Bangalore District Court
Karnataka State Agro Corn Products ... vs Sri.R.Ramesh Rao on 23 February, 2017
IN THE COURT OF THE 42nd ADDL. CITY CIVIL & SESSIONS
JUDGE AT BENGALURU CITY (CCH.NO.43).
PRESENT: Sri.BAILUR SHANKAR RAMA,
B.Sc., M.A., LL.B.(Spl),
42nd ADDL. CITY CIVIL AND
SESSIONS JUDGE, BENGALURU.
Dated this the 23rd day of February 2017.
O.S.No.486/2008
Plaintiff:- Karnataka State Agro Corn Products Limited,
A Government of Karnataka Undertaking,
Registered Office at PO No.2479,
Bellary Road, Hebbal, Bangalore-24,
Represented by its Managing Director,
Sri.H.D.Sheshagiri,
S/o. late H.T.Thimmarayi Gowda,
Aged about 53 years.
(By Sri.Shanmukhappa, Adv.)
v.
Defendant:- Sri.R.Ramesh Rao,
S/o.Ramadas.R.,
Aged about 51 years,
R/o No.21,
Model House Street,
Basavanagudi,
Bangalore -560 032.
(Sri.R.Vijaya Kumar, Adv.)
Date of institution of the suit : 14.01.2008
2 O.S.No.486/2008
Nature of the suit : Recovery of Money
Date of commencement of : 17.08.2011
Recording of the evidence
Date on which the Judgment : 23.02.2017
was pronounced
Total Duration : Years Months Days
09 01 09
(BAILUR SHANKAR RAMA)
nd
42 ADDL. CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
JUDGMENT
This is a suit filed by the plaintiff for recovery of amount of Rs.32,09,487/- with future interest and costs..
2. The brief facts as averred in the plaint are that:-
The plaintiff is a Company registered under the provisions of the Companies Act, 1956 and it is a Government of Karnataka Undertaking having its Head Office at Bangalore and other branches at Mysore, Raichur, Belgaum, Chintradurga and Doddaballapur, engaged in manufacturing Energy Food/Amylase Rich Energy Food, Maize Products, Feeds etc. The Government of Karnataka 3 O.S.No.486/2008 had entrusted the work for production and supply of Energy Food and Soya Fortified Wheat Rava under the ICDS Schemes to the Plaintiff Company. Some of the Child Development Project Officers (CDPOs) had complained to the Department of Women and Child Development regarding non-supply of Energy Food / Soya Fortified Wheat Rava by the Plaintiff Company and further some irregularities were also found regarding conversion of wheat into rava by the Plaintiff Company. Under such circumstances, the Government had ordered for investigation on these irregularities and appointed Sri.R.B.Agwane, IAS, to investigate into the matter. After investigation he has submitted report to the Government of Karnataka, stating that Plaintiff Company had not supplied the committed quantities at the rate of Rs.10.50 per kg (Soya Fortified Wheat Rava). On account of non-supply of the committed quantities, the concerned CDPOs had made alternative arrangements of procuring the Soya Fortified Rava at a higher price by incurring an additional expenditure of Rs.1.29 crores to the Government. Hence, the Plaintiff Company was held responsible for the said loss. 4 O.S.No.486/2008 The Government vide letter No.Kru Tho E.116 Kru 97 and Krutho E dated 30.06.1997 forwarded the report submitted by Sri.R.B.Agwane to the Plaintiff Company for taking further action. On receipt of the same, the Plaintiff Company had appointed Sri.N.S.Sangolli, a Retired District & Sessions Judge, to investigate the report submitted by Sri.R.B.Agwane. He has visited all the Energy Food Manufacturing Units of the Plaintiff Company and submitted report on 19.10.2000 stating that all the Unit Managers and General Manager (P & E) and Financial Managers at the Head Office including the defendant herein were responsible for their failure in implementing the scheme. Basing on the reports submitted by Sri.R.B.Agwane and Sri.N.S.Sangolli the Plaintiff Company issued show-cause notice and charge sheet vide letter No.KSACP/MD/CS/RRR/2125/2003-04 dated 12/20.12.2003 by detailed out charges against the defendant. Therefore, the charges specified are acts of omission on the part of the defendant which are very serious and grave misconducts as per the Service Rules. The reply sent by the defendant was not satisfactory, as such the Plaintiff Company appointed an Enquiry Officer 5 O.S.No.486/2008 Sri.Lakshminarashimaiah, a Retired District & Sessions Judge, to conduct a domestic enquiry on the said charges. Enquiry Officer found the defendant guilty of all the charges alleged against him and submitted report to the Plaintiff Company. Thereafter, copy was forwarded to the defendant seeking for his comments on the finding of the Enquiry Officer. Since the explanation submitted by the defendant was not satisfactory, the charges were proved in the enquiry, which are grave in nature, the Plaintiff Company took a decision to terminate the defendant from the services of the Company and accordingly, terminated him from service vide Office Order No.KSACP/MD/3648/2005-06 dated 25th January, 2006. Therefore, the total loss caused to the tune of Rs.1.29 crores to the Government, for which the Plaintiff Company was responsible. Rs.32,25,000/- is recoverable from the defendant. Out of which, the Plaintiff Company had already recovered the terminal benefits and still the defendant is due for a sum of Rs.32,09,487/- to the Plaintiff Company. The Plaintiff Company got issued a legal notice on 09.08.2007, calling upon the defendant to pay sum of Rs.32,09,487/- within 15 days from the date of 6 O.S.No.486/2008 receipt of notice. The reply submitted by the defendant was not satisfactory, accordingly Company had terminated all accused Officers from the services of the Plaintiff Company with effect from 25.01.2006. The financial loss was caused was equally divided among 4 accused officials to the tune of Rs.32,25,000/- each. Therefore, Plaintiff Company is a Government of Karnataka Undertaking and there is public money involved, as such defendant is liable to pay the said amount. For the loss caused to his acts of omission and commission so as to make wrongful gain for himself and caused loss to the Plaintiff Company. Hence, the suit.
