E P Abhinandana Kumar Vs Karnataka State Warehousing

Digitally signed 1. KARNATAKA STATE WAREHOUSING by SHARADAVANI CORPORATION (A GOVERNMENT OF B KARNATAKA UNDERTAKING) Location: HIGH COURT OF UGRANA BHAVANA, NO.43, KARNATAKA PRIMROSE ROAD, BANGALORE - 560025 (REPRESENTED BY ITS MANAGING DIRECTOR)

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DISCIPLINARY AUTHORITY

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KARNATAKA STATE WAREHOUSING

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2 - NC: 2026:KHC:13282 WP No. 29460 of 2024

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HC-KAR

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CORPORATION, UGRANA BHAVANA,

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NO.43, PRIMROSE ROAD,

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BANGALORE - 560025.

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THE STATE OF KARNATAKA

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REPRESENTED BY ITS

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PRINCIPLE CHIEF SECRETARY

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FOOD AND CIVIL SUPPLIES AND CONSUMER AFFAIRS DEPARTMENT VIKAS SOUDHA,

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BANGALORE - 560001.

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…RESPONDENTS

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(BY SRI. SHISHIRA AMARNATH., ADVOCATE FOR R1 & R2 SRI G.RAMESH NAIK, AGA FOR R3)

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF

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THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE ORDER DTD 9.09.2024 ISSUED BY THE R-1 KARNATAKA STATE WAREHOUSING CORPORATION (A GOVT OF KARNATAKA UNDERTAKING ) (ANNX-F) BEARING NO.KRUN/JU/01/202324/1084 AND ETC.

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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3 -

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NC: 2026:KHC:13282 WP No. 29460 of 2024

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CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

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ORAL ORDER

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In this petition, the petitioner seeks the following reliefs:

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"The Petitioner most respectfully prays that this Hon'ble High Court may be pleased to issue a Writ or Certiorari or quashing the Order dated 9/9/2024 issued by first respondent - Karnataka State Warehousing Corporation (A Government of Karnataka Undertaking) (Annexure-F) bearing No.KRUN/JU/01/2023-24/1084 &

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This Hon'ble High Court may be pleased to issue such other writ or writs or directions in the nature of a writ as this Hon'ble High Court may deem it fit to grant in the facts and circumstances of the petitioner's case."

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Heard learned counsel for the petitioner, learned

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counsel for respondent Nos.1 and 2, learned AGA for respondent No.3 and perused the material on record.

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Learned counsel for the petitioner would reiterate the various contentions urged in the petition and invite my attention to the material on record in order to point out that the impugned proceedings initiated by the respondents on the ground that there was shortage of additional 0.89% is well within the permissible 2% as held by this Court in the cases of

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A. Prabhulinga Swamy v. The Karnataka Warehousing

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HC-KAR

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Corporation and another [W.P.No.33426/2013 C/w W.P.No.4484/2018 dated 31.05.2024] and Karnataka State Ware Housing Corporation Employees Union (Regd) and others v. Union of India and others [W.P.No.39245/2011 dated 07.06.2024] and as such, the impugned notice and all further proceedings pursuant thereto deserve to be quashed.

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In support of his submissions, he places reliance upon A. Prabhulinga Swamy's and Karnataka State Ware Housing Corporation Employees Union (Regd)'s cases supra.

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Per contra, learned counsel for respondent Nos.1 and 2 would submit that there is no merit in the petition and the same is liable to be dismissed.

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A perusal of the material on record will indicate that respondent No.1 has initiated disciplinary proceedings against the petitioner on the ground that the petitioner is guilty of misappropriation of 0.89%, which is in excess of the maximum

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1% permissible limit and that the petitioner is guilty of the charges levelled against him.

