Karnataka High Court
Sri. G. S. Bhat vs Karnataka Soaps And Detergents ... on 17 February, 2022
Bench: S.Sujatha, Ravi V Hosmani
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17TH DAY OF FEBRUARY, 2022
PRESENT
THE HON'BLE MRS. JUSTICE S. SUJATHA
AND
THE HON'BLE MR. JUSTICE RAVI V. HOSMANI
W.A.No.65/2021(S-DIS)
BETWEEN:
SRI.G.S.BHAT
S/O SHANKAR S.BHAT
AGE: 65 YEARS
GENERAL MANAGER (FINANCE)
KARNATAKA SOAPS AND
DETERGENTS LIMITED
BENGALURU
(UNDER ORDERS OF DISMISSAL)
R/A NO.1, 1ST CROSS, WIDIA LAYOUT
VIJAYANAGAR, BENGALURU-560 040.
...APPELLANT
(BY SRI. P.A.KULKARNI, ADVOCATE)
AND:
1. KARNATAKA SOAPS & DETERGENTS LIMITED
(A GOVT. OF KARNATAKA UNDERTAKING)
HAVING ITS CORPORATE OFFICE
AND FACTORY AT "SANDAL CITY"
BENGALURU-PUNE HIGHWAY
BENGALURU-560 055
BY ITS COMPANY SECRETARY.
2. MANAGING DIRECTOR
KARNATAKA SOAPS & DETERGENTS LIMITED
(A GOVT. OF KARNATAKA UNDERTAKING)
2
HAVING ITS CORPORATE OFFICE
& FACTORY AT "SANDAL CITY",
BENGALURU-PUNE HIGHWAY
BENGALURU-560 055.
...RESPONDENTS
(BY SMT. P.SUNITA SRINIVAS, ADVOCATE FOR R1 & R2)
THIS WA IS FILED UNDER SECTION 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED
09.12.2020 PASSED BY THE LEARNED SINGLE JUDGE IN
W.P.NO.37271/2015(S-DIS) AND ALLOW W.P. NO.37321/2015 (S-
DIS) AND ETC.,
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 17.01.2022, THIS DAY, RAVI V. HOSMANI J.,
PRONOUNCED THE FOLLOWING:
JUDGMENT
Challenging the judgment dated 09.12.2020 passed by
learned Single Judge in W.P. No.37271/2015 dismissing writ
petition, petitioner has filed this intra-Court appeal.
2. Appellant and respondents herein were petitioner
and respondents respectively in writ petition. For sake of
convenience they shall hereinafter be referred to as per their
respective ranks in writ petition.
3. Since appeal is on limited grounds, narration of
facts of case in detail is not required. Only those as are
necessary for consideration of this appeal are stated.
4. Respondent no.1 is a government company
(hereinafter referred to as the Company). Respondent no.2 is
its Managing Director and Disciplinary Authority ( for short
'Disciplinary Authority'). Petitioner was working as General
Manager (Finance) in the Company. While working as such,
disciplinary proceedings were initiated against petitioner on
the allegation that he committed serious financial
irregularities resulted in company suffering huge financial
loss. An articles of charge was issued to him on 30.10.2004
for possessing assets disproportionate to his known sources
of income. After holding departmental enquiry, wherein he
was found guilty of charges, disciplinary authority passed
order dated 18.04.2008 dismissing petitioner from services of
company.
5. In the meanwhile, he was issued with one more
articles of charge on 12.07.2006 (Annexure - C). The instant
appeal arise out of departmental proceedings initiated issuing
this articles of charge, in which petitioner was charged with
failure to maintain absolute integrity and devotion to duty
and causing huge financial loss to company due to willful
negligence. Petitioner denied the charges in his reply filed on
18.09.2006 (Annexure - D). Not satisfied with reply,
respondent proceeded to hold departmental enquiry.
Thereafter, petitioner filed W.P.No.7903/2008 for declaring
instant proceedings as illegal and unsustainable in law etc.,
as he had already been dismissed from service on 18.04.2008.
Said writ petition was dismissed on 05.09.2011 with a finding
that as instant proceedings were initiated prior to order of
dismissal, clause II of Rule 19 of Karnataka Soaps and
Detergents Ltd., Conduct and Disciplinary Action Rules, 1984
('C & D Rules' for short) provided for continuation of
disciplinary proceedings even after cessation of employer -
employee relationship.
