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Dr.T. Venkateshaiah v/s The Principal Secretary, Commerce & Industries Department, Government of Karnataka, Bangalore & Others

    Writ Petition No. 10157 of 2020 (S-RES)
    Decided On, 08 January 2021
    At, High Court of Karnataka
    By, THE HONOURABLE MR. JUSTICE M. NAGAPRASANNA
    For the Petitioner: A Nagarajappa, Advocate. For the Respondents: R1, M.C. Nagashree, AGA, A. Sai Leela, R3, Sumana Baliga, Advocates.


Judgment Text
(Prayer: This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 11.08.2020 passed by the R2-appellate authority marked at Annexure-AA to the writ petition and etc.,)

1. The petition, though listed for Orders, is taken up for its Final Disposal with the consent of learned counsel appearing for the parties.

2. Heard the learned counsel, Sri. A. Nagarajappa, appearing for the petitioner, the learned AGA, Smt. M.C. Nagashree, appearing for respondent No. 1 and the learned counsel, Smt. A. Sai Leela, appearing for respondent No. 3.

3. The petitioner in this writ petition has called in question the order of the Disciplinary Authority imposing a penalty of dismissal from service along with certain other consequential actions that were directed to be taken against the petitioner as well as the order of the Appellate Authority dated 11.08.2020.

4. The petitioner at the relevant point of time was working as a Director (Finance) in respondent No. 3-Karnataka Soaps and Detergents Limited Company. Alleging certain omissions and commissions against the petitioner, certain disciplinary proceedings were initiated by issuance of a charge sheet. These proceedings culminated in imposition of a penalty of dismissal from service by the Disciplinary Authority, by his order dated 25.03.2019.

5. Against the order of the disciplinary authority, petitioner preferred an appeal to the Appellant Authority-The Board, after which, the petitioner also submitted a representation to the Chairman of the Corporation, who headed the Board. The Chairman, by his order dated 02.04.2019, stayed the order of the Disciplinary Authority and directed the petitioner be continued in the post of Director (Finance) of the Corporation. The said order was not implemented by the Managing Director which led the petitioner to approach this Court in W.P. No. 20700/2019 c/w W.P.No. 16086/2019. This Court, by its order dated 03.05.2019, disposed the writ petitions directing the petitioner to pursue his appeal remedy and till then stalled any precipitative action to be taken against the petitioner. The relevant portion of the order of this Court dated 03.05.2019, reads as follows:

€œ3. In view of the above, without going into the contentions urged by the learned counsel for parties, it is appropriate to direct the petitioner to pursue the appeal already filed as contemplated under Rule 23 of the Rules before the Chairman of the Board as contemplated. Till the disposal of the appeal or interim order to be passed by the Appellate Authority, the respondents shall not take any precipitate action against the petitioner in pursuance of the impugned order dated 25.03.2019.€

6. It is after this, the petitioner pursued his appeal that he had submitted before the Appellate Authority which was in great detail submitted about the injustice caused to him at the hands of the Disciplinary Authority. The Appellate Authority, by its order dated 11.08.2020, has dismissed the appeal which read as follows:

€œQuote:

In this regard, the Board deliberated and opined that the action of the Managing Director to dismiss Dr.Venkateshiah from the services of the Company is proper and justified for the following reasons:

1. Dr.Venkateshiah has made a payment of Rs.1,62,35,353/- on the manipulated court decree against the actual amount of Rs.1,34,38,643/- resulting an excess payment of Rs.27,96,910/- to M/s. Ruchi Soya Industries, Mumbai.

2. Dr.Venkateshiah, without obtaining the approval of the Managing Director has signed the Joint Memo in the Court of the Addl. City Civil & Sessions Judge on 27.02.2018 even though he was not authorized to sign the court documents and received a part amount of Rs.18,53,093/- (DD 376236/1.12.2017 for Rs.15,80,072/- + Pay Order dated 25.02.2018 for Rs.2,73,021/-) from M/s. Ruchi Soya Industries Limited as full and final settlement with no further claims whatsoever against the Decree holder with a condition that this claim is amicably settled between the parties.

3. Dr.Venktaeshia, holding such crucial position in the Finance Department, with his malafide intention has caused financial loss to the Company.

The Board of Directors concurred with and upheld the dismissal of Dr. T. Venktaeshaiah, Director (Finance) and to reject his appeal.€

7. The appeal is dismissed without considering any of the grounds urged by the petitioner in the appeal memorandum.

8. The appeal is preferred by the petitioner under Rule 23 of the Karnataka Soaps 7 Detergents Limited Conduct and Disciplinary Action Rules, 1984 (hereinafter referred to as €˜the said Rules€™), which reads as follows:

€œRule 23. Appeal:

Every employee to the Company shall be entitled to appeal to the appropriate Appellate Authority against orders passed under these rules within one month from the date of communication of the order provided however that the Appellate Authority may entertain an appeal after the expiry of the period if he is satisfied that the appellant had sufficient grounds for not preferring the appeal in time.

The Appellate Authority after satisfying himself that the enquiry was conducted as per principles of natural justice shall examined whether the findings of the disciplinary authority are warranted by the evidence on record and decide on the quantum of punishment imposed on the employee as adequate inadequate or excessive and pass orders accordingly.