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In this context, in the case of A. Prabhulinga

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Swamy's case supra , this Court held as under:

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"Sri. A. Prabhulinga Swamy, who is now deceased, is the petitioner in W.P.No.33426/2013, and he was in employment as a Manager, Grade-I with the first respondent - the Karnataka Warehousing Corporation. Sri. A. Prabhulinga Swamy has retired with effect from 31.12.2012 upon attaining the age of superannuation. He has instituted this petition in W.P.No.33426/2013 impugning the second respondent's order dated 13.03.2013. The second respondent by this order has concluded that the petitioner would be entitled for retiral benefits subject to deduction of Rs.8,63,943/-, and the second respondent has computed this amount as comprising of.

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[a] Rs.5,78,020/- as loss caused to the first respondent during the year 200405 in handling maize procured under a scheme.

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[b] Rs.2,85,923/towards the loan availed by the petitioner as against the Provident Fund and the interest payable thereon.

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2. At the outset, this Court must observe that there is no dispute that Sri. A. Prabhulinga Swamy's retiral benefits had to be settled subject to deduction of the loan amount with interest at Rs.2,85,923/-, and the dispute in W.P.No.33426/2013 and the other petition in W.P.No.4484/2018 is confined to the decision to

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release the Provident Fund subject to deduction of Rs.5,78,020/-. Sri. A. Prabhulinga Swamy's grievance with the decision to deduct Rs.5,78,020/-, as canvassed in W.P.No.33426/2013, is on the ground that it is without any enquiry.

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3. During the pendency of this writ petition the respondents, perhaps as a curative action, have initiated departmental proceedings to justify the decision to deduct Rs.5,78,020/-. Sri. A. Prabhulinga Swamy has participated in such proceedings, but before the Disciplinary Authority's decision on the culmination of the enquiry, he has died, and the Disciplinary Authority's decision is communicated to his wife and as such, the second petition in W.P.No.4484/2018 is filed by his wife and the children impugning such decision justifying deduction.

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4. Sri. M. Subramanya Bhat, the learned counsel for the petitioners, is categorical in his submission that with the initiation of disciplinary proceedings culminating with the Disciplinary Authority's impugned order dated 18.11.2017, the petition in W.P.No.33426/2013 is rendered infructuous as the demand for recovery of Rs.5,81,495/- is now based on the Disciplinary Authority's impugned order dated 18.11.2017. This submission must be accepted and the petition in W.P.No.33426/2013 allowed quashing the order dated 13.03.2013 while examining the merits of the petitioners’ grievance as against the Disciplinary Authority's order dated 18.11.2017.

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5. It is undisputed that Sri. A. Prabhulinga Swamy, as the Manager of the first respondent’s concerned unit during the year 2004 and 2005 oversaw procurement of 10573.120 Metric Tons of maize in terms of the Union Government’s program for extending Minimum Support Price [MSP] for maize. This quantity was stocked according to Sri. A.

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Prabhulinga Swamy for a period of twenty-two months and according to the respondents for a period of eight months, but it is not disputed that this quantity was stocked with a storing facility of the Karnataka Co-operative Sugar Factory, Sangur, Haveri District [the Sugar Factory] and not within the storing facility of the respondents. Sri. A. Prabhulinga Swamy has overseen release of 10406.32 Metric Tons of maize to the Food Corporation of India [FCI], as against 10573.120 of Metric Tons of procured maize.

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6. The FCI has therefore paid the respondents only for 10406.32 Metric Tons and as such, the respondents contend that there is a loss of value of the difference in the quantity procured and released viz., 110.761 Metric Tons. The second respondent has allowed driage loss at the rate of 1.58% of 10573.120 Metric Tons. The respondents, asserting that the permissible driage loss for the year 2004-05 according to the correspondence from the Ministry of Consumer Affairs, Food and Public Distribution would only be 0.53%, have alleged that Sri. A. Prabhulinga Swamy is responsible for loss in excess of 0.53% at Rs.5,250/- per Metric Ton. Therefore, the respondents claim contend that though the actual difference is 166.798 Metric Tons, but after allowance towards driage at 0.53%, the shortfall is taken at 110.761 Metric Tons.

