IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO.38299 OF 2009 (L-KSRTC) BETWEEN: SRI M R SUBBA RAO, AGED ABOUT 55 YEARS, S/O SRI M K RANGANATHA RAO, EX-ASST. ACCOUNTS OFFICER, BMTC R/AT NO.629, 1ST MAIN, 1ST STAGE INDIRANAGAR, BANGALORE-560038. ...PETITIONER (BY SRI V S NAIK, ADVOCATE) AND: 1. THE BOARD OF DIRECTORS AND THE APPELLATE AUTHORITY, KSRTC, CENTRAL OFFICES, K H ROAD, BANGALORE-27. 2. THE MANAGING DIRECTOR, KSRTC CENTRAL OFFICES, K H ROAD,BANGALORE-27. ...RESPONDENTS (BY SMT H R RENUKA, ADVOCATE FOR R1 & R2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING 2 TO QUASH THE ORDERS DATED 26.09.08/01.10.2008 AND DATED 09.03.2009 PASSED BY THE 2ND AND 1ST RESPONDENTS RESPECTIVELY, THE ORIGINAL / TRUE COPY OF WHICH ARE PRODUCED HEREWITH AS ANNEXURES-A AND B RESPECTIVELY, SINCE THE ORDERS ARE WITHOUT ANY JURISDICTION AND BEING VIOLATIVE OF RULES OF NATURAL JUSTICE AND ETC. THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 08TH SEPTEMBER, 2025 AND COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE CAV ORDER The petitioner is before this court aggrieved by the order dated 09.03.2009 passed by the appellate authority confirming the order dated 01.10.2008, passed by the disciplinary authority dismissing the petitioner for service. 2. In terms of the order dated 01.10.2008, the disciplinary authority dismissed the petitioner from service and also directed to forfeit the gratuity and to recover sum of Rs.10,41,719/-. 3. Brief facts noticed from the pleadings are as under: 3 The petitioner was appointed on 07.02.1975 as Accounts Supervisor in Karnataka State Road Transport Corporation. On 28.04.2003, a charge-sheet is issued against the petitioner and 13 others alleging negligence in discharge of duties resulting in misappropriation of funds. On 02.06.2003 the petitioner issued reply denying the charges. A Retired District Judge was appointed as Enquiry Officer on 03.10.2003, and on 08.10.2007 the enquiry officer, post enquiry, submitted a report holding that the petitioner is not guilty of charges. 4. The disciplinary authority disagreed with the report of the enquiry officer and issued show cause notice on 14.03.2008 and the petitioner replied to the said notice. 5. The disciplinary authority in terms of order dated 01.10.2008 dismissed the petitioner holding him guilty and ordered to recover Rs.10,41,719/-. As already noticed the appeal before the appellate authority was unsuccessful. Hence, the petitioner is before this Court. 4 6. The learned counsel appearing for the petitioner would contend that: (i) The enquiry officer has held that charges against the petitioner are not proved and there is no allegation of misappropriation of funds against the petitioner and the charges levelled against the petitioner if read carefully would only indicate that he was charged for negligence and not for misappropriation of funds. Under the Karnataka State Road Transport Corporation Services (Conduct and Discipline) Regulations, 1971. (for short, ‘the Regulations, 1971’) the disciplinary authority disagreeing with the finding of other enquiry officer is required to issue a show cause notice assigning the reasons for disagreement and thereafter he must consider the reply in the light of the evidence placed in the disciplinary enquiry and then should pass an order. The order passed by the disciplinary authority is in violation of the Regulations, 1971 and principles of natural justice, and on this account that the impugned order has to be set aside. 5 (ii) The disciplinary and conduct Rules applicable to the respondent – Corporation does not enable the fresh enquiry as the petitioner has attained the age superannuation as such the petitioner is entitled to all consequential benefits including full backwages. 7. The learned counsel for the respondent – Corporation would contend: (i) The enquiry officer was not justified in recording a finding of ‘not guilty’ against the petitioner and he has overlooked the material evidence on record and the disciplinary authority is not bound by the order passed by the enquiry officer. (ii) After appreciating the evidence placed before the disciplinary enquiry, and after going through the procedure in the Accounts Department, the disciplinary authority has issued the second show cause notice with reasons for rejecting the finding of the enquiry 6 officer. The petitioner was asked to show cause for the proposed penalty penalty and there is no violation of any of the Regulations 1971, applicable, as such, the disciplinary authority is justified in dismissing the petitioner. (iii) On an appeal filed by the petitioner, the appellate authority has considered all the contentions raised by the appellant and passed the order dismissing the appeal and no infirmity can be found in the aforementioned impugned orders. (iv) The petitioner himself has admitted his negligence during the course of enquiry and it is not open for the petitioner to contend that he is not guilty. It has been brought on record that the petitioner was negligent in not verifying the vouchers and other documents before signing the cheques for payment. Had he verified the vouchers, the excess payments 7 would not have been made and petitioner is responsible for excess payment as such the order of dismissal is justified. (v) Even in the reply to the show cause notice issued, the petitioner has not assigned any acceptable reasons to impose a lesser penalty other than dismissal and the penalty imposed is certainly proportionate to the misconduct committed by the petitioner. 