- 1 - HC-KAR NC: 2025:KHC:35659-DB WA No. 1369 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C M JOSHI WRIT APPEAL NO. 1369 OF 2024 (S-DIS) BETWEEN: 1. THE KARNATAKA STATE TOURISM DEVELOPMENT CORPORATION, NO.49, 2ND FLOOR, KANIJA BHAVAN, RACE COURSE ROAD, BENGALURU-560 001. REP. BY ITS MANAGING DIRECTOR. 2. THE CHAIRMAN, THE KARNATAKA STATE TOURISM DEVELOPMENT CORPORATION, NO.49, 2ND FLOOR, KANIJA BHAVAN, RACE COURSE ROAD, BENGALURU-560 001. REP. BY ITS MANAGING DIRECTOR, KSTDC …APPELLANTS (BY SRI SANJEEV B L, ADVOCATE) AND: SRI M G SHIVAJI RAO, S/O GOVINDA RAO, AGED ABOUT 65 YEARS, R/O MIG 13, VIVEKANANDA MAIN ROAD, DEPOT CIRCLE, KUVEMPUNAGARA-570 023. …RESPONDENT (BY SRI AJOY KUMAR, ADVOCATE C/R-1) Digitally signed by NANDINI R Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:35659-DB WA No. 1369 of 2024 THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 25/06/2024 PASSED BY THE LEARNED SINGLE JUDGE IN WP NO.38110/2016, IN SO FAR AS IT PERTAINS TO SETTING ASIDE REMOVAL OF RESPONDENT FROM SERVICE, AND CONSEQUENTLY DISMISS THE SAID WRIT PETITION. THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C M JOSHI ORAL JUDGMENT (PER: HON’BLE MR. JUSTICE C M JOSHI) 1. For the reasons stated in the affidavit accompanying the application, IA No.1/2025 is allowed. Delay of 34 days in filing the appeal is condoned. 2. Being aggrieved by the order passed by the learned Single Judge in Writ Petition No. 38110/2016 [S-DIS] dated 25.06.2024, the appellants, [who are respondents in the Writ Petition] have filed this intra Court appeal under Section 4 of the Karnataka High Court Act, 1961, questioning the reduction in the penalty imposed upon respondent -M.G. Shivaji Rao, [the writ petitioner]. 3. The factual matrix that is relevant for the purpose of this appeal may be summarized as below: - 3 - HC-KAR NC: 2025:KHC:35659-DB WA No. 1369 of 2024 (a). The respondent-M.G.Shivaji Rao, was the Manager at Hotel Mayura Hoysala at Mysuru and he was responsible for the overall administration, day-to-day affairs of the Hotel, including the control and supervision over all the staff of that Hotel. (b) The Audit Report found that there was a misappropriation of a sum of `10,71,069/- between 01.07.2006 to 31.12.2008. There were differences in the actual sales and the amount which was collected. It was found that the utility worker was entrusted with the activity of the sale of liquors, soft drinks, snacks etc., to the customers visiting the Hotel and he had manipulated the records and had suppressed the actual sales figures. The duty of the utility worker was under the supervision of a First Division Assisstant [FDA]. (c) It was alleged that the utility worker who was responsible for generating the Kitchen Order Tickets [KOTs] and collection of the amounts, had not accounted for the cancellation and modification of the KOTs and as such, he had siphoned off the above amount. The FDA who was responsible for the supervision over the said utility worker - 4 - HC-KAR NC: 2025:KHC:35659-DB WA No. 1369 of 2024 was also negligent in his duty to verify the records every day, which was part of his routine work. The respondent, who was the manager of the said hotel was alleged to have derelicted his duty in supervising the utility worker as well as the said FDA and resulting in the misappropriation of the above said sum. (d) An enquiry was instituted and the Enquiry Officer conducted the enquiry and found that the charges against the delinquents were found to be proved and the conduct being unbecoming of the employees of the Corporation, concluded that they are to be penalised and submitted the Report. (e) The Disciplinary Authority, issued the second show cause notice to the respondent as well as the other two delinquents and upon considering the reply to the show cause notice, imposed the punishment of removal from service, which shall not be disqualification for future employment. The delinquents were also held liable to make good the loss occurred. The respondent was held liable to pay the sum of `2,67,767/-, which is 25% of the amount misappropriated. - 5 - HC-KAR NC: 2025:KHC:35659-DB WA No. 1369 of 2024 (f) Aggrieved by the same, the respondent filed the Writ Petition No.38110/2016 and after hearing, the learned Single Judge set aside the Part A of the punishment, that is removal from service, but, maintained that the respondent is liable to pay the sum of `2,67,767/-. It was observed that the punishment imposed is disproportionate to the misconduct. 4. Being aggrieved by the said finding, the appellants have approached this Court in appeal. 5. We have heard the learned counsel appearing for the appellants-Corporation and the learned counsel appearing for the respondent. 6. The learned counsel appearing for the appellants would argue that there is no dispute that the enquiry conducted was fair and proper. Even though the order of the Appellate Authority was questioned by the respondent in a Writ Petition, later the Appellate Authority has considered the same and has confirmed the order passed by the Disciplinary Authority. He submits that the Enquiry Officer had given a categorical finding that the errors were obvious and could have been detected in the normal and frequent checks and therefore, it has to be held that the failure to exercise normal - 6 - HC-KAR NC: 2025:KHC:35659-DB WA No. 1369 of 2024 day-to-day verification by cross checking of the records were not done by the respondent and therefore, the learned Single Judge erred in reducing the punishment. He relies on several judgments in this regard to contend that, once it is found that the procedural requirements have been complied with, the Courts would not ordinarily, interfere with the quantum of the punishment imposed upon a delinquent employee. He argues that the Disciplinary Authority and the Appellate Authority are vested with exclusive power to examine the evidence forming part of the Enquiry Report and on finding the evidence to be adequate, the discretion has been exercised by the Disciplinary as well as the Appellate Authorities and interfering in such discretion is not sustainable. 