Karnataka High Court
Ministry Of Finance vs Hanumath N Karakum on 21 July, 2025
Author: R.Devdas
Bench: R.Devdas
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NC: 2025:KHC-D:8996-DB
WA No. 100221 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 21ST DAY OF JULY, 2025
PRESENT
THE HON'BLE MR. JUSTICE R.DEVDAS
AND
THE HON'BLE MR. JUSTICE K V ARAVIND
WRIT APPEAL NO.100221 OF 2025 (S-R)
BETWEEN:
1. THE MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE,
CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS,
2ND FLOOR, HUDCO VISHALA BUILDING,
BHIKAJI, R.K. PURAM, NEW DELHI-66.
2. THE COMMISSIONER OF CENTRAL
EXCISE CUSTOMS AND SERVICE TAX
AND THE DISCIPLINARY AUTHORITY,
NO.71 CLUB ROAD, BELAGAVI-590001.
...APPELLANTS
(BY SRI. K. ARVIND KAMATH, ADDL. SOLICITOR GENERAL FOR
SRI. GIRISH S.HULMANI, ADVOCATE)
AND:
Digitally signed by
CHANDRASHEKAR
LAXMAN KATTIMANI
Location: HIGH
1. HANUMANTH N.KARAKUM
COURT OF S/O. NARASINGRAO KARKUM,
KARNATAKA
AGE. 73 YEARS, OCC. PENSIONER,
R/O. "SRI PARAVATEESHA" SHREYAS COLONY
HALIYAL ROAD, SAPTAPUR, DHARWAD-580001.
2. HON'BLE MINISTER OF FINANCE,
GOVERNMENT OF INDIA,
DEPARTMENT OF REVENUE,
NORTH BLOCK, NEW DELHI-110002.
...RESPONDENTS
(BY SRI. GIRISH A.YADAWAD, ADVOCATE FOR R1;
SRI. M.B. KANAVI, CGSC FOR R2)
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NC: 2025:KHC-D:8996-DB
WA No. 100221 of 2025
HC-KAR
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF
KARNATAKA HIGH COURT ACT, 1961, PRAYING TO SET ASIDE THE
ORDER DATED 17.01.2025 PASSED BY THE LEARNED SINGLE JUDGE
IN WP NO.101714/2024 DATED 22.03.2024 AND ETC.,.
THIS WRIT APPEAL, HAVING BEEN HEARD AND RESERVED ON
24.06.2025, COMING ON FOR 'PRONOUNCEMENT OF JUDGMENT',
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
CORAM: THE HON'BLE MR. JUSTICE R.DEVDAS
AND
THE HON'BLE MR. JUSTICE K V ARAVIND
CAV JUDGMENT
(PER: THE HON'BLE MR. JUSTICE K V ARAVIND) Heard Sri K. Arvind Kamath, learned Additional Solicitor General of India appearing for Sri Girish S. Hulmani, learned counsel for the appellants; Sri Girish A. Yadawad, learned counsel for respondent No.1; and Sri M.B. Kanavi, learned Central Government Standing Counsel for respondent No.2.
2. This intra-Court appeal is filed under Section 4 of the Karnataka High Court Act, 1961, by the respondent - Central Board of Indirect Taxes and Customs, being aggrieved by the order dated 17.01.2025 passed by the learned Single Judge in W.P. No.101714/2024.
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3. The brief facts of the case are as follows:
Respondent No.1 was employed as Superintendent, Central Excise, Range 'A', Hubli Division, under appellant No.2.
