MR. D H NAGESH v. THE GOVERNMENT OF KARNATAKA

(BY SRI.BHOJEGOWDA T KOLLER, AGA FOR R1 & R2 SRI G NARASIREDDY, ADV. FOR R3 SRI NAGAIAH, ADV. FOR R4 SRI SHANKARAMURTHY K., ADV. FOR SRI VENKATESH S ARABATTI, ADV. FOR R5 TO R7) …RESPONDENTS THIS PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO I) ISSUE A WRIT OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT, QUASHING THE REFERENCE REPORT UNDER COMPLAINT/UPALOK/BGM/178/2017/UHNEVI-4 SECTION 12(3) OF THE KARNATAKA LOKAYUKTHA ACT, 1984, BY THE UPALOKAYUKTHA, KARNATAKA (ANNEXURE-F) AND ETC. 12/10/2018, BEARING ISSUED DATED THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT AND HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR - 3 - NC: 2024:KHC:41412-DB WP No. 17817 of 2022 ORAL ORDER (PER: HON'BLE MR JUSTICE S.G.PANDIT) The petitioner, a retired employee of 3rd respondent- Karnataka State Small Industries Development Corporation (for short “KSSIDC”) is before this Court under Article 226 of the Constitution of India, questioning the report of Upa Lokayukta submitted under Section 12(3) of the Karnataka Lokayukta Act, 1984 (for short “1984 Act”) dated 12.10.2018 (Annexure-F), entrustment order dated 22.11.2019 (Annexure-N) and Articles of Charge dated 10.07.2020 (Annexure-Q).

The brief facts of the case are that, the petitioner is an employee of 3rd respondent-KSSIDC and he retired from service on attaining the age of superannuation on

29.10.2020. While he was in service, he was on deputation from 02.04.2008 to 03.06.2014 to the 4th respondent-Karnataka Residential Educational Institutions Society (for short “KREIS”). On a complaint against petitioner, Upa Lokayukta investigated the complaint and - 4 - NC: 2024:KHC:41412-DB WP No. 17817 of 2022 in terms of Annexure-F, submitted a report under Section 12(3) of 1984 Act, recommending action against the petitioner. The said report was acted upon by the first respondent-State Government and issued a Government Order dated 22.11.2019, entrusting enquiry against the petitioner to Upa Lokayukta under Rule 214(2)(b)(iii) of KCSRs read with Rule 14A of Karnataka Civil Service (Classification, Control and Appeals) Rules, 1957 (for short “CCA Rules”). In terms of the said entrustment, Articles of Charge dated 10.07.2020 (Annexure-Q) was issued to the petitioner. Questioning the said orders, the petitioner is before this Court in this writ petition.

Heard learned counsel Sri. Shivabhushan S.Hatti for Smt. Prema Shivalingappa Hatti, learned counsel for the petitioner, learned counsel Sri. Bhojegowda T Koller, learned AGA for Respondents No.1 and 2, Sri.G.Narasi Reddy, learned counsel for respondent No.2, Sri. Nagaiah, learned counsel for respondent No.4 and Sri. Venkatesh - 5 - NC: 2024:KHC:41412-DB WP No. 17817 of 2022 S.Arbatti, learned counsel for respondents No.5 to 7. Perused the writ petition papers.

Learned counsel for the petitioner would contend that the petitioner is not an employee of the State Government and he is an employee of KSSIDC, hence State Government has no jurisdiction to entrust the enquiry to respondent No.5. In respect of the employees of KSSIDC, the Board of KSSIDC is the Appointing and Disciplinary Authority. Any proceedings against its employees shall have to be initiated by the Board. In that respect, learned counsel for the petitioner invites attention of this Court to Annexure-B- Karnataka Small Industries Development Corporation (Conduct and Disciplinary) Rules, 1979. Further, he also submits that KSSIDC has adopted CCA Rules to the extent of absence particular provision in the Board’s disciplinary rules. In terms of CCA Rules, the Board is the Disciplinary Authority insofar as the petitioner is concerned. But he submits that entrustment order is passed by the Government which has no jurisdiction over - 6 - NC: 2024:KHC:41412-DB WP No. 17817 of 2022 the petitioner. He submits that the Government is neither Appointing nor Disciplinary Authority insofar as petitioner is concerned. Therefore, only on this ground, learned counsel would pray for setting aside the order of entrustment as well as Articles of Charge. Learned counsel would further submit that insofar as the report submitted by Upa Lokayukta under Section 12(3) of 1984 Act that the report is submitted without taking note of the material on record and further he submits that the petitioner is in no way responsible for non-construction of building in time. Thus, learned counsel would pray for allowing the writ petition.

