- 1 - NC: 2025:KHC:11423 WP No. 1089 of 2013 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 1089 OF 2013 (L-KSRTC) BETWEEN: KARNATAKA STATE ROAD TRANSPORT CORPORATION CENTRAL OFFICES, K H ROAD BANGALORE BY ITS MANAGING DIRECTOR REPRESENTED BY ITS CHIEF LAW OFFICER. …PETITIONER (BY SRI. H R RENUKA.,ADVOCATE) AND: S VEERANNA S/O SATHAIAH AGED ABOUT 38 YEARS R/O NO. 100, 6TH CROSS KEMPEGOWDANAGARA MAGADI MAIN ROAD VISHWANEEDAM POST NEAR ST. ASH PUBLIC SCHOOL BENGALURU-560091. …RESPONDENT (BY SRI. S B MUKKANAPPA., ADVOCATE) Digitally signed by VANAMALA N Location: High Court of Karnataka - 2 - NC: 2025:KHC:11423 WP No. 1089 of 2013 THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE AWARD OF THE III ADDL. LABOUR COURT, BANGALORE IN REF 41/11 DATED 9.5.12 VDE ANNX-B. THIS PETITION, COMING ON FOR HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD ORAL ORDER The petitioner, the Karnataka State Road Transport Corporation, has called in question the award dated 09.05.2012 in Reference No.41/2011 on the file of the III Additional Labour Court, Bengaluru [for short, ‘the Labour Court']. The Labour Court, by this impugned award, has allowed the reference by the State Government under Section 10(1) of the Industrial Disputes Act, 1947 [for short, the 'ID Act'], setting aside the petitioner's order dated 01.10.2008 dismissing the respondent from service with a direction to reinstate him into service with continuity of service, all consequential benefits and full back - 3 - NC: 2025:KHC:11423 WP No. 1089 of 2013 wages from the day of dismissal till the date of reinstatement. 2. This Court on 08.01.2013 has stayed the execution of the Labour Court's impugned award directing the respondent's reinstatement, but on the condition that the respondent's reinstatement shall be subject to the outcome in the present proceedings. It is undisputed that the respondent is accordingly reinstated, and he is continued in service subject to the outcome. It is seen from the records that efforts are made to settle the dispute, but to no avail. The petitioner has been in service for a period of over 12 [twelve] years since his reinstatement. 3. The State Government’s reference for adjudication is whether the petitioner's decision vide the Order dated 01.10.2008 to dismiss the respondent from service is justified, and if not, the relief that the respondent would be entitled to. The Labour Court, on 18.01.2011, has framed additional - 4 - NC: 2025:KHC:11423 WP No. 1089 of 2013 issues for consideration, and these additional Issues are [a] whether the petitioner proves that the domestic enquiry against the respondent is fair and proper, and [b] whether the respondent proves that the dismissal order is non-est because it is without the approval as envisaged under section 33(2)(b) of the ID Act. The Labour Court has answered the issue on the enquiry being fair in the affirmative and against the respondent by its order dated 03.01.2012. 4. The respondent, after this order on the fairness of the enquiry, has examined himself as a witness and marked two exhibits viz., Exs.W-1 and W- 2. The petitioner has not let in any oral evidence, but has proposed to rely upon the enquiry records, which are marked as Exs.M-1 to M-104 by consent. The Labour Court has answered the additional Issue No.2 against the petitioner observing that [a] the respondent admittedly is a member of the Karnataka State Road Transport Corporation Staff and Workers Federation - 5 - NC: 2025:KHC:11423 WP No. 1089 of 2013 from the day of his appointment [b] the State Government by its order dated 02.09.2005 has referred a dispute raised by the Federation in connection with the Charter of demands, [c] this Reference is pending in ID No.148/2005, [d] if this Reference is allowed, the respondent's interests would be affected and [e] admittedly the petitioner has not applied for approval under Section 33(2)(b) of the ID Act and therefore the order of dismissal dated 01.10.2008 is non-est. The Labour Court, in this premise, has opined that it need not enter upon the merits of the circumstances that would justify the petitioner's decision to dismiss the respondent from service. 5. Sri S.B. Mukkannappa, the learned counsel for the respondent, proposes to defend the Labour Court's award, but ultimately when this Court has put to Ms. Renuka, the learned counsel for the petitioner, and Sri S.B. Mukkannappa, on - 6 - NC: 2025:KHC:11423 WP No. 1089 of 2013 examining the merit of the petitioner’s decision to dismiss the respondent for a final decision in the peculiarities of this case such as that [a] the dispute is pending over 16 years [including 12 years before this Court], [b] that the respondent has been reinstated about 12 years back and has continued in service, [c] this Court can re-appreciate the evidence in its plenary jurisdiction under Article 226 of the Constitution of India when the original decision is perverse or is without evidence or is for extraneous reasons1, and [d] even if the petitioner succeeds on the limited ground of alleged non-compliance with Section 33(2)(b) of the ID Act, there would be protraction by another few years, they submit in unison that this Court could consider, in the light of the evidence on record, whether the petitioner's decision to dismiss the respondent from service is justified. 