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7. Sri. A. Prabhulinga Swamy, responding to the charges in this regard, has categorically stated that the maize was stocked/stored in a storage facility of the Sugar Factory, that this facility did not have the necessary facilities for a compact storage, and that therefore, he cannot be made liable for any loss. In the Departmental Enquiry Sri. A. Prabhulinga Swamy has examined himself in support of his defense as aforesaid. The Enquiry Officer, while considering this evidence and the evidence let in by the Presenting Officer on behalf of the respondents,

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has found Sri. A. Prabhulinga Swamy guilty of having caused the loss.

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8. The Enquiry Officer has opined that though Sri. A. Prabhulinga Swamy contends that the driage loss to the extent of 1.58% is because the maize was stored over a period of 330 days, the records indicate that the stock was in such facility only for a period of six to eight months. The Enquiry Officer has further observed that the moisture content when the stock was procured was between 13.5% and 18.9% and when the stock was released, the moisture content was between 10.2 - 11%. The Disciplinary Authority has accepted the Enquiry Officer's report relying upon, as aforesaid, the Communication by the Ministry of Consumer Affairs, Food and Public Distribution, Government of India about the permissible percentage of driage loss for the year 2004-05.

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9. However, the Disciplinary Authority has not considered the undisputed evidence that the stock was in the premises of the Sugar Factory which did not have the necessary facilities for storing maize, nor the significance of the loss in the moisture content from 13.5% and 18.9% to 10.2 - 11%. This Court must observe that, as rightly contended by Sri. M. Subramanya Bhat, that there is no evidence to establish that the loss of moisture content of over 3% - 5% between a period of six to eight months would justify driage loss of only 0.53%. Further, again as rightly argued by Sri. M. Subramanya Bhat, this Court must opine that the respondents are not consistent in allowing driage loss while deciding on the merits of the Enquiry Reports of similarly placed persons. As could be seen from Annexure-J, one of the orders of the Disciplinary Authority in similar proceedings initiated against certain other managers [an undisputed document], driage loss up to 2% is allowed.

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10. This Court must opine that if the Ministry of Consumer Affairs, Food and Public Distribution, Government of India has indicated a possible driage loss at 0.53%, and if the respondents, in similar circumstances, have allowed driage loss up to the extent of 2%, the opinion that driage loss in the present situation at 1.58% would not be for natural reasons must be justified by cogent and credible circumstances introduced as evidence. This will especially be so when the stock is admittedly stored in the premises of the Sugar Factory and not within the premises of the first respondent, and there is loss in moisture content. This Court must also opine that culpability cannot be fixed mechanically applying the parameters fixed [which could only be a guiding factor] without considering the peculiarities of a given situation.

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11. As such, this Court must conclude that that the finding against Sri. A. Prabhulinga Swamy by the Disciplinary Authority that he has caused loss of the value of 110.761 Metric Tons of maize is both without evidence and arbitrary, the grounds which justify interference with the finding in the disciplinary proceedings under Article 226 of the Constitution of India. In the light of the above, this Court must interfere even with the petition in W.P.No.4484/2018, and hence, the following:

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ORDER

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a) The petition in W.P.No.33426/2013 is allowed quashing the order dated 13.03.2013 [Annexure-A] as appended to this petition.

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b) The petition in W.P.No.4484/2018 is also allowed quashing the order dated 18.11.2017 [Annexure-G] declaring that the respondents could not have deducted

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Rs.5,81,495/- or any such other sum towards this.

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c) The second respondent is directed to take all such measures as would be necessary to ensure that this amount is paid to the petitioners along with interest at the rate of 6% per annum for the period between the day the amount is deducted and till the date of repayment.

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d) The petitioners are reserved with liberty to file a representation with the second respondent - the Managing Director - along with a certified copy of this order within four [4] weeks from the date of receipt of a certified copy.

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e) If the petitioners file such a representation along with certified copy, the Managing Director shall consider and pass suitable orders within eight [8] weeks there from to enable the petitioners to obtain release of the amount payable in terms of this Order."

