Karnataka High Court
H V Narayanaswamy vs The Karnataka State Small Industries ... on 1 October, 2013
Author: Ravi Malimath
Bench: Ravi Malimath
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®
IN THE HIGH COURT OF KARNATAKA, BANGALORE
ON THE 1ST DAY OF OTOBER 2013
BEFORE
THE HON'BLE MR.JUSTICE RAVI MALIMATH
WRIT PETITION NOS.34661-34663/2009 (S-RES)
BETWEEN:
1. SRI H V NARAYANASWAMY
S/O LATE H VEERAIAH,
AGED ABOUT 57 YRS
DEPUTY CHIEF MANAGER (ADMN),
KARNATAKA STATE SMALL INDUSTRIES
DEVELOPMENT CORPORATION LTD.,
INDUSTRIAL ESTATE, RAJAJINAGAR,
BANGALORE-560 010.
2. SRI G RAMESH BABU
S/O LATE H V GOVINDA SETTY,
AGED ABOUT 49 YRS, MANAGER(ADMN)
KARNATAKA STATE SMALL
INDUSTRIES DEVELOPMENT
CORPORATION LTD., INDUSTRIAL ESTATE
RAJAJINAGAR, BANGALORE-560 010
3. SRI S VENKATESH PRASAD
S/O LATE K SATHYANARAYANA SETTY,
AGED ABOUT 45 YRS, SENIOR ASSISTANT
KARNATAKA STATE SMALL
INDUSTRIES DEVELOPMENT
CORPORATION LTD., INDUSTRIAL ESTATE
RAJAJINAGAR,
2
BANGALORE-560 010. ... PETITIONERS
(BY SRI M N PRASANNA, SRI K. PUTTEGOWDA AND
SMT. B.S. VIJAYALAKSHMI, ADVS.)
AND:
1. THE KARNATAKA STATE
SMALL INDUSTRIES DEVELOPMENT
CORPORATION LTD.,
ADMINISTRATIVE OFFICE,
INDUSTRIAL ESTATE, RAJAJINAGAR,
BANGALORE-560 010,
REP. BY ITS MANAGING DIRECTOR
2. THE MANAGING DIRECTOR
THE KARNATAKA STATE SMALL
INDUSTRIES DEVELOPMENT
CORPORATION LTD
ADMINISTRATIVE OFFICE,
INDUSTRIAL ESTATE, RAJAJINAGAR
BANGALORE-560 010. ... RESPONDENTS
(BY SRI ASHOK HARANAHALLI, SR. COUNSEL FOR
SMT.MANJULA N TEJASWI, FOR R1 & R2)
******
THESE WRIT PETITIONS ARE FILED UNDER
ARTICLES 226 AND 227 OF THE CONSTITUTION OF
INDIA PRAYING TO CALL FOR THE ENTIRE RECORDS
RELATING TO, CONCERNING AND CONNECTED WITH
THE IMPUGNED ORDER DT. 31.7.2007 VIDE ANX-A
AND THE IMPUGNED ENDORSEMENT DT. 28.10.2009
VIDE ANX-B FROM THE RESPONDENTS, PERUSE THE
SAME AND DECLARE THE ENTIRE PROCEEDINGS
CULMINATING IN THE SAID ORDER AND THE SAID
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ENDORSEMENT AS ILLEGAL AND UNSUSTAINABLE IN
LAW. AND ETC.,
THESE WRIT PETITIONS COMING ON FOR
HEARING THIS DAY, THE COURT PASSED THE
FOLLOWING:
ORDER
The petitioners are employees of the respondent - Corporation working as Deputy Chief Manager (Admn.) and Manager (Admn.) respectively. On the basis of certain acts committed by them, articles of charges were issued on 1.8.2001. They submitted their reply. It was un-satisfactory. An Enquiry Officer was appointed. He submitted his report on 30.10.2003. The charges against the petitioners were held to be proved. A second show cause notice was issued. A detailed reply was submitted by the petitioners. The Disciplinary Authority by its order dated 31.7.2007 vide Annexure-A imposed the penalty of reducing the rank and time scale of pay to the lowest in their respective cadre, reserving its right to recover the financial losses. 4 Aggrieved by the same, an appeal was preferred. The Appellate Authority by the impugned order dated 23.10.2009 vide Annexure-B rejected the appeal. Hence, the present Writ Petitions.