Per contra, learned counsels appearing for the respondents would submit that 3rd respondent-KSSIDC has adopted CCA Rules. Hence, the Government is proper authority initiate enquiry and accordingly, Government has entrusted enquiry against the petitioner to Upa Lokayukta. Further, it is submitted that, in terms of Section 12(3) report of Upa Lokayukta, the Government - 7 - NC: 2024:KHC:41412-DB WP No. 17817 of 2022 rightly entrusted enquiry to Upa Lokayukta. Thus, they pray for dismissal of the writ petition.

Having heard the learned counsel for the parties and on perusal of the writ petition papers, we are of the opinion that the petitioner has made out a case and the petitioner is entitled for the reliefs sought in the writ petition, insofar as entrustment order as well as Articles of Charge.

It is not in dispute that the petitioner is an employee of 3rd respondent-KSSIDC. Insofar as the petitioner is concerned, the Board of 3rd respondent is the Appointing as well as Disciplinary Authority. Government is neither Disciplinary Authority nor Appointing Authority in relation to petitioner. Entrustment order passed by Government entrusting enquiry against the petitioner to Upa Lokayukta is one without jurisdiction. The Division Bench Court in W.P.No.50413/2019 (S.G.PADMANABHA AND ANOTHER v/s STATE OF KARNATAKA AND OTHERS) disposed of on 22.11.2022 in an identical - 8 - NC: 2024:KHC:41412-DB WP No. 17817 of 2022 fact situation at paragraphs 10, 11, 12, 13 and 14 has held as follows: “10. From conjoint reading of the aforesaid provisions, it is evident that the Board has adopted CCA Rules to its employees. Explanation to Rule 5 makes it evident that unless context otherwise requires the expression 'Government Servant', 'Head of Department', 'The Government' or 'The Governor' mentioned in Rules mentioned in Rule 5 of 1999 Rules means 'Board Employee', 'Secretary', 'Board' and 'The Government in Housing Department'. Therefore, while reading Rule 14-A of the 1999 Rules, which empowers the entrustment of enquiry to Lokayukta or Upalokayukta as the case may be, the word shall be read as 'Board'.

11. The petitioners being the employees of the Board are governed by the 1999 Rules as well as CCA Rules. The Board is the appointing authority as well as the disciplinary authority of the petitioners. The State Government, which has entrusted the enquiry to Upalokayukta is neither the appointing authority nor the disciplinary authority.

12. The issue of entrustment of the enquiry by the State Government to Lokayukta or Upalokayukta is in respect of employees of the Board, and the Corporations is no longer res integra and has been examined by a division bench of this court in R.F. HUDEDAVAR supra and it has been held that the State Government cannot entrust the enquiry to Upalokayukta under Rule 14-A of the 1999 Rules in respect of an employee of the Board or Corporation. The relevant extract of the judgment in para 25 to 31 read as under:

25. Section 12 of the KL Act refers to the expression "competent authority" to which the report has to be sent under sub-section (1) of Section 12 of - 9 - NC: 2024:KHC:41412-DB WP No. 17817 of 2022 the KL Act, on a preliminary investigation being made on a complaint under Section 9 thereof by the Lokayukta or Upa-lokayukta. The expression "competent authority" in relation to a public servant is defined under Section 2(4) of the KL Act to mean, inter alia, such authority as may be prescribed.

26. Rule 3 of the Karnataka Lokayukta Rules, 1985 ('KL Rules' for short), prescribes that in respect of the public servants referred to in sub-clause (d) of clause (4) of Section 2, the Government of Karnataka shall be the Competent Authority. The expression "public servant" is defined in Section 2(12) of the KL Act, to mean, inter alia, a person in the service or pay of, a statutory body or a corporation (not being a local authority) established by or under a State or Central Act, owned or controlled by the State Government and any other Board or Corporation as the State Government may, having regard to its financial interest therein by notification, from time to time, specify; a Company registered under the Companies Act, 1956, in which not less than fifty-one percent of the paid up share capital is held by the State Government, or any company which is a subsidiary of such company.

27. Thus, the report submitted under Section 12(2) of the KL Act is to the competent authority. On an analysis of the aforesaid provisions insofar as a Government Company or a Corporation is concerned, an employee under the service of such a Company is a public servant and in the case of a public servant, the competent authority is the Government of Karnataka in terms of Rule 3 of the KL Rules.

