xxx: ':'1-;;:«; men comm or' KARNATAKA "
DATED Tms THE 22"" DAY OF Ji;II%f2cai}9 I" * '
BEFORE % Q
THEHON'BLE MR.JUs2f1C.': S.VA.z1§IjUl;--NA2'.I3ERv...
WRIT PETITION Nc}.;356s,2¢i0:: (52:23). V
Between:
Niyaz, Ahamed shariefi; .. % M
S223 lav: Ibrahirn V.
Aged about 54.y£:ars,TA * . 31;;
Assistant Manager {_PLi1ciaa§es) §:'€3, "~ . __
Kamataka Siikfig/Iarketing
Cubbeupet MainRoad, _ A
Silk Exchange Building; -_
Bangaicre M»-;560_GO2. ~ V ' "
. . .. ?et£ti0ner.
.....
L 12:e%g=rmeipaa%s¢cm:ary,
x_ Conunerm: & Industries Depaxtxnaant,
. V. 4 44 ‘ = _ V’ M.S.BJdgs., Sachivalaya,
% ‘ Ba_nga_Iore – see 09:.
_ ” The Board afDire-ctors,
‘ ‘Karnataka Siik Marketing Beard,
* Mysugar Buifdings, 2″” Fleur,
IC. Road, Bangalore – 2,
Reptd. By its Managing Director.
3 The Managing Director,
Kamataka Silk Marketing Board,
Niysugar Buildings, 2″” Floor,
J.C. Road, Bangalore — 2. 2 . .
(By Sri T.P. Srinivas, AGAfor R1,. _
M/s S.N.Murthy, AIS, Advs. fQ}”‘R2 8}; –.
This ‘Péfitiéiji is fifijed tinder A_*1′”iC}’6SV 226 & 227 of the
Constituiion, pr3ying_to ‘qz23sh”fl1e ‘imj:r11_g31ed order dated 23.7.2008
issued by R}. andtheé co:2seq:;”c.r1t’Tn.9ticg:”d_atcd 24.9.2008 issued by
This um: Petitionagririing tun ibr Orders this day, the Court
mz:_u:,~!r;-‘;~t1}_e fofifixwiing; H —– -A ”
i ORDER
m;ga is posted 12:»: Orders, by consent ofthe
_ £3: partiw, it is taken up for final hearing and
order.
this ease, the petitioner has challenged the directisn
-issgzéd: the first respondent to the second respondent dated
he
23.7.2008 (Annexure ‘K’) to recover a sum of Rs.70,83,958;?¢:.””»..
towards the iess alleged to have been caused by the petitio_z;~e;*- ”
the show cause notice at Annexere ‘L’ issued hy_.1h,e_: _ 3
respondent dated 24.9.2008 whereby the X.
proposed to review the order of theV.di§.cipii§§a1’e;€”authori’i*y:V
24.3.2007 imposing penislnneni of wiiiiiieidizig ih”er”_vV:inerezié.en1s
with eumeiative effect. I i A A A H
3. The petitieiier Wang as’fé«¥a;;ch Ofiieer efthe
Kamaiaka short ‘Bearé’). He wasfikept
under suspensieeéieia enquiry. He was issued
with a Show ._cau.<ie "»x2etiee eéith. five articles. ef charges dated
.?e'.£i1ir;ii1'eij teed eiiieepiy to the Show cause notice dated
10.&_2.00Q..ii$ei.§e%:;ce,hthé;-disciplinary authority was not satisfied with
ivthe rep§§é’;— an..e::qu~i:«_~,.» was ordered against him. A Retired District
ei1.d.”Sees.i0nS””Jedge was appointed as an enquiry ofiieer. After
‘a.n;enc{uiry, the enquiry office? subznifi ed his report holding
Vi is guilty efall the five charges levelled against him.