3. After the service of suit summons, the defendant appeared before the court through his advocate - Sri.R.Vijay Kumar and filed the written statement. It is contended that suit filed by the plaintiff is wholly misconceived and not maintainable on facts and merits. As the plaintiff had initiated Departmental Enquiry against the defendant on the basis of false allegations, again plaintiff cannot proceed against the defendant. The Departmental Enquiry against the defendant is now pending in a writ petition filed by him on the file of Hon'ble High Court of 7 O.S.No.486/2008 Karnataka, Bangalore, as such present suit shall have to be stayed till the disposal of said D.E. under Section 10 of CPC. The plaintiff cannot initiate simultaneous proceedings in relation to the same set of facts and cause of action on the assumption that charges against the defendant is proved, is wholly un-sustainable. Writ Petition No.17092/2007 (S-DE) challenging the order of termination dated 25.01.2006 and also order dated 28.08.2006 passed by the Board of Directors, same is pending consideration before the Hon'ble High Court of Karnataka. Therefore, the present suit is liable to be dismissed. Since the Company is registered under the provisions of Indian Companies Act, it is governed by provisions of the Companies Act and Rules made there under. The Company being represented by Managing Director, to carry out day-to-day activities, in turn M.D. reports to Board of Directors. The M.D. of the Company sometimes of IAS Rank, highly qualified, experienced. The plaintiff submits that the defendant has no role to play in the matter of governing the grant of contracts placing orders pursuant to such grants or inform / advise or put forth his views to the Board or others. Therefore, 8 O.S.No.486/2008 allegations made against the defendant that because of his negligence the Government had suffered loss is false and baseless. All the transactions of the plaintiff are regulated by its own Memorandum of Association and Articles of Association and in terms of Companies Act and Rules. Every transaction the Plaintiff Company has with third party is the subject matter of Board Resolution, which is required to be incorporated in the Minutes Book. In matters relating to grant of contract, entering into transactions with third party, procuring materials, supplying materials, paying for the same and the like relating to such transactions is the Managing Director of the Company, who is required to report to the Board. All Board Meetings are chaired by the Chairman. In the report submitted by Sri.R.B.Agwane, IAS, he has made certain observations against the Department and held it responsible for such acts of its own. However, the plaintiff appointed one Sri.N.S.Sangolli, a Retired District & Sessions Judge to go into certain aspects with regard to getting PDF wheat allotted for converting into wheat rava etc. process the same and thereafter to supply to ICDS Projects depending upon the indents submitted by 9 O.S.No.486/2008 them. The said Sri.N.S.Sangolli submitted an erroneous and false report to the Board. Show-cause notice was issued to the defendant and he has replied suitably. Wherein, he had made it clear that no proper investigation was done by Sri.N.S.Sangolli and no opportunity was even granted to him before furnishing his report. Even in the report submitted by Sri.R.B.Agwane, nothing worth the name has been mentioned about the so-called misconduct on the part of the defendant. He has simply observed that the Government had incurred loss and the reason stated therein is that the plaintiff did not supplied the products in time which enable the Women and Child Welfare Department to procure the products from the open market. The defendant submits that whatever duties entrusted to him were faithfully and correctly discharged by him and he did not commit any misconduct either not in acting or over acting in as much as he has exercised those powers in the best interests of the Company and has gone to the extent of utilizing all the facilities to the best interests of the Company, which were detailed out in the reply notice. After receipt of such reply from the defendant, the Plaintiff 10 O.S.No.486/2008 Company kept quite for nearly 3 years and thereafter, a charge memo was issued during December 2003, which on a perusal would clearly indicate that no specific charges are levelled against the defendant. The charges are quite vague and bald. The defendant has caused a reply to the charge memo, disputing the correctness and legality of the same. He has also sought for dropping entire proceedings. Even in the charge memo there is no specific mention about the so-called loss caused by the defendant to the plaintiff or to the Government. During enquiry in the cross- examination of the witnesses it revealed that the allegations levelled against the defendant were not only false, but also baseless. Even then the Enquiry Officer without any application of mind, suddenly jumped to the conclusion that the defendant was responsible for certain allegations contained in charge memo. Since the very report of the Enquiry Officer has been seriously disputed and challenged in the writ petition pending before the Hon'ble High Court of Karnataka, the plaintiff cannot be permitted to take advantage of the said report. The present suit and the claim made by the plaintiff is wholly based on the said 11 O.S.No.486/2008 report, which is subjudice, as such no reliance can be placed on the said report. Even though the defendant had sent suitable and correct reply to the said report and show-cause notice the plaintiff deliberately with malafide intention appointed an Enquiry Officer. The defendant submits that Enquiry Officer did not conduct the enquiry properly, even though the defendant furnished his objections before the Enquiry Officer. Wrong finding of facts was recorded by the Enquiry Officer, which is the subject matter of the writ petition. Basing on such erroneous findings of the Enquiry Officer, the plaintiff terminated the services of the defendant. Even Appellate Authority without even furnished any reasons dismissed the appeal. Therefore, services of the defendant was illegally terminated and terminal benefits were also withheld by the plaintiff illegally. Therefore, the claim made by the plaintiff is false and baseless. The defendant denies all the allegations made against him. The Government did not suffer any kind of loss as alleged. The plaintiff has no cause of action against the defendant for recovery of any sums. The defendant is not at all responsible for all the inactions or acts or omission of Board 12 O.S.No.486/2008 of Directors of the Company and the Managing Director should be saddled with the so-called loss stated to be sustained by the Government. As such, whole case of the plaintiff is misconceived and frivolous in nature and liable to be dismissed. The plaintiff issued legal notice prior to the filing of the suit, which has been suitably replied by the defendant. With malafide intention such suit is filed. The plaintiff is not entitled to the suit claim and prayed that suit be dismissed with costs.
4. Basing on the rival pleadings the following issues are framed:-
ISSUES
1. Whether the plaintiff proves that the defendant has caused loss of Rs.32,09,487/- to the plaintiff - Corporation during his service?
2. Whether the plaintiff is entitled for recovery of suit amount from the defendant?
3. What order or decree?
5. The Joint Manager of the Plaintiff-Company got himself examined as PW-1 and got marked Ex.P1 to P12. 13 O.S.No.486/2008 The defendant got himself examined as DW-1 and got marked Ex.D1 to D18 and closed his side.
6. After the closure of the evidence, heard the arguments.
7. My answers to the above issues are as follows:-
Issue No.1:- In the negative.
Issue No.2:- In the negative.
Issue No.3:- As per final order,
for the following:-
REASONS
8. Issue Nos.1 & 2:-
For the sake of convenience these issues are taken up together for discussion to avoid repetition of facts and evidence.
9. The plaintiff - Karnataka State Agro Corn Products Limited is a Government of Karnataka Undertaking, have filed this suit for recovery of Rs.32,09,487/- from the defendant along with future interest at the rate of 18% p.a. from the date of suit till realization, on the ground that Government of Karnataka had entrusted for the supply of 14 O.S.No.486/2008 Energy Food and Soya Fortified Wheat Rava under the ICDS Scheme to the Plaintiff Company. Some of the Child Development Project Officers (CDPOs) complained to the Department of Women and Child Development (DWCD) regarding non-supply of Energy Food and Soya Fortified Wheat Rava by the Plaintiff Company and also irregularities were found regarding conversion of Wheat into Rava by the Plaintiff Company. Basing on those complaints, Government ordered for investigation by appointing Sri.R.B.Agwane, IAS. In turn, he has submitted Report to the Government that the plaintiff had not supplied the committed quantity at the rate of Rs.10.50 per kg of Soya Fortified Wheat Rava. Because of non-supply of required committed quantity as per the work entrusted, the concerned CDPOs had made alternative arrangement of procuring Energy Food at the higher price by incurring additional expenditure of Rs.1.29 crores to the Government. Thus, as per the Report submitted by Sri.R.B.Agwane, Plaintiff Company was held responsible for the loss. That is the reason, Plaintiff Company have appointed Sri.N.S.Sangolli, to investigate the matter and in his Report 15 O.S.No.486/2008 dated 19.10.2000 against the Unit Managers, General Managers and Financial Managers including the defendant reporting that they are responsible for their failure in implementing the Scheme and caused loss to the Plaintiff Company. Investigation Report submitted by Investigating Officer - Sri.N.S.Sangolli, a Retired District & Sessions Judge to the Plaintiff Company is produced at Ex.P7.
10. It is not in dispute that DW-1 had worked in the Plaintiff Company for more than 20 years. He was appointed as per the Appointment Order as a Factory Manager as per letter No.KHACP/ADM/EST/2273/83-84 as evidenced by Ex.P2. In the Appointment Letter itself, the terms and conditions and the responsibility entrusted to DW-1 for the said post is narrated. Therefore, based on the Report submitted by Sri.R.B.Agwane and Investigating Officer - Sri.N.S.Sangolli - Ex.P7, DW-1 was charge sheeted on 12/20.12.2003 as per letter No.KSACP/MD/CS/RRR/2125/2003-04 as evidenced by Ex.D13. The Enquiry Officer -
Sri.N.C.Lakshminarasimhaiah, a Retired District & Sessions Judge, was appointed and he held enquiry and submitted 16 O.S.No.486/2008 Enquiry Report as evidenced by Ex.P8 and in his Report, he has found that all the charges levelled against DW-1 is proved. Basing on the said Enquiry Report, Plaintiff Company terminated the services of DW-1 on 25.01.2006. As per the Report, out of the total loss caused to the Government of Rs.1.29 crores, for which Plaintiff Company was held responsible. As per the Enquiry Report it has to be recovered from 4 Officers, who are responsible for the loss. It was decided to recover Rs.32,25,00/- each from those erring officials. While terminating the services of DW.1, salary due of DW-1 on that day Rs.15,153/- was deducted and liability was fixed on DW-1 for recovery of Rs.32,09,847/- and this suit came to be filed.
11. DW-1 has raised so many defences in his written statement as well as in his evidence, apart from the fact of denying his liability to pay the said amount. Even DW-1 contended that the purchase made by Department of Women and Child Development, materials from the outside source is not directly related to the Plaintiff Company and absolutely there is no reference with regard to the same in the Reports of Sri.R.B.Agwane and Sri.N.S.Sangolli - Ex.P7. 17 O.S.No.486/2008 The contract entered into between Plaintiff Company and Department of Women and Child Development was not produced before the court, to know what was the committed quantity of Energy Food and Soya Fortified Wheat Rava supplied by DW-1 and the quantity purchased by Department of Women and Child Development to quantify what exactly the loss caused. Therefore, without making enquiry, the claim made by the plaintiff against the defendant attributing loss against him is imaginary and according to the defendant is not sustainable. No specific case was made out, only relying on the Enquiry Report and Investigating Report - Ex.P7, P8 and Ex.P9 - Proceedings of the Disciplinary Authority and producing these documents, this suit for recovery was filed without taking any pains to prove the allegations and the actual loss caused because of this defendant, as such the claim made against DW-1 solely basing on Reports and other documents relied in Disciplinary Proceedings is not maintainable. Therefore, learned counsel for the defendant stressed on the point that independently the plaintiff is expected to lead evidence and prove that they are entitled to the amount claimed in this 18 O.S.No.486/2008 suit against the defendant, that has not been done. As such, case against the defendant is not proved, evidence is insufficient. He has also raised the question, the Fact Finding Officer submitted his Report in the year 2000 and charge sheet was issued in the year 2003 and suit filed in the year 2008 is barred by limitation.
12. The learned counsel for the plaintiff drew the attention of the court to the evidence of PW-1 and DW-1 and also urged that in the written statement the defendant has admitted that no doubt a loss is caused to the Government and not to the Company. Hence, they are not liable to pay the amount. Therefore, it goes to show the mindset of the defendant forgetting that Plaintiff Company is a Government of Karnataka Undertaking. Therefore, loss admitted by the defendant to the Government is also loss as well as to the Company and vice versa. Precisely, the public money was squandered, public interest suffered and laudable purpose of the State is defeated, because of the act done by the defendant holding responsibility in the Company. Further, he invited the attention of the court to Order passed by the Hon'ble High Court in Writ Petition 19 O.S.No.486/2008 No.17092/2007 challenged by present DW-1 against the Enquiry Report - Ex.P8 to squash the same and their lordships have observed in para No.10 of the judgment:
"I am of the view that the findings recorded by the Officer as well as the acceptance of Report by the Disciplinary Authority cannot be faulted".
Therefore, he submits that Writ Petition came to be dismissed upholding the Report submitted by Enquiry Officer - Ex.P8 by its Order dated 18.02.2011. The crucial issue has reached its finality. Even subsequently Writ Appeal is preferred by DW-1 in a service matter is pending before the Hon'ble High Court, doesn't prevent this court to adjudicate this suit. In this suit, the evidence given by the defendant, legal contentions taken and materials brought on record to challenge the suit claim by the defendant, they cannot plead that they are not liable to pay the suit claim on any ground and urged that because of reckless and negligent attitude showed by the defendant, causing loss not only to their employers, but precious public funds thereby defeating the Policy of the State and its cause and 20 O.S.No.486/2008 interest and prayed that suit be decreed along with interest as claimed in the suit.
13. Per contra, learned counsel for the defendant argued that the findings given by Enquiry Officer in Disciplinary Proceedings cannot be equated to a finding to have been recorded by the Civil Court so as to make it binding in the suit. The plaintiff is required to prove the case dehors the finding of the Enquiry Officer in a Disciplinary Proceeding. No such effort is made by the plaintiff and relied only on the Enquiry Reports and documents placed at the time of enquiry. Therefore, basing on such evidence, liability cannot be fastened on the defendant. Further, he has pointed out that Report of Sri.R.B.Agwane, Ex.P7 - Report of Sri.N.S.Sangolli and Ex.P8 - Report of Enquiry Officer -
Sri.N.C.Lakshminarasimhaiah, cannot be construed as a conclusive, so as to foist a claim on the defendant. For the reason that, such findings do no attract principles governed by the Evidence Act and same is not binding on this court. Further more, in the Writ Appeal the said finding is under challenge. Therefore, matter is subjudice and till the 21 O.S.No.486/2008 disposal of the said Writ Appeal the findings in Ex.P7 and P8 cannot be relied by the plaintiff for their claim. He invited the attention of the court that, no documents are produced to show that when orders were placed and materials were supplied, payments were made etc. Therefore, adverse inference can be drawn against the plaintiff under Section 114(E) of the Indian Evidence Act. As per Memorandum of Association and Articles of Association of the Company, Managing Director is responsible for day-to-day activities of the Company, powers were not delegated to DW-1. The technicalities involved in the process of production of Energy Food and Soya Fortified Wheat Rava with vitamin mix were not properly understood by the Enquiry Officer and the finding given in Ex.P8 was the result of wrong appreciation and assessment. DW-1 in fact has produced more the quantity than the unit's capacity and annual turn out, production of Weaning Foods and mixes for the year 1994-99 of Chitradurga Unit during the tenure he had worked there as Deputy General Manager (WF) was more than that of installed capacity. As such, he cannot be targeted for the imaginary loss suffered even in other units. 22 O.S.No.486/2008 The every transaction in the Company has with the third party is the subject matter of Board Resolution, which is duly incorporated in the Minutes Book. Therefore, fastening the liability on the defendant for no fault committed by him, doesn't arise at all and suit itself is not maintainable and Company cannot saddled it on DW-1 to any extent. He further urged that so-called loss stated to have been caused to the Company on the ground that what was purchased by the Company was on the higher side than what was rate prevailing at the relevant point of time, same cannot be a ground to file a suit against DW-1 to recover the amount. The cause of action if any arose as and when Purchase Orders were placed by the Unit Head, when surplus were made, payments were made by the M.D. of the plaintiff, as such suit filed by the Company in the year 2008 is barred by limitation. The question of short supply or non-supply of material to Department of Women and Child Development, as such said Department is necessary party and suit is bad for non-joinder of necessary party also, which is fatal to the case of the plaintiff and prayed that suit be dismissed with costs. In the light of the above arguments canvassed by 23 O.S.No.486/2008 both the sides it is necessary to appreciate the evidence brought on record.
14. Heavy burden is on the plaintiff to establish that, because of the reckless and negligent attitude of DW-1 in discharge of his duty, which has resulted in, Company had suffered loss. Merely because it is a Government of Karnataka Undertaking and public funds are involved and acts of DW-1 was of such a nature defeating the Policy of the State and its cause and interest that alone is not sufficient to claim against the defendant in the suit for recovery of the amount. Since this being a suit for recovery of the amount on specific allegations, independently the plaintiff has to substantiate the said allegations against DW.1 to the satisfaction of the court by leading cogent, plausible, judicially acceptable evidence.
15. It is not in dispute that Plaintiff Company is a registered Company, undertaken by the Government of Karnataka. PW-1 admits that Plaintiff Company is having of Memorandum of Association and Articles of Association and also having Rules of its own administration. The 24 O.S.No.486/2008 administrative control is with Department of Agriculture, State of Karnataka. The Chairman is to be appointed by the State of Karnataka. The Director of Department of Women and Child Development, CFTRI Mysore and Finance Department of State of Karnataka are the Directors and Additional Director will be appointed, who is the senior most in the Departments by the Government of Karnataka. Sometimes IAS Officer will be appointed as Managing Director. Not more than 9 Directors and not less than 6 Directors will have to be appointed. PW-1 stated that Managing Director is taking decision in the Head Quarters, Unit Heads will be taking decision in the Units.