8. This court has considered the contentions raised at the Bar and perused the records. 9. The primary contention of the petitioner is that the second show cause notice is defective and contrary to Regulation 23(25) of the Regulations, 1971. As per regulation 23(25) of the Regulations, 1971, the disciplinary authority disagreeing with the finding of the enquiry authority has to record reasons for said disagreement and 8 record its own finding on the such charge and shall issue show cause notice on the proposed penalty. 10. Regulation 23(25) reads as under: “ The disciplinary authority shall, if it disagrees with the findings of the Inquiring Authority on any article of charge, records its reasons for such disagreement and record its own findings on such charge, if the evidence is sufficient for the purpose.” 11. Referring to these Regulations, 1971 learned counsel for the petitioner would contend that the reasons for disagreement are not assigned in the second show cause notice and the reply to the second show cause notice is not considered in proper prospective. 12. The second show cause notice is dated 14.03.2008. While disagreeing with the finding of the enquiry officer, the disciplinary authority has referred to the Accounts Manual which provides for the duties and 9 responsibilities of the Divisional Auditor/Accounts officer/Assistant Accounts Officer of the Division. 13. After noticing and extracting the duties and responsibilities of the Accounts Officer in detail, the disciplinary authority has observed that the petitioner was working as an Assistant Accounts Officer in the concerned Division from April, 2000 to January, 2002 and in that period Rs.63,14,820/- is misappropriated. 14. It is also observed by the disciplinary authority, that every month, based on the salary bills prepared by the officials, in the Department the officials in the Accounts Department should have checked whether the amount allotted to the Depot was properly utilized by cross checking with the acquaintance Roll, and if any amount is transferred in excess, same should be withdrawn and transferred to the appropriate Account. 15. The disciplinary authority has noticed that the reconciliation of the accounts was not carried every month and the lapse continued for two years and because of this 10 lapse on the part of the Assistant Accounts Officer huge amount is transferred based on fictitious bills. The disciplinary authority also observed that the petitioner is one of the Accounts Officers whose negligence and carelessness resulted in the financial loss on account of misappropriation. 16. Having said so, the disciplinary authority issued notice stating that it is disagreeing with the finding of the enquiry officer and issued show cause notice as to why the petitioner should not be dismissed from service under Regulation 18(B)(X) of Regulations, 1971 and to why entire gratuity amount should not be forfeited to recover the loss. 17. The petitioner replied to the said notice. As can be seen from the said reply though the petitioner in one sentence would say that he would deny all the charges, on a complete reading of the reply to the show cause notice it is noticed that the negligence and consequent loss is not denied. 11 18. It is also noticed that the petitioner tried to project a defence that because of shortage of staff there was tremendous pressure and the workload prevented him from carrying out the job entrusted to him with diligence. The petitioner also tried to defend himself by stating that during the period under scrutiny the Corporation was in the process of implementing ERP Accounting Package which primarily dealt with online transactions and for this reason the Divisional Accounts Superintendent was deputed to Central Office, which in turn disturbed the working conditions in the Accounts Section. 19. Delinquent employee also stated that w.e.f. February, 2000, the procedure of Manual Compilation of Establishment expenditure on monthly basis was discontinued. Petitioner in his reply states that the problem faced by the staff in the Accounts Department on account of shortage of workers was repeatedly brought to the notice of the concerned in various meetings, and same was not resolved. It is also stated that taking undue 12 advantage of the situation prevailing in the Division many unscrupulous elements in the Accounts division have colluded with each other and misappropriated the funds of the Corporation. Citing these reasons, petitioner denied the charges of misappropriation to the tune of Rs.63,14,820/-. 