A complaint was lodged by one Rohit B. Deshpande alleging that respondent No.1 had demanded a bribe of ₹2,000/-, which was later negotiated to ₹1,500/-, for issuance of a Service Tax Registration Certificate. The complainant reported the demand to the Lokayukta, Dharwad, on 23.09.2011. Based on the recorded conversation between respondent No.1 and the complainant, the Lokayukta Police laid a trap. A case was registered on 23.09.2011 for the offences punishable under Sections 7, 13(1)(d), and 13(2) of the Prevention of Corruption Act, 1988 ('P.C. Act', for short). Subsequently, the matter was transferred to the Central Bureau of Investigation ('CBI', for short), as respondent No.1 was an employee of the Central Government. After completion of investigation, the CBI filed a charge sheet in Spl.CBI C.C. No.26/2013. Respondent No.1 retired from service on 31.01.2012 upon attaining the age of superannuation.-4-
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4. Thereafter, the disciplinary authority initiated departmental proceedings by issuing a charge sheet against respondent No.1 based on the same set of facts that formed the basis for the registration of the criminal case. An Enquiry Officer was appointed to conduct a disciplinary enquiry, which culminated in a finding that the charges against respondent No.1 were not proved. Disagreeing with the said findings, the disciplinary authority remitted the matter to the Enquiry Officer to conduct a de novo enquiry. Pursuant thereto, the Enquiry Officer once again submitted a report dated 13.02.2017 reiterating that the charge against respondent No.1 was not proved. The disciplinary authority again disagreed with the findings and referred the matter to the Union Public Service Commission (UPSC). The UPSC advised withholding 100% of the pension and forfeiture of 100% of the gratuity payable to respondent No.1. Based on the said advice, appellant No.1 imposed the penalty by order dated 06.02.2023.
5. In the interregnum, respondent No.1 was acquitted of the offences in the criminal proceedings in Spl. CBI C.C. No.26/2013. Respondent No.1 thereafter challenged the order -5- NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR passed in the disciplinary proceedings withholding his pension and gratuity. The learned Single Judge, upon examination of the matter, observed that the documents marked as exhibits and the witnesses examined in the criminal trial, as well as those in the disciplinary enquiry, were verbatim similar. It was further held that the acquittal in the criminal proceedings was based on full consideration of the prosecution evidence. Since the documentary evidence and the witnesses examined in both the criminal and disciplinary proceedings were identical, and the scope of the enquiry and charges in both proceedings arose from the same set of facts, the learned Single Judge concluded that the disciplinary authority could not take a contrary view. The learned Single Judge further held that, as the acquittal in the criminal proceedings was on merits upon appreciation of the evidence, the disciplinary proceedings could not virtually act as an appellate forum to reassess the same material. Accordingly, the order directing the withholding of pension and gratuity was set aside.
6. Sri K. Arvind Kamath, learned Additional Solicitor General of India appearing for Sri Girish S. Hulmani, learned -6- NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR counsel for the appellant, submitted that the acquittal recorded in the criminal proceedings is not honourable acquittal. Hence, it is contended that such acquittal would not have any bearing on the disciplinary proceedings. Learned Additional Solicitor General of India further submitted that the standard of proof required in criminal proceedings is different from that in disciplinary proceedings, and an acquittal in the former does not ipso facto result in exoneration in the latter. It is also submitted that the finding recorded in the criminal proceedings that there was no work pending so as to warrant a demand for bribe is factually incorrect. It is contended that the Service Tax Registration Certificate was issued by respondent No.1 in favour of the complainant only after receipt of the demanded bribe.
6.1 Learned Additional Solicitor General further submits that the report submitted by the Enquiry Officer was rendered without proper consideration of the material evidence available on record. Consequently, the disciplinary authority did not accept the recommendation of the Enquiry Officer. It is submitted that the Union Public Service Commission (UPSC), -7- NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR upon evaluation of the evidence on record and considering the gravity of the misconduct, rightly advised the withholding of 100% of the pension and 100% gratuity payable to respondent No.1. It is submitted that the learned Single Judge, without due consideration of the aforesaid aspects, has committed an error in setting aside the order directing withholding of pension and gratuity.
7. Per contra, Sri Girish A. Yadawad, learned counsel appearing for respondent No.1, submits that the standard of proof in disciplinary proceedings is that of preponderance of probability, whereas in criminal proceedings, the requirement is proof beyond reasonable doubt. It is submitted that when an accused is acquitted in criminal proceedings where a higher standard of proof is applied, the initiation or continuation of disciplinary proceedings on the same set of facts, with the same documentary evidence and witnesses, requiring a lower standard of proof, amounts to an abuse of process and results in duplication of proceedings.
7.1 Learned counsel further submits that, once the criminal court, after a meticulous and detailed examination of -8- NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR the evidence on record, has recorded a finding on merits that respondent No.1 did not commit the alleged offence, any further disciplinary proceedings by the departmental authorities, culminating in imposition of punishment, would in effect amount to sitting in appeal over the judgment of the Special Court, which is impermissible in law. It is submitted that the mere absence of the expression 'honourable acquittal' in the judgment of acquittal cannot, and ought not to, be construed as an acquittal on technical grounds. It is further submitted that a holistic reading of the entire judgment clearly demonstrates that the acquittal was on merits and, in fact, amounts to an honourable acquittal.
8. This Court has considered the submissions advanced by the learned Additional Solicitor General and the learned counsel appearing for respondent No.1.
9. The point that arises for consideration before this Court is:-
"Whether the acquittal recorded by the Special Court in the criminal proceedings for offences under the Prevention of Corruption Act would have a -9- NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR bearing on the disciplinary proceedings initiated on the same set of facts?"
10. It is a well-settled position of law that every acquittal in criminal proceedings does not ipso facto result in closure or dropping of disciplinary proceedings; the effect of such acquittal depends upon the facts and circumstances of each case. As held by the Hon'ble Apex Court and various High Courts, an acquittal on technical grounds may not have any bearing on the disciplinary proceedings. However, where the acquittal is after a full-fledged trial, based on appreciation of the evidence, and is on merits, such an acquittal would certainly have a bearing on the disciplinary proceedings. Nevertheless, caution must be exercised to determine whether the foundation of both the criminal case and the disciplinary proceedings rests on the same set of facts and whether the documentary evidence and witnesses relied upon are identical. If it is found that both proceedings are based on identical facts, evidence, and witnesses, then the outcome of the criminal trial would have a direct impact and may be decisive in the disciplinary proceedings as well.
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11. In the present case, before proceeding to examine the judicial pronouncements on the issue, it is necessary to take note of the outcome of the departmental enquiry. In the first enquiry report, the Enquiry Officer recorded a finding that the amount received by respondent No.1 was not bribe money. It was further concluded that there was no failure on the part of respondent No.1 to maintain absolute integrity or proper devotion to duty, and that the charge of acting in a manner unbecoming of a Government servant was not established. Accordingly, the Enquiry Officer opined that the case did not warrant imposition of any penalty under Rule 14 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965. However, the disciplinary authority disagreed with the said findings and directed a de novo enquiry. Even in the second enquiry report, the Enquiry Officer reiterated that there was no material on record to establish that the amount received by respondent No.1 was bribe money.
12. On a conjoint reading of the findings recorded in the two enquiry reports and the order passed by the Special Court in the criminal proceedings, the only possible conclusion that
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NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR emerges is that respondent No.1 has not committed the charged offence.
13. This Court has also examined in detail the order passed by the Special Court acquitting the accused. A thorough scrutiny of the said order makes it evident that the acquittal was recorded after a full-fledged trial and upon appreciation of evidence on merits. The mere absence of the phrase honourable acquittal, which may at best be considered an expression of form rather than substance cannot detract from the nature of the acquittal. What is material, as held by various Courts, is the substance of the findings recorded by the Special Court and not the terminology employed.
14. It is relevant at this stage to refer to a few judgments of the Hon'ble Supreme Court and this Court which have dealt with the issue in question. In Maharana Pratap Singh v. State of Bihar and Others, [2025 SCC On-Line SC 890], the Hon'ble Supreme Court held as under:
"47. While an acquittal in a criminal case does not automatically entitle the Accused to have an order of setting aside of his dismissal from public service following disciplinary proceedings, it is well- established that when the charges, evidence,
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NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR witnesses, and circumstances in both the departmental inquiry and the criminal proceedings are identical or substantially similar, the situation assumes a different context. In such cases, upholding the findings in the disciplinary proceedings would be unjust, unfair, and oppressive. ....... .
48. To assess the degree of similarity between the charges, evidence, witnesses, and circumstances in the disciplinary and criminal proceedings, it is indeed crucial to review the materials placed before the Court where such an issue arises. ...... ."