16. If we go through the Report submitted by Sri.R.B.Agwane, IAS and Report submitted by Sri.N.S.Sangolli - Ex.P7 or Enquiry Report - Ex.P8 submitted by Sri.N.C.Lakshminarasimhaiah do not disclose that PW-1 had given evidence before them. On the contrary in page 13 of the cross-examination of PW-1, he has deposed that he doesn't have any personal knowledge, on the basis of the records he has given evidence. He has made it clear that he has not given evidence before 25 O.S.No.486/2008 Sri.R.B.Agwane, Sri.N.S.Sangolli or Sri.N.C.Lakshminarasimhaiah at the time of enquiries and even Company did not ask him to appear before those Authorities and to give evidence. According to him, this case relates to non-supply of Energy Food as per the order placed by Women and Child Welfare Department. He doesn't have any idea, whether there was any Agreement between Women and Child Welfare Department and Plaintiff Company and the present suit is filed in relation to the indents given by the Women and Child Welfare Department and non-supply by the Company. The Plaintiff Company has not produced any documents to show that, what are all the indents given by Women and Child Welfare Department to the Plaintiff Company. Of course, PW-1 is working in the Plaintiff Company as Joint Manager at Raichur, though he professed that he is acquainted with the facts of the case and out of his knowledge he has been deposing, but in cross-examination he has come up with the version that he doesn't have any personal knowledge at all. If the relevant documents with regard to the indents given by the Women and Child Welfare Department is produced atleast to show 26 O.S.No.486/2008 that, whether the allegations attributed against DW-1 about his carelessness in achieving the targets given to him. An unequivocal admission in the cross-examination at page No.14 that they have not produced any documents to show what are all the indents given by the Women and Child Welfare Department to their Company and admits that in the unit levels indents received are available and at the relevant point of time DW-1 was working in Chitradurga Unit. DW-1 had worked in Chitradurga Unit from 1994-99 and they are having records to evidence the same. PW-1 has deposed that this suit is based on Report of Sri.R.B.Agwane only. He admits that said Report submitted by Sri.R.B.Agwane and Enquiry Reports have been challenged by DW-1 before the Hon'ble High Court of Karnataka in Writ Petition No.17092/2007, though he claims that said Writ Petition has been disposed of, but it is an admitted fact that Writ Appeal is filed challenging the order passed by the Appellate Authority and same is pending.
17. If we go through Report of Sri.R.B.Agwane in page No.51, para No.2 which refers the supply of Energy Food was only 20,000 MTS. PW-1 has deposed that he 27 O.S.No.486/2008 doesn't know whether Agreement is available in the Company or not. It is an admitted fact that Plaintiff Company had Units functioning at branches in Mysore, Raichur, Belgaum, Chitradurga and Doddaballapur, engaged in manufacturing Energy Food / Amylase Rich Energy Food, Maize Products, Feeds etc. PW-1 has deposed that all the 5 units were closed in the year 2012 itself. He doesn't have any idea regarding the total quantity of supply in metric tons by the Plaintiff Company. PW-1 has stated that, he has no idea about the documents produced by the defendant in the enquiry and Report of Sri.R.B.Agwane includes 2 years of grace period. However, he has stated that they have not given any other documents except Report of Sri.R.B.Agwane. He has no idea about the installed capacity and in page No.15, he has stated that loss is suffered by the Government. In page No.16 again he has deposed that plaint is based on Report of Sri.R.B.Agwane and they don't have any other documents to show the misdeeds of the defendant except Report of Sri.R.B.Agwane. The short supply of materials have been purchased in the market, that itself is the basis for short 28 O.S.No.486/2008 supply, though he claims that assessment is not hypothetical. In page 16 of cross-examination of PW-1 another categorical admission by him to the effect that, he admits that there is no loss sustained by Plaintiff Company. In page No.16 of the cross-examination, PW-1 admits that from all the 5 units the required Energy Food was 20,000 MTS and he has no idea whether the said 20,000 MTS Energy Food is supplied to the Women and Child Welfare Department by the Company. Therefore, when the records are available in the Plaintiff Company, why they failed to produce before the court in this suit. Even before the Enquiry Officer also, no such documents are produced. In page No.17, PW-1 has deposed that even he has stated that whether they are able to produce the records or not in the suit. According to him, the Managing Director can say regarding the same. In this suit, if Managing Director is having full knowledge of the facts of the case and the records which were admittedly in the Plaintiff Company, they ought to have examined the Managing Director to substantiate their allegation for the claim made against DW.1, not done. PW-1 came before the court to give 29 O.S.No.486/2008 evidence based on the Authorization Letter given to him by Managing Director dated 26.06.2010 as per Ex.P1. PW-1 has deposed that he cannot personally state regarding the actual loss. He has no idea about the rates agreed by the Women and Child Welfare Department. He cannot say about the penalty in respect of Agreement. He further admits that they have not produced any documents apart from Report of Sri.R.B.Agwane to show when the indents were issued and materials were supplied. PW-1 admits that if Soya Fortified Wheat Rava is mixed with Wheat Rava will become Soya Fortified Wheat Rava and it is to be roasted mildly. If it is not roasted, its life will be 30 days. Even he doesn't know whether Sri.R.B.Agwane has given evidence before Enquiry Officer - Sri.N.C.Lakshminarasimhaiah. Even he has not read the evidence recorded in the enquiry. Even he doesn't know in the enquiry Sri.R.B.Agwane has admitted that spoilage is due to wrong storage of Energy Food. He admits that there is a formula given by the Quality Control which is given by CFTRI, Mysore and every unit working under the Plaintiff Company has to adhere to the specification and they used to collect samples in bags 30 O.S.No.486/2008 randomly for the purpose of check-up, but he can't say random check-ups done by them is correct or not. In page 22 of the cross-examination, he admits that in Report of Sri.R.B.Agwane there is no particular mention in respect of loss by particular person. But it is a General Report mentioning Company is responsible. He admits that in the Report of Sri.R.B.Agwane it is mentioned from which particular unit loss was occurred. Therefore, careful analysis of cross-examination of PW-1 manifestly makes it clear that he doesn't have any knowledge about the facts of the case on hand and in particular the relevant records which are admittedly in possession of the Plaintiff Company they have not preferred to produce those relevant records to clarify the facts stated in the Report of Sri.R.B.Agwane, Report of Sri.N.S.Sangolli and Report submitted by Sri.N.C.Lakshminarasimhaiah.
18. The positive case made by the defendant that from his Unit no loss has been occurred, he has given maximum output. It has come in the evidence of DW-1 and the documentary evidence produced by him that goes to show that before the Enquiry Officer in the Written Brief 31 O.S.No.486/2008 submitted by him as per Ex.D15 in justification of his stand, he has contended the maximum utilization against the installed capacity and what was the output given by him for 1993 to 1997, the Unit did not have the facility to convert Wheat into Wheat Rava. In the cross-examination of Sri.N.S.Sangolli, he had agreed that he was not aware whether the Company at Unit level had the capacity to produce Rava or not, in his answer to the Question No.10 and 11 posed by him, copy is available in this suit. He has stated that Wheat Rava was being manufactured in the Unit and machineries were there for the same. Before the Enquiry Authority he has deposed about the actual production capacity of the Unit at Chitradurga was Rs.3600 MTS of Energy Food / Energy Food Mix per annum. Therefore, what was appraised before the Enquiry Officer was not reflected and appreciated in the Report can be seen. He has produced Ex.D5 to D8 - certified copies of Annual Reports of the Plaintiff Company for the year 1996- 1997 to 1999-2000 and Ex.D2 and D3 are the copies of 165th Meeting of Board of Directors and 182nd Meeting of Board of Directors. Therefore, there is justification in the 32 O.S.No.486/2008 contention raised by the defendant that in his Unit he has taken all pains to give more than installed capacity. The Meetings which reveal the approvals given to the Units regarding the purchase and also Annual Reports reflect the performance and outcome from each Unit. Therefore, if in other units as per Report of Sri.R.B.Agwane and what is referred in the Annual Reports, production was low against the installed capacity, liability or responsibility cannot be saddled on DW-1, who was working in Chitradurga Unit. A specific suggestion to PW-1 in this regard in the cross- examination, he has denied it. Though he claims that they have got records to show that the installed capacity for Chitradurga Unit is more than 3600 MTS per annum, but not produced. In page 21 he has admitted that in Mysore and Chitradurga Units have produced more than installed capacity. According to him, during 1996-97 non-supply of Energy Food is 100:50 and 100:100, 60% of Wheat Rava is given by Millers if 100 kg is given to them. In respect of the ratios, the Agreement is done by Managing Director and Unit Heads on some occasions. Unit Heads will be given authorization, but documents have not been produced by 33 O.S.No.486/2008 PW-1. PW-1 has deposed in the cross-examination page No.21 that, he has no idea whether Women and Child Welfare Department has complained to the Managing Director or the Government in respect of alleged non-supply of Energy Food. According to him, it is not necessary that DWCD has obtained permission from Plaintiff Company to purchase Energy Food from others and Plaintiff Company do not have any control DWCD in this regard. He has no idea whether DWCD has purchased the energy food, at what rate. Therefore, categorical admission in his cross that in the Annual Report of the Company there will be no mention regarding the loss. He is specific in his cross-examination that in the Report of Sri.R.B.Agwane there is no particular mention in respect of loss by particular person, but it is a General Report mentioning Company is responsible and there is a mention that from which particular Unit loss was occurred. The evidence of PW-1 if analysed which reflects that, he doesn't know the actual true facts of the case on hand and also the documents in a generalised form he has deposed that though documents are with them as stated by him in his evidence, but they failed to produce the same 34 O.S.No.486/2008 before the court. Therefore, as rightly argued by the learned counsel for the defendant that the M.D. of the Plaintiff Company as per the Memorandum of Association and Articles of Association of Company, who is in know of the matter, has refrain himself from appearing before the court and on his authorization PW-1 has given evidence, but in fact he doesn't have appropriate knowledge at all. Therefore, the material facts which is very crucial to determine the point in issue, such records are withheld by the Plaintiff Company and persons who are having knowledge of the fact and were actually dealing with the facts imputed against DW-1, have not come forward to give evidence by entering into witness box. M.D. of the Plaintiff Company avoided to give evidence. Thus, facts and best evidence within the hands of the Plaintiff Company has not come on record. As such, adverse inference can be drawn against the Plaintiff Company under Section 114 (E) of the Indian Evidence Act.
19. Further more, much reliance is placed by the learned counsel for the plaintiff on Report of Sri.R.B.Agwane and Investigating Report by Sri.N.S.Sangolli - Ex.P7 and 35 O.S.No.486/2008 Disciplinary Enquiry by Sri.N.C.Lakshminarasimhaiah - Ex.P8 that Hon'ble High Court decline to interfere with the findings recorded by Enquiry Officer in Ex.P8 that in para 10 of judgment passed by the Hon'ble High Court in Writ Petition No.17095/2007 c/w.17092/2007 (S-DE) dated 18.02.2011 that:
"I am of the view that the findings recorded by the Officer as well as the acceptance of Report by the Disciplinary Authority cannot be faulted".
Again in para No.11 similar view was taken by the Hon'ble High Court, to contend that the facts recorded by the Enquiry Officer and acceptance by the Disciplinary Authority followed by termination of DW-1 which according to him is perfectly in accordance to law. Therefore, the contention of the Plaintiff Company that the theory of the defendant that the suit claim is only based on Report of Sri.R.B.Agwane, Report submitted by Sri.N.S.Sangolli- Ex.P7, Enquiry Report submitted by Sri.N.C.Lakshminarasimhaiah - P8 and Proceedings by the Managing Director of the Plaintiff Company - P9 is not maintainable, has no legs to stand. In this suit, clear evidence need be given by the plaintiff and it 36 O.S.No.486/2008 has to be proved that they are entitled to the relief and those reports cannot be made use of for their support on the ground that it has been nullified by the observation made by Hon'ble High Court of Karnataka in the above said Writ Petition. Once Enquiry Report is accepted in all aspects and Hon'ble High Court has clearly viewed that findings recorded by the Enquiry Officer as well as the acceptance of the Report by the Disciplinary Authority cannot be faulted, thereby DW-1 has caused loss to the Plaintiff Company, thus stands proved, is the argument canvassed by the learned counsel for the plaintiff.
20. Further, against the order passed by the Appellate Authority opportunity was given for him to substantiate his contention, there also the defendant was failed. Even though Writ Appeal was filed and pending before the Hon'ble High Court has no bearing on this suit. Because, Hon'ble High Court has decline to interfere with the findings given by the Enquiry Officer in Ex.P8, on the ground that all opportunities were given and crucial issue has attained its finality, again defendant is disentitled to contend that independent evidence need be given in this 37 O.S.No.486/2008 suit. Therefore, according to him, pendency of Writ Appeal filed by DW-1 doesn't prevent this court to proceed with the suit.
21. Here, what was observed in the said Writ Petition No.17092/2007 (S-DE) by the Hon'ble High Court that, Ex.P8 - Report submitted by Enquiry Officer shows that sufficient opportunity was given to the Delinquent Official to participate in the proceedings. Therefore, in the service matter limited jurisdiction is to be exercised in the Writ Petition, which confined only if there is any fallacy in the decision making process and not decision itself. Because DW-1 has sought quashing of Enquiry Report and their lordships have observed that, in conformity with the Service Rule, Appellate Authority was required to consider the specific ground raised against the termination itself based on Ex.P8 and pass appropriate order. Of course, in the evidence of DW-1, he has deposed that Appellate Authority is the person relating to the Company itself, therefore no justice was meted to him, that is the reason he has again challenged it by way of Writ Appeal, same is pending. Therefore, as far as claim of termination order passed by 38 O.S.No.486/2008 the Disciplinary Authority is upheld by Appellate Authority, now matter is admittedly pending in the Writ Appeal No.34646/2012. This court is not concerned with the facts relating to service conditions and the steps taken by the Plaintiff Company against the defendant. Here, we are concerned with the adjudication of the issue that, whether suit filed by the plaintiff to claim the amount against DW-1 on the ground that he was responsible for the loss caused to the Company, whether was it proved to the satisfaction of the court, apart from it whether present suit is maintainable.
22. DW-1 in his evidence has deposed that there is no specific mention about the so-called loss caused by him to the Plaintiff Company or to the Government in the charge memo - Ex.PD13 served on him. He has given suitable reply by way of submission denying the allegations contending that they are false and baseless. Nonetheless, Enquiry Officer without any application of mind suddenly jumped to the conclusion that he was responsible for such an allegation contained in the charge memo. DW-1 has seriously disputed the finding given by the Enquiry Officer in 39 O.S.No.486/2008 Ex.P8 and also the observations made by the Appellate Authority in the Writ Appeal No.34646/2012, same is pending. Therefore, as all the issues were already before the Hon'ble High Court of Karnataka, relying on those reports plaintiff cannot claim the suit amount contending that the defendant has caused loss to the Plaintiff Company or the Government. He has categorically stated in his evidence that as per the case of the plaintiff that Rs.1.29 crores was the loss caused to the Government, for which Plaintiff Company is held responsible, dividing it and fastening the liability on DW-1 of Rs.32,25,000/- amount recoverable from him for the alleged loss suffered to the Company, which according to him is not tenable under law. Even he contends that if Government sustained some loss the plaintiff has no cause of action against DW-1 for recovery of alleged sum, as he is not at all responsible for all the inactions or acts or omissions of the Board of Directors of the Company and Managing Director should be saddled with so-called loss stated to have been sustained by the Government. Here, merely because the defendant has taken contention not admitting his liability or for argument 40 O.S.No.486/2008 sake even it is assumed that some loss is suffered and caused to the Government, then also he cannot be saddled with the responsibility, plaintiff cannot take advantage of the same to their benefit that DW-1 has admitted that loss caused to the Government. Therefore, it can be said that evidence goes to show that DW-1 had worked in Chitradurga Unit, the output was substantially good, what is admitted by PW-1 in his cross, then how could defendant being held responsible without producing any documents or evidence worth to believe in this suit. The Plaintiff Company alleged that the defendant is responsible for the loss caused to the Plaintiff Company without there being any specific case against DW-1. Because what has come in the evidence that the plaintiff used to more than the installed capacity. The lesser use of capacity is not established by the Company. The Plaintiff Company have got the capacity to supply only about 20,000 MTS and the documents produced reveal that which is very well met with. Whereas, the charge sheet - Ex.D13 which reveal that requirement of Department of Women and Child Development was about 57,000 MTS per annum.
41 O.S.No.486/2008Therefore, as rightly stated by DW-1 that DWCD is not controlled by the Plaintiff Company or Units for which Officers cannot be held responsible. If they purchased from outside agency and there is no material placed even before the Enquiry Officer to substantiate it. In any event for the extra amount paid for the said purpose for which DW-1 cannot be saddled with the liability to pay.
23. In the Enquiry Report - Ex.P8, no doubt only Sri.R.B.Agwane and Sri.N.S.Sangolli were examined and Report submitted by them were got marked. Though voluminous documents are produced by DW-1 in the enquiry, but finding was not given appreciating those documents in the said Report, can also be made out. If that being so, admittedly that question is before the Hon'ble High Court in the Writ Appeal. The plaintiff is expected to independently prove their claim against the defendant by producing oral and documentary evidence worth to believe, to substantiate their case, to the satisfaction of the court. Reliance wholly on the Ex.P7, P8 and P9 cannot be held that the plaintiff has got cause of action to sue. Even though while disposing Writ Petition No.17092/2007 their lordships 42 O.S.No.486/2008 have observed that, sufficient opportunity was given for the Delinquent Official to participate in the proceeding. Therefore, acceptance of the Report submitted by the Disciplinary Authority as per Ex.P9 cannot be faulted. Because their lordships have observed that Appellate Authority had to appreciate all the contentions and in the writ jurisdiction limited scope is there, was the view taken by the Hon'ble High Court. Ex.P10 is the Officer Order communicated to DW-1, wherein he was saddled with the responsibility to pay Rs.32,09,847/- and after deducting the salary payable upto date of Rs.15,153/-, they decided to initiate civil suit against him for recovery of Rs.32,09,847/- i.e., present suit claim. Before filing the suit on 07.08.2007 legal notice was issued at Ex.P11. To the said legal notice, DW-1 has sent Reply - Ex.P12, wherein he has clearly taken the defence that, what are the amount quantified in the notice - Ex.P11 has not been determined or quantified either in the show-cause notice, charge memo, Enquiry Reports or in the Order of Disciplinary Authority. Ex.P8 and P9 certainly do not disclose that such quantification was made against DW-1. 43 O.S.No.486/2008 He has categorically taken the defence that no where in the charge memo - Ex.D13 it has been stated that he is liable to pay the sum referred in the notice. As long as there is no evidence either documentary or oral, quantifying the same, there cannot be any recovery from him. It is contended that entire charge memo, finding given by the Enquiry Officer, Order passed by the Disciplinary Authority and the Appellate Authority are highly illegal, arbitrary and perverse, as the charge levelled against him is not specific. Therefore, the contention of the plaintiff that Hon'ble High Court has observed that Order passed by the Enquiry Officer under Ex.P8 and acceptance of the Report by the Disciplinary Authority cannot be faulted, was with a view that all his contentions can very well be appreciated before the Appellate Authority, in writ jurisdiction scope was very limited. The plaintiff cannot take this to his advantage in the present suit on hand.
24. Here, DW-1 had participated in the Disciplinary Proceedings against him. Ex.D9 is the copy of the letter dated 09.07.1996, through which he has sent the details regarding issue of PDS Wheat for conversion into Wheat 44 O.S.No.486/2008 Rava to the Managing Director, Bengaluru. Ex.D10 is the copy of the letter of the plaintiff through its Chairman and Managing Director dated 02.05.1996 by according approval for conversion of PDS Wheat into Wheat Rava. Ex.D11 is the copy of show-cause notice dated 20/22/26.12.2001 issued by the plaintiff to the defendant. They made certain references that he has not safeguarded the interest of the Company or the Government and alleged misconduct. But by then already Report submitted by Sri.R.B.Agwane was made basis for issue of such show-cause notice. Ex.D12 is the Reply submitted by DW-1 to the Managing Director dated 24.01.2002, wherein he has stated that how he has taken measures to achieve the desired Government Scheme and Wheat Rava at the Unit Level Factory and also the quantities supplied from the Head Office Mill Division was not completely sufficient for manufacture and supply of Soya Fortified Wheat Rava to DWCD as per indents and as per the approval of then CMD and later MD the Wheat was issued to the Miller and in return, Wheat Rava was received on the basis of ratios agreed upon by the Company to achieve the target of 100:100, 100:50 and marginally they 45 O.S.No.486/2008 supplied excess quantity for the benefit of the Company and denied all the allegations imputed in the Report of Sri.R.B.Agwane as well as in the show-cause notice and all the records are in the Company itself. He has safeguarded the interest of the Company and that of the Government on all times and he has not done any misconduct. That means, right from the beginning, he has denied the allegations against him imputed by the Managing Director based on the Report of Sri.R.B.Agwane. Ex.D14 is the reply submitted to the charge memo, he has denied the allegations imputed against him specifically and he has not caused any financial loss or damage to the Company. Ex.D15 is the written brief submitted by him before the Enquiry Officer, wherein he has categorically made it clear that, conversion of Wheat into Wheat Rava was a unique scheme approved by the Board as a strategic decision without examining the technically qualified officer. Investigating Officer - Sri.N.S.Sangolli has formed his own opinion, which do not corroborate with the documents, annexures and statements. He has not examined any officers of the Head Office. Though in Ex.P7, Investigating Officer has made a comment that Unit has 46 O.S.No.486/2008 suppressed the information, without specifying him as to which of information was suppressed. Therefore, as PW-1 himself admits that the basis for initiating the Disciplinary Proceeding was Report of Sri.R.B.Agwane and Report submitted by Sri.N.S.Sangolli, a Retired District & Sessions Judge as per Ex.P7. Report of Sri.R.B.Agwane is not produced. In Ex.D15 - Written Arguments submitted before the Enquiry Officer in detail with the documents furnished in justification of his contention, he has submitted his case. Ex.D16 is the reply dated 19.09.2005 given by DW-1 to the Managing Director of the Plaintiff Company, wherein also he has substantiated his defence and denied the charges. Ex.D17 is the office copy of the representation given by DW-1 to the Board of Directors against the Order of Termination, substantiating the ground for defending his case. Ex.D18 is the copy of the evidence given by Sri.N.S.Sangolli before Enquiry Officer -
Sri.N.C.Lakshminarasimhaiah. The questions put to him in the evidence and the facts stated in the Reports submitted by Sri.R.B.Agwane and Sri.N.S.Sangolli, there is justification for the defendant to contend that there are serious grounds 47 O.S.No.486/2008 alleged against the decision arrived at by the Disciplinary Authority, admittedly pending for adjudication in the Writ Appeal. In the cross-examination of DW-1, learned counsel for the plaintiff wanted to suggest about the disciplinary action taken by the Disciplinary Authority and Order of Termination is perfectly justified and they have got right to file a suit to claim the amount against the defendant for the loss suffered by the Plaintiff Company. But all the suggestions were denied by DW-1. No doubt, Disciplinary Authority has accepted the Report submitted by the Enquiry Officer and by forfeiting the due salary to be paid to the Delinquent Official and for the remaining amount after issuing legal notice the plaintiff has filed this suit. But when the whole disciplinary process itself is under adjudication before the Hon'ble High Court, relying on those documents Ex.P8 and P9, which was based on Report of Sri.R.B.Agwane and Report of Sri.N.S.Sangolli - Ex.P7, the plaintiff cannot succeed in the present suit on hand to claim the amount from the defendant. No doubt, DW-1 in the cross- examination has admitted that the Government Fund is 48 O.S.No.486/2008 public money, but has specifically denied that he has caused loss to the Plaintiff Company.
25. Therefore, except the reliance placed on Ex.P7, P8 & P9, the plaintiff has not placed any other independent evidence worth to prove the suit claim against the defendant. In the Report of Sri.R.B.Agwane, he had opined that there is necessity why Company was not able to fulfill the requirement of DWCD and to find out possibilities of Wheat allocation being misused. In the Report, it is found that he has opined that there is need to investigate into the matter for the purpose of fact finding. Though Report of Sri.R.B.Agwane is not produced which is referred in Ex.P8 and P9, but same was produced in the other case i.e., OS.No.483/2008 and this court can very well refer it. Based on such finding, Sri.N.S.Sangolli, a Retired District & Sessions Judge was appointed as Investigating Officer. But evidence of PW-1 that basis is by Report of Sri.R.B.Agwane, as rightly contended by the defendant that, that cannot be basis for charges. Neither the Enquiry Report nor Ex.P8 and P9 did not specify the role of the defendant in the entire episode, that is sought to be placed as an allegation in the 49 O.S.No.486/2008 charge sheet. The contentions raised by the defendant in his reply to Ex.P8 - Report submitted by the Enquiry Officer at Ex.D16 that without there being any charge against him and without giving any opportunity to the defendant and hold him guilty, was disputed by him. Therefore, as rightly contended by the defendant that, according to the Disciplinary Authority while accepting the Enquiry Report under Ex.P9 it is vaguely stated that Rs.1.29 crores was the loss caused to the Government. Without specifying what is the basis for dividing it into four, saddling the responsibility on the defendant that he is liable to pay 1/4th of the said loss, thus is apparently without basis and such quantification at random is impermissible under law. Because law warrants that specific charges should be placed on him and the relevant documents must also be produced to prove that on account of his negligence and insubordination and acts done by him, Plaintiff Company has put to loss and that has to be determined basing on the existing facts available on record. Because such a huge monetary transaction, investment of Government money for the scheme implemented by the Government, proper 50 O.S.No.486/2008 records should be maintained. PW-1 has stated that records are available in the Plaintiff Company. Then why they failed to produce the same before the court.
26. Therefore, careful analysis of evidence of PW-1 goes to show that he doesn't have any adequate knowledge regarding the facts of the case. The documentary evidence produced and relied by the plaintiff mainly Ex.P7, P8 & P9, which are challenged before the Hon'ble High Court of Karnataka in Writ Appeal No.34646/2012, which is pending. The competent person who is having full knowledge of the facts of the case and who was actually dealt with the issues involved by personal verification and inspection of the records maintained by them, has not entered into witness box and not subjected to cross-examination by the learned counsel for the defendant. According to PW-1, all the documents are available in their office. Then why they suppressed the same, is again a question. Therefore, non- production of those documents is fatal to the case of the plaintiff and there is no clear and specific evidence against the defendant that he was responsible for the loss caused to the Plaintiff Company, who and when placed the orders, 51 O.S.No.486/2008 when it supplied to DWCD and also alleged purchases made by DWCD. PW-1 in the cross-examination deposed that M.D. must be knowing all those details and also documents, goes to show that he has come before the court under authorization without having personal knowledge about the facts of the case on hand.
27. Therefore, learned counsel for the plaintiff has relied on a decision reported in AIR 1968 Supreme Court 1413, in the case of Gopal Krishnaji Ketkar v. Mohamed Haji Lathif and others, wherein their lordships have held as under:-
"Evidence Act, 1872 - Section 114(g) - Adverse inference - Non-production of documents - The court should draw adverse
inference against such party not withstanding the fact that the onus of proof does not lie on such party"
Further more, in the very same decision their lordships have held that:-
"If party is bound to prove certain facts, failed to lead evidence and non-production of relevant documents in support of their 52 O.S.No.486/2008 contention, the court should draw adverse inference"
It is needless to say that in the present case also the Managing Director and Board of Directors are supreme and they are responsible to lead evidence, but failed to appear before the court. Therefore, the entire evidence of PW-1 is of no use to appreciate allegations made by the Plaintiff Company against the defendant so as to saddled with the responsibility on him and he has failed to prove. PW-1 has failed to discharge the burden which is on the plaintiff to prove on facts as required under Sections 101 to 103 of the Evidence Act, irrespective of the facts by way of defence taken by the defendant or denial made by him. Therefore, whole evidence is insufficient to fasten the liability on the defendant and the plaintiff has failed to prove their claim with satisfactory evidence independently in this suit.
28. The defendant has questioned the very maintainability of the suit on several grounds. No doubt, Disciplinary Authority has accepted the Report submitted by the Enquiry Officer as per Ex.P8 and basing on it terminated the services of DW-1 under Ex.P9. Therefore, Company has 53 O.S.No.486/2008 held that DW-1 is at fault and has taken a conscious decision to punish the Delinquent Official by imposing some punishment. Therefore, it is not open to the Company to launch civil suit for recovery of loss suffered on account of the negligence by the defendant. Already, as a measure of punishment they terminated him by forfeiting the benefits and adjusted. Because there is no specific charge and the case made out by the Plaintiff Company in the Disciplinary Proceeding what exactly the role played by the defendant and what exactly the quantum of loss caused by the defendant to Company because of his negligence and dereliction of duty and misconduct, that is not clearly established. That is the reason in Ex.P9 it was ordered to file a suit for recovery, distributing the total loss amongst 4 officers, who have faced the enquiry at randomly ordering for recovery of Rs.32,25,000/- each, such a thing cannot be done under law.
29. The learned counsel for the defendant has relied on a decision reported in AIR 2006 Supreme Court 1438, in the case of Punjab State Civil Supplies Corp. Ltd., v. 54 O.S.No.486/2008 Sikander Singh, wherein in para 34 of the judgment, their lordships have observed that "Negligence in the performance of a duty under a contract of employment may give rise to a disciplinary proceeding but as at present advised, in a case of this nature, we are of the opinion that same would not give rise to a cause of action for recovery of money for the goods lost as in the disciplinary proceeding itself recovery of money from the delinquent can be directed by way of punishment".
30. Further, learned counsel for the defendant has relied on a decision reported in 2015 AIR SCW 510, in the case of M/s.Swati Ferro Alloys Pvt Ltd. v. Orissa Industrial Infrastructure Development Corporation (IDCO) & others, wherein also the question which was considered that, whether the Company would be entitled to recover the so-called loss stated to have been caused to it on the ground that what was purchased by the Company was on the higher side than what was prevailing at the relevant point of time. Hon'ble Apex Court answered this issue in the negative. Therefore, whole allegation of the Plaintiff Company for recovery of alleged loss stated to have 55 O.S.No.486/2008 been sustained by the Government on account of non- supply of materials to Department of Women and Child Development based on the Report of Sri.R.B.Agwane.