2. Sri M.N. Prasanna, learned counsel appearing for the petitioners contends that there are no reasons forthcoming in the impugned orders passed by the Disciplinary Authority as well as Appellate Authority in holding the case against the petitioners. Therefore, he prays that the Petitions be allowed and the impugned orders be set aside.
3. On the other hand, Sri Ashok Haranahalli, learned Senior Counsel appearing on behalf of the respondents' counsel defends the impugned orders. He however, very fairly submits that in so far as the order passed by the Appellate Authority is concerned, the same is bereft of any reasoning. Therefore, he contends 5 that the petitions be allowed only to the extent of remanding the matter back to the Appellate Authority for re-consideration. He however, very strongly disputes the contention of the petitioners that the matter requires to be re-considered by the Disciplinary Authority. His primary contention is that if the Disciplinary Authority affirms the view expressed in the enquiry report, no reasons are required. It is suffice that the order of the Enquiry Officer stands approved by the Disciplinary Authority. Therefore, no reasons require to be assigned.
4. On hearing learned counsels', I'am of the considered view that the issue for consideration is as to, "Whether the Disciplinary Authority or the Appellate Authority would have to record reasons while affirming the order passed by the Enquiry Officer or the Disciplinary Authority respectively?"
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5. Annexure-A shows that the Disciplinary Authority has passed an order affirming the order of the Enquiry Officer. The entire order reads thus:
"ORDER I, Azeezulla Baig, Managing Director and Disciplinary Authority, Karnataka State Small Industries Development Corporation Limited under powers vested with me as per Rule 18 A (vii), Rule 18 A (iv) read with Rule 24 of Conduct and Disciplinary Rules 1979 of the Corporation hereby impose the penalty of reducing the rank and time scale of pay to the lowest in their respective cadre of Shri.H.V.Narayanaswamy, Deputy Chief Manager (LAQ), Shri G.Ramesh Babu, Manager (E & WA) and Shri S.Venkatesh Prasad, Senior Assistant, Coml. Section, H.O., Bangalore with immediate effect.
However, the Corporation reserves its rights to recover the financial losses caused to 7 the Corporation at any point of time from the above said Delinquent Officer/Officials.
Sd/-
(AZEEZULLA BAIG) MANAGING DIRECTOR & DISCIPLINARY AUTHORITY
6. It narrates that in exercise of the powers conferred, the penalty is being imposed. There are no reasons for affirmation or otherwise. The detailed reply to the second show cause notice, which has been produced herewith at Annexure-J, which incidentally runs into almost 30 pages, has not even been referred to. Subsequently, an appeal was filed, wherein by an extremely brief order, the appeal was dismissed as being bereft of merit.
7. In support thereof, the learned counsel for the petitioners relies on the judgment of the Constitution Bench of the Hon'ble Supreme Court in the case of Managing Director, ECIL, Hyderabad etc., Vs. B. 8 Karunakar, reported in AIR 1994 SC 1074, with reference to para 19 of the judgment, which reads as follows:
19. It would thus, be clear that the report together with the findings on the charge and the recommendations, if any, would constitute appropriate material for consideration by the disciplinary authority. It is not incumbent upon the enquiry officer to indicate in his report of the nature of the penalty to be imposed on the delinquent.
Neither findings on merits, nor the suggested penalty binds the disciplinary authority who is enjoined to consider the record and the report. It is open to him to agree on the findings of the enquiry officer in which event he need not record elaborate consideration or reasoning in support of his conclusions, but the order must bear out his application of mind to the questions involved and brief reasons in support thereof, though not like a judgment, if he disagrees on some or all of the findings or reasons of the enquiry officer, then 9 he is enjoined to record the reasons for his disagreement. On the nature of the penalty, though it is discretionary, the discretion must be exercised reasonably, consistent with the gravity of the misconduct having indelible effect on the discipline or morale of the service, etc, and adequate punishment be imposed on the delinquent. Brief reasons in this behalf also always lend assurance of the application of the mind and consideration given to the case by the disciplinary authority which would be a factor the High Court or the Tribunal would take into consideration even on the nature of the penalty.
