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2009 Supreme(Kar) 496
2011 (1) KCCR 205 (DB)
KARNATAKA HIGH COURT (CIRCUIT BENCH AT GULBARGA)
V. Gopalagowda and L. Narayana Swamy, JJ.
Sri N.B. Swami –Appellant
Versus
The Primary Co-operative Agriculture and Rural Development Bank Ltd., Bangalore and Others – Respondent
Writ Appeal No. 454 of 2008,
Decided on 24.7.2009
Sri N.B. Swami, for Appellant appointed through High Court Legal Services' Committee;
Sri KA. Kalburgi, for Respondent-I; Respondents-2, 3 and 4 are served and un-represented.
The main legal point established in the judgment is the requirement for disciplinary enquiries to strictly adhere to service regulations and principles of natural justice, including the need for a fair and proper enquiry, the obligation to prove charges with positive and substantive evidence, and the necessity to furnish the enquiry report to the appellant before imposing a penalty.
Headnote:
Disciplinary Enquiry - Karnataka State Co-operative Societies Act - Regulation-58 - [58. Procedure for imposing major penalties:-(1) Where ever the disciplinary Authority is of the opinion that there are grounds for enquiring into the truth of any imputations of misconduct or misbehaviour against any employee, it may itself enquire into or appoint any officer working in the Secretariat of the committee or any officer of the Federal Society not below the rank of District Manager or any other person. (2) Where it is proposed to hold an enquiry against an employee, the Member Secretary shall draw up or cause to be draw up. '5. The Disciplinary Authority shall, where it is not the Inquiring Authority, forward to inquiry Authority. i) A copy of the articles of charge and the statement of the imputations of misconduct or misbehaviour. ii) A copy of the written statement of defence, if any submitted by an employee; iii) A copy of the statements of witnesses, if any, referred to in sub-rule(3); iv) evidence proving the delivery of the documents referred to in sub-rule (iii) to the employee; and v) a copy of the order appointing the 'presenting Officer'. 7. An employee may take the assistance of any other employee to present the case on his behalf, but may not engage a legal practitioner for the purpose unless the presenting Officer appointed by the Disciplinary Authority is a legal practitioner, or the Disciplinary Authority, having regard to the circumstances of the case, to permits. 9. The Inquiring Authority shall return a finding of guilt in respect of those articles of charge to which an employee pleads guilty. 10. xxxxxxx an employee may for the purpose of preparing his defence. (ii) Submit a list of witnesses to be examined on his behalf; (iii) apply orally or in writing to inspect and take extracts of the statements, if any, of witnesses mentioned in the list referred to in sub-rule (3) and the Inquiring Authority shall permit him to take such extracts as early as possible and in any case not later than three days before the commencement of the examination of the witness on behalf of the Disciplinary Authority. 14. If it shall appear necessary before the close of the case on behalf of the Disciplinary Authority, the inquiring Authority may, in its discretion, allow the presenting officer to produce evidence not included in the list given to the employee or may itself call for new evidence or recall and re-examine any witness and in such case the employee shall be entitled to have, if he demands it, a copy of the list of further evidence proposed to be produced and an adjournment of the enquiry' for three clear days before the production of such new evidence, exclusive of the day of adjournment and the day to which the enquiry IS adjourned. The inquiring Authority shall give an employee an opportunity of inspecting such documents before they are taken on the record. The inquiring Authority may also allow the employee to produce new evidence if it is of the opinion that the production of such evidence is necessary in the interests of justice". 9. On careful perusal of the Regulations particularly, Regulation 58 Sub-regulations 5, 7, 9, 10 clauses (ii) and (iii) and 14 of the 'Regulations', prima facie we find that the Disciplinary Authority has not at all issued the list containing the articles of charges against the appellant/employee by furnishing the material particulars and the list of witnesses and the list of documents on which it places reliance in support of the allegations and the statement of the imputations of misconduct or misbehaviour made against the Appellant. Further, an Enquiry Officer appointed is a retired Assistant Director of Audit, department of co-operative societies, which is• in contravention of the procedure prescribed in Regulation 58(1) which provides to appoint any officer working in the Secretariat of the Committee or any officer working in the Secretariat not below the rank of District manager or any other person and also appointed one Mr.Jagannath as the Presenting Officer on behalf of disciplinary authority before the enquiry officer though the appellant has objected for his appointment as the Presenting Officer by writing letter dated 18.9.2001 and not given opportunity to engage either a Co-employee or the officer of the appellant which is in violation of sub-regulation 7 and the enquiring authority has not submitted finding of guilt in respect of articles of charges as required under sub-regulations. The Disciplinary Authority has not permitted appellant to inspect the documents on which the reliance is placed to prove the charges against the appellant as required under sub-regulation 10 clause (ii) and also not permitted to inspect the documents or take out the extracts of the statement of documents mentioned in the list as provided under clause (iii) of sub-regulation 10 and not permitted to cross-examine the management witnesses and not permitted to adduce defence evidence by examining witnesses as required under sub-regulation 15 and the enquiring officer has not questioned the employee on the circumstances appearing against him in the evidence for the purpose of enabling the appellant to explain the circumstances appear against him and further not permitted him to file written brief as required under sub-regulation 18 and the enquiry report is not in conformity with the sub-clauses (a) to (d) of clause (i; of sub-regulation 20 of Regulation 58 and the report of enquiry officer along with second show-cause notice is not furnished to the appellant. Hence, the same is in contravention of statutory rules which are required to be strictly followed by the disciplinary authority and the enquiry officer.