1 State of Haryana v. Devi Dutt & Ors, (2006) 13 SCC 32 and Coimbatore District Central Co-operative Bank v. Employees Association, (2007) 4 SCC 669 - 7 - NC: 2025:KHC:11423 WP No. 1089 of 2013 6. The circumstances leading to the State Government's reference under Section 10(1) of the ID Act, are encapsulated thus: [i] The petitioner appointed the respondent as a Junior Assistant in the year 1996 and he was working in the Fuel Section/Store Section and ME Section until 08.09.2000 when he was directed to work as a Junior Assistant/Cashier in the Accounts Section of the Bengaluru Depot-1. [ii] The petitioner and eighteen others are served with common Article of Charges. The charges against the petitioner and others [some of whom were working with the Divisional Office] are that during the period between April 2000 and July 2002, they, acting in a network, have - 8 - NC: 2025:KHC:11423 WP No. 1089 of 2013 misappropriated an amount of Rs.62,50,311/-. [iii] The Charges are based on the Report dated 07.02.2003 by the Deputy Chief Accounts Officer [Internal Audit, KSRTC, Bengaluru] that Sri Raghavendra Rao, Accounts Supervisor with the Divisional Office, Sri B.A. Varadaraju, Sri A.G. Thimmegowda and the petitioners [the Junior Assistants/Cashiers] have caused misappropriation in collusion with each other with an intention to cheat the Corporation for personal gains. Sri Raghavendra Rao has assisted the petitioner and others and Smt. K.K. Radhamani has failed to audit the records and has certified payments. 7. The Deputy Chief Accounts Officer in this Report dated 07.02.2003 has similar observations - 9 - NC: 2025:KHC:11423 WP No. 1089 of 2013 against Sri M.R. Subba Rao and others against whom common Articles of Charges are served. Insofar as the petitioner, in the report dated 07.02.2003, the Deputy Chief Accounts Officer has stated that the petitioner [and the others] have acted in collusion with the Accounts Supervisors in preparing salary bills and drawing amounts more than the actual salary bill and withdrawn such excess amounts under fictitious heads. The Deputy Chief Accounts Officer is categorical in stating that the petitioner has misappropriated a sum of Rs.6,42,988/- by fictitious entries in the Pay Cash Book. The respondent, though served with the Article of Charges, has not responded. The respondent is also served with the notice of enquiry, and he has appeared in the enquiry proceedings but has not participated in the inquiry. 8. The petitioner, to bring in evidence in support of the charges against the petitioner [and - 10 - NC: 2025:KHC:11423 WP No. 1089 of 2013 others], has examined the Deputy Chief Accounts Officer as PW.1 and persons in whose name fictitious payments are purportedly made are examined as PWs.2 to 4. The Enquiry Officer, upon an appreciation of this evidence on record and other circumstances, has opined that the petitioner and others at the depot are guilty of the charges against them because of the following circumstances. [a] The witnesses [PWs.2 to 4] have stated in the evidence that they have received no amount other than the salary, and therefore, the additional payment in their names is a fictitious payment to misappropriate amount. [b] The fictitious payment that could be apportioned to the petitioner's participation is a sum of Rs.6,32,853/- [as against Rs.6,42,988/- mentioned in the - 11 - NC: 2025:KHC:11423 WP No. 1089 of 2013 Deputy Chief Accounts Officer’s Report dated 07.02.2003]. [c] The misappropriation by the petitioner is established by the evidence of PW.1 and the Report dated 07.02.2003, which is marked as Ex.P-16. [d] The misappropriation to the extent of Rs.62,50,311/- could not have been possible without the participation of the petitioner and others in cohorts. [e] Sri Raghavendra Rao, including Sri Varada Raju and Sri Jayakumar, working in the depot have made certain remittances admitting to the guilt and have also signed statements accordingly. [f] The petitioner has not put up his defense or otherwise participated in - 12 - NC: 2025:KHC:11423 WP No. 1089 of 2013 the proceedings and as such evidence against him remains unchallenged. 9. This Court must, on perusal of the Disciplinary Authority’s dismissal order dated 01.10.2008, observe that, apart from the petitioner, Sri M.R. Subbarao, Assistant Accountant, Sri D. Vijaya Kumar, Accounts Superintendent [Depot -1], Sri B.S. Raghavendra Rao, Audit Superintendent, [Bengaluru Division] and Sri B.V. Varada Raju, Junior Assistant, are found culpable of misappropriation. The Disciplinary Authority has found the petitioner and the five others guilty of the charges of misappropriation directing each of them to pay a sum of Rs.10,41,719/- towards loss caused to the Corporation. 