IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF JANUARY, 2021
PRESENT
THE HON'BLE MRS.JUSTICE S.SUJATHA
AND
THE HON'BLE MR. JUSTICE M.I.ARUN
W.P.No.57874/2017 (S - KAT)
BETWEEN :
1. STATE OF KARNATAKA
REP BY ITS PRINCIPAL SECRETARY
TO GOVERNMENT,
FINANCE DEPARTMENT,
VIDHANA SOUDHA,
BANGALROE-560001
2. SECRETARY TO GOVERNOR
RAJ BHAVAN, BANGALORE-560001
3. THE ACCOUNTANT GENERAL
IN KARNATAKA, OPP. PARK HOUSE,
BANGALORE-560001 ...PETITIONERS
(BY SRI A.C.BALARAJ, AGA.)
AND :
SRI S.S.BAGALKOTI
S/O SHANKARAPPPA BAGALKOTI,
AGED ABOUT 74 YEARS,
RETIRED DEPUTY COMMISIONER OF EXCISE,
R/O NO.164, KHB COLONY,
SOLAPUR ROAD, BIJAPUR-595201 ...RESPONDENT
(BY SMT.M.S.PRATHIMA, ADV. FOR SRI S.V.NARASIMHAN, ADV.)
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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE
ORDER DATED 21.10.2016 IN APPLICATION No.4348/2004
PASSED BY THE KARNATAKA STATE ADMINISTRATIVE
TRIBUNAL, BANGALORE, VIDE ANNEXURE-A AND ETC.
THIS PETITION COMING ON FOR PRELIMINARY HEARING
IN 'B' GROUP, THIS DAY, S. SUJATHA, J., MADE THE
FOLLOWING:
ORDER
This petition is directed against the order passed by the Karnataka State Administrative Tribunal ('Tribunal' for short) in Application No.4348/2004 dated 21.10.2016 inter alia seeking for the dismissal of the Application No.4348/2004 dated 21.10.2016 filed by the respondent before the Tribunal.
2. The respondent, an employee of State Excise Department was appointed as an Excise Inspector in the year 1970. Thereafter, he has served in the department in various capacities, such as Deputy Superintendent of Excise, Superintendent of Excise and Deputy Commissioner of Excise. The respondent on attaining the age of superannuation retired from service -3- on 30.6.2000. During the year 1989 the respondent was working as Superintendent of Excise in M/s Sapthagiri Enterprises, a distillery situated at Sameera Wadi, Mudhol Taluk, Bijapur District. On 12.7.1989, the then Deputy Commissioner, Bijapur District, along with the Superintendent of Excise and Officers of Commercial Tax Department inspected the distillery of M/s Sapthagiri Enterprises and noticed certain irregularities which resulted in evasion of excise duty as well as tax. It was pointed out in the report submitted by the then Deputy Commissioner, Bijapur District, that the respondent while working as Superintendent of Excise along with Sri.M.M.Gowdar, Inspector of Excise, had colluded with the management of M/s Sapthagiri Enterprises in evading the tax and as such, they are responsible for all the irregularities in the said distillery relating to the evasion of payment of tax and excise duty. It was recommended for initiation of disciplinary action against the respondent and Sri.M.M.Gowdar, -4- pursuant to which 1st respondent issued show cause notice dated 2.6.1998 by enclosing the article of charges and relevant documents to which the respondent submitted his reply. Not being satisfied with the explanation offered by the respondent, the joint departmental enquiry was ordered against the respondent and Sri.M.M.Gowdar. The Addl. Commissioner of Excise-II, Dharwad was appointed as an Enquiry Officer to hold joint enquiry. The said Enquiry Officer had submitted the enquiry report dated 4.5.2001 holding that the charge Nos.1, 3, 4, 9, 10 and 11 (6 charges out of 11) against the respondent were proved. The petitioner issued second show cause notice dated 2.7.2001 by enclosing the enquiry report and called upon the respondent to submit his reply, if any. In response to the same, the respondent has submitted his written submission dated 11.9.2001. Thereafter, 1st petitioner has examined the charges levelled against the respondent, the report of the Enquiry Officer and the -5- reply submitted by the respondent and passed an order dated 3.11.2003 by holding that charge Nos.1, 3, 4, 9, 10 and 11 are proved in enquiry. In view of the respondent attaining the age of superannuation during the pendency of the departmental proceedings, by invoking Rule 214(1) Karnataka Civil Services (C.C & A) Rules ('KCSR' for short), penalty was imposed withholding the pensionary benefits of the respondent permanently which had the concurrence of the Karnataka Public Service Commission.