31. The said Report was submitted in the year 2000 and charge sheet was given as per Ex.D13 in the year 2003. DW-1 was terminated as per Proceedings of the Disciplinary Authority - Ex.P9 on 25.01.2006 and this suit is filed in the year 2008. As such, the claim made by the plaintiff is barred by time. In the first place, the Plaintiff Company has not proved the liability of the defendant, much less what is claimed in this suit to the satisfaction of the court by leading evidence. Therefore, as rightly argued by the learned counsel for the defendant, there are no specific provisions in the Limitation Act dealing with such situation, then the residuary Article 113 would apply, which stipulates period of 3 years for filing the suit when cause of action arose. Therefore, as rightly argued by the learned counsel for the defendant that cause of action if any arose as and when purchase order was placed by the Units Heads, when supplies were made, payments made by M.D. to the Plaintiff Company and also when exactly DWCD have purchased 56 O.S.No.486/2008 from outside at a higher price and payments were made for the said purpose, that is admittedly much previous to the year 2000.
32. According to PW-1, there was short supply or non-supply of DWCD, in Report of Sri.R.B.Agwane and Investigation Report - Ex.P7 what is alleged that because of non-supply the Government Scheme could not be achieved and DWCD purchased through outside agency and Government has put to loss. As rightly pointed out by the learned counsel for the defendant that, DWCD is not under the control of Plaintiff Company. Therefore, to adjudicate that question, DWCD is necessary party. Therefore, non arraying DWCD as a party is also fatal to the case of the plaintiff. This suit is based on Report of Sri.R.B.Agwane, Report of Sri.N.S.Sangolli and Enquiry Report and action taken by Disciplinary Authority and findings given therein. Therefore, those findings of the Enquiry Officer in a Disciplinary Proceedings cannot be equated to a finding to have been recorded by the civil court so as to make it binding in the suit. Therefore, for the reasons recorded hereinabove the plaintiff has to prove that allegations for 57 O.S.No.486/2008 the claim of money against the defendant independently by leading evidence and also by producing the documents. Even in the Report of Sri.R.B.Agwane, which reveal that he has not attributed any malice or misfeasance on the part of any of the Officers of the Plaintiff Company, but it was directed against DWCD and under what circumstances DWCD had to purchase from outside agency. That cannot be attributed against the defendant unless independently it is established in this suit that because of his misconduct and negligence, Plaintiff Company had suffered loss. The evidence let in is insufficient in this regard. Further, as rightly argued that every transaction the Company has with the third party is the subject matter of the Board Resolution, which is duly incorporated in the Minutes Book. Managing Director of the Company reporting every such transaction to the Board and PW-1 admits that all Board Meetings are chaired by the Chairman and decision of the Directors of the Company is supreme. Therefore, every records, every transaction was within the knowledge of the MD of the Company and Plaintiff Company is having all the relevant records with them, they have not chosen to place it before 58 O.S.No.486/2008 the court as an evidence against the defendant. Therefore, adverse inference can very well be drawn against the plaintiff.
33. The learned counsel for the defendant has relied on a decision reported in AIR 2004 Supreme Court 1596, in the case of Union of India and others v. West Coast Paper Mills Ltd. and another, wherein their lordships have held that:
"Period of limitation in as much as 'the right to sue first accrues' in terms of Article 113 of Limitation Act. The limitation would be counted from the date 'when the right to sue accrues'"
Therefore, this is also against the plaintiff. Therefore, in the first place the evidence given by PW-1 in the present suit is not sufficient to appreciate the claim made by the plaintiff against the defendant. The claim made is solely based on Ex.P7, P8 & P9, which are the Reports in the Disciplinary Proceedings and its basis pending under adjudication before the Hon'ble High Court of Karnataka in Writ Appeal. Therefore, independently in this suit the plaintiff has failed to establish that the defendant has 59 O.S.No.486/2008 caused loss of Rs.32,25,000/- to the Plaintiff Corporation during the tenure of his service and after adjusting benefits he is liable to pay sum Rs.32,09,487/-. Evidence is wholly insufficient. The evidence found basis for Disciplinary Proceedings cannot be equated to the evidence required to be adduced in a civil suit. Therefore, independently the Plaintiff Company has failed to establish their case. For detailed reasons recorded hereinabove this court is of the view that, the plaintiff is not entitled to the relief claimed in the suit, same is liable to be dismissed. Accordingly, I answer Issue Nos.1 & 2 in the negative.
34. ISSUE NO.3:-
For the forgoing reasons, I proceed to pass the following:-
ORDER Suit filed by the plaintiff against the defendant is hereby dismissed.
Under the circumstances, there shall be no order as to costs.60 O.S.No.486/2008
Draw a decree accordingly.
(Dictated to the Judgment Writer on computer, typed by her, the transcript thereof corrected and then pronounced by me, in open Court, this the 23rd day of February 2017) (BAILUR SHANKAR RAMA) 42ND ADDL. CITY CIVIL & SESSIONS JUDGE, BENGALURU.
ANNEXURE I. List of witnesses examined on behalf of:
(a) Plaintiff's side:
PW.1 - Sri.M.K.Jayaram
(b) Defendant's side:
DW.1 - Sri.R.Ramesh Rao II. List of documents exhibited on behalf of:
(a) Plaintiff's side:
Ex.P1 Authorization Letter
Ex.P2 Appointment Order
Ex.P3 Letter dated 28.06.1997
Ex.P4 Letter dated 08.06.1997
Ex.P5 Letter dated 06.05.1997
Ex.P6 Letter of Sri.N.S.Sangolli, District &
Session Judge (Retd) dated 13.10.2000
Ex.P7 Report Submitted by Sri.N.S.Sangolli,
District & Session Judge (Retd)
61 O.S.No.486/2008
Ex.P8 Enquiry Report submitted by
Sri.N.C.Lakshminarasimaiah, Enquiry
Officer at 16.05.2005
Ex.P9 Proceedings of the Managing Director,
Karnataka State Agro Corn Products
Limited, Bangalore
Ex.P10 Office Order dated 25/27.01.2007
Ex.P11 Legal Notice dated 07.08.2007
Ex.P12 Reply to Notice dated 24.08.2007
(b) Defendant's side:
Ex.D1 Copy of R.T.I. Application
Ex.D2 Letter dated 27.04.2016
Ex.D3 Certified copy of 165th Meeting of the
Board of Directors
Ex.D4 Certified copy of 182nd Meeting of the
Board of Directors
Ex.D5 Certified copy of 24th Annual Report of
Plaintiff Company for the year 1996-97
Ex.D6 Certified copy of 25th Annual Report of
Plaintiff Company for the year 1997-98
Ex.D7 Certified copy of 26th Annual Report of
Plaintiff Company for the year 1998-99
Ex.D8 Certified copy of 27th Annual Report of
Plaintiff Company for the year 1999-2000
Ex.D9 Copy of Letter dated 31.05.1996
Ex.D10 Letter dated 02.05.1996, according approval
for conversion of PDS Wheat Rava
Ex.D11 Copy of the Show Cause Notice
Ex.D12 Copy of the Reply to Show-Cause Notice
Ex.D13 Copy of the charge sheet dated 12/20.03.2003
Ex.D14 Copy of Reply to charge sheet dated
05.01.2004
Ex.D15 Copy of the Written Brief dated 22.4.2005
Ex.D16 Copy of Written Explanation to the
Enquiry Report dated 19.09.2005
Ex.D17 Copy of the Representation given by the
Defendant dated 17.02.2007 to the
Board of Directors and Reviewing Authorities 62 O.S.No.486/2008 Ex.D18 Evidence of Sri.N.S.Sangolli before the Enquiry Officer Sri.N.C.Lakshminarasimhaiah 42nd ADDL. CITY CIVIL & SESSIONS JUDGE, BANGALORE.