10. The Disciplinary Authority has called upon the petitioner to pay a sum of Rs.9,66,719/- [as against the sum of Rs.10,41,719/-] in the premise that he has remitted Rs.75,000/-admitting his guilt. - 13 - NC: 2025:KHC:11423 WP No. 1089 of 2013 It follows from this that one reason that has prevailed with the Disciplinary Authority to dismiss the petitioner from service is the assertion that he has paid a sum of Rs.75,000/- admitting guilt. The Enquiry Officer has elaborately referred to the different amounts paid by the persons who are similarly charged as the petitioner, including the reference to the statements made by them admitting the guilt, but there is no reference to any payment by the petitioner. Even otherwise, admittedly there is no material on record to show that the petitioner has indeed paid Rs.75,000/- acknowledging his culpability. As such, the reason that the petitioner has paid a sum of Rs.75,000/- admitting his guilt is extraneous to the material on record. This would be a crucial element in deciding on the merits of the petitioner's decision [the Disciplinary Authority’s decision] to dismiss the respondent from service. - 14 - NC: 2025:KHC:11423 WP No. 1089 of 2013 11. Next, the other factors that could undermine the Disciplinary Authority’s decision are as follows. The discrepancy in the amounts that the petitioner has allegedly misappropriated. The Deputy Chief Accounts Officer [PW.1] has reported that the petitioner has misappropriated a sum of Rs.6,42,988/- and the Enquiry Report apportions the liability in a sum of Rs.6,32,853/-, but without any explanation on why the difference. The Article of Charges does not make this apportionment, and in fact, the Article of Charges only states that during definite intervals, the petitioner and others acting in collusion have misappropriated amounts that add up to a total sum of Rs.62,50,311/- apart from listing out the fictitious payments made to certain persons. These circumstances viz., the difference in the amounts apportioned in the Deputy Chief Accounts Officer’s Report and the Enquiry Report without the same being stated in the Article of Charges will be very crucial circumstance, especially if the evidence - 15 - NC: 2025:KHC:11423 WP No. 1089 of 2013 does not bring out the circumstances that will justify this apportionment. 12. The evidence of the Deputy Chief Accounts Officer who has conducted the enquiry and the Report itself will be crucial evidence. This Court has examined the evidence and the Report with the assistance of both Ms. Renuka H.R. and Sri S.B. Mukkannappa. This Officer has not spoken about the basis upon which this apportionment is made though he mentions the apportionment. Ms. Renuka H R invites this Court's attention to the Report, which has a separate table on the petitioner’s tenure [as also the tenure of the other workmen] and the amounts misappropriated, but there is no other material except a statement in this regard. 13. Ms. H.R. Renuka submits that this Court must consider the description of the modus by the witness which show that the petitioner could not have but known the misappropriation over a period - 16 - NC: 2025:KHC:11423 WP No. 1089 of 2013 because as a Cashier he would be the custodian of the cash and he could not have parted with the cash unless the papers were in order for payment. This Court must opine that it was incumbent upon the petitioner to justify the decision of dismissal from service to bring on record all these circumstances, which when assessed on the scale of preponderance of probabilities, should demonstrate that the petitioner had misappropriated the amount for personal gain. If all the circumstances are not thus brought on record and there are unsubstantiated reasons, it is not reasonable to infer that the respondent, being only a Junior Officer with the allegation against Seniors, both at the depot level and at the divisional level, could have known but has not raised this issue or was negligent. 14. The inference against culpability gets reinforced by the lack of underlying evidence to support apportionment of liability and the - 17 - NC: 2025:KHC:11423 WP No. 1089 of 2013 extraneous consideration that the petitioner has admitted his guilt and remitted a sum of Rs.75,000/- This Court on a holistic consideration of all these circumstances must opine that the decision to dismiss the petitioner from service is not justified, but the respondent cannot be found completely innocent. As opined earlier, there can be justifiable inference of negligence and failure to discharge the duties as expected from a Cashier. 15. It is trite that if Courts are not satisfied that the order of dismissal is justified, such order could be interfered with directing reinstatement on such terms and conditions as found fit and proper. This Court with the opinion as aforesaid has heard both Ms. H.R. Renuka and Sri S.B. Mukkannappa, on the appropriate punishment that could be. This Court is of the considered view that the petitioner having been reinstated way back in January 2013, the denial of back wages for the - 18 - NC: 2025:KHC:11423 WP No. 1089 of 2013 period under which he was not in service would be justified as would be the denial of consequential benefits for this period will be reasonable, but the respondent should be entitled to all applicable wages as of the date of reinstatement and continuity of services thereafter for retiral benefits. Hence, the following:- ORDER [A] The petition is allowed in part, and the Labour Court's impugned award dated 09.05.2012 in Reference No.41/2011 by the III Additional Labour Court, Bengaluru is modified holding that the respondent will not be entitled to back wages for the period between the date of dismissal and the date of reinstatement or for consequential benefits for this period. - 19 - NC: 2025:KHC:11423 WP No. 1089 of 2013 [B] It is clarified that the respondent shall be entitled to be paid current wages from the date of reinstatement with all consequential benefits and continuity of service, from this date, for the purpose of retiral benefits. Sd/- (B M SHYAM PRASAD) JUDGE nv