3. Aggrieved by the same, the respondent had preferred an appeal before His Excellency the Governor of Karnataka seeking to set aside the order dated 3.11.2003 passed by the 1st petitioner, which came to be dismissed as per order dated 11.06.2004. The respondent challenged the said orders before the Tribunal by filing Application No.4348/2004 and the same came to be allowed by setting aside the orders -6- dated 3.11.2003 and 11.6.2004 directing the petitioner No.1 to pay all the retiral benefits to the respondent within four months from the date of receipt of certified copy of the order.
4. Being aggrieved, the petitioners - State have preferred the present writ petition.
5. Sri.A.C.Balaraj, learned AGA appearing for the petitioners submitted that the 1st petitioner is entitled to withhold the pensionary benefits if the pensioner is found guilty of grave misconduct or negligence during the period of his service and the service rendered after his employment. A conjoint reading of the charges and the enquiry report makes it clear that a grave misconduct as well as negligence committed by the respondent is apparent, but the Tribunal held that neither the Disciplinary Authority nor the Appellate Authority have given any finding about the grave misconduct and negligence. -7-
6. It was further submitted that notwithstanding any delay caused in concluding the disciplinary proceedings, having regard to the nature of charges and also keeping in mind the huge amount of loss caused to the state exchequer, the Tribunal ought to have confirmed the order of imposing penalty on the respondent. Moreover, no such ground was raised by the respondent in the appeal field before His Excellency the Governor of Karnataka. In the circumstances, the Tribunal ought not to have allowed the application on the ground of delay. In support of his contentions, learned counsel has placed reliance on the judgment of the Hon'ble Apex Court in the case of Government of Andhra Pradesh and others Vs. V.Appala Swamy reported in (2007)14 SCC 49.
7. Learned counsel appearing for the respondent argued that no charges leveled against the respondent were proved to be grave misconduct or -8- negligence which is sine-qua-non as per Rule 214 (1)(a) of KCSR. Secondly, there was inordinate delay in initiating the disciplinary proceedings and concluding the same, 14 years elapsed in punishing the respondent on the ground of misconduct. The pension of the pensioner cannot be withheld by the Government on surmises and conjunctures. What is required to be proved is the grave misconduct or negligence. In the absence of finding by the Disciplinary Authority or Appellate Authority in this regard, the Tribunal was right in allowing the application setting aside the impugned orders challenged therein.
8. Learned counsel placed reliance on the judgment of the Hon'ble Apex Court in the case of D.V.Kapoor Vs. Union of India reported in AIR 1990 SC 1923.
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9. We have carefully considered the rival submissions of the learned counsel appearing for the parties and perused the material on record.
10. The articles of charge framed by the respondent No.1 are as under:
"Charge - 1:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. During your working tenure, on 12.7.89 the Deputy Commissioner, Bijapura District, Excise Superintendent and Deputy Commissioner, Commercial Tax North Zone have visited the office for liquor inspection. But inspite of knowing the matter you stood absent. By colluding with the distillery persons you have intentionally absented yourself and this is dereliction of duty. By this you have violated
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Rule 20 of Karnataka Excise (Distillery and Warehouse) rule 1967 and rule 3(1)(i)(ii) of Karnataka Govt. Services (Conduct) rules, 1966. Hence, this charge against you.
Charge - 2:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery, office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. During your working tenure, you have permitted to pump the molasses to nearby industry without the permission of the superiors. By this you have violated, Rule 10 of Karnataka Excise (Distillery and Warehouse) rule 1967 and rule 3(1)(i)(ii) of Karnataka Govt. Services (Conduct) rules, 1966. Hence, this charge against you.