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Similarly, in the case of Karnataka State Ware

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Housing Corporation Employees Union (Regd)'s case

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supra, this Court held as under:

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"This petition is by those who are working with the fifth respondent [the Karnataka State Warehousing Corporation Limited - for short, 'the Corporation'] Managers and a Union of the Employees [the Union] with the Corporation. If the petitioners [except the second petitioner¹ ] who are

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1 It is stated that the second petitioner has been served with the order of dismissal dated 05.11.2013 after the conclusion of the departmental proceedings against him.

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working as Managers with the fifth respondent are aggrieved by the initiation of the enquiry proceedings against them and the corresponding orders for dismissal and recovery of certain amounts alleged as due, the Union [the first petitioner] is essentially canvassing that the Union of India and the Food Corporation of India, [the first and second respondents respectively] as also the fourth respondent must pay the State Government for the losses incurred to the Corporation.

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2. However, Sri Sandeep S Patil, the learned counsel for the petitioners, at the very outset, submits that neither the first petitioner nor the other petitioners propose to continue the writ petition for any relief as against the first, second and fourth respondents. With this submission, the petition as against these respondents must be dismissed, and the merits of the individual petitioner’s grievances as against the different enquiry reports and the orders for dismissal and recovery of the amounts will have to be examined.

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3. Sri Sandeep S Patil, the learned counsel for the petitioners, Sri Kumar M N, the learned Central Government Counsel for the first respondent, Sri S Srinivasa Murthy, the learned counsel for the second and fourth respondents, Sri Gopala Krishna Sooda, the learned Additional Government Advocate for the third respondent, are heard for final disposal. Sri Sandeep S Patil, without dispute from the other side, explains the following as the circumstances leading to the petition.

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4. The fifth respondent was identified as one of the Nodal Agencies by the State Government to procure maize to implement the Central Government's Scheme for extending Minimum Support Price to the farmers, and with the Corporation so identified, the Managers with each unit of the Corporation were entrusted with

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procurement, storing and facilitating removal of the stock. This Scheme was implemented through the Corporation for the years 2004-05, 2005-06, 200910 and 2013-14. The Corporation procured maize during these years but there was delay [according to the petitioners] in the Food Corporation of India [FCI] lifting stock which constrained the first petitioner to approach this Court with the writ petition in W.P. No.5558/2007.

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5. This Court has disposed of² this writ petition directing the Union of India to complete the ‘economic costing’ of the maize for Kharif Monsoon Season [KMS] 2004-05, 2005-06 with the observation that the Corporation would be at liberty to proceed with the enquiry against its employees where they are found to be delinquent but with the explicit stipulation that no proceedings shall be initiated for losses due to driage.

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6. Sri Sandeep S Patil canvasses that it was brought to this Court's notice that the delay was because of the FCI and that because of such delay, the proceedings were being initiated against the Managers and other employees with the Corporation. Sri Sandeep S Patil, relying upon the directions by this Court as aforesaid in the writ petition in W.P. No.5558/2007, contends that with this specific embargo the fifth respondent could not have initiated any proceedings against any of the petitioners but notwithstanding the same, the proceedings are commenced.

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7. Sri Sandeep S Patil next contends that the petitioners are found culpable and therefore responsible for alleged losses essentially because of the allegation that they are responsible for driage. The learned counsel submits that even according to the appropriate communication from the Ministry of

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2 Date of Disposal - 14.08.2008

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Consumer Affairs, Food and Public Distribution, the Corporation should have considered driage losses at 0.53% of the stock procured and the petitioners are found guilty of having brought about a reduction in the weightage beyond 0.53% without considering the circumstances such as the delay in lifting and the losses of moisture content in the stock with the stock lying in the premises identified by the Corporation.