6. Even W.A.No.16519/2011, filed challenging said
order was dismissed on 31.05.2012, with an observation that
petitioner (appellant therein) was entitled to be afforded
opportunity to defend himself in the enquiry. A direction was
issued to respondents to give due opportunity to defend as
permissible under law. Further challenge before Hon'ble
Supreme Court in SLP No.(CC) 2007/2013 came to be
dismissed on 21.01.2013.
7. Thereafter, challenging order of disciplinary
authority dated 03.02.2012 and that of Appellate Authority
dated 05.12.2014, W.P.No.37271/2015 was filed.
8. Main grounds urged in writ petition were that
Division Bench of this Court while dismissing appeal filed by
petitioner had held that petitioner was entitled to opportunity
to defend himself in instant departmental proceedings and
issued directions to said effect. Without affording such
opportunity, petitioner was dismissed from service.
9. It was also contended that in response to second
show-cause notice dated 11.07.2011 (Annexure - P), issued
after receipt of report of enquiry officer dated 04.02.2011,
petitioner vide letter dated 12.12.2011, sought some more
time to submit reply. Disciplinary Authority under letter dated
16.01.2012 (Annexure - AH), had granted period of ten days
from date of receipt of letter dated 16.01.2012 to file reply.
Though petitioner had filed representation on 27.01.2012
(Annexure - Y), after receipt of letter dated 16.01.2012, he
addressed letter dated 28.01.2012 (Annexure - Z) seeking for
time till 13.02.2012.
10. However, without either considering his request for
extension of time or awaiting lapse of ten days after receipt of
letter dated 16.01.2012 by petitioner, disciplinary authority
had passed order of punishment on 03.02.2012 produced as
Annexure - AA holding petitioner jointly and severally liable
along with two other delinquent officers, to pay to respondent
- company a sum of Rs.1,81,00,000/- with 6% interest per
annum. Therefore, impugned order passed by disciplinary
authority was liable to be quashed, both on ground of
violation of principles of natural justice and non-compliance
of direction issued by Division Bench of this Court.
11. However, learned Single Judge, proceeded to
dismiss, petitioner's writ petition. Aggrieved thereby,
petitioner is in appeal.
12. Sri. P.A. Kulkarni learned counsel for petitioner
submitted that learned Single Judge while passing impugned
order failed to consider directions issued by this Court in
W.A.No.16159/2011 directing respondents to grant
opportunity to petitioner in departmental proceedings. As
order of punishment was passed by placing petitioner
ex-parte, impugned order of punishment was liable to be set
aside on the ground of violation of principles of natural
justice.
13. Learned counsel further contended that impugned
order for recovery of Rs.1,81,00,000/- from petitioner and Sri.
K. Anjinappa was without authority of law and contrary to
Rule 17 of 'C & D Rules' which reads as follows:
"17. PENALTIES:
Any one of the following penalties may be
imposed for good and sufficient reasons on any
employee of the company by the appointing
authority or the disciplinary authority or any
other authority empowered in that behalf to
impose such penalties under the rules :
17 (a) MINOR PENALTIES :
(i) Written Warning (ii) Censure (iii) Witholding
of promotion (iv) Recovery from employee's pay
of the whole or part of any loss caused to the
company on account of his negligence or orders
of the company; and (v) stoppage of increments
of pay with or without cumulative effect.
(b)MAJOR PENALTIES :
(i) Suspension on loss of pay and allowances;
(ii) Reduction to a lower stage in the time scale
of pay for a specified period; (iii) Demotion to
junior post or lower grade; (iv) Compulsory
retirement and (v) Dismissal from service."
14. It was submitted that this would go to root of
matter and though this ground was pleaded in paragraph
no.29 of writ petition, learned Single Judge failed to consider
the same. Hence interference was called for in appeal as this
was a pure question of law.
15. It was further submitted that learned Single Judge
in paragraph no.5 of impugned judgment observed that as
petitioner had submitted detailed reply on 27.01.2012 as per
Annexure - Y of nearly 38 pages, he nevertheless sought
further time in his letter dated 28.01.2012. It was further
observed that both letter and reply were filed on 28.01.2012,
therefore, disciplinary authority was justified in passing
impugned order after considering reply filed by petitioner on
27.01.2012. It was submitted that said observation was not
justified and contrary to record. It was submitted that when
disciplinary authority had granted further time of ten days
from date of receipt of his order dated 16.01.2012 at
Annexure - AH, it was not justified in passing impugned order
before lapse of said period, especially so when petitioner had
submitted one more letter on 28.01.2012 seeking further
time, without considering said request. Therefore, impugned
order called for interference.
16. Learned counsel further submitted that Division
Bench of this Hon'ble Court in W.A.No.16519/2011
(Annexure - M) had directed grant of opportunity to petitioner.
Paragraph no.8 of said order reads as follows:
"8. In the circumstance, thus holding of
second enquiry subsequent to dismissal from
service in an enquiry proceedings initiated
earlier to retirement/dismissal cannot be held
to be bad in law. However, the appellant in
entitled to put forth his defence as permissible
under law and as such, he is entitled to be
afforded an opportunity to defend himself in
the said proceedings. Thus, by holding that the
enquiry proceedings which was initiated earlier
to passing of dismissal order in a different
enquiry proceedings, is entitled to be continued
ever after such dismissal with a direction to the
respondents to give due opportunity to the
appellant to defend himself as permissible
under law, the above appeal is disposed off."
17. It was submitted that this direction was issued on
31.05.2012 in writ appeal wherein respondents were
represented. Therefore, though impugned order passed by
disciplinary authority was prior to issuance of said direction,
respondents were required to reopen enquiry and continue
same from stage of providing opportunity to petitioner to
cross-examine management witnesses. As petitioner was
denied such opportunity, impugned order stood vitiated. As
learned Single Judge failed to appreciate this aspect in proper
perspective, impugned order calls for interference.
18. On the other hand, Smt. P. Sunita Srinivas
learned counsel appearing for respondents no.1 and 2
opposed appeal. She submitted that while working as General
Manager (Finance) in the Company, petitioner was issued
articles of charges alleging acquisition of assets beyond
known sources of income and also involving himself in serious
irregularities and financial embezzlement causing huge
financial loss to the tune of Rs.1,81,25,457/- to respondent
company. After conducting separate domestic enquiry in
respect of two articles of charges, finding him guilty of
charges, an order dismissing him from service was passed in
respect of first articles of charge. In respect of second articles
of charge, petitioner was held jointly liable for recovery of sum
of Rs.1,81,00,000/- along with Sri. K. Anjinappa.
19. It was further submitted that in W.P.No.
37271/2015, petitioner challenged order passed by
disciplinary authority on 03.02.2012 and Appellate Authority
on 05.12.2014 i.e., Annexures - AA and AG respectively. The
challenge was not on merits of findings in departmental
enquiry but on ground of violation of principles of natural
justice etc. It was submitted that contention urged in appeal
namely that impugned order passed by disciplinary authority
was beyond powers of disciplinary authority under Rule 17 of
'C & D Rules', was not urged before learned Single Judge and
therefore petitioner was estopped from urging same in appeal
for the first time. It was further submitted that company had
already filed civil suit for recovery of money against petitioner
which was pending before City Civil Court. Therefore, it was
submitted recovery of financial loss caused to company was
not under Rule 17 of 'C & D Rules'.
20. It was further submitted that though petitioner's
request for further time to file reply to second show-cause
notice was on ground of inability to go through voluminous
records, petitioner had in fact filed a very detailed reply on
27.01.2012, virtually covering every aspect of enquiry and
leaving no scope for further reply. Therefore, request of
petitioner for further time was not bonafide and was a mere
ruse. It was further submitted that second show-cause notice
was issued on 11.07.2011, therefore petitioner had already
availed ample opportunity. Under the circumstances, learned
Single Judge was fully justified in holding so and dismissing
petition.
21. Heard learned counsel and perused record.
22. As stated above, since contentions urged are in
narrow compass, this Court is not called upon to delve into
merits of findings of enquiry officer, disciplinary authority or
appellate authority.
23. Insofar as first contention urged regarding non-
compliance of direction issued by this Court in
W.A.No.16519/2011, it is seen that domestic enquiry stood
concluded on 04.02.2011 when enquiry officer submitted his
report. Thereafter second show-cause notice (Annexure - P)
was issued on 11.07.2011. It is endorsed 'received on
13.07.2011'. Petitioner filed his reply to same on 27.01.2012
as per Annexure - Y. After considering same, Disciplinary
Authority passed impugned order on 03.02.2012. Thereafter,
petitioner preferred appeal before Appellate Authority on
26.03.2012 as per Annexure - AF. It is relevant to mention
here that the memorandum of appeal spans across no less
than sixty-six pages and in fact exhaustive addressing every
aspect of charges, domestic enquiry, finding of Enquiry Officer
as well as order of disciplinary authority. Said appeal was
considered by appellate authority on 05.12.2014 and order
passed as per Annexure - AG dismissing appeal.
24. Therefore, when W.A.No.16519/2011 came up for
consideration before a Division Bench of this Court, petitioner
was well aware of order passed by disciplinary authority and
that departmental proceedings stood concluded and therefore
direction issued was without subsisting cause of action. In
any case, petitioner had also approached Hon'ble Supreme
Court, which dismissed his petition for special leave. There
are no observations/directions issued by Hon'ble Supreme
Court. As direction issued by Division Bench of this Court
was after conclusion of disciplinary proceedings and after
passing of order by disciplinary authority, especially without
subsisting cause of action, we are of considered view that
petitioner cannot seek to derive any benefit of said direction.
Hence said contention is liable to be rejected.
25. Insofar as contention regarding denial of adequate
opportunity for filing representation against the findings of
enquiry officer, it is seen that petitioner has filed detailed
representation against the enquiry report virtually touching
upon every aspect. Even without going into the question
whether there was denial of adequate opportunity, said
contention is required to be rejected as no case of prejudice
having been caused has been established before us.
Especially, when there is substantial compliance of principles
of natural justice and procedure followed by respondents has
been fair.
26. Even contention regarding Rule 17 not providing
power to disciplinary authority to order recovery of money
from petitioner also does not impress us. Firstly, petitioner
had challenged continuation of instant disciplinary
proceedings, before this Court in W.P. No.7903/2008. In the
said writ petition, it has been specifically held that
proceedings for recovery of dues for misappropriation of funds
was held maintainable by referring to Division Bench decision
of this Court in the case of State Bank of Mysore Vs.
Smt. Saroja reported in 1998 (3) LLN 689. Observations of
the learned Single Judge in paragraph no.9 are as follows:
"As a result of first enquiry report major
punishment of dismissal was imposed on the
petitioner. Though that is not under challenge
in this proceeding, what is not in dispute is,
prior to the dismissal another enquiry was
instituted alleging financial irregularities. The
grievance of the respondent is, due to mis-
management a huge loss has been caused.
The Rule also provides for continuation of the
enquiry even after retirement i.e., even after
ceasing of the relationship of employer and
employee if the petitioner had been put on
notice prior to the retirement/dismissal. The
Division Bench of this Court has held that
even for recovery of misappropriated amount,
proceedings could be continued to recover the
amount. Except the word 'dismissal' is not
being mentioned in clause II of Rule 19 of the
Amended Rules, the continuation of enquiry
proceedings has not been prohibited after
retirement/any consequential actions being
initiated and punishment is imposed prior to
dismissal. In the context, to determine and
identify the extent of loss, whether it is to be
recovered or not and also when the rules
provide for withholding of gravity etc., in such
a situation, necessarily the continuation of the
second enquiry proceedings cannot be said to
be irregular. In the circumstances, it is for the
petitioner to press for early conclusion of the
enquiry, if so advices. "
27. Said finding has not been interfered with either in
appeal before Division Bench or before the Hon'ble Supreme
Court. In any case, petitioner ought to have urged this
contention ideally in the earlier round of challenge and atleast
in the second round of challenge before the learned Single
Judge of this Court. Though learned counsel for petitioner
drew our attention to pleading in writ petition wherein said
contention was specifically raised, but failure to urge the
same before the learned Single Judge is fatal. Especially, so in
this case, when petitioner had earlier questioned
maintainability of proceedings in earlier round of challenge.
Thus, none of the grounds urged merit consideration.
Accordingly, we pass following
ORDER
Writ Appeal is dismissed.
No order as to costs.
Sd/-
JUDGE
Sd/-
JUDGE
BVK