Charge - 3:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery, office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. During your working tenure, by colluding with distillery officials you have left two tankers without molasses layout plan license, and shown dereliction of duty. By this you have violated rule 3(4) of Karnataka Excise (Distillery and Warehouse) rule 1967 and
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rule 3(1)(i)(ii) of Karnataka Govt. Services (Conduct) rules, 1966. Hence, this charge against you.
Charge - 4:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery, office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. During your working tenure, instead of keeping the keys of the distilleries with you, you have handed over the keys to the distillery administrative officers. By this you have violated rule 8 of Karnataka Excise (Distillery and Warehouse) rule 1967 and rule 3(1)(i)(ii) of Karnataka Govt. Services (Conduct) rules, 1966. Hence, this charge against you. Charge - 5:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery, office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. During your working tenure, there were two doors in distillery and you have permitted to open the said doors and also failed to engage the guards for security. By this you have violated rule 20 of Karnataka Excise (Distillery and Warehouse) rule 1967 and rule
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3(1)(i)(ii) of Karnataka Govt. Services (Conduct) rules, 1966. Hence, this charge against you. Charge - 6:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery, office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. In spite of three posts of Excise Guards, clerks and peons posts being vacant, you have failed to fill the said posts by bringing the matter to your superiors. Due to this there was interruption in performance of the day to day affairs of the distillery. By this you have violated rule 14 of Karnataka Excise (Distillery and Warehouse) rule 1967 and rule 3(1)(i)(ii) of Karnataka Govt. Services (Conduct) rules, 1966. Hence, this charge against you.
Charge - 7:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery, office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. There is a rule for providing house for staff of the excise department in your jurisdiction. But you have failed to take steps in this regard. Due to this, the staff suffered problems for their residence. By this you have violated rule 17 of Karnataka Excise (Distillery
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and Warehouse) rule 1967 and rule 3(1)(i)(ii) of Karnataka Govt. Services (Conduct) rules, 1966. Hence, this charge against you.
Charge - 8:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery, office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. You have not arranged security for protection of the sealed samples in the said distillery and by keeping open the windows you have shown negligence of duty. By this you have violated rule 3(1) of Karnataka Excise (Distillery and Warehouse) rule 1967 and rule 3(1)(i)(ii) of Karnataka Govt. Services (Conduct) rules, 1966. Hence, this charge against you.
Charge - 9:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery, office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. During your working tenure, you have allowed the distillery administration to utilize the Spirit from the storage tank without prior permission of the superiors and misused your power. By this you have violated rule 33, 34 of Karnataka Excise
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(Distillery and Warehouse) rule 1967 and rule 3(1)(i)(ii) of Karnataka Govt. Services (Conduct) rules, 1966. Hence, this charge against you. Charge - 10:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery, office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. During your working tenure, without giving details of conversion of spirit stored in the tank to the investigating officer, you have misguided and acted in a manner to suppress the matter. By this you have violated rule 24(1)(2) of Karnataka Excise (Distillery and Warehouse) rule 1967 and rule 3(1)(i)(ii) of Karnataka Govt. Services (Conduct) rules, 1966. Hence, this charge against you. Charge - 11:
Sri S.S.Bagalkote, you have worked at M/s Sapthagiri Enterprises, Sameervadi Distillery, office Bijapura District as Excise Superintendent from 20.07.85 to 16.7.89. Due to negligence of duty, misuse of the power the Govt. has sustained the revenue loss as under:
1. Excise Duty Rs.1,50,00,000
2. Sales Tax Rs.24,58,193
3. Penalty amount under
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Sec. 12(4) for 1987-88 Rs.14,88,806
4. Penalty amount under
Sec. 12 (b)(3) Rs.44,29,000
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Total Rs.2,33,77,999
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You being a responsible Govt. officer, in order to help the distillery acted in a manner which causes loss to the Govt. By this you have violated the 1996 Karnataka Service (Conduct) rules, rule 3(1)(ii)(iii). Hence, these charges against you."