Fact of the Case:
The appellant, an In-charge Accountant in a co-operative Bank, was issued a show-cause notice alleging misconduct (misappropriation of funds). After a disciplinary enquiry, the Disciplinary Authority imposed a major penalty of compulsory retirement. The appellant challenged the order, alleging non-compliance with mandatory procedures and violation of natural justice principles.
Finding of the Court:
The court found that the disciplinary enquiry was not conducted in accordance with the service regulations, and the penalty imposed was against the principles of natural justice. The court held that the entire enquiry proceedings and the order of compulsory retirement were vitiated both on facts and in law.
Issues: The issues before the court were: (i) Compliance with service regulations in conducting the enquiry, (ii) Alleged error by the Disciplinary Authority in not following mandatory requirements, (iii) Violation of principles of natural justice in the enquiry and penalty imposition, and (iv) Justification of the Single Judge's dismissal of the writ petition and affirmation of the findings of the Disciplinary Authority.
Ratio Decidendi: The court held that the disciplinary enquiry must comply with the service regulations and principles of natural justice. It emphasized the need for a fair and proper enquiry, and the requirement for the Disciplinary Authority to prove charges by adducing positive and substantive evidence. The court also highlighted the mandatory procedures and the need for the report of the enquiry officer to be furnished to the appellant before imposing a penalty.
Final Decision: The court allowed the writ appeal, set aside the impugned order, quashed the order of compulsory retirement, and directed the reinstatement of the appellant with full backwages and other consequential benefits. The court also granted the appellant's counsel a fixed fee payable by the High Court Legal Services Committee.
V. Gopala Gowda, J: This writ appeal is directed against the order of the learned Single Judge dated 24.01.2008 passed in W.P.No. 135G9/ 2003. The facts of the case in the nutshell is that the appellant was working as In-charge Accountant in the 4th respondent-Bank at Gulbargo. from the month of February' 2000 to May 2001; that a show-cause notice was issued to him on 30.05.2001 alleging certain misconduct (misappropriation of funds), for which he submitted his reply on 11.06.2001 denying the charges levelled against him and thereafter, disciplinary enquiry proceedings were initiated and based on the report of the enquiry officer, the Disciplinary Authority passed an order on 29.10.2002 imposing major penalty of compulsory retirement of appellant from the service. Challenging the said order, the appellant preferred W. P. No. 13559/2003 and the learned Single Judge of this Court dismissed the writ petition holding that the charges are grave in nature, involving financial misappropriation in violation of the regulations and guidelines and that the penalty imposed on the appellant is in accordance with law. Being aggrieved by the order passed by the learned Single Judge, the appellant has preferred the present writ appeal.
2. We have beard Sri. Huleppa Heroor, learned Counsel who has, been appointed as Counsel to represent the appellant through High Court Legal Service Committee and Sri. K.A. Kalburgi, learned Counsel appearing on behalf of the respondent No. 1. The respondents-2, 3 and 4 remained un-represented despite service of notice.
3. The principal contentions of the learned Counsel for the appellant is that the respondents-authorities have not followed the mandatory procedures as contemplated under the Karnataka State Co-operative Societies Act and Regulation-58 of Regulations regarding- Appointment, transfers, disciplinary action and other service conditions of the employees of PCA and RD Banks in Karnataka which contemplates an appointment of an officer not below the rank of the District Manager. On the contrary, they appointed a retired officer as Enquiry Officer who is below the rank of District Manager. Further, a letter written to the member secretary of the Common Cadre Committee by the appellant dated 18.09.2001 requesting not to appoint one Sri. B.M. Jagannath as Presenting Officer to present the case on behalf of the Disciplinary Authority to prove the act of misconduct alleged against him has not been considered; that the chargesheet, making 25 allegations were very vague and that the material particulars, the substance of the imputations of the misconduct or misbehaviour into definite and distinct articles of charge are not made and list of witnesses in support of the charges are also not furnished to the appellant and therefore; the enquiry proceedings are vitiated under the Regulations and the Disciplinary Authority did not prove the case of misconduct before the enquiry officer by producing documentary evidence which is in the custody of the 4th respondent-Bank in support of the finding of the enquiry officer in holding that the appellant is guilty of misconduct; that the respondents authorities have not at all furnished the copy of the enquiry report to enable the delinquent employee to submit his explanation to each one of the charges and therefore, the enquiry conducted against the appellant is in contravention of Section- 128-A of the Act and Regulation58 of the Service Regulations and in violation of the principles of natural justice, as the Enquiry Officer has suo-motu recorded that the appellant herein has admitted the charges which is contrary to the explanation offered by him and therefore, the proceedings are incorrectly recorded and the findings recorded on the basis of the incorrect proceedings is not based on the legal evidence and hence, the findings of the Enquiry Officer and subsequent order passed by the Disciplinary Authority, imposing major penalty on the employee are perverse in la