20. The disciplinary authority thereafter in terms of the impugned order dated 01.10.2008 has concluded that five delinquent employees including the petitioner are guilty of charges and accepted the finding of the enquiry officer relating to other eight employees. 21. It is relevant to note that there is no material to disbelieve the finding that Rs.63,14,820/- is the amount misappropriated. Though the enquiry officer has given a finding that the petitioner has not misappropriated the said amount for his personal gain or has not gained anything personally, the negligence on the part of the petitioner in verifying the bills and payment is very much established. It is also established that the petitioner signed cheques for 13 the amount in excess of Rs.50,000/- which he was not authorised. 22. Under these circumstances, this court does not find any merit in the contention that the reasons are not assigned by the disciplinary authority while disagreeing with the finding of the enquiry officer. 23. Though the second show cause notice does not refer to the evidence in detail what is required to be noticed is the petitioner was under obligation to cross verify the bills and was required to reconcile the bills. The reply given by the petitioner itself would reveal that he did not reconcile the bills because of shortage of staff. 24. It is to be noticed that under Regulation 23(25), the disciplinary authority disagreeing with the finding of the enquiry officer has to assign reasons for disagreeing with the finding and has to assign reasons for recording his own finding. 14 25. As can be noticed from the second show cause notice issued by the disciplinary authority, the disciplinary authority has disagreed with the finding of the enquiry officer by referring to the duties and responsibilities of the Assistant Accounts Officer and has concluded that there is failure to reconcile the funds. Said reason is stated as the reason for disagreeing with the findings of the enquiry officer. 26. The impugned order dated 01.10.2008 dismissing the petitioner from service is preceded by the finding that the disciplinary authority has perused all the records and also perused the reply to the show cause notice. Before dismissing the petitioner from service the disciplinary authority has recorded a finding that Assistant Accounts Officer/Petitioner being the head of the Accounts Department failed to exercise proper control to reconcile the funds released every month by the Division in relation to the payments made in the Depot. 15 27. According to the disciplinary authority the omission on the part of the petitioner in verifying the payments reconciling the accounts and verifying the bills resulted in misappropriation and loss. 28. For aforementioned reasons one cannot conclude that the disciplinary authority has not recorded reasons for disagreement and reasons for imposing the penalty. The reason recorded to disagree with the report is the omission to carry out the necessary verification and reconciliation of accounts contemplated under the Accounts Manual. The reason for imposing penalty is also the same. There is no mandate of law that the reasons for disagreement should be preceded by complete re- appreciation of evidence placed before the enquiry officer when the delinquent employee does not point out any evidence in his reply to the show cause notice to justify the finding of the inquiry officer, except saying that on account of shortage of staff he could not pay attention to the certain things which he was excepted to do. 16 29. In light of reply given by the petitioner, this Court is of the view that reasons recorded to disagree with the view of the enquiry officer are sufficiently clear and one cannot conclude that the show cause notice being vague did prevent the petitioner from giving adequate reply pointing out the relevant evidence. 30. Learned counsel for the petitioner placed strong reliance on the judgment of the Apex Court in Punjab National Bank and others Vs. Kunj Behari Misra1 to contend that while interpreting a provision which is identical to Regulation 23(25), the Apex Court held that the principles of natural justice have to be read into in Regulation 7(2) which was under discussion in the said case. There is no doubt that principles of natural justice have to be read into in the Regulation 23(25) of Regulations, 1971 applying the principle laid down in Kunj Behari Misra supra. However, the question is whether the principles of natural justice have been complied or not. 1 AIR 1998 SC 2713 17 31. This court is of the view that the disciplinary authority has recorded reasons for disagreement with the finding of the enquiry officer and has also assigned reasons for taking a different view. Hence, the impugned order dated 01.10.2008 cannot be said to be in violation of the Regulation under 23(25) of the Regulations, 1971. 32. The ratio in the case of Institute of Chartered Accountants of India Vs. L.K. Ratna and Ors2 also does not come to the aid of the petitioner given the fact that the petitioner is given the opportunity to defend himself after the disciplinary authority disagreed with the view of the enquiry officer. 