11. After enquiry, the enquiry Authority submitted the report holding the respondent guilty of 6 charges out of 11 charges. In these proved 6 charges, it has been held that it is proved that the respondent has colluded with M/s Sapthagiri Enterprises in causing loss to the State Exchequer. The bone of contention of the learned counsel for the respondent is that though these 6 charges are proved, they are not grave misconduct or negligence to attract Rule 214(1)(a) of the KCSR. The Tribunal has recorded a finding that
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neither the Disciplinary Authority nor the Appellate Authority has given any finding that the misconduct or negligence committed by the respondent is grave.
12. It is apt to refer to para 6 of D.V.Kapoor's case, supra and the relevant portion of the same is quoted here under:
"6. As seen the exercise of the power by the President is hedged with a condition precedent that a finding should be recorded either in departmental enquiry or judicial proceedings that the pensioner committed grave misconduct or negligence in the discharge of his duty while in office, subject of the charge. In the absence of such a finding the President is without authority of law to impose penalty of with- holding pension as a measure of punishment either in whole or in part permanently or for a specified period, or to order recovery of the pecuniary loss in whole or in part from the pension of the employee, subject to minimum of Rs.60/-."
13. Thus, in exercising the power under Section 214(1)(a), recording of a finding either in departmental enquiry or judicial proceedings that the pensioner
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committed grave misconduct or negligence in the discharge of his duty while in office, subject to the charge is a condition precedent. The Articles of charge unequivocally indicates the grave misconduct or negligence of the respondent. The Appellate Authority has referred to subsequent legal proceedings emanating from the order of the Commercial Tax Department regarding the loss of revenue caused to the State Exchequer owing to the dereliction of duties of the respondent so as to benefit M/s Sapthagiri Enterprises. Having considered the records relating to the Government order dated 3.11.2003 which was appealed, the order has been passed by the Appellate Authority confirming the order of the Disciplinary Authority after application of mind. Hence, it cannot be held that there was no finding by the Disciplinary Authority and Appellate Authority as regards the misconduct or negligence on the part of the respondent.
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14. In our considered view, this argument of the learned counsel for the respondent and the finding of the Tribunal in this regard cannot be countenanced for the reason that the articles of charge, the enquiry report and the orders of the Disciplinary Authority as well as the Appellate Authority clearly indicates the grave misconduct or negligence of the respondent subject of the charge which specifically denotes the charges as grave.
15. It is trite that the inordinate delay in initiation of departmental enquiry without any convincing explanation could be bad in law. The protracted enquiry should be avoided. As held by the Hon'ble Apex Court in Government of Andhra Pradesh and others, supra, so far as the question of delay in concluding the departmental proceedings as against a delinquent officer, no hard-and-fast rule can be laid down. Each case should be determined on its own facts.
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The principles laid down by the Hon'ble Apex Court upon which a proceeding can be directed to be quashed on the ground of delay are:
1. Where by reason of the delay, the employer condoned the lapses on the part of the employee;
2. Where the delay caused prejudice to the employee.
No such ground was raised by the respondents before the disciplinary Authority or the Appellate Authority. Delay if caused prejudice, the same has to be made out by the employee before approaching the Tribunal.
16. Having regard to the grave nature of charges leveled against the respondent found to be proved, the tribunal ought to have addressed on the merits of the case where the State exchequer has suffered huge loss.
17. As we are not inclined to approve the finding of the Tribunal for the reasons aforesaid, we deem it appropriate to set aside the impugned judgment and
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order and remand the matter to the Tribunal for re- consideration.
Hence, the following:
ORDER
i) Writ petition is allowed.
ii) The impugned order dated 21.10.2016 in so far as Application No.4348/2004 by the Karnataka Administrative Tribunal at Bangalore is set aside. The matter is remanded to the Tribunal for re-
consideration.
iii) All the rights and contentions of the parties are left open.
iv) The Tribunal shall re-consider the matter in accordance with law and pass a speaking order as expeditiously as possible.
SD/-
JUDGE SD/-
JUDGE Dvr: