Allowed

Sri Srinivasa Murthy v. Karnataka State

Karnataka HC4 Jul 2024WP/47382/2014

Case brief

AI extract

What is this about?

The High Court quashed the order of compulsory retirement imposed on a Technical Supervisor for alleged misappropriation under the Margin Money Scheme. Relying on a coordinate bench decision and a special court acquittal finding no evidence of misappropriation, the Court held that the departmental finding was based on insufficient material. The writ petitions were allowed, granting notional promot

What did the court decide?

Quashing of compulsory retirement order; grant of notional promotion with all consequential benefits.

Sri Srinivasa Murthy Vs Karnataka State — Pension and Retirement Benefits | Karnataka HC (2024)

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1 - NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF JULY, 2024

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BEFORE

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THE HON'BLE MR JUSTICE B M SHYAM PRASAD

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WRIT PETITION NO. 20597 OF 2012 (S-PRO)

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C/W

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WRIT PETITION NO. 47382 OF 2014

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IN WP NO.20597/2012

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BETWEEN:

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Digitally signed by VINAYAKA B V Location: HIGH COURT OF KARNATAKA DHARWAD BENCH DHARWAD Date: 2024.08.09 15:16:40 +0530

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SRI SRINIVASAMURTHY S/O LATE PILLAPPA AGED ABOUT 55 YEARS WORKING AS TECHNICAL SUPERVISOR KARNATAKA STATE KHADI & VILLAGE INDUSTRIES BOARD NO.10, JAMSA BHAVAN RDKHADI BHAVAN BENGALURU - 560052 R/AT C/O LAKSHMIDEVI KODIHALLI MAIN ROAD BB NAGAR, BENGALURU.

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…PETITIONER

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(BY SRI. SUBRAMANYA BHAT M.,ADVOCATE)

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AND:

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KARNATAKA STATE KHADI & VILLAGE INDUSTRIES BOARD, REPTD. BY ITS CHIEF EXECUTIVEOFFICER NO. 10, JAMSA BHAVAN ROAD KHADI BHAVAN BENGALURU - 560052

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SRI. R. NARASIMHAMURTHY AGED ABOUT 53 YEARS

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NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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WORKING AS DISTRICT OFFICER BENGALURU URBAN DISTRICT KARNATAKA STATEKHADI & VILLAGE INDUSTRIES BOARD NO. 10, JAMSA BHAVAN ROAD KHADI BHAVAN BENGALURU - 560052

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SMT. LAKSHMIBAI AGED ABOUT 45 YEARS WORKING AS DISTRICT OFFICER BENGALURU URBAN DISTRICT KARNATAKA STATEKHADI & VILLAGE INDUSTRIES BOARD NO. 10, JAMSA BHAVAN ROAD KHADI BHAVAN BENGALURU - 560052.

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…RESPONDENTS (BY SRI. PRAKASH T HEBBAR.,ADVOCATE FOR R1 TO R- 3)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE ENTIRE RECORDS PERTAINING TO THE CASE OF HE PETITIONER. QUASH THE (1) OFFICE ORDER DATED 21.02.2007 MARKED AT ANNEXURE D AND (2) THE OFFICE ORDER DATED 19.05.2009 MARKED AT ANNEXURE F, BOTH ISSUED BY THE IST RESPONDENT AS THE SAME ARE ILLEGAL, ARBITRARY AND VIOLATIVE OF ARTICLES 14, 16, 19 AND 21 OF THE CONSTITUTION OF INDIA.

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IN WP NO.47382/2014

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BETWEEN:

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SRI SRINIVASA MURTHY S/O CHIKKAPILLAPPA, AGED ABOUT 57 YEARS, TECHNICAL SUPERVISOR, OFFICE OF THE DISTRICT OFFICER, KARNATAKA STATE KHADI

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3 - NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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VILLAGE INDUSTRIES BOARD KHADI BHAVAN, NO.10, JASMA BHAVAN ROAD, BENGALURU - 560 052

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…PETITIONER

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(BY SRI.D.R.RAVISHANKAR., SR.COUNSEL FOR SRI AMBARISHA M., ADVOCATE)

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AND:

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1 . KARNATAKA STATE KHADI AND VILLAGE INDUSTRIES BOARD, KHADI BHAVAN,

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NO.10, JASMA BHAVAN ROAD,

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BENGALURU REP. BY ITS CHIEF EXECUTIVE OFFICER.

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2 . KARNATAKA STATE KHADI AND VILLAGE INDUSTRIES BOARD, KHADI BHAVAN, NO.10, JASMA BHAVAN ROAD, BENGALURU,

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REPRESENTED BY ITS CHIARMAN.

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3 . THE STATE OF KARNATAKA, REPRESENTED BY ITS PRINCIPAL SECRETARY,

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DEPARTMETN OF COMMERCE AND INDUSTRIES,

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M.S BUILDING, DR. AMBEDKAR VEEDHI, BENGALURU -560 001.

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…RESPONDENTS

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(BY SRI. PRAKASH T HEBBAR.,ADVOCATE FOR R1 TO R- 2;

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SRI.GOPALA KRISHNA SOODI, AGA FOR R-3)

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4 - NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE ENTIRE RESPONDENTS, QUASH THE IMPUGNED ORDER DATED 22.09.2014 ISSUED BY THE R-1 (ANNEXURE -A TO THE W.P) AND GRANT ALL CONSEQUENTIAL BENEFITS TO THE PETITIONER)

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THESE WRIT PETITIONS, ARE COMING ON FOR FINAL HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner was in service with the Karnataka State Khadi and Village Industries Board [ the Board ], and during the pendency of these writ petitions, he has attained the age of superannuation. The petitioner is appointed as a Technical Supervisor, and he is issued with notice to show cause against initiation of inquiry for having caused certain financial loss to the Corporation. Even as of the date of this Show Cause Notice, CBI was conducting an investigation based on a complaint against the petitioner and others alleging misappropriation of subsidy amount. In view of this ongoing investigation, the petitioner is denied promotion to the post of

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5 - NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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Superintendent with those juniors to him being promoted.

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The petitioner has filed the first petition in W.P.No.20597/2012 calling in question the Board's office orders dated 21.02.2007 and 19.05.2009 [ Annexures - D and F ]. The petitioner's grievance with these office orders is confined to the promotion that is granted to the second and third respondents respectively. The petitioner in the next petition in W.P.No.47382/2014 has impugned the Board's order dated 22.09.2014 [ Annexure-A ] for appropriate orders with consequential benefits. The Board by this impugned order dated 22.09.2014, on completion of the internal proceedings, has found the petitioner guilty of misconduct and imposed the punishment of compulsory retirement under the adopted Karnataka State Civil Services (Classification, Control and Appeal) Rules, 1957 with the directions to recover a sum of Rs.5,53,800/-.

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6 - NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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3. Sri D.R. Ravishankar, the learned Senior

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Counsel for the petitioner [ in W.P.No.47382/2014 ] and Sri Subramanya Bhat, the learned counsel on record for the petitioner [ in W.P.No.20597/2012 ], are heard for the disposal of these writ petitions in the light of their first canvass that this Court, in WP No.34767/2010 [S-RES]¹ , in similar circumstance where a Development Officer with the Board suffered punishment of compulsory retirement on the allegation of causing certain pecuniary losses to the Board, has allowed the writ petition quashing such order and directing the Board to pay all salaries from the date of termination till the date he attained the age of superannuation.

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4. Sri D.R. Ravishankar and Sri Subramanya

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Bhat emphasize that the Board, based on the Inquiry Officer's report, has concluded that the petitioner has

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1 This writ petition is disposed of on 27.09.2023

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misappropriated a sum of Rs.5,53,800/- to 65 beneficiaries under a particular Scheme and that this conclusion is without considering the nature of the Scheme and the responsibilities thereunder and these aspects have been considered by this Court in W.P.No.34767/2010 [ S-RES ]. They invite this Court's attention to this Court's observations in the said writ

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petition to contend that:

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[i] a Scheme viz., Margin Money Scheme [MM Scheme] floated by the Central Government is implemented through the concerned Nationalized/ Scheduled/ Cooperative Banks with certain participation by the Board,

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[ii] a beneficiary files an application in triplicate with the Board and the concerned Bank disburses the initial amount envisaged under the MM Scheme by crediting the same to the beneficiaries' account with the Bank,

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8 - NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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[iv] the concerned Bank appraises a beneficiary’s application for assistance and his/ her eligibility, and only on the approval of the loan by this Bank and its advisory, the benefit [initial amount] is disbursed by the Board to the beneficiaries’ Account with the Bank to be kept in a term deposit for a period of two years, and

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[iv] the Bank must retain this amount in its account and utilize the accruing interest to service the loan, and in the event the loan turns sour, appropriate the amount towards recovery of the amount due .

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5. Sri D.R. Ravishankar and Sri Subramanya

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Bhat also canvass that this Court, in the light of these salient features, has opined that the Scheme does not indicate any role for a Development Officer with the Board in verifying the beneficiaries’ establishments or operation of the concerned Village Industry and because the Scheme does not envisage

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9 - NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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a role in supervision to the Board or its employees, the charge of misappropriation could not have been found against the Development Officer.

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6. Sri D.R. Ravishankar and Sri Subramanya

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Bhat underscore that if a Senior Officer cannot be found guilty, the petitioner, who was only working as a Technical Supervisor, cannot be found guilty. They also draw support from the conclusion by the Special Court in its judgment on 20.04.2013 in Spl.C.C.No.46/2008 to contend that the Special Court, while examining similar circumstances and evidence, has opined that there is no evidence whatsoever to establish the petitioner's culpability.

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Sri Prakash T. Hebbar, the learned

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counsel for the Board, is heard in the light of these submissions. The learned counsel submits that no appeal is filed against this Court's order dated 27.09.2023 in W.P.No.34767/2010 [S-RES], nor can the Board place any record to persuade this Court to

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10 - NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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differ from the analysis of the Scheme and the conclusion of a Coordinate bench. As regards the petitioners' grievance that the Office Orders dated 21.02.2007 and 19.05.2009, Sri Prakash T. Hebbar submits that the petitioner has called in question these orders in its entirety and the petitioners cannot have grievance with the promotion granted to those who were senior to him and if there is any relief in the first writ petition, it must necessarily be in this context.

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This Court must observe that the Special Court in the criminal proceedings, on considering the evidence placed on record, has specifically concluded that there is evidence to believe that the loan facilities extended to the members/beneficiaries, that the concerned Banks have received subsidy from the Board, that corresponding amounts were credited while further concluding that the officials of the concerned Bank are shown to have received custody

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of the public money but no inference can be drawn that they had misappropriated and acted in cohorts with the Board’s employees. The Special Court's finding in this regard reads as under:

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"There is evidence on the record to believe that the bank has received the subsidy from the KVIB, the FDR's were created and based on the said FDR's the loan facilities were accorded to the members of the Gramodhyoga Sangha. The evidence on the record would prove the custody of the public money with A1 and A6 while they allowed the financial accommodation to the members of the Gramodhyoga Sangha no inference could be drawn that the funds were misappropriated to say that they commit the criminal breach of trust."

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Further, the Board’s finding in the impugned order is that the petitioner has misappropriated a sum of Rs.5,53,800/- while implementing MM Scheme during the years 2000-21 and 2021-22, and as is rightly canvassed, this

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12 - NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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conclusion is without examining the Scheme details. This Court could only be in respectful agreement with

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the Coordinate Bench's decision in W.P.No.34767/2010 [S-RES] if it is indisputable that the application for loan is filed with a Bank, that the Bank forwards advise to the Board after verifying whether a particular Village Industry was in operation, and that based on such advisory, amounts are transferred, not to the beneficiary but to his/ her account with the Bank to be in a term deposit for two years subject to utilization.

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Furthermore, on a conjoint reading of the Special Court's finding as aforesaid and this Court's finding in the writ petition filed by the petitioners' superiors, this Court must conclude that the impugned order dated 09.02.2014 is without considering the relevant materials and is not based on evidence and must necessarily yield. Indisputably, the petitioner, who by now has attained

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13 - NC: 2024:KHC:25264 WP No. 20597 of 2012 C/W WP No. 47382 of 2014

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the age of superannuation, is denied promotion only because of the investigation and contemplated internal proceedings. With the investigation also culminating in favour of the petitioner, this Court must opine that the petitioner cannot be denied the benefit of promotion or the consequence that would ensue therefrom. Hence, the following:

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ORDER

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[A] The petition in W.P.No.47382/2014

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is allowed quashing the Board's order dated 22.09.2014 [Annexure-A] and the petition in W.P.No.20597/2012 is disposed of directing the Board to extend notional promotion to the petitioner from the date he was entitled to and grant all consequential benefits as permissible in law.

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[B] The petitioner, to receive such benefits, shall be at liberty to file a certified copy of this order with the Board within four [4] weeks from the date of receipt of a certified copy of this order and the Board, within three [3] months from the date of receipt of such certified copy, shall communicate the details of the calculation and the payments payable to the petitioner .

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Sd/(B M SHYAM PRASAD) JUDGE

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SA List No.: 1 Sl No.: 23

Sri Srinivasa Murthy v. Karnataka State

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Sri Srinivasa Murthy v. Karnataka State

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