State Of Karnataka vs Sri.S.S. Bagalkoti
2021 Latest Caselaw 374 Kant

     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.)
                          -2-

     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

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,

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

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

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.

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

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.

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

- 11 -

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

- 12 -

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

- 13 -

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

- 14 -

(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
                                 - 15 -


        Sec. 12(4) for 1987-88                  Rs.14,88,806
     4. Penalty amount under
        Sec. 12 (b)(3)                          Rs.44,29,000
                                                ------------------------
              Total                             Rs.2,33,77,999
                                                -----------------------

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.

- 18 -

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.

- 19 -

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

- 20 -

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: