Karnataka High Court
Sri. Jayavibhava Swamy vs The Chief Secretary on 14 December, 2023
Author: N S Sanjay Gowda
Bench: N S Sanjay Gowda
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NC: 2023:KHC:45621
WP No. 24481 of 2023
C/W WP No. 23473 of 2023
WP No. 24719 of 2023
WP No. 24977 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 14TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE N S SANJAY GOWDA
WRIT PETITION No.24481 OF 2023 (S-RES)
C/W
WRIT PETITION No.23473 OF 2023 (S-RES)
WRIT PETITION No.24719 OF 2023 (GM-RES)
WRIT PETITION No.24977 OF 2023 (S-RES)
IN W.P.No.24481/2023:
BETWEEN:
1. SRI.CHANDRASHEKARA SIDRAMAPPA HEGDE,
S/O SIDRAMAPPA,
AGED ABOUT 62 YEARS,
OCCUPATION:RTD. GENERAL MANAGER(FINANCE),
KARNATAKA STATE WARE HOUSING CORPORATION,
R/AT No.254, NTI LAYOUT,
II PHASE, RAJIV GANDHI NAGAR,
NEAR NCBC FRONT GATE,
Digitally
signed by VIDYARANYAPURA,
KIRAN
KUMAR R BENGALURU-560 097.
Location:
HIGH 2. SRI.G.H.RAMESH,
COURT OF
KARNATAKA S/O LATE HANUMANTHAIAH,
AGED ABOUT 61 YEARS,
OCCUPATION:RTD. GENERAL
MANAGER(COMMERCIAL)
KARNATAKA STATE WARE HOUSING CORPORATION,
R/AT No.229/A, SREE KAKIMALLESHWARA NILAYA,
BYREGOWDA LAYOUT,
MUDDAYANAPALYA,
BENGALURU-560 091.
3. SRI.SOMASHEKAR.S.GANJI,
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WP No. 24719 of 2023
WP No. 24977 of 2023
S/O LATE SHIVAPPA,
AGED ABOUT 62 YEARS,
OCCUPATION:RTD DGM (FINANCE),
KARNATAKA STATE WARE HOUSING CORPORATION,
R/AT No.316/12, 2ND "A" CROSS,
VINAYAKANAGAR, NAGASANDRA POST,
TUMKUR ROAD, BENGALURU-560 073.
4. SRI.ARANI GIRISH,
S/O LATE KRISHNAPPA SETTY,
AGED ABOUT 62 YEARS,
OCCUPATION:RTD.AEE
KARNATAKA STATE WARE HOUSING CORPORATION
R/AT GOVINDA KRUPA,
JAKKAREDDY HOSPITAL ROAD,
VIDYANAGAR, HUBBALLI-580 021.
5. SRI.G.HANUMANATHARAYAPPA,
S/O LATE GURUVANA BOVI,
AGED ABOUT 62 YEARS,
OCCUPATION:SUPERINTENDENT OF
ENGINEER(RETD)
DEPARTMENT OF PWD,
R/AT No.687, 14TH MAIN,
27TH CROSS, JUDICIAL LAYOUT,
GKVK POST, BENGALURU-560 065.
6. SRI.MALLIKARJUNA ALLIPUR,
S/O LATE SIDRAMAPPA ALLIPUR,
AGED ABOUT 58 YEARS,
OCCUPATION:EXECUTIVE ENGINEER
URBAN DEVELOPMENT DEPARTMENT,
R/AT FLAT No.106, VIJAYA HOMES,
NEAR ALLALASANDRA LAKE,
80 FEET ROAD, SECTOR-A,
YELAHANKA NEW TOWN,
BENGALURU-560 064.
...PETITIONERS
(BY SRI.M.R.BALAKRISHNA., ADVOCATE)
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WP No. 24481 of 2023
C/W WP No. 23473 of 2023
WP No. 24719 of 2023
WP No. 24977 of 2023
AND:
1. THE GOVERNMENT OF KARNATAKA,
REPRESENTED BY ITS CHIEF SECRETARY,
VIDHANA SOUDHA,
BENGALURU-560 001.
2. THE PRINCIPAL SECRETARY,
KARNATAKA STATE CO-OPERATIVE DEPARTMENT,
6TH FLOOR, 3RD STAGE,
M.S.BUILDING,
BENGALURU-560 001.
3. THE SECRETARY,
URBAN DEVELOPMENT DEPARTMENT,
GOVERNMENT OF KARNATAKA,
VIKASA SOUDHA,
BENGALURU-560 001.
4. THE MANAGING DIRECTOR,
KARNATAKA STATE WARE HOUSING CORPORATION,
No.43, PRIMROSE ROAD,
SIVANCHETTY GARDENS, ASHOKNAGAR,
BENGALURU-560 025.
5. THE KARNATAKA LOKAYUKTA,
REPRESENTED BY SPP.
M.S.BUILDING,
DR.B.R.AMBEDKAR VEEDHI,
BENGALURU-560 001.
...RESPONDENTS
(BY SMT.PRATHIBHA.R.K, AGA FOR R-1 TOR -3;
SRI.JAGADEESHA.B.N., ADVOCATE FOR R-4;
SRI.VENKATESH.S.ARBATTI, ADVOCATE FOR R-5)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
QUASH THE ANNEXURE-A DATED 20.01.2023, BEARING No.CO
85 WHC 2020(PART-4) PASSED BY THE R-3 ENTRUSTING THE
INVESTIGATION TO HON'BLE LOKAYUKTA THE R-5 HEREIN IN
CONNECTION WITH THE ALLEGATIONS OF ILLEGALITIES AND
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WP No. 24481 of 2023
C/W WP No. 23473 of 2023
WP No. 24719 of 2023
WP No. 24977 of 2023
IRREGULARITIES IN RESPECT OF CONSTRUCTION OF WARE
HOUSES IN THE STATE OF KARNATAKA BY THE PETITIONERS
No.1 TO 4, ETC.
IN W.P.No.23473/2023:
BETWEEN:
DR.NAVEEN KUMAR RAJU.S.
SON OF SUDHAKAR RAJU.R.,
AGED ABOUT 43 YEARS,
RESIDING AT No.379, 1ST FLOOR,
21ST MAIN ROAD, JUDICIAL LAYOUT,
BANGALORE-560 065.
...PETITIONER
(BY SMT.IRFANA NAZEER., ADVOCATE)
AND:
1. STATE OF KARNATAKA
REPRESENTED BY THE PRINCIPAL SECRETARY
CO-OPERATIVE DEPARTMENT,
6TH FLOOR, 3RD STAGE, M.S.BUILDING,
BANGALORE-560 001.
2. KARNATAKA STATE WAREHOUSING CORPORATION
NO.43, PRIMROSE ROAD, SIVANCHETTI GARDENS,
ASHOK NAGAR, BANGALORE-560 025
REPRESENTED BY ITS MANAGING DIRECTOR.
3. KARNATAKA LOKAYUKTA POLICE
M.S.BUILDING,
AMBEDKAR VEEDHI, BANGALORE-560 001.
...RESPONDENTS
(BY SMT.PRATHIBHA.R.K, AGA FOR R-1;
SRI.JAGADEESHA.B.N., ADVOCATE FOR R-2;
SRI.VENKATESH.S.ARBATTI, ADVOCATE FOR R-3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
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WP No. 24481 of 2023
C/W WP No. 23473 of 2023
WP No. 24719 of 2023
WP No. 24977 of 2023
QUASH THE IMPUGNED DIRECTION DATED 12.10.2023 AT
ANNEXURE-A, ETC.
IN W.P.No.24719/2023:
BETWEEN:
SRI.JAYAVIBHAVA SWAMY,
S/O C.M.YARESEEME,
AGED ABOUT 58 YEARS,
WORKING AS MANAGING DIRECTOR
KARNATAKA STATE MINERAL
CORPORATION LIMITED
TTMC A BLOCK, 5TH FLOOR, BMTC BUILDING,
K H ROAD, SHANTINAGAR,
BENGALURU-560 027.
...PETITIONER
(BY SRI.BASAVARAJ.V.SABARAD, SENIOR COUNSEL FOR
SRI. H.L.PRADEEP KUMAR., ADVOCATE)
AND:
1. THE CHIEF SECRETARY
GOVERNMENT OF KARNATAKA,
VIDHANA SOUDHA,
BENGALURU-560 001.
2. ADDITIONAL CHIEF SECRETARY
AND DEVELOPMENT COMMISSIONER
TO THE GOVERNMENT OF KARNATAKA,
VIDHANA SOUDHA,
BENGALURU-560 001.
3. THE PRINCIPAL SECRETARY
TO GOVERNMENT CO-OPERATION
DEPARTMENT,
M.S.BUILDING, D.R.B.R.AMBEDKAR ROAD,
BENGALURU-560 001.
4. THE SECRETARY TO GOVERNMENT
DEPARTMENT OF PERSONNEL AND
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WP No. 24481 of 2023
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WP No. 24719 of 2023
WP No. 24977 of 2023
ADMINISTRATIVE REFORMS
VIDHANA SOUDHA,
BENGALURU-560 001.
5. MANAGING DIRECTOR
KARNATAKA STATE WAREHOUSING
CORPORATION
#43, PRIMROSE ROAD,
ASHOK NAGAR,
BENGALURU-560 025.
6. KARNATAKA LOKAYUKTHA POLICE
REPRESENTED BY ITS REGISTRAR
M.S.BUILDING,
AMBEDKAR VEEDHI,
BENGALURU-560 001.
...RESPONDENTS
(BY SMT.PRATHIBHA.R.K, AGA FOR R-1 TO R -4;
SRI.B.N.JAGADEESH, ADVOCATE FOR R-5;
SRI.B.B.PATIL, ADVOCATE FOR R-6)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
QUASH THE IMPUGNED ORDER BEARING No.SAEE 85 RAUNI
2020 (PART-4) DATED:12.10.2023 PRODUCED AS
ANNEXURE-R ISSUED BY R-3, ETC.
IN W.P.No.24977/2023:
BETWEEN:
M.B.RAJESH GOWDA,
S/OM.J.BETTASWAMAIAH,
AGED ABOUT 52 YEARS,
R/AT No.152/39,
SAI RAM KRIPA, 6TH CROSS,
BAPUJI LAYOUT, NEAR CHANDRA LAYOUT,
VIJAYNAGAR, BENGALURU-560 040.
...PETITIONER
(BY SRI.S.S.NAGANAND, SENIOR COUNSEL FOR
SMT.SUMANA NAGANAND., ADVOCATE)
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WP No. 24719 of 2023
WP No. 24977 of 2023
AND:
1. STATE OF KARNATAKA
DEPARTMENT OF CO-OPERATION,
6TH FLOOR, 3RD GATE, M.S.BUILDING,
BENGALURU-560 001.
REPRESENTED BY IT PRINCIPAL SECRETARY.
2. KARNATAKA STATE WAREHOUSING CORPORATION
A COMPANY REGISTERED UNDER THE
PROVISIONS OF THE COMPAINES ACT 1956
HAVING ITS OFFICE AT UGRANA BHAVAN,
No.43, PRIMROSE ROAD, BENAGLURU-560 025.
REPRESENTED BY ITS MANAGING DIRECTOR.
3. KARNATAKA LOKAYUKTA
M.S.BUILDING, AMBEDKAR VEEDHI,
BENGALURU-560 001.
REPRESENTED BY ADDITIONAL-REGISTRAR,
ENQUIRY.
...RESPONDENTS
(BY SMT.PRATHIBHA.R.K, AGA FOR R-1;
SRI.JAGADEESHA.B.N., ADVOCATE FOR R-2;
SRI.VENKATESH.S.ARBATTI, ADVOCATE FOR R-3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, QUASH THE
DIRECTION BEARING No.SA E 85 RA U NI 2020 (PART-4)
DATED 12/10/2023 ISSUED BY R-1 TO THE MANAGING
DIRECTOR OF R-2 (ANNEXURE-D), ETC.
THESE PETITIONS HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 21.11.2023, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE
FOLLOWING
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WP No. 24481 of 2023
C/W WP No. 23473 of 2023
WP No. 24719 of 2023
WP No. 24977 of 2023
ORDER
1. In the year 2015, the State Government approved
the construction of scientific based storage warehouses of
16.25 lakh metric tonnes. A loan was availed under the
NABARD (short for, "the National Bank for Agriculture and
Rural Development") Warehousing Scheme 2014-15. The
State, thereafter, modified its approval and reduced the
overall size of the project i.e., it reduced the construction
capacity of warehouses from 16.25 lakh to 14.09 lakh
metric tonnes and the project cost stood reduced from
Rs.650 crores to Rs.500 crores. Tenders were called for in
relation to the construction of warehouses and in this
tender process, M/s. Soma Enterprises Private Limited was
the successful bidder. The Corporation entered into a
contract with M/s. Soma Enterprises Private Limited and
the value of the subject matter of the contract was
approximately Rs.796 crores.
2. However, there were several allegations raised in the
manner in which the entire project was implemented, and
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this prompted the Government to appoint Sri.
C.R.Benakanahalli, a Retired District and Sessions Judge,
to conduct an enquiry and submit a report regarding the
lapses.
3. On 10.08.2020, Sri. C.R.Benakanahalli submitted a
report, in which he recorded several findings and also
recommended initiation of legal and disciplinary action
against the following Managing Directors and Officials of
the Karnataka State Warehousing Corporation (for short,
"the Corporation"):
i. Sri.Rajesh Gowda;
ii. Sri.Jaya Vibhava Swamy;
iii. Dr.S.Naveen Kumar Raju;
iv. Sri.Hanumantarayappa;
v. Sri.Arani Girish;
vi. Sri.Mallikarjun Allipur;
vii. Sri.C.S. Hegde; and
viii. Sri.S.S. Ganji.
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4. The details of the petitioners in the four instant writ
petitions are as hereunder:
Chandrashekara Petitioner No.1 W.P. No.24481/2023
Sidramappa Hegde
G.H. Ramesh Petitioner No.2 W.P. No.24481/2023
Somashekar S. Ganji Petitioner No.3 W.P. No.24481/2023
Arani Girish Petitioner No.4 W.P. No.24481/2023
G.Hanumantharayappa Petitioner No.5 W.P. No.24481/2023
Mallikarjuna Allipur Petitioner No.6 W.P. No.24481/2023
Dr.Naveen Kumar Raju S. Sole Petitioner W.P. No.23473/2023
M.B. Rajesh Gowda Sole Petitioner W.P. No.24977/2023
Jayavibhava Swamy Sole Petitioner W.P. No.24719/2023
5. In the meantime, disputes had arisen, and
Arbitration Proceedings were initiated, in which M/s. Soma
Enterprises Private Limited made several claims and the
Corporation also raised counter claims. Ultimately, an
arbitral award was passed on 10.06.2021, whereby the
claims made by M/s. Soma Enterprises Private Limited
were partly allowed and the counter claims made by the
Corporation were rejected.
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6. The Cabinet, thereafter, on 12.05.2022, decided to
entrust the investigation against the eight officials to the
Anti-Corruption Bureau. A decision was also taken to form
a Cabinet Sub-Committee to advice the Cabinet regarding
the allegations and the issues involved in the entire
transaction. The Cabinet Sub-Committee submitted its
recommendation dated 29.06.2022 to the Cabinet and the
Cabinet took a decision to proceed against petitioner
No.2 in W.P. No.24481/2023, as well.
7. As the matter stood thus, this Court quashed the
order by which the Anti-Corruption Cell had been
established and directed that all matters be transferred to
the Lokayukta.
8. At that stage, it was noticed that departmental
proceedings had already been entrusted to the Lokayukta
in some cases and it was suggested that reference be
made to the Lokayukta under Section 7 of the Karnataka
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Lokayukta Act, 1984 (hereinafter referred to as "the 1984
Act", for brevity).
9. But it was also noticed that departmental
proceedings had already been initiated against four
officials and they were at the concluding stage, and
therefore, a clarification was sought as to whether the
investigation should be done by the Lokayukta or if the
Corporation could proceed with the departmental enquiry.
10. Upon consideration of these factors, the Government
took a decision to refer the matter to the Lokayukta (vide
order dated 20.01.2023) under Section 7(2A) of the 1984
Act, in respect of four officials i.e., petitioner Nos.1 to 4 in
W.P. No.24481/2023.
11. On 28.03.2023, the Government passed another
order making a reference under Section 7(2A) of the 1984
Act, in respect of petitioner No.6 in W.P. No.24481/2023.
12. On 05.10.2023, the Cabinet took a decision to direct
the Corporation to initiate criminal proceedings against all
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the Officers involved and also recovery proceedings
against the Officers for the loss caused to the
Government. Pursuant to the said decision, the Principal
Secretary to the Government addressed a communication
dated 12.10.2023 to the Managing Director of the
Corporation. The contents of the letter read as follows -
"ªÉÄð£À «µÀAiÀÄPÉÌ £ÀA§A¢ü¹zÀAvÉ, WIF & NWS 2015-16
ºÁUÀÆ RIDF-XXII AiÉÆÃd£ÉUÀ¼À C£ÀĵÁ×£ÀzÀ°è DVgÀĪÀ
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(L.J.J¸ï. C¢üPÁjUÀ¼ÀÆ ¸ÉÃjzÀAvÉ) Qæ«Ä£À¯ï ªÉÆPÀzÀݪÉÄ ºÀÆqÀ®Ä
¤UÀªÀÄzÀ ºÀAvÀ¢AzÀ¯Éà CUÀvÀåPÀæªÀÄ PÉÊUÉƼÀÄîªÀAvÉ ºÁUÀÆ ¸ÀPÁðgÀPÉÌ
DVgÀĪÀ £ÀµÀÖªÀ£ÀÄß vÀ¦àvÀ¸ÀÜ C¢üPÁjUÀ½AzÀ ªÀ¸ÀÆ° ªÀiÁqÀĪÀAvÉ
¢£ÁAPÀ:05.10.2023gÀAzÀÄ £ÀqÉzÀ ¸ÀaªÀ ¸ÀA¥ÀÄl ¸À¨ÉsAiÀÄ°è ¸ÀaªÀ
¸ÀA¥ÀÄlzÀ°è wêÀiÁð£À PÉÊUÉƼÀî¯ÁVzÉ.
F »£É߯ÉAiÀÄ°è, ¸ÀaªÀ ¸ÀA¥ÀÄlzÀ wêÀiÁð£ÀzÀ£ÀéAiÀÄ, ¥ÀæPÀgÀtPÉÌ
¸ÀA§A¢ü¹zÀAvÉ dªÁ¨ÁÝgÀgÁzÀ J¯Áè C¢üPÁjUÀ¼À «gÀÄzÀÞ (L.J.J¸ï.
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PÀÄjvÀÄ vÀªÀÄä ºÀAvÀzÀ°èAiÉÄà CUÀvÀåPÀæªÀÄ PÉÊUÉƼÀÄîªÀAvÉ vÀªÀÄä£ÀÄß PÉÆÃgÀ®Ä
¤zÉÃð²¸À®ànÖzÉÝãÉ."
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NC: 2023:KHC:45621
13. On the same day, the Government issued an
Addendum to its previous Order dated 20.01.2023,
wherein reference had been made in respect of four
Officials, and the Order stated that apart from the four
Officials, they would also enquire into the allegations made
against the following Officers:
"PÀ£ÁðlPÀ ¸ÀPÁðgÀ
¸ÀASÉå: ¸ÀE 85 gÁG¤ 2020 (¨sÁ-4) PÀ£ÁðlPÀ ¸ÀPÁðgÀ ¸ÀaªÁ®AiÀÄ
§ºÀĪÀĺÀrUÀ¼À PÀlÖqÀ,
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À gÀÄ, ¢£ÁAPÀ:12-10-2023
¸ÉÃ¥ÀðqÉ DzÉñÀ
¸ÀPÁðj DzÉñÀ ¸ÀASÉå:¸ÀE 85 qÀ§ÆèöåJZï¹ 2020 (¨sÁUÀ-4)
¢£ÁAPÀ:20-01-2023gÀ°è, PÀ£ÁðlPÀ gÁdå GUÁæt ¤UÀªÀĪÀÅ
£À¨Áqïð ¸Á®zÀ £ÉgÀ«¤AzÀ PÉÊUÉÆArgÀĪÀ RIDF ºÁUÀÆ WIF &
NWS AiÉÆÃd£ÉUÀ¼À C£ÀĵÁ×£ÀzÀ°è DqÀ½vÁvÀäPÀ ¤AiÀĪÀÄUÀ¼À£ÀÄß
G®èAX¹ GUÁæt ¤ªÀiÁðtUÀ¼À PÁAiÀÄðzÀ C£ÀĵÁ×£ÀzÀ°è
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«gÀÄzÀÞ PÀæªÀÄ PÉÊUÉƼÀÄîªÀ ¸À®ÄªÁV, Erà ¥ÀæPÀgÀtzÀ vÀ¤SÉAiÀÄ£ÀÄß
PÀ£ÁðlPÀ ¯ÉÆÃPÁAiÀÄÄPÀÛ C¢ü¤AiÀĪÀÄ-1984gÀ ¤AiÀĪÀÄ
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DzÉò¹zÀÝ DzÉñÀ ¨sÁUÀzÀ°è£À PÀæªÀÄ ¸ÀASÉå:04gÀ £ÀAvÀgÀ, F
- 15 -
NC: 2023:KHC:45621
PɼÀPÀAqÀ C¢üPÁjUÀ¼À ºÉ¸ÀgÀÄUÀ¼À£ÀÄß ¸ÉÃj¹PÉÆÃAqÀÄ,
¢£ÁAPÀ:20.01.2023gÀAzÀ¯Éà N¢PÉƼÀîvÀPÀÌzÀÄÝ.
01 ²æà JA© gÁeÉñï UËqÀ, »A¢£À ªÀåªÀ¸ÁÜ¥ÀPÀ ¤zÉÃð±ÀPÀgÀÄ,
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¨sÁD¸ÉÃ., PÀ£ÁðlPÀ gÁdå GUÀæt ¤UÀªÀÄ
04 ²æà ºÀ£ÀĪÀÄAvÀgÁAiÀÄ¥Àà f, ¯ÉÆÃPÉÆÃ¥ÀAiÉÆÃV E¯ÁSÉ,
¤ªÀÈvÀÛ PÁAiÀÄð¥Á®PÀ (PÀ£ÁðlPÀ gÁdå GUÁæt ¤UÀªÀÄzÀ°è
C©üAiÀÄAvÀgÀgÀÄ ¤AiÉÆÃd£É ªÉÄÃgÉUÉ)
05 ²æà ªÀÄ°èPÁdÄð£À D°¥ÀÄgÀ £ÀUÀgÁ©üªÀÈ¢Þ E¯ÁSÉ, (PÀ£ÁðlPÀ
PÁAiÀÄð¥Á®PÀ C©üAiÀÄAvÀgÀgÀÄ gÁdå GUÁæt ¤UÀªÀÄzÀ°è ¤AiÉÆÃd£É
ªÉÄÃgÉUÉ) ªÀÄÆ®vÀB ¥ËgÁqÀ½vÀ
E¯ÁSÉAiÀÄ C¢üPÁj
PÀ£ÁðlPÀ gÁdå¥Á®gÀ DzÉñÁ£ÀĸÁgÀ
ºÁUÀÆ CªÀgÀ ºÉ¸Àj£À°è,
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14. As already stated above, the arbitration proceedings
which had been initiated by M/s.Soma Enterprises Private
Limited had culminated in an Award dated 10.06.2021, by
which the claims made by M/s.Soma Enterprises Private
Limited were partly allowed and the counter claim of the
Corporation was rejected.
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15. It is stated at the Bar that applications were filed by
the Corporation to set aside the award and during the
pendency of those proceedings, the State Government
entered into a settlement with M/s.Soma Enterprises
Private Limited, whereby M/s.Soma Enterprises Private
Limited was permitted to continue with the execution of
work and a supplementary agreement was also entered
into on 03.08.2023.
16. It is also stated that a compromise petition was filed
in the Arbitration proceedings on 04.10.2023 and on the
following day i.e., on 05.10.2023, the decision to initiate
criminal proceedings was taken by the Cabinet.
17. These Writ Petitions have been filed laying a
challenge to the decision of the State Government to refer
the issue to the Lokayukta under Section 7(2A) of the
1984 Act, and more importantly, on the direction issued
by the Government to the Corporation to initiate criminal
and recovery proceedings against the petitioners herein.
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18. In one of the Writ Petitions filed by the Engineers, a
challenge is also made to the Enquiry report submitted by
Sri.C.R.Benakanahalli.
19. Learned Senior Counsel, Sri.S.S. Naganand and
learned counsels, Sri.M.R. Balakrishna and Smt.Irfana
Nazeer strenuously contended that the decision taken by
the State Government to initiate criminal prosecutions and
recovery proceedings were wholly illegal. They contended
that the petitioners had not been heard in the matter
before a decision had been taken to initiate the criminal
and recovery proceedings.
20. It was also contended that the petitioners (in W.P.
Nos. 23473/2023, 24977/2023 and 24719/2023) had
submitted detailed representations against the enquiry
report, requesting the State Government not to initiate
any action against them since they were not guilty of any
wrong doing, and yet, a decision had been taken by the
Government.
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21. It is one of their main contentions that the Technical
Committee which had submitted a report, had exonerated
all of them and that this technical report also justified the
payments that were made, along with reasons as to why
such payments were made. It was submitted that since
the duly appointed Technical Committee had gone into the
entire matter threadbare and had found that there was no
wrongdoing, the Government could not have referred the
issue to the Lokayukta or directed the Corporation to
initiate criminal and recovery proceedings against the
petitioners.
22. It is also argued that in the arbitral proceedings, the
counter claim made by the Corporation was rejected and
an award was passed in favour of M/s.Soma Enterprises
Private Limited, and this award clearly indicated that the
payments had, in fact, not been made within the agreed
time limit and this award, therefore, absolved the
petitioners of wrongdoing.
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23. It was also argued that in the counter claims made
by the Corporation, it had been contended that the fault
was on the part of M/s. Soma Enterprises Private Limited,
as a result of which, the Corporation had suffered losses,
and since this contention had been rejected, the
Government could not have directed any action to be
taken against the petitioners.
24. It was contended that ultimately, the Government
entered into a compromise with M/s.Soma Enterprises
Private Limited and executed a supplementary agreement,
thereby enabling them to continue the contract, and that,
by itself, established that there were no irregularities in
the entire matter. An averment was also made that since
the Government decided to continue the contract with
M/s.Soma Enterprises Private Limited, it was clearly
established that there was no collusion of any kind
between M/s.Soma Enterprises Private Limited and the
petitioners, and when viewed in totality of the
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circumstances, the decision taken by the State
Government would be wholly illegal.
25. It was contended that the decision of the
Government to initiate criminal proceedings against the
petitioners would have a serious effect on their respective
careers and since this decision was taken without even
hearing the petitioners or considering the representations,
the same cannot be sustained.
26. In fact, learned Senior counsel elaborately pointed
out with reference to the enquiry report and the technical
report that all the documents had not been furnished to
the Enquiry Officer and that the Technical Committee,
after considering the entire matter exhaustively, had
concluded that there was no wrongdoing on the part of the
petitioners.
27. In light of the submissions, the points that would
have to be considered in the Writ Petitions are as follows:
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i. Whether the State Government was justified in
directing the Corporation to initiate criminal and
recovery proceedings against the concerned
officers?
ii. Whether the State Government was justified in
referring the matter to the Lokayukta under
Section 7(2A) of the 1984 Act ? and
iii. Whether the report submitted by
Sri.C.R.Benakanahalli was vitiated and ought not
to have been considered?
28. In all these cases, the order by which the State
Government has referred the matter to the Lokayukta
under Section 7(2A) of the 1984 Act, is being questioned.
Apart from this order of reference passed by the
Government to the Lokayukta to conduct an investigation,
the petitioners are also aggrieved by the communication
dated 12.10.2023, which has been addressed to the
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Managing Director of the Corporation, which has already
been extracted above in paragraph 11.
29. Before the validity of this communication is
considered, it would be appropriate to consider the validity
of the order, by which the matter had been referred to
Lokayukta under Section 7(2A) of the 1984 Act. Section
7(2A) of the 1984 Act reads as follows:
"Section 7: Matters which may be investigated
by the Lokayukta and an Upalokayukta.- (2A)
Notwithstanding anything contained in sub-sections
(1) and (2), the Lokayukta or an Upalokayukta may
investigate any action taken by or with the general or
specific approval of a public servant, if it is referred to
him by the State Government."
30. As could be seen from the above, the Lokayukta is
empowered to investigate any action that has been taken
by a Government servant, if it is referred to it by the State
Government. The 1984 Act, by itself, is an enactment
which had been made with the objective of making
enquiries into administrative actions taken by or on behalf
of the Government. It is, therefore, clear that the State
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Government has the unfettered right to refer any action
relating to a Government servant to the Lokayukta for
conducting an investigation.
31. It cannot be in dispute that before an investigation is
ordered, the persons who are to be investigated are
neither required to be heard nor notified about the
proposed investigation. In fact, the very purpose of
directing an investigation is to ascertain the requisite facts
relating to an action which is believed to be improper. If
the person who is alleged to be guilty of the wrongful
action is to be notified or heard before an investigation is
undertaken, the very purpose of the investigation would
be nullified and it would basically allow the wrongdoer to
be on guard and obfuscate the investigation.
32. A Division Bench of this Court in the case of
Prakash.T.V.1, while considering the import of Section
7(2A) of the 1984 Act, has held as follows:
The Hon'ble Lokayukta and Ors. v. Prakash T.V. and Ors., ILR 2021 KAR 4117.
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"45. In the light of the aforesaid judgment, in the
matter of enquiry conducted by the Lokayukta and the
proceedings under Section 7(2-A) of the Act of 1984,
the question of issuance of a show cause notice nor
the question of grant of opportunity of hearing arises
and therefore, the impugned order passed by the
Tribunal deserves to be quashed by this Court."
33. This decision of the Division Bench has, in fact, been
confirmed by the Apex Court by the dismissal of S.L.P. (C)
Nos. 13209-13210/2021, and it is, therefore, clear that
there is no necessity of issuing a show cause notice or
granting of an opportunity of hearing before order an
investigation under Section 7(2A) of the 1984 Act.
34. If any irregularities are found on the conclusion of
the investigation, then proceedings to hold the wrongdoer
accountable would be initiated. Thus, the decision to
conduct an investigation is not justiciable by the person
who is being investigated.
35. In a case relating to an action of a Government
Servant, on the conclusion of the investigation, the
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Lokayukta is empowered to make a recommendation to
the Government, and the Government may act upon such
recommendation.
36. In my view, the petitioners, being Government
servants, are basically attempting to forestall the very
investigation under Section 7(2A) of the 1984 Act, by
contending that they have a right to be heard in the
matter before a decision to conduct an investigation is
taken.
37. It is to be kept in mind that it is the State's
prerogative to direct an investigation to be conducted and
this prerogative cannot be subject to any claim by the
Government servants that an investigation cannot be
ordered. The State, in order to ensure that action taken by
public servants was lawful, appropriate and are not
vitiated by malafides, would definitely be empowered to
order an investigation to be conducted under Section
7(2A) of 1984 Act.
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38. In this view of the matter, a challenge to the order
by which investigation has been referred to the Lokayukta
under Section 7(2A) of 1984 Act, cannot be found fault
with.
39. As regards the communication dated 12.10.2023,
wherein the State Government has directed the
Corporation to initiate criminal and recovery proceedings
against all the Officers, the arguments advanced by the
petitioners do not merit acceptance in view of the ratio laid
down by the Apex Court in the case of Rajesh Agarwal2.
The Apex Court, in the said case, has held as follows:
"37. ...At the outset, we clarify that principles of
natural justice are not applicable at the stage of
reporting a criminal offence, which is a consistent
position of law adopted by this Court.
38. In Union of India v. W.N. Chadha, 1993 Supp
(4) SCC 260, a two-Judge Bench of this Court
held that that providing an opportunity of
hearing to the accused in every criminal case
State Bank of India v. Rajesh Agarwal, (2023) 6 SCC 1.
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before taking any action against them would
"frustrate the proceedings, obstruct the taking of
prompt action as law demands, defeat the ends
of justice and make the provisions of law relating
to the investigation lifeless, absurd, and self-
defeating". Again, a two-Judge Bench of this
Court in Anju Chaudhary v. State of U.P., (2013)
6 SCC 384, has reiterated that the Code of
Criminal Procedure, 1973 does not provide for
right of hearing before the
registration of an FIR."
40. In view of this proposition of law laid down by the
Apex Court, whereby it has affirmed an earlier decision
i.e., in the case of Anju Chaudhary3, the argument that
the petitioners were required to be heard before criminal
proceedings could be initiated, would be wholly
unacceptable.
41. Learned Senior Advocates appearing for the
petitioners, however, contended that there was adequate
material to indicate that the petitioners were not guilty of
any misconduct and therefore, the direction to initiate
Anju Chaudhary v. State of U.P., (2013) 6 SCC 384.
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proceedings for recovery and for criminal prosecution was
wholly unwarranted.
42. Learned Senior Advocates made elaborate
submissions and took great pains to refer to the report of
Sri.C.R.Benakanahalli, the Technical Committee report and
also made submissions regarding the arbitral proceedings
that were initiated by M/s.Soma Enterprises Private
Limited. They have, in unison, contended that in light of
the specific representations submitted by the petitioners
that the report of Sri.C.R.Benakanahalli was unacceptable,
and the further fact that they had clearly established that
there was no misconduct on their part, the direction by the
State for initiation of criminal and recovery proceedings
was illegal.
43. An argument was also advanced by them that the
State Government had entered into a compromise with
M/s.Soma Enterprises Private Limited and had also
entered into a Supplementary Agreement with them, and
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therefore, the question of there being any irregularities in
the performance of the terms of the contract would be
untenable.
44. It is also contended by them that since the State
decided to proceed with the contract, the fundamental
basis of the allegations that there were irregularities in the
execution of the contract would have to be rejected.
45. In my view, these arguments would not merit any
consideration because the State has only directed the
Corporation to initiate civil and criminal proceedings
against all the Officers who were responsible for the
irregularities and the loss caused to the Corporation. The
State Government, as the ultimate authority of the
Corporation, has taken the view that there were certain
irregularities and financial losses caused to the
Corporation, for which, legal proceedings had to be
initiated. If the State has formed an opinion that there
were irregularities and financial losses caused to the
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Corporation, it would be well within its right to order
initiation of legal proceedings, both on the civil as well as
on the criminal side.
46. The petitioners, by virtue of having served the
Corporation on various occasions, cannot put forth the
contention that the State Government, which owns the
Corporation, does not have such power.
47. As stated above, it is ultimately the State
Government which has to bear the consequences of any
wrongdoing and therefore, if the State is of the opinion
that a crime has been committed and financial loss had
been caused to the Corporation, it would be the imperative
duty of the Government to direct the concerned authorities
to initiate legal proceedings to prosecute the accused and
also initiate proceedings for recovery against those officials
who were the cause for such financial losses. This primary
power of the Government cannot be subject to the rights
of its employees.
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48. In my view, therefore, there is absolutely no merit in
the contentions urged by the petitioners that the State
Government did not have the power to direct the
Corporation to initiate recovery, as well as the criminal
proceedings against those persons responsible for the
alleged crime and for the alleged financial loss caused to
the State Government.
49. It must be pertinent to state here that the
Government has neither specified the financial loss nor the
crime, and it has also not specified as to which officers
were responsible for the loss or which officers had
committed such crime. The Government has only formed
an opinion that there has been a financial loss and that a
crime has been committed, which would, therefore, have
to be investigated. The petitioners, being the employees of
the Corporation at the relevant point in time, cannot have
a legal right to nullify such an action by way of
approaching this Court under Article 226 of the
Constitution of India. It would definitely be open to the
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petitioners to put forth their appropriate defence, if any
recovery proceedings have been initiated or take such
steps as are necessary to defend themselves, if criminal
prosecution is launched against them. In that view of the
matter, I find no illegality in the order passed by the State
Government in this regard.
50. The argument that the report submitted by
Sri.C.R.Benakanahalli was vitiated and ought not to have
been considered for the purpose of initiating proceedings
against the petitioners, is also without any merit. As could
be seen from the report of Sri.C.R.Benakanahalli, it is
obvious that it is only a fact finding report and the opinion
of Sri.C.R.Benakanahalli that there were several
irregularities, for which action was necessary. The State
Government, in the impugned order, has not relied upon
the report of Sri.C.R.Benakanahalli and directed initiation
of action against the persons named in the report. The fact
that the Government merely directed the Corporation to
proceed against those who were responsible for the
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financial loss and for the crime that was committed, by
itself, establishes that the report of Sri.C.R.Benakanahalli
was not the only cause for issuing the direction.
51. It may be pertinent to state here that the fact that
Sri.C.R.Benakanahalli, in his report, had named various
persons who were responsible for the lapses in the
execution of the contract, and the State Government has
not pointedly named any officials but has directed only
initiation of investigation against all those persons who
were responsible, indicates that the report of Sri. C.R.
Benakanahalli was not the sole cause for the impugned
decision. As already stated above, the report of
Sri.C.R.Benakanahalli was only a fact finding report and
therefore, this report would not, in any way, prejudice the
petitioners. If the Corporation does initiate proceedings
against the petitioners and place reliance on the report of
Sri.C.R.Benakanahalli, it would definitely be open to the
petitioners to put forth their contentions regarding the
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correctness or otherwise, of the report of
Sri.C.R.Benakanahalli.
52. In the result, I hold that the State Government was
justified in issuing directions to the Corporation to initiate
criminal and recovery proceedings against the concerned
Officers, and it would also be justified in referring the
matter to Lokayukta under Section 7(2A) of the 1984 Act.
I also hold that the argument that report of
Sri.C.R.Benakanahalli ought not to have been considered
is without any merit.
53. The points for consideration are accordingly
answered.
54. Consequently, the writ petitions are dismissed.
Sd/-
JUDGE
HNM/PKS
