Karnataka High Court
Karnataka Food And Civil Supplies Corpn ... vs R Krishna Murthy on 4 July, 2013
Bench: K.L.Manjunath, Ravi Malimath
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 4th DAY OF JULY 2013
PRESENT
THE HON'BLE MR.JUSTICE K.L.MANJUNATH
AND
THE HON'BLE MR.JUSTICE RAVI MALIMATH
WRIT APPEAL NO. 856 OF 2009 (S-DIS)
BETWEEN:
Karnataka Food & Civil Supplies
Corporation Limited,
147, Kambali Bhavan,
Infantry Road, Bangalore - 560 001
Now at No.16(1),
Miller Tank Bed Area,
Bangalore - 560 052
Rep. by its District Manager,
(Legal & Disciplinary) ... APPELLANT
(By Sri.Muralidhar, Adv. For
Sri. Ranga Associates)
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AND:
Sri.R. Krishna Murthy,
S/o. Late Sri. P.S. Ramanujam,
Aged about 51 years,
Residing at 'Shreenikethana',
No.9/18, 1st Cross, Akkamma Block,
Dinnur Main Road, R.T. Nagar,
Bangalore - 560 032 ... RESPONDENT
(By Sri. S.N. Murthy, Senior Counsel,
For Sri.H.S. Prakash, Adv.)
*****
This Writ Appeal filed under Section 4 of the
Karnataka High Court Act praying to set aside the order
passed in the Writ Petition No.46376/2002, dated
17.02.2009.
This Writ Appeal coming on for Hearing this day,
K.L.Manjunath J., delivered the following:-
JUDGMENT
The legality and correctness of the order passed by the learned Single Judge in W.P.No.46376/2002, dated 17.02.2009, is called in question in this appeal. 3
2. Heard Shri.Muralidhar, learned counsel for the appellant for the appellant and Shri.S.N. Murthy, Senior Counsel appearing for the respondent.
3. The admitted facts in this appeal are as hereunder:
The appellant is a wholly owned State Government Corporation, registered under the provisions of the Companies Act, 1956. In terms of the memorandum and articles of association, the Company Secretary has to be appointed by the Board. Accordingly, the respondent came to be appointed as Company Secretary. It is an undisputed fact that the appellant company has adopted the provision of the Karnataka Civil Services (Classification, Control and Appeal) Rules, 1957 (hereinafter referred to as 'K.C.S.R. Rules 1957' for short), in order to regulate the conduct and discipline of the employees of the appellant company, which rules 4 are also made applicable to the respondent / company secretary.
4. On certain allegations, an enquiry was conducted against the respondent. The Enquiring Officer, submitted the report on 15.05.2002, holding that the charges leveled against the respondent were proved. The Managing Director of the appellant corporation invoking Rule-8 of the K.C.S.R. Rules 1957 passed an order on 29.11.2002, imposing the punishment of dismissal. The action of the Managing Director in dismissing the respondent from the services was questioned by the respondent by filing a writ petition in W.P.No.46376/2002.
5. The learned Single Judge by his order dated 17.02.2009, allowed the writ petition and set-aside the order of dismissal on the ground that the respondent could not have been dismissed by the Managing 5 Director of the company, since he was not an appointing authority and the Disciplinary Authority shall be the appointing authority. Accordingly the writ petition came to be allowed, granting liberty to the appellant- corporation to take action against the respondent in accordance with law. This order is called in question in this appeal.
6. Shri.Muralidhar, learned counsel for the appellant submits that the learned Single Judge did not consider that the appellant company had delegated certain powers of the Board to the Managing Director and in terms of the power of delegation, it was within the powers of the Managing Director to impose the penalty of dismissal. He contended that the Learned Single Judge without considering the power of delegation, delegated by the Board to the Managing Director of the company has erroneously allowed the 6 writ petition, which requires to be reversed by this Court.
7. To support his argument, he has also placed reliance on the judgment of the Hon'ble Supreme Court reported 2006 AIR SCW 2358, in the case of Maharashtra State Mining Corporation vs. Sunil. Relying upon the aforesaid judgment, he contends that in view of the power delegated, the Managing Director could have imposed the penalty of dismissal and after imposing the penalty, he sought for ratification of the Board and the Board has passed a resolution holding that no such permission is required since the Managing Director is authorized to exercise the powers of the Board as the Disciplinary Authority. In the circumstances, he requests the Court to allow the appeal.
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8. Per contra, the learned Senior Counsel appearing for the respondent, Shri.S.N.Murthy, contends that at the first instance, in view of the adoption of K.C.S.R. Rules 1957, the power of imposing major penalty cannot be delegated by the appointing authority to any other persons. In view of Rule-(3) of Rule-9 of the K.C.S.R. Rules 1957 and he further submits that even if the argument of the appellant counsel is accepted for the sake of argument, in view of the powers delegated, the Managing Director could not have dismissed the respondent from the services without prior approval of the Board. He further submits that when the Managing Director sought ratification from the Board, the Board even without examining the powers of delegation has erroneously held that there is no necessity for the Board to ratify the action of the Managing Director as he was empowered with the 8 powers to impose punishment on the company secretary exercising the powers of the Disciplinary Authority.
9. He further submits that the judgment of the Hon'ble Apex Court in the case of Maharashtra State Mining Corporation vs. Sunil, has no application to the facts of this case. Because in the aforesaid case the person who exercised the powers of Disciplinary Authority had obtained ratification at a later date and Board has ratified the same. But in the present case, no such ratification has been made by the Board. In the circumstances, he requests the Court to dismiss the appeal.
10. In order to appreciate the rival contentions, what is required to be considered by us in this appeal are:
(i) Whether the Board has delegated powers to the Managing Director to dismiss the 9 company secretary without prior approval of the Board?
(ii) Whether the board has ratified the action of the Managing Director subsequently?
(iii) When the appellant company has adopted the provisions of the K.C.S.R. Rules 1957, is it open for the appellant board to delegate the powers, in view of clause - (v) to (viii) of Rule - 8 of K.C.S.R. Rules 1957?
11. In order to appreciate the rival contentions, we have to consider the nature of delegation and powers granted to the Officers by the appellant company. Copy of the delegation of the powers of the officers, which has come into effect on 01.04.2000 is made available to the Court. On perusal of the same, we have noticed at page- 23, that the power is delegated to the Managing Director to impose penalty as per K.C.S.R. Rules 1957 upto the 10 cadre of District Manager. Wherein it is stated that if an officer is appointed by the board the same shall be imposed with the prior approval of the Board.
12. Admittedly, the post of the Company Secretary is not equivalent to District Manager or below District Manager, it is above District Manager. Therefore, on this short ground, alone we have to hold that the Managing Director has no power to impose major punishment of dismissal as per clause -(v) to (viii) of Rule-8 of K.C.S.R. Rules 1957 on a Company Secretary.
13. Even if we accept the arguments of Shri.Muralidhar, that Managing Director has powers and the powers exercised by him has been later ratified by the board. On perusal of the resolution passed by the board which is available on page-389 of the paper book, the board has not ratified the action and on the 11 contrary it has proceeded as if Managing Director had power of terminating / removing the company secretary. The resolution reads as follows:
"The Board perused the note submitted on the subject and decided that since the powers of termination/removal are vested with the Managing Director the question of ratification did not arise."
14. On perusal of the resolution, it is clear that the board has proceeded as if the Managing Director was authorized to impose major punishment of dismissal or termination, and that there is no necessity for ratification.
15. As stated supra, at the first instance, the Managing Director has no power to impose major penalities as per 1957 Rules. More particularly, as envisaged under Rule - 8(v) to 8(viii), to dismiss the Company Secretary. Because such a power has not 12 been granted to him. When such power is not granted, the question of ratification does not raise at all. Even otherwise, there is no ratification made by the board. In the circumstances, we are of the opinion that no case is made out for us to reverse the order of the learned Single Judge.
16. In the case of Maharashtra State Mining Corporation vs. Sunil, the facts involved therein and the facts involved in the present case are entirely different. In the above case, there was ratification by the board subsequent to the order of imposing of penalty. In such circumstance, the Hon'ble Supreme Court has held that subsequent ratification would cure the defect and declined to interfere with the order of punishment. But the facts involved in the present case are entirely different. In view of the adoption of K.C.S.R. Rules 1957, the appellant company shall exercise its powers only in 13 accordance with K.C.S.R. Rules 1957. In order to appreciate the said point, it is proper for us to refer to Rule-8 and 9 of the K.C.S.R. Rules 1957.
"8. Nature of Penalties: (One or more of the following penalties) for good and sufficient reasons and as hereinafter provided, may be imposed on Government Servants, namely.-
(i) Fine in the case of Government Servants belonging to State Civil Services, Group 'D'
(ii) Censure
(iii) Withholding of increments; (iii-a) Withholding of promotion);
(iv) Recovery from pay of the whole or part
of any pecuniary loss caused by
negligence or breach of orders to the State Government or to the Central Government, any other State Government, any person, body or authority, to whom the service of the Officer had been lent;14
(iv-a) Reduction to a lower stage in the time scale of pay for a period with a specific direction as to whether or not the Government Servant will earn increments of pay during the period of such reduction with reference to the reduced pay or whether the pay shall remain constant and with a further direction whether on the expiry of the period of penalty the reduction will or will not have the effect of postponing the future increments of his pay;
(v) Reduction to a lower time scale of pay, grade, post or service which shall, unless otherwise directed, be a bar to the promotion of the Government Servant to the time scale of pay, grade, post or service from which he was reduced, with or without further directions regarding.-
(a). Seniority and pay in the scale of pay, grade, post or service to which the Government Servant is reduced;
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(b) Conditions of restoration to the scale of pay, grade or post or service from which the Government Servant was reduced and his seniority and pay on such restoration to that scale of pay, grade, post or service];
(vi) Compulsory retirement; (vii) Removal from service which shall not be
disqualification for future employment;
(viii) Dismissal from service which shall ordinarily be a disqualification for future employment:
9. Disciplinary Authorities.-(1) the Governor may impose any of the penalties specified in Rule 8 on any Government Servant.
(2) Without prejudice to the provision of sub- rule(1) but subject to the provisions of sub- rule(3).-
(2-A) Without prejudice to sub-rule(1) and subject to sub-rule(3), where a Government Servant who is a Member of any class or grade of State Service (hereinafter in this Sub- 16 rule referred to as the 'parent service') is deputed for service of any class or grade of another State Service (hereinafter in this sub- rule referred to as the 'deputed service') the authority which appointed him in the class or grade of the deputed service shall have the powers of the Appointing Authority for placing him under suspension and of the Disciplinary Authority for the purpose of taking a disciplinary proceedings against him:
Provided that the authority which appointed him in the deputed service shall a soon as possible inform the Appointing Authority in the parent service the circumstances leading to the order of his suspension or the commencement of the disciplinary proceeding, as the case may be.
(3) Notwithstanding anything contained in this rule, no penalty specified in clauses(v) to
(viii) of Rule 8 shall be imposed by any authority lower than the Appointing Authority."17
Under clause -(v) to (viii) of Rule - 8 of K.C.S.R. Rules 1957, powers cannot be delegated to any person by the Disciplinary Authority. Accordingly, we do not see any merits in the appeal. In the result the appeal is dismissed.
Sd/-
JUDGE Sd/-
JUDGE JJ