E
The disciplinary authority issued a second show cause noticmfio
petitioner on 24.5.2896 and the reply was flied by the «.A 9
6.7.2096. The Managhg Director of 1m__ mmgio §v;;5.%’as- T
discipiinaxy authority passed an order-giatecvfA2,4.8.2OG? ‘ :2 u
Annexure ‘J’ withholding tour annual xxtriiia-. ..;ooo1ni%i$ive
efiiect. It appears that the Chaiofiétx noto oated
13.9.2007 {Annexure %m(b)}Vo:eo[%g¢e§«k like orders
passod by the A copy
of the said zfzofio The State
Govetxzxnentigent ~.i:3;v7?.20€}8 (Armexure ‘K’) to the
Board opining tho 0;; the potitioasr is on
a lower s;i§§:i’é’Vai2,c¥ ‘£hat”L’2o :i\-“i&11zV§ging Dixecior had no: foiiowed the
V. issued by the Govermnent Whiie imposing
the Government direoteé the Board to take
fiezps to :;€:Covi%1E.a”som of Rs.7{},83,958:’«~ from the petitioner and to
I ponioiimeni in proportion to the charges proveci. In
K pvJ:sti’a;1§é7e’Aoi”{he said oornmunieation of 131:: State Government at
n ‘ Afifiéfiuro ‘K’, the Board has issuod a Show cause notice as per
in
Axmemnre ‘L’ fiaied 24.9.2868 caiiitig upon the petitioner to show
cause as to why enhanced penalty in coimnenszzration wit}; £13. it
nzisconduci shouid net be imposed on him andialsato
as to why the dues to the tune cf Rs.6i,.SV3,85$}’~V A
suffered by the Board on acczount of the
the petitioner should not be recoviaregi item’ * “~
4. The respond§%ii’§;~;.._V1iaveliiilgd.:fiiei:i”‘§<§(i;:iiter"j'£{$ the writ
petition.
5. Leainéd Ceuxisel Wauld coniend that the
first respondent-Stziiési as power or authority to
ziigegwiizsgmg ‘”§)§2’ A35 ‘n'”e;s:u:-e directiiig the Board first
rr:*viévz?:i:ig’_?.t’}:e piis§;ed by the disciplinary aistherity. it is
:.,,./;;;j£}’i3I16e€1′.I.iV1a’£ Thai ofthe disciplinmy azzthority being quasi-
” “–§£1Lii;:i::%Ai:; nafuxfé; it sat; be reviewed only in ascordanee with law.
has 110 jurisdiciion to issue the Show cause netice
V..r¢3?i§ewing the earlier order of the dissipiinaiy authority.
R
V
Leamed Counsel has made eiaborate subamssions on the oi’ . A
the matter as well. ‘
6. On the other hand, ieamed
second 3:espondent-Board submits that the yetitioneft
serious irregularities on account of ouflereci
huge financial losses. had
acted as the diseiplinzgry which
is not in propoxtirarto is submitted that
for the 5}; another eiiipioyee,
nameiy, Sri shaaihé’ disciplinary authority
of..dismiss.al as per the order dated
It is further contended that the
V ‘company is Company and the Government has every
_ to direet .tiie:_Board to set right the illegai orders passed by
authority. It is argued that the writ petition should
‘ientertaineci as it is filed against a Show cause notice. The
i’ has to idle his repiy and contest the matter. The petitioner
i’;
\m
can even raise the objection as to the competence ofthe Board_4tnV_l
review its order.
7. I have carefully considered the arni1n1ents..n1ni§e1
learned Counsel at the Bar and mtai»?-rlals
record.
8. As rightly submitted for the respondents, this writ petition challenging the present case, the
petitioner has ilze show cause notice at
Annexure rnnpondmn bui also the dirnction
Ainéégngngnlgnz fig} Annexure whereby the Board
was Aliigenled Govazmnentz to recover a sum of
‘_i7,83,958f- .i;i*o;n«:lflla petitinner towards the loss alleged to have
l Eéénnllkéazlsegi by” and also to impose punishment in proportion to
cnnnnitted by him. According tn the learner}
, _ for the petiiinner, neithnr the State Gevennnent nor the
1′
Beard has campetence to direct the to é.ga§ns§7′
petitianar as the order imp0singVpu;2isii1}1é1’1tV_ A.z1gaizf:?.’;’V;v_%.1;}ie.
is a quasi judicia} erder passed The V
shew cause notice at Arméxgre fiié Board to
the petitioner as per the under
Atmexure ‘K’? ‘$13 Bentertain this writ
petition c>nl§§?4’V1;<"$¥.€;z)':A1iéé"3¢:%a=:1;: the State Govemment
£0 issfié Viiazifiate action against the
peiitioxgér iifid Board to issue the Show cause
zzxitiéfi .35 'L' respectively.