33. The learned counsel for the petitioner has also placed reliance on the judgment of the Co-ordinate Bench of this court in Anantha Krishna Jois Vs. The Board of Directors and Appellate Authority and another3 and the judgment in W.A.2689/2018 confirming the order in 2 (1986) 4 SCC 537 3 WP No.22369/2009 18 W.P.22369/2009. This Court in the aforementioned cases had an occasion to interpret the Regulation 23(25) of the Regulations, 1971. Based on the facts obtained in the said case, this court recorded a finding that there is no material to indicate that second show cause notice issued to the delinquent employee in the said case was preceded by the reasons for disagreement with the finding of the enquiry officer. Thus, this Court in the said judgments held that the requirements of Regulations, 1971 are not followed. However, it is not the case here. This Court has already noticed the reasons for disagreement with the findings of the enquiry officer and the reasons for the penalty in the second show cause notice and the order of dismissal. 34. Now the question is whether the disciplinary authority is justified in holding that the charges are proved disagreeing with the finding of the inquiry officer and the Appellate Authority is justified in dismissing the appeal. 35. The respondent framed four charges against the petitioner. 19 a. First charge is relating to payment of excess amount towards the salary of the employees working in the depot which covered the period from April, 2000 to November, 2001. It is alleged that in the said period the petitioner and other employees in the Accounts Department without verifying the salary bills have disbursed excess amount through cash as well as cheque and thereafter, deliberately failed to reconcile the accounts and failed to secure the excess amount back to the Accounts Department and acting diligently caused loss to the tune of Rs.53,18,982/-. b. Second charge is on the same line as that of the first charge for the period December 2001 to January 2002 and the loss alleged is Rs.1,53,589/-. c. Third charge is relating to not complying the directions in the Accounts Manual No.9 and Circular No.26 and not visiting the Depot from time to time to inspect the accounts and to bring to the notice of the seniors about the defects in the accounts. 20 d. Fourth charge is relating to issuance of cheque in excess of Rs.50,000/- though the delinquent employee was not authorised to issue and sign the cheque in excess of Rs.50,000/-. 36. The enquiry officer while exonerating the petitioner has observed as under (page No.27 middle two paragraphs unnumbered): “In his cross examination PW1 has categorically admitted that they have not misapproporiated any amount or gained. PW1 further admitted in his cross examination that cheque exceeding Rs.50,000/- signed by Subba Rao and Shri. Sampangi issued to Depot Managers A/c and that they have not misappropriated any amount. It is a fact that there is due to shortage of staff in A/c. Section they have worked under pressure. For the above said reasons and discussions, I have to say that management failed prove charges levelled against mt. Radhamani, Nagendran, Subba Rao and Sampangi because if they have signed documents without criminal intention”. 21 37. The above said finding clearly demonstrates that the cheque in excess of Rs.50,000/- is signed and issued by the delinquent employee. Admittedly, it is not the case of delinquent employee that he had the authority to sign the cheque in excess of Rs.50,000/-. The enquiry officer has based his report on the premise that the employer failed to establish that the delinquent employees have signed the cheque with criminal intention. It is relevant to note that issuance of cheque with criminal intention is not the charge levelled by the employer. The charge is that cheque is issued without authority. 38. The disciplinary authority referring to the Accounts Manual for violation of which one of the charges is framed, agreed with the report of the enquiry officer as in so far as eight employees and disagreed with the finding as against five employees and issued the second show cause notice. 39. The second show cause notice issued to the petitioner specifically refers to the Accounts Manual and 22 the duties and responsibilities of the personnel working in the Accounts Department. After extracting the relevant provisions of the Accounts Manual, the disciplinary authority records a finding as under: "10. The result of these inspections should be placed on record for information of the Chief Accounts Officer but serious financial irregularities like defalcation or loss of stores, money etc., together with any suggestions should be reported at once to the Chief Accounts Officer even though they might have been set right under the orders of Competent Authority. b) In this particular case, Sri M.R. Subba Rao, was working as Asst. Accounts Officer of Bangalore (C) Division from April 2000 to January 2002 during which time