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8. It is also brought to this Court's notice that in similar circumstances, this Court has interfered with the proceedings and the decision to impose punishment, and in this regard, this Court's attention is drawn to the orders of this Court in the writ petitions in W.P. No.31402/2017 and connected matters³ as also orders of this Court in the writ petitions in W.P. Nos.33426/2013 connected with the writ petition in W.P. No.4484/2018⁴ . This Court admittedly while disposing of the writ petition in W.P. No.5558/2007 has injuncted the fifth respondent from proceeding with the enquiry on the ground of losses caused to it is because of driage.

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9. This Court must record respectful agreement with the finding in the proceedings in the writ petition in W.P. No.31402/2017 and connected matters in concluding that after this Court's order in the writ petition in W.P. No.5558/2007, the fifth respondent could not have initiated the proceedings only on the ground that there was loss without examining the circumstances under which such loss could have been caused especially because of the assertion that there was delay in lifting the stock from the concerned premises is brought on record.

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10. This Court must next observe that the fifth respondent indisputably has not been consistent in extending the benefit of driage loss in the different proceedings initiated against its employees or in

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3 Date of Disposal - 23.04.2024

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4 Date of Disposal - 31.05.2024

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assigning reasons for the different driage losses allowed in these different proceedings. In some cases, as is observed by this Court in the course of the order dated 31.05.2024 in the writ petitions in W.P. Nos.33426/2013 and connected matter, the driage loss is allowed to the extent of even 2%.

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11. The conclusion of the disciplinary proceedings is without considering the significance of this Court's order in the writ petition in W.P. No.5558/2007 or examining the reasons for loss given to justify the delay in lifting the stocks and the possible reasons for moisture loss as recorded during the period when the stock is procured and lifted. Therefore, this Court must intervene insofar as the petitioners' grievance for recovery and imposition of punishment. Sri Sandeep S Patil submits that during the pendency of this petition, the second petitioner has been served with the order of dismissal dated 05.11.2013, and as such, the writ petition is amended but the other petitioners are only facing threat of recovery because of the impugned orders. In the light of the afore, the following:

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ORDER

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[a] The petition as against the first, second and fourth respondents stands dismissed and the petition is otherwise allowed quashing the Notice cum Enquiry Reports [Annexures - A, A1, A3, A5, A7, A9, A11, A12, A13, A14 and A15] as also the Recovery Orders [Annexures-A2, A4, A6, A8, A10] and the second respondent's order of dismissal issued to the second petitioner dated 05.11.2013 [Annexure-A16].

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[b] The petitioners are reserved with liberty to file a representation along with a certified copy of this order for settlement of their financial benefits as a consequence to this

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order. They shall be at liberty to file such representation within four [4] weeks from the date of receipt of a certified copy of the order, and the fifth respondent shall consider the same within an outer limit of four [4] months from the date of receipt of such representation."

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As can be seen from the aforesaid judgments, this

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Court has come to the conclusion that a maximum of 2% is permissible and in the instant case since the petitioner is held to be guilty of misappropriation to the extent of 0.89%, which is well within the upper limit/maximum permitted in the said judgments of 2%, I am of the considered opinion that the impugned proceedings, impugned notice and all further proceedings pursuant thereto deserve to be quashed.

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10. In the result, the following:

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ORDER

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i. Petition is hereby allowed .

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ii. The impugned order dated 09.09.2024 and all further proceedings are hereby quashed.

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iii. All other legal contentions urged by the petitioner are not dealt with in the present petition and the same are kept open.

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iv. The respondents are directed to settle the retiral benefits of the petitioner within a period of two months from the date of receipt of a copy of this order.

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v. To enable respondent No.1 to settle all the retiral benefits as stated supra, the petitioner is directed to submit a representation along with relevant documents within a period of two weeks from the date of receipt of a copy of the order.

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Sd/(S.R.KRISHNA KUMAR) JUDGE

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VM

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List No.: 1 Sl No.: 28

E P Abhinandana Kumar v. Karnataka State Warehousing

Case brief

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E P Abhinandana Kumar v. Karnataka State Warehousing

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