T. ‘is in dispute their {ha Kaxnataka Silk Marketing
is a Govemineni cernpany. Articles of Association
0i”the”cgii;pany are 3:” Annexure ‘A’. The reievani Articies are 15,
18, which are as unéer:
“I5. Subjeci {Q the provisions sf Ariicias I8 and 19
harem), the business ofthe company shaii be managed
\
10:
may from time to time revoke, withdraw, alter or vary
all or any of such pewers.
18. Notwithstanding any thing eentainegi ” e A
these articles, the Govemer may,.»i’ro_m time “e tinae, ” ”
subject to the Drovisicns ef the issue .
Directives as he may coixsider neeessztiy i1’1~..i*egard’to,_AA
fizsance, conduct. of the et” or
Directors thereof and in 1i1ge~me:3;eer’ jgenul
any such V give
immeéiate ” V. Se *issued by
means 1 ii ~ . Boatd. Meeting, passing
neeessziry resoliitiofasjiet and implementing
the same by e3;eeutive*«e’et.ién,f’ <
it -. 'git dear tiom….A.:ticle 15 that the business of the
coiiipeiafi by the Board of Directors subject tn the
i"'V"provisiene ot"V.A'rt:i§le;s 18 and 19. Article 18 clearly states that
" 'Anotxeithstandittg; anything contained in the Articles of Association,
ifievejfisitnent may free: time te time subject to the provisions of
it flue» Aet, issue eueh ctireetivm as it may consider necessary in regard
it 9' :70 tiztanee, conduct ef the business of the company or Directers
H
thereofand in like manner may vary or amnzi any such _d_irec£ives
and the Direciors shall give immediate effect to these' Qfireétives
issued by means of placing in the Board
necessary resolutiens at the Board and »§n1piei11en1§fig4the same-by 9 j
executive aciion .
11. Learned Ceunsel for “‘pe.n’t£onAer”az’gz}Ees that the
Karnataka sex Marxaingegg;-aV e§ee:,:n:{i:eaee(sue) Regaiaiions (ta;
shoxji’ previfies peeeedere of conduciiag discipiinary
egaimzi He submits out that the Re-guiations
do not enipewer fige E’oe.’r’ciVte review the order of the disciplinary
v_1.2fe:’1–:Tf:ie petitioner is admeeely an Officer of the
eempefiy and ihe Genera} Manager of the Company is the
V’ . ei£eifi§iinazy auihority. It is clear fiem the erder 91′ the discipiinary
eutizority that the shew cause notice for conducting the discipiinary
proeeedizigs was issued on i3,_’?’,2OGfl aged the artieies 01′ charges
12
was also served on the petitioner on the same day. The 9eti_’_r§_oi1e:;.i’_~ _;. A’
has filed his reply on 10.8.2030 and 1
Preseming Ofiieer was filed on 12.12.2oo5.i,_mgug§> 3
submitted to the disciplirsary authority Seeoiio
cause notice was issued {:0 the petitioner refily
was filed by the petitioner on 6;? éjgpete thai the
Managng Director was ‘impugned
order was passed . Whether
the authority is. in
proportion toV’1’11e– or” not is a question to be
oonsidered in fhig ” «because the order of the
vdi5eip§:ine1*3i:.a:;fi1o1fit3?’His;”rzot__’i;i1r3er ehalienge before me. The only
ooixgi t§V>”‘»'<e, case is the competence of the State
_Goven"ene:it to iséue Véifection at Annexure 'K' ant} ihe competence
_ofthe the Show cause notice at Annezszure 'L'.
Vf13.'The Regulations do not empower the Boaré to review
V oeder ofthe disoipiinary authezéty. As stated above, Article 18
in
K
13
of tfie Articles of Association of the company states ~
notwiihstanding anything contained in any of these articIes;”.._’:§hejV”TVV: ‘
Govemor, may, fiom time to time, subject to £335 fifdvisiiéns of _V
Act, issue such Digfectives as he may consider necessary in zfegafd ‘
to finance, conduct of the business of thé””c§”fl1pany d;.VDiré§:tdi$;’
tlxereofand in iike manner may direéiiveé.
In exercise of the power under the State
Gevemment ha::.’Vi’$ sHiied the at Annexure ‘K’.