No enhanced penalty shall be imposed by the Appellate Authority on the Appellant unless the Appellant has been given an opportunity to make representation against such enhanced punishment.€

9. The Appellate Authority in terms of the afore-said Rules is required to satisfy himself that the enquiry was conducted as per principles of natural justice and examine whether the findings of the Disciplinary Authority are warranted by considering the evidence on record and decide on the quantum imposed on the employee as adequate or inadequate.

10. A cursory perusal at the order of the Appellate Authority would in unmistakable terms indicate that it suffers from non-application of mind and blatantly contrary to the afore-extracted mandate of the said Rules, which the Appellate Authority is obliged to follow.

11. It is apposite to refer to the judgement of the Apex Court interpreting identical powers and obligations of the Appellate Authority to consider the appeal find in terms of the rules, has in the case of Narinder Mohan Arya v. United India Insurance Co. Ltd., reported in (2006) 4 SCC 713, wherein the Apex Court holds as follows:

€œ31. We may for the aforementioned purpose take note of the extant rules operating in the field. Requirements of consideration in an appeal from an order of the disciplinary authority by the Appellate Authority is contained in Rule 37 whereas the provisions as regard filing of a memorial are contained in Rule 40 thereof, which read as under:

€œ37. Consideration of appeals. €“(1) In case of an appeal against an order of suspension, the Appellate Authority shall consider whether in the light of the provisions of Rule 20 and having regard to the circumstances of the case the order of suspension is justified or not and confirm or revoke the other accordingly

(2) In the case of an appeal against an order imposing any of the penalties specified in Rule 23, the Appellate Authority shall consider:

(a) whether the procedure prescribed in these Rules has been complied with and if not, whether such non-compliance has resulted in failure of justice;

(b) whether the findings are justified; and

(c) whether the penalty imposed is excessive, adequate or inadequate, and pass order:

I. setting aside reducing confirming or enhancing the penalty; or

II. remitting the case to the authority which imposed the penalty or to any other authority with such direction as it may deem fit in the circumstances of the case.

€œ40. Memorial.-An employee whose appeal under these Rules has been rejected by the Chairman/Chairman-cum-Managing Director or in whose case such Appellate Authority has enhanced the penalty either on appeal under Rule 24 or on review under Rule 39(2) may address a memorial to the Chairman/Chairman-cum-Managing Director in respect of that mater within a period of 6 months from the date the appellant received a copy of the order of such Appellate Authority.

32. The Appellate Authority, therefore, while disposing of the appeal is require to apply his mind with regard to the factors enumerated in sub-rule (2) of Rule 37 of the Rules. The judgment of the civil court being inter parties was relevant. The conduct of the appellant as noticed by the civil court was also relevant. The fact that the respondent has accepted the said judgment and acted upon it would be a relevant fact. The authority considering the memorial could have justifiably come to a different conclusion having regard to the findings of the civil Court. But, it did not apply its mind. It could have for one reason or the other refused to take the subsequent event into consideration, but as he had a discretion in the matter, he was bound to consider the said question. He was required to show that he applied his mind to the relevant facts. He could not have without expressing his mind simply ignored the same.

36. The order of the Appellate Authority demonstrates total non-application of mind. The Appellate Authority, when the Rules require application of mind on several factors and serious contentions have been raised, was bound to assign reasons so as to enable to writ court to ascertain as to whether he had applied his mind to the relevant factors which the statute required him to do. The expression €œconsider€ is of some significance. In the context of the Rules, the Appellate Authority was required to see as to whether (i) the procedure laid down in the Rules was complied with; (ii) the enquiry officer was justified in arriving at the finding that the delinquent officer was guilty of the misconduct alleged against him; and (iii) whether penalty imposed by the disciplinary authority was excessive.

35. The Appellate Authority, therefore, could not ignore to exercise the said power.€

12. If the order of the appellate Authority, impugned, is considered in the light of the mandate of the Rules extracted hereinabove and the judgment of the Apex Court it would in unmistakable terms fall foul of both Rule 23 of the said Rules and the law laid down by the Apex Court in the afore-extracted judgment. Therefore, the order of the Appellate Authorit

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y becomes unsustainable and the Board-Appellate Authority is required to reconsider the appeal filed by the petitioner in terms of the said Rules and the law laid down by the Apex Court. This Court on an earlier occasion when the petitioner was directed to pursue his remedy of appeal had ordered that no precipitative action shall be taken against the petitioner till the Appellate Authority decides on the appeal filed by the petitioner, since matter is now remitted back to the hands of the Appellate Authority to consider afresh, the same order needs to be maintained. 13. Wherefore, the following: ORDER 1. The order of the Appellate Authority dated 11.08.2020 is quashed. 2. The matter is remitted back to the hands of the Appellate Authority to consider the appeal as is required under Rule 23 of the said Rules and pass appropriate orders in accordance with law within a period of three months from the date of receipt of the copy of this order. 3. Till such consideration is made by the Appellate Authority, the respondents are directed not to precipitate the matter against the petitioner as was observed by this Court in the earlier writ petition.
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