28. While the definition of "public servant" is under Section 2(12) of the KL Act, it is noted that Section 2(6) of the said Act defines a "Government Servant" to mean a person who is a member of the Civil Services of the State of Karnataka or who holds a civil post or is serving in connection with the affairs of the State of Karnataka and includes any such person whose services are temporarily placed at the disposal of the Government of Government of another State, a local authority or any person whether incorporated or not, and also any person in the service of the Central or another State Government or a local or other authority whose services are temporarily placed at the disposal of the Government of Karnataka. India, - 10 - NC: 2024:KHC:41412-DB WP No. 17817 of 2022

29. The entrustment of the inquiry in the instant case has been made by the State Government, which is the competent authority under Rule 14-A of the CCA Rules, to the Lokayukta, which is questioned by the petitioners herein. It is necessary to note that Rule 14-A of the CCA Rules applies only to Government servants and not public servants. As to the definition of Government servants under CCA Rules is concerned, Rule 2(d) of the CCA Rules defines a "Government Servant" in identical terms as "Government Servant" is defined under the KL Act. The expression 'Government servant' under the CCA Rules does not include within its scope and ambit a 'public servant'. The same is also the position on a reading of the definitions of "Government servant" and "public servant" under the KL Act. Therefore, Rule 14-A of the CCA Rules applies to a "Government servant" and not to a "public servant". That is why the expression "Government servant" is defined under Rule 2(d) of the CCA Rules but the said Rules do not define a "public servant". On the other hand, a reading of Rule 3 of CCA Rules would make the position clear inasmuch as, while the CCA Rules apply to all Government servants, Rule 3 of the CCA Rules is an exception. On a reading of the same, it is clear that the CCA Rules do not apply to persons for whose appointment and other matters are not covered by those Rules, as special provisions are made by or under any law for the time being in force or in any contract, in regard to the matters covered by such law or such contract. In other words, the CCA Rules would not apply to those public servants who are covered by special provisions or by any contract with regard to matters covered by such law or such contract. Therefore, when there are separate Rules, which are applicable to the employees of a statutory body or a Government Company or a subsidiary of a Government company, the CCA Rules do not apply, just as in the instant cases, there are separate Rules in the form of C&R Rules applicable to the employees of the KRIDL.

30. Thus, on a conjoint reading of Rule 14-A with Rules 2(d) and 3 of the CCA Rules, it is evident that the CCA Rules are not applicable to the petitioners in the instant cases. Although, the employees of such a statutory body or a Corporation or a Government company are "public servants" and therefore, the provisions of KL Act applies to them, they are not "Government servants" within the meaning of Rule 2(d) read with Rule 14-A of the CCA Rules. Thus, - 11 - NC: 2024:KHC:41412-DB WP No. 17817 of 2022 even though under the provisions of KL Act and the KL Rules, the competent authority for employees of such a statutory body or a Corporation or a Government Company (who are in any case public servants within the meaning of Section 2(12) of the KL Act) is the Government of Karnataka, but, such employees are "not Government servants" within the meaning of Rules 2(d) and 3 of the CCA Rules. Hence, on receipt of a report under Section 12(2) of the KL Act by the competent authority, namely, the Government of Karnataka, vis-à-vis the employees of such statutory bodies or Corporation or Government Companies, such as KRIDL in the instant case, it has to be sent to the Disciplinary Authority under the C&R Rules of KRIDL for the purpose of taking a decision with regard to the conduct of inquiry and not directly entrust the inquiry to the Lokayukta under Rule 14-A of the CCA Rules. In other words, Rule 14-A of the CCA Rules applies only to "Government servants" as defined under Rule 2(d) of the CCA Rules and as excepted under Rule 3 thereof. The object of submitting the Report under Section 12(2) of the KL Act to the is to State Government (competent authority) appraise the State Government about the enquiry servant" by "public Lokayukta/Upa-lokayukta, as the case may be. against a

31. Therefore, we find considerable force in the arguments of the learned counsel for the petitioners to the effect that Rule 14-A of the CCA Rules does not apply to the employees of the KRIDL such as the petitioners herein. Even though they may be "public servants" within the meaning of the KL Act, they are not "Government Servants" within the meaning of the said Act as well as CCA Rules. Though the Government of Karnataka is the competent authority under the KL Act, the petitioners, not being Government Servants under the provisions of the CCA Rules, the entrustment of the inquiry under Rule 14-A of the CCA Rules to the Lokayukta is without power and jurisdiction. On that short ground alone, orders passed by the State Government entrusting the inquiry to the Lokayukta are liable to be quashed.

13. Similar view has also been taken by another division bench of this court in SANNAMALLAPPA AND ANOTHER - 12 - NC: 2024:KHC:41412-DB WP No. 17817 of 2022 VS. STATE OF KARNATAKA AND OTHERS', (2021) 6 KAR L.J. 424 (DB).

14. We are in respectful agreement with the view expressed by a division bench of this court. Therefore, the board alone was competent to entrust the enquiry by considering the report submitted under Section 12(3) of the Act by Upalokayukta and not the State Government.”