15. In Deputy Inspector General of Police and Others v. S. Samuthiram [AIR 2013 SC 14], the Hon'ble Supreme Court held as under:
"23. .......the standard of proof required for holding a person guilty by a criminal court and the enquiry conducted by way of disciplinary proceeding is entirely different. In a criminal case, the onus of establishing the guilt of the accused is on the prosecution and if it fails to establish the guilt beyond reasonable doubt, the accused is assumed to be innocent. It is settled law that the strict burden of proof required to establish guilt in a criminal court is not required in a disciplinary proceedings and preponderance of probabilities is sufficient. ......."
16. In Ram Lal v. State of Rajasthan and Others, [(2024) 1 SCC 175], the Hon'ble Supreme Court observed as under:
"28. Expressions like "benefit of doubt" and "honourably acquitted", used in judgments are not to
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NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR be understood as magic incantations. A court of law will not be carried away by the mere use of such terminology. In the present case, the Appellate Judge has recorded that Ext. P-3, the original marksheet carries the date of birth as 21-4-1972 and the same has also been proved by the witnesses examined on behalf of the prosecution. The conclusion that the acquittal in the criminal proceeding was after full consideration of the prosecution evidence and that the prosecution miserably failed to prove the charge can only be arrived at after a reading of the judgment in its entirety. The Court in judicial review is obliged to examine the substance of the judgment and not go by the form of expression used."
17. In P.V. Rudrappa v. State of Karnataka and Others, [2024 SCC On-Line Kar 10628], this Court has held as under:
"......., when the facts, evidentiary material and the circumstances arising from the criminal case are identical to those in the disciplinary proceedings, ordinarily there cannot be difference in terms of their outcome. If on identical set of facts/allegations that are vouched by the very same evidentiary material/witnesses, an accused employee is acquitted after a full-fledged trial, ordinarily he cannot be punished in a disciplinary enquiry. In a way, this can be likened to doctrine of double jeopardy,......."
18. In Aejaz Hussain v. State of Karnataka and Others [2020 SCC On-Line Kar 5552], this Court held as under:
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NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR "23. Both the afore extracted judgments were again reiterated by the Hon'ble Supreme Court in the case of S. Bhaskar Reddy v. Supt. of Police, (2015) 2 SCC 365 and the relevant paragraph Nos. 21 to 26, which are as under:
xxx xxx .....The expressions 'honourable acquittal', 'acquitted of blame', 'fully exonerated' are unknown to the Code of Criminal Procedure or the Penal Code, which are coined by judicial pronouncements. It is difficult to define precisely what is meant by the expression 'honourably acquitted'. When the accused is acquitted after full consideration of prosecution evidence and that the prosecution had miserably failed to prove the charges levelled against the accused, it can possibly be said that the accused was honourably acquitted. ...." "31. Insofar as the judgment of the larger Bench of the Hon'ble Supreme Court relied by the 2nd respondent in the case of Shashi Bhusan Prasad v. Inspector General, CISF, (2019) 7 SCC 797, at paragraph Nos. 16 to 22, which read thus:
xxx xxx xxx
19. We are in full agreement with the exposition of law laid down by this Court and it is fairly well settled that two proceedings criminal and departmental are entirely different. They operate in different fields and have different objectives. Whereas the object of criminal trial is to inflict appropriate punishment on an offender, the purpose of enquiry proceedings is to deal with the delinquent departmentally and to impose penalty in accordance with the service rules. The degree of proof which is necessary to order a
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NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR conviction is different from the degree of proof necessary to record the commission of delinquency. Even the rule relating to appreciation of evidence in the two proceedings is also not similar. In criminal law, burden of proof is on the prosecution and unless the prosecution is able to prove the guilt of the accused beyond reasonable doubt, he cannot be convicted by a Court of law whereas in the departmental enquiry, penalty can be imposed on the delinquent on a finding recorded on the basis of "preponderance of probability". Acquittal by the Court of competent jurisdiction in a judicial proceeding does not ipso facto absolve the delinquent from the liability under the disciplinary jurisdiction of the authority......."
19. If the case on hand is examined in the light of the legal principles enunciated by the Hon'ble Supreme Court and this Court, it is evident that, although the judgment of acquittal in the criminal proceedings does not expressly use the term 'honourable acquittal,' a reading of the well-reasoned order clearly demonstrates that the acquittal was on merits, after due appreciation of the prosecution evidence. The witnesses examined in the criminal trial and those in the departmental enquiry are, for the most part, identical. Likewise, the documentary evidence relied upon by the prosecution in the criminal proceedings and by the Enquiry Officer in the disciplinary proceedings is substantially the same. This Court
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NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR has no doubt that the set of facts, the evidence, and the witnesses in both proceedings are materially identical.
20. Further, if two parallel proceedings, based on the same set of facts, evidence, and witnesses, are permitted to culminate in conflicting conclusions, the implementation of such inconsistent findings would seriously prejudice the interests of the delinquent officer. In order to avoid such an anomalous and unjust consequence, the Hon'ble Supreme Court as well as this Court have consistently recognized that, although criminal and departmental proceedings are distinct and can proceed simultaneously, the outcome of criminal proceedings--where the standard of proof is higher--may, in appropriate cases, have a bearing on the disciplinary proceedings.
21. The rationale is well-founded: the standard of proof in criminal proceedings is proof beyond reasonable doubt, whereas in disciplinary proceedings, it is the preponderance of probability. Since the standard of proof required in criminal law is higher, a finding of acquittal on merits necessarily casts a significant doubt on the sustainability of a contrary finding in disciplinary proceedings based on the same evidence.
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22. The appellant has contended that the complainant's application for issuance of the Service Tax Registration Certificate was pending with respondent No.1, and that the certificate was in fact issued by him. However, the findings recorded in both the enquiry reports as well as in the judgment of the Special Court in the criminal proceedings indicate otherwise. No material has been placed before this Court to substantiate the contention that the complainant's work was, in fact, pending with respondent No.1.
23. Be that as it may, the UPSC, while recommending disciplinary action, appears to have proceeded solely on the basis of the alleged recovery of the bribe amount. The explanation offered by the delinquent that he had an insurance transaction with the complainant and that the amount of ₹1,500/-, alleged to be a bribe, was actually a refund arising out of a misunderstanding has not been duly considered.
24. To attract the charged offences under the Prevention of Corruption Act, pendency of official work with the accused is one of the essential requirements. In the present case, the appellant has failed to establish that the
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NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR complainant's application was pending with respondent No.1. On the contrary, the material on record suggests that while the complainant had submitted an application seeking a Service Tax Registration Certificate, the processing of the same was pending before another officer in a different range, over which respondent No.1 had no jurisdiction or decision-making authority.
25. The learned Single Judge, upon considering the law laid down by the Hon'ble Supreme Court as well as the outcome of the criminal proceedings, held that the acquittal recorded in the criminal trial would enure to the benefit of the petitioner and render the continuation of the disciplinary enquiry unsustainable. The learned Single Judge further held that the penalty imposed on respondent No.1, pursuant to the advice of the UPSC, directing withholding of 100% of pension and 100% of gratuity, is contrary to the applicable rules. It is also observed that respondent No.1, who is presently aged about 73 years, would suffer serious prejudice if such an extreme penalty were to be sustained, as complete withholding
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NC: 2025:KHC-D:8996-DB WA No. 100221 of 2025 HC-KAR of pension and gratuity would result in multiple hardships to the delinquent.
26. This Court, upon consideration of the submissions advanced on both sides and on perusal of the findings recorded by the learned Single Judge in the light of the legal principles enunciated by the Hon'ble Supreme Court and this Court, is of the considered view that the order dated 06.02.2023 passed by respondent No.2 is unsustainable in law. The learned Single Judge was fully justified in quashing the said order. The judgment of the learned Single Judge is well-reasoned, consistent with the settled position of law, and warrants no interference.
27. In the light of the above discussion, the appeal is devoid of merit and is, accordingly, dismissed.
Sd/-
(R.DEVDAS) JUDGE Sd/-
(K V ARAVIND) JUDGE CLK_CT: UMD List No.: 1 Sl No.: 4