to be furnished.
21. Attachment and confiscation of the properties of the accused:
Whenever
it is believed that a scheduled offence is committed, the concerned Departmental
Officers should collect the necessary data regarding movable / immovable
property standing in the name of the persons family members, relatives and
friends and orders shall be issued for attachment of the properties under
Sections 3 and 4 of the Criminal Law Amendment Ordinance, 1944 contemplates that
if any person commits any offence punishable under Section 406, 408, 409, 411 ,
417 and 420 of the IPC 1860 or under clause (c) of sub-section (1) of Section
13 of the P.C. Act, 1988, the Government may whether or not any court has taken
cognizance of offence, authorize the making of an application to the District
Judge concerned for attachment of the money or other property which the State
Government believes the said person to have procured by mean, of the said
offence or if such money or property cannot for any reason be attached of other
property of the said person of value as nearly as may be equivalent to that of
the aforesaid money or other property.
(i) The
attachment can be of the money or other property which the State Government
believes the said person to have procured by means of the offence or if such
money or the property cannot for any reason be attached, of other property of
the said person of value as nearly as may be equivalent to that of the
aforesaid money or other property.
(ii) The
District Judge has jurisdiction to issue an interim order of attachment of moneys
procured by commission of a scheduled offence and deposited in Bank. Such money
in the hands of the Bank does not cease to be attachable although its identity
is lost by getting mixed up with the other money of the Bank, so long as it is
not converted into anything else and remains liable to be paid back in cash to
the depositor or by his order (K. Satwant Singh vs. Provincial Government of Punjab,
AIR 1956 Lah 406).
(iii) Where
the assets available for attachment are not sufficient and where he is satisfied
that the transfer of the property to the transferee was not in good faith and
for consideration, the District Judge has power to order the attachment of so much
of the transferee's property equivalent to the value of the property
transferred, as per section 6 of the Ordinance.
(iv) The
court having jurisdiction to entertain the application for attachment of property
under the said Ordinance is the court of the District Judge within the local
limits of whose jurisdiction the suspect ordinarily resides or carries on his business.
A Special Judge while trying an offence punishable under the said Act can
exercise all the powers and functions exercisable by a District Judge under the
Criminal Law Amendment Ordinance, as per sub-section (6) of section 5 of the
Prevention of Corruption Act, 1988.
(v) The District Judge is empowered under Sec.4(1) of the Ordinance, as also the Special Judge trying an offence punishable under the Prevention of Corruption Act, 1988, to pass an interim order of attachment of the money or other property and to make an interim order of attachment absolute, under sec.5 of the Ordinance.
(vi) The order of attachment remains in force for 3 months as per clause (I) of Section 10, but the period has. been raised to one year by the Prevention of Corruption Act, 1988 as per clause (b) of section 2 thereof. Where a court has taken cognizance of the scheduled offence, the order of attachment continues in force until orders are passed by the Judge, as per clause (b) of section 10 of the Ordinance.
(vii) The District Judge
or a Special Judge trying an offence punishable under the P.C. Act, 1988 has
power to order forfeiture of the attached property on the termination of the
criminal proceedings where the final judgement or order of the criminal court
is one of conviction as per sub-section (3) of sec. 13 of the Ordinance.
(viii) The above
provision should be used for attaching the properties of the Government
Servant(s) who are found to have misappropriated Government money pending the
criminal proceedings and eventual confiscation of the property.
22. Invoking provision of Andhra Pradesh Revenue Recovery Act
The
provisions of Revenue Recovery Act can be invoked for recovery of the
misappropriated amounts or loss caused to the Government. Recovery of
misappropriated amount or loss caused to Government can be recovered as if it
were an arrear of Land Revenue in accordance with the procedure laid down in
the A.P. Revenue Recovery Act, where the officer responsible fails to remit the
amount to the Government account. It is open to Government to file a civil suit
for recovery of such sum as a last resort.
23. Punishments to be awarded in proved cases of misappropriation.
There
is a wide disparity in the scales of punishment meted out in misappropriation cases.
The question of prescribing uniform scale of punishment in such cases has been
considered by Government. It has been decided that ordinarily cases of proved
misappropriation would justify nothing less than dismissal from service and
action should accordingly be taken. The minimum penalty to be imposed in all
proven cases of misappropriation (in addition to the recovery of amount
misappropriated) in dismissal from service. In case of a retired employees the
penalty should be withholding of entire pension and gratuity permanently or
withdrawal of pension as the case may be besides recovery of the
misappropriation / loss amount. There may, however, be rare cases where in the
circumstances, such as trivial amount, short duration, immediate payment on
detection, all of which may raise a presumption that it was an error in
accounting, which may justify a different punishment. A clear distinction
should be drawn between the cases of "delayed remittance" and
"misappropriation" having regard to the fact that in proved cases of
misappropriation.no punishment short of dismissal is normally justified and
accordingly the case of 'delayed remittance' need not always be classified for
the purpose of audit as a case of misappropriation.
24. An officer who is
convicted by a Criminal Court for the offence of misappropriation or fraud
should be dismissed from service without waiting for filing of an appeal or its
outcome. Such action would be taken not withstanding suspension of sentence by
an Appellate Court. It shall not be necessary to consult the Andhra Pradesh
Public Service Commission for taking action to dismiss the officer on the
grounds of conviction in a Court of Law. In the case of an officer who in the
meantime has retired, has pension and gratuity shall be withheld or where it
has already been sanctioned, his pension should be withdrawn. The officer, who
fails to enforce these instructions promptly, will be held responsible for any
loss to the Government on account of avoidable payment of subsistence allowance
or provisional pension as the case may be.
25. Consultation with Vigilance Commission:
In
all cases of misappropriation, the Vigilance Commissioner has to be consulted in
accordance with the procedural instructions of the Commission.
26. Review of cases
There
should be periodical office inspections by the Heads of Department and such
inspections should invariably cover financial aspects, accounts and cases of
misappropriation of funds, if any. In the office of Heads of Department, one
officer may be nominated as Vigilance Officer to keep track of cases involving misappropriation
of Government funds. The Chief Vigilance Officers of the Secretariat
Departments under the Vigilance Officers of Heads of Departments, Public
Enterprises, Autonomous Bodies and Cooperative Institutions etc., to keep track
of the cases of misappropriation of funds by Government employees.
27. The Finance
Department will nominate an officer specially to monitor the pendency and watch
progress with reference to statistics that will be furnished to him by the
other Departments. This officer would place the statistical data regarding
outstanding misappropriation cases for a review by Chief Secretary to Government
with Secretaries of Departments periodically.
28. The Secretary of
each Department should review each month all cases of misappropriation in his
Department and send a copy of the review containing full details to the officer
nominated for the purpose in the Finance Department. The Chief Secretary will
review these cases with all Secretaries to Government once in 6 months to find
out whether there are any bottle necks in expediting cases of misappropriation.
29. All the
Departments of Secretariat, all the Heads of Department and District collectors
are directed to bring these instructions to the notice of their subordinates for
their guidance and compliance and enforce strict compliance of these instructions
and any deviation in the matter will be viewed seriously.
(By
order and in the name of the Governor of Andhra Pradesh)
MOHAN
KANDA
Chief
Secretary to Government
Note: Your support facilitates us to update the site.