Rs.63,14,820/- (Rupees Sixty three lakhs fourteen thousand eight hundred and twenty only) was misappropriated out of the total misappropriation amount of Rs.68,29,719/-. He has released huge amounts to Depot - 1, every month for making salary payments, encashment payments etc., based on the 23 salary bills prepared by the depot authorities. After releasing the payments, the divisional authorities should have checked whether the amount allotted to the depot has been properly utilised by cross checking with the aquittance rolls. After cross checking, the excess amount pending with the depot authorities should have withdrawn and transferred to divisional account. In other words, reconciliation of funds in the depot was not carried out every month and this was continued for a period of almost two years. The serious lapse on the part of the Asst. Accounts Officer made the Pay Bill Clerks, Accounts Supervisors working in the depot and the accounts staff working in the divisional office to misappropriate the huge sums by preparing fictitious bills. c) The said lapse could be attributed only to the Accounts Officer and his supervisory staff in the division and accounts staff in the depot. At the relevant point of time, Sri M.R Subba Rao was the Asst. Accounts Officer who was heading the accounts department in the Bangalore Central Division. 24 5. His negligence and carelessness in not maintaining the accounts of the depot has led to the misappropriation of funds. Had he been cautions, prompt and vigilant in his duties, this situation would not have taken place and the Corporation would not have lost this huge amount. In the circumstances explained above, there is adequate evidence to prove that he is involved in misappropriation of the said funds". 40. Citing aforementioned reasons, the disciplinary authority has disagreed with the findings of the enquiry officer. The Court cannot find fault with the finding of the disciplinary authority as the said finding is based on evidence which point to the lapses on the part of the employee in following the mandate of the accounts manual which have to be adhered to by the persons working in accounts department. 41. The charges levelled against the petitioner is negligence, non-verification of accounts and vouchers, failure to reconcile the amounts, and in addition issuance 25 of cheque in excess of Rs.50,000/- without authorisation, are found to be established. 42. This Court is of the view that in terms of second show cause notice, the petitioner is put to a proper notice for disagreement with reasons. Thereafter, the disciplinary authority in the same show cause notice has proposed dismissal from service under Regulation 18(B)(x) of Regulations, 1971. 43. Though the learned counsel appearing for the petitioner referring to Regulation 23(25) contends that disciplinary authority has not recorded the reasons for disagreement with the report of the enquiry officer and its own finding, this Court for the reasons already recorded has to hold that reasons for disagreement are very much found in the second show cause notice. Though one may technically argue that the reasons for its finding are not separately recorded in the second show cause notice, on careful perusal of the second show cause notice one can safely conclude that the reasons for disagreement with the 26 findings of the enquiry officer can also be the reasons for its own findings in certain circumstances. 44. In few cases where the disciplinary authority relies on any material not noticed by the enquiry officer may have to record reasons for its own finding distinctly from the reasons for disagreement with the findings of the enquiry officer. Since, the charge is relating to negligence and non-compliance of the Accounts Manual, this Court is of the view that the finding recorded for disagreement with reference to non-compliance of requirement of Accounts Manual can also be the reason for its finding to hold the petitioner guilty. 45. The reliance placed by the learned counsel for the petitioner in Poonacha Vs. New Government Electric Factory4 is also not applicable to the present case as the said judgment is rendered in a completely factual background and the ratio in the said case is not attracted to the case on hand. 4 ILR 1986 Karnataka 3181 27 46. The very object of second show cause notice is to provide a fair opportunity to the party to give his say on the findings of the disciplinary authority. The delinquent employee has replied to the show cause notice. The reply to the show cause notice would clearly disclose that the delinquent employee has understood as to what is put against him and in substance has admitted the allegation of negligence by trying to blame the respondent for the scenario on the premise that there was shortage of staff in the Accounts Department resulting in unbearable workload on the petitioner. 47. For the reasons recorded this Court does not find any reasons to interfere with the impugned orders. 48. Accordingly the writ petition is dismissed. SD/- (ANANT RAMANATH HEGDE) JUDGE BL/CHS …