Reference is also placed on the judgment in the case of Roop Singh Negi Vs. Punjab National Bank and Others reported in 2009 (2) SCC 570 with reference to para 23, as follows:
"23. Furthermore, the order of the disciplinary authority as also the appellate authority are not supported by any reason.10
As the orders passed by them have severe civil consequences, appropriate reasons should have been assigned. If the enquiry officer had relied upon the confession made by the appellant, there was no reason as to why the order of discharge passed by the criminal court on the basis of selfsame evidence should not have been taken into consideration. The materials brought on record pointing out the guilt are required to be proved. A decision must be arrived at on some evidence, which is legally admissible. The provisions of the Evidence Act may not be applicable in a departmental proceeding but the principles of natural justice are. As the report of the enquiry officer was based on merely ipse dixit as also surmises and conjectures, the same could not have been sustained. The inferences drawn by the enquiry officer apparently were not supported by any evidence. Suspicion, as is well known, however high may be, can under no circumstances be held to be a substitute for legal proof.11
Further reference is made to the judgment in the case of G.V. Aswathanarayana, Vs. Central Bank of India, Bombay and others reported in 2004 AIR Kant. H.C.R. 676, wherein at para 26, it was held as follows:
26. It is now well settled that where an authority makes an order in exercise of a quasi judicial function or an order which has the effect of affecting civil rights of a person and which action is liable to be reviewed by Constitutional Courts as provided under the Constitution, it must record its reasons in support of the order it makes. In Siemens Engg. and Mfg. Co. of India Limited v. Union of India, AIR 1976 SC 1785, the Supreme Court held that the rule requiring reasons in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirements of law. To the same effect is the opinion of the Supreme Court in 12 Union of India v. M.L.Kapoor, AIR 1974 SC 87: (1974 Lab IC 338); Woolcombers of India Ltd., v. Woolcombers Workers' Union, AIR 1973 SC 2758: (1973 Lab IC 1613); Maneka Gandhi v. Union of India, AIR 1978 SC 597.
It hardly requires any emphasis that compulsion of disclosure of reasons guarantees consideration. The condition to give reasons introduces clarity and excludes or at any rate minimises arbitrariness; it gives satisfaction to the other party against whom the order is made; and it also enables an appellate or supervisory or reviewing Court to keep the Tribunals and Authorities within bounds. Therefore, a reasoned order is always a desirable condition of judicial disposal or a disposal which is required to be done judiciously.
It is therefore pleaded that even though the authorities are affirming the order of the Enquiry Officer, they would necessarily have to record reasons. The reasons need not be as much as a judgment, order or otherwise. 13 The reasons must be sufficient to show that there has been an application of mind. Apparently, the same is absent in the present case.
8. On the other hand, the learned counsel appearing for the respondents relies on the judgment of the Constitution Bench of the Hon'ble Supreme Court in the case of State of Madras Vs. A.R. Srinivasan, reported in AIR 1966 SC 1827 (V 53 C 367) with reference to para 15, which reads as follows:
"15. We are not prepared to accept this argument. In dealing with the question as to whether it is obligatory on the State Government to give reasons in support of the order imposing a penalty on the delinquent officer, we cannot overlook the fact that the disciplinary proceedings against such a delinquent officer begin with an enquiry conducted by an officer appointed in that behalf. That enquiry is followed by a report and the Public Service Commission is 14 consulted where necessary. Having regard to the material which is thus made available to the State Government and which is made available to the delinquent officer also, it seems to us some what unreasonable to suggest that the State Government must record its reasons why it accepts the findings of the Tribunal. It is conceivable that if the State Government does not accept the findings of the Tribunal which may be in favour of the delinquent officer and proposes to impose a penalty on the delinquent officer, it should give reasons why it differs from the conclusions of the Tribunal though even in such a case, it is not necessary that the reasons should be detailed or elaborate. But where the State Government agrees with the findings of the Tribunal which are against the delinquent officer, we do not think as a matter of law, it could be said that the State Government cannot impose the penalty against the delinquent officer in accordance with the findings of the Tribunal unless it gives reasons to show why the said findings 15 were accepted by it. The proceedings are no doubt, quasi-judicial, but having regard to the manner in which these enquiries are conducted, we do not think an obligation can be imposed on the State Government to record reasons in every case."
Herein the Hon'ble Supreme Court have also observed that it is not necessary that the reason should be detailed or elaborate. This is a very crucial finding of the Hon'ble Supreme Court. They have specifically stated that the reasons need not be detailed or elaborate. It could therefore be implied that the reasons must exist, even though they need not been detailed or elaborate.
9. Reliance is also placed on the subsequent judgment of the Hon'ble Supreme Court in the case of National Fertilizers Ltd., and another Vs. P.K. Khanna 16 reported in AIR 2005 SC 3742 with reference to para 12 which reads as follows:
"12. The respondent's reliance on the decision in Managing Director Vs. V. Karunakaran, (1993) 4 SCC 727 is misplaced. That decision relates to the right of a delinquent officer to a copy of the Enquiry Officer's report. In the course of the judgment the Court had no doubt said that the report of the Enquiry Officer is required to be furnished to the employee to make proper representation to the Disciplinary Authority before such authority arrives at its own finding with regard to the guilt or otherwise of the employee and the punishment if any to be awarded to him. By using the phrase "its own finding" what is meant is an independent decision of the Disciplinary Authority. It does not require the Disciplinary Authority to record separate reasons from those given by the Enquiry Officer. The concurrence of the Disciplinary Authority with the reasoning and conclusion of the Enquiry 17 Officer means that the Disciplinary Authority has adopted the conclusion and the basis of the conclusion as its own. It is not necessary for the Disciplinary Authority to restate the reasoning."
The Hon'ble Supreme Court was of the view that the reliance placed on Karunakaran's case is misplaced. However, it is to be seen that in Karunarkaran's case, the Constitution Bench of the Supreme Court have clearly narrated with regard to the recording of reasons vide para-19 of the Judgment. They have categorically held that reasons are required. The Judgment in Karunakaran's case is a Constitution Bench Judgment.
10. Further reliance is placed on the judgment of the Hon'ble Supreme Court in the case of State Bank of Bikaner and Jaipur and Others Vs. Prabhu Dayal Grover with Prabhu Dayal Grover Vs. State Bank of Bikaner & 18 Jaipur & Others reported in AIR 1996 SC 320 with reference to para 13 which reads as follows:
"13. In view of the answer so given, it has to be now seen whether under the Regulations, the concerned authorities are required to give reasons for their decisions. Regulation 68(3) lays down the procedure the Disciplinary Authority is required to follow after it receives the proceedings of the enquiry including the report of the Enquiry Officer. On careful perusal thereof, we find that only in those cases where the Disciplinary Authority considers it necessary to direct fresh or further enquiry or disagrees with the findings of the Enquiry Officer, it has to record the reasons for its such directions, but there is no such obligation if it agrees with the findings of the Enquiry Officer. It can, therefore, be legitimately inferred that when express provisions have been made in the Regulations for recording reasons in only the first two of the three fact situations - and not the other - there is no implied obligation also to record 19 the 'reasons in case of concurrence with the findings of the Enquiry Officer. Even if we proceed on the basis that such an obligation is implicit, still the order of the Disciplinary Authority cannot be held to be bad as, on perusal thereof, we find that before concurring with the findings of the Enquiry Officer it has gone through the entire proceeding and applied its mind thereto. In our considered opinion, when the Disciplinary Authority agrees with the findings of the Enquiry Officer and accepts the reasons given by him in support of such findings, it is not necessary for the punishing authority to re- appraise the evidence to arrive at the same findings. We are, therefore, unable to accept the contention of Mr. Dutta that the order of punishment was liable to be struck down as it was a non-speaking order and did not contain any reason."
11. What is to be noted in the Judgment is the fact that the Hon'ble Supreme court has stated that on a perusal of the order of the disciplinary authority, it 20 shows that the disciplinary authority had gone through the entire proceedings and applied its mind. Therefore factually the same can be distinguished in the present case. In the Judgment of the Hon'ble Supreme Court the fact was that the disciplinary authority went through the entire proceedings and applied its mind whereas in the case on hand the disciplinary authority has not even referred to a single statement or otherwise. Even the lengthy reply filed by the petitioners were not even referred to.
12. By relying on these judgments it is contended that no reasons need be recorded when the Disciplinary Authority merely confirms the order of the Enquiry Officer. Therefore, it is pleaded that the Writ Petitions be dismissed.
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13. On hearing learned counsels', I'am of the considered view that in the Constitution Bench of the Supreme Court in the case of State of Madras Vs. A.R. Srinivasan reported in AIR 1966 SC 1827, the Hon'ble Supreme Court has narrated in para 15 to the effect that it was unreasonable to suggest that the State Government must record its reasons, why it accepts the finding of the Tribunal which may be in favour of the delinquent officer. Even in such a case, it is not necessary that the reasons should be in detail or elaborate. But where the State Government agrees with the findings of the Tribunal, as a matter of law it could be said that the State Government cannot impose a penalty in accordance with the findings of the Tribunal unless it gives reasons to show why the said findings were accepted or otherwise. Even though the proceedings are no doubt quasi judicial, but having regard to the manner in which the enquiries are 22 conducted, there is no obligation on the State Government to record reasons in every case. It is this finding that is harped upon by the respondent to contend that no reasons are necessary when the findings are affirmed.
14. However, subsequent to that, the Constitution Bench in the case of B. Karunakaran, the Hon'ble Supreme Court were more categorical in their view with regard to recording of reasons. In para 19 of the said judgment, it was held that even though elaborate reasoning in support of the conclusions, though not necessary, it must be sufficient to hold that there has been an application of mind to the questions involved and that brief reasons in support thereof should be made. Therefore, the Constitution Bench went one step further than the judgment in the case of State of Madras Vs. A.R. Srinivasan. The view was re-iterated that even though elaborate reasonings are not necessary, some 23 reasons atleast were called for. Some reasons were called for only to ensure that justice is not only done but it also appears to be done. Therefore, there should be a reasonable reasoning offered by the authority as to why, it is confirming the order. In fact, the Constitution Bench further holds that the reasons to be given even while affirming the finding need not be as elaborate as a judgment. But, however, some reasons require to be recorded. Therefore, I'am of the considered view that the later Constitution Bench judgment of the Hon'ble Supreme Court in Karunakaran's case would narrate the law on the issue with regard to recording of reasons. Therefore, Karunakaran's case would stand applicable to the case on hand. Herein, there is no application of mind by the Disciplinary Authority. It is not a speaking order. It does not show application of mind. It has merely imposed the penalty. In the circumstances, 24 the order of the Disciplinary Authority cannot be sustained.
15. Further reliance is placed by the learned counsel for the respondents in the case of the National Fertilizers., wherein at para 12 of the judgment, the Hon'ble Supreme Court held that the judgment in Karunakaran's case, does not require the Disciplinary Authority to record separate reasons from those given by the Enquiry Officer. The concurrence of the Disciplinary Authority with the reasoning and the conclusions of the Enquiry Officer means that the Disciplinary Authority has adopted the conclusions on the basis of the conclusions of its own. It is not necessary for the Disciplinary Authority to re-state the reasons. However, para 19 of Karunakaran's judgment is not, what has been stated in para 12 in National Fertilizers' case. Therefore, reliance placed on National Fertilizer's case, runs contrary to the judgment of the 25 Constitution Bench judgment in Karunakaran's case. It is to be noted that the judgment in Karunakaran's case is a constitution bench judgment. Hence it would hold the field. Therefore, the judgment in National Fertilizer's Case would not be applicable.
16. The Reliance placed in the case of State of Punjab is also on the same footing. Hence, I am of the considered view that the said judgment is also not applicable.
17. Herein, no reasons are assigned by the Disciplinary Authority. The disciplinary authority is bound to consider the enquiry report, the material concluded through enquiry, the objections etc., and then to make up his mind whether to agree or disagree with the findings. While agreeing or disagreeing he is bound to give reasons. The reasons are required in order to show his application of mind. The manner in 26 which the reasons should be given and the manner which the application of mind should be made is subjective. However, the consideration by the disciplinary authority should leave no doubt, that the disciplinary authority has applied its mind and thereafter passed the order. Failure to give the reasons would amount to failure of justice. The order cannot be sustained in the absence of reasons. Hence, it is bad in law.
18. Hence the issue is answered by holding that the Disciplinary Authority or the Appellate Authority would have to record reasons even while affirming the order of the Enquiry Officer or the Disciplinary Authority.
19. Therefore, in so far as the validity of the order passed by the Disciplinary Authority is concerned, in view of the aforesaid reasons, I'am of the considered view that the order passed by the Disciplinary Authority 27 is unsustainable. As fairly conceded by the respondents, that the appellate order is unsustainable, the same also requires to be set aside.
20. In the circumstances, the petitions are allowed. The order dated 31.7.2007 and 28.10.2009 vide Annexures A & B are hereby quashed. The matter is remanded back to the second respondent Disciplinary Authority namely the Managing Director, The Karnataka State Small Industries Development Corporation Ltd., to pass appropriate orders in accordance with law based on the findings recorded hereinabove.
Rule made absolute.
Sd/-
JUDGE PL