7. A careful perusal of the Enquiry Report would show that the Utility Worker was entrusted with the sale of the liquor, soft drinks etc., at three (3) places that is, in the garden, in the hotel and in the restaurant of the hotel. He was also entrusted with the billing on the basis of KOTs. He was also responsible for KOT in respect of the complementary service and ultimately, to collect the money and remit the same along with the statement to the FDA. He had found a flaw in the process and manipulated the billing by not accounting - 7 - HC-KAR NC: 2025:KHC:35659-DB WA No. 1369 of 2024 for the cancelled KOTs and thereby, utilising the ordered products for his personal benefit. The sale figures were manipulated by him and it was found in the Audit Report. The remittances were to be monitored and verified by the FDA, who was entrusted with the job of verifying the daily statement and tallying with the remittances received and the stock available. He did not do so, resulting in the misappropriation of the amount so collected by the Utility Worker. At that relevant point of time, the respondent-M.G. Shivaji Rao was the Manager and he had to oversee and supervise the Utility Worker as well as the FDA, who were responsible for the processes that involved in preparation of the KOTs and collection of the sales. 8. The perusal of the Enquiry Report dated 17.02.2011 submitted by the Enquiry Officer, Sri S. B. A. Kulkarni, discloses that there was no connivance between the respondent-M.G. Shivaji Rao and the other two delinquents [Utility Worker and the F.D.A]. In the reply to the second showcase notice, the respondent had stated that the overall performance of the Hotel had improved and he had strived to plug many faults during his tenure as the Manager of the Hotel at Mysuru. The annual turnover and profits - 8 - HC-KAR NC: 2025:KHC:35659-DB WA No. 1369 of 2024 had risen over the years, therefore, there is no dereliction of duty by him. However, the Disciplinary Authority and the Appellate Authority did not find any substance in his contentions and ultimately, passed the punishment order as stated above. 9. The learned Single Judge in impugned order has observed that the Manager's Role as established by evidence did not encompass direct involvement in financial transactions. However, the negligence on his part is to be acknowledged. Opining that the severity of dismissal from service is excessive, the punishment of dismissal from service was set aside while maintaining making good the loss to the extent of 25%. It was also observed that the managerial duties do not explicitly include the task of cross verifying the accounts. 10. On a close scrutiny of the records, particularly, the Enquiry Report, it may be seen that there is a clear job description in respect of the Utility Worker and the FDA, but there is no such specific duty assigned to the respondent. The Enquiry Report dated 17.02.2011 submitted by the Enquiry Officer, notes that the over all supervision of the Utility Worker and the FDA [Delinquents No.1 and 2] was with respondent and there was no specific role - 9 - HC-KAR NC: 2025:KHC:35659-DB WA No. 1369 of 2024 assigned to the respondent concerning the acts of the Utility Worker and FDA. The KOTs and the collections made by the servers, were to be verified by the Utility Worker and the FDA respectively. The nature of the work of the respondent was of overall supervision of the business at the Hotel. Therefore, we find that the observations of the learned Single Judge that the role of the respondent does not encompass the direct involvement of the financial transactions cannot be faulted. 11. The judgments of the Apex Court in the case of Chairman and Managing Director, VSP and others V. Goparaju Sri Prabhakara Hari Babu1 and in the case of Union of India V. Subrata Nath2, no doubt, laid down that even though invoking the doctrine of proportionality by the Superior Courts is permissible, it should not be invoked, if the decision of an employer is found to be within the legal parameters. 12. We find that neither the order passed by the Disciplinary Authority nor the Appellate Authority addressed the points raised by the respondent. On the other hand, they proceeded on the premise that the respondent was also indicted by the Enquiry 1 2008 (5) SCC 569 2 2022 SCC Online SC 1617 - 10 - HC-KAR NC: 2025:KHC:35659-DB WA No. 1369 of 2024 Officer. Obviously, the role of the respondent and his job description was not considered. In that view of the matter, the observations made by the learned Single Judge, in appreciating the role of the respondent and invoking the Doctrine of proportionality cannot be faulted. 13. Thus, we find no infirmity in the order of the learned Single Judge and therefore, the appeal is dismissed. 14. Pending application is disposed of. Sd/- (VIBHU BAKHRU) CHIEF JUSTICE Sd/- (C M JOSHI) JUDGE tsn* List No.: 1 Sl No.: 37