The expression ‘T’,usine$s employed in Article 18
shoiiid net % given a§i:z1j;:’a}vI.15:1eéi1i1V1«g..as confined to activities ofa
cotiiiiie:;:ia1″‘n a’5.tu;=f”e. wiiiz a pfoiifinoiivation having regard to the
. facts ziizri ofiiae case. It is no doubt true that {he main
. ébjex:’t ei’the..§ornpafi§r:E’§3TV:te carry on the business of dealers in raw
‘ siH{,.s§ ik yam £11 all iis branches and kinds and ‘£0 carry
V of marketing, dealers, importer s and exporters sf
silk, twisted silk, silk yam, silk waste of an kinds,
V. ” ~ .. with siik as one ofits components and silk finished precincts
arid bye-products of all kinds, and description and aim to act: as
K
It
3&3
ageats for the Seriszsulture Department of the Govemniéfii’
Kamaiaka, other Autht:>rftiesfBoards whetherj:1ccsrparai>cc3.: u
The cmnpany has 3350 other ebjects incidefifgal gr Vto’tij§:-L ;, .’
attainnaent ofmain csbj acts stated abové. -.
14. As stated abexré, is a
Govemment company Va 11%: efthe
cempany passes 31′; f:Q£c’iVVa:f”v;}iejudicia£ 1:9 the
iirserest. Gffiff empower the Boarci
ie .review Said the Articies of Association of
the corzzpasxy has ._¢:31p0i&’aéd t}’2§”‘§}eveznor to issue such directives
he cénsider’:1ec§$sa;fj in regard to finance, cozzduct the
i;us£;1;é’ss..:>f–.’§hecQ§§:pan§2, etc. As discussed abcwe, {he expression
‘bu”*siz1Vé§s% ‘of;’ti«§}é”L:c<jt:r;i;§%s;z3:' etnpicsyed in Article 18 shouid not be
esnderstoéai $9 ézarrew sense to the activity of the commexcial
I i1.?:fi'iuA1:'€:; aignek The word 'business' has a wide iznpcm. The word
___"':bu$'i;;@n§$' has :19 deiinite teehnicai meaning but is to be teat} with
_ '4"';eét»fé§;ence t0 the abject and intent cf the ékct is which it occurs.
3'.
Us
15
Having regard to the facts and circumstances ofthe case, ‘bixsirfreée . :’
ofthe cempany’ employed in Artieie 18 embraces in itseIi’ne{ ienlye ”
the commercial transaction ef the compxnifif “E-1:1: “._aIs»e’
adminisiratien of the company. Thus, if “I191: ”
managed properly, the Governor has the to S
‘:6 set right the managemeni (:~f~._t_he Thereiere; ‘(He
direction issaed by the State ‘K’ is
reierabie to Atjtiéie” In obedience
of the said V its present hianagng
Director has siseuedx §h3′:!x5.%~.cet;_e-eririetice. Therefore, it eannet be
saidfiiet ofjhe §£ate”£3′”7e:ven1rnent in issuing the direction
to ‘K’ and the noiice issued by the
Tsczard are without jurisdictieze
‘C_’;I;,ea:nec¥ Ceuzzsei 1231* the petitioner has pieced reliance
deeésiexls e:t’fi§e Apex Ceurt in HARBHAJAN SINGH 123:
k’ ‘VKf%;?rM’ SINGH & orr11:1e5 W AIR 1966 so 641, CHIEF or
AR;1fl’STAFF & OTHERS 3/IS. MAJOR Dfiiiifl/-134′ PAL
{E
_a
:12
7,5?
‘a
“x.
17
ebjeeimns is the show came notice at Axmexare V’MlLA,V’ ‘and
resgonéent is directed to consider the same p:_:1:;~;sA. iwprfipfiaié
erders thereon in accerdance with law. itwié; 32¢rehy”u3§1*iiied :%,§i:i€’_iZr\:¢ .
cmnpeience ofthe State Govemmgnt to iSS§f3_§:§vVE}.§%_€£’i.{i0I1 id
as per Axmexure ‘K’ and the pcfiréi ‘tie issue shew
cause notice is the peiitéonérv as pe3;*”:3s.:a.n§s:s.’1ir: $1936″ axé decided
in this writ peiitio:1._.”£72ie;ef§fr._?; t11i$«_ei*d_§ér shéigid ;f§6t”iie understoed
as expressing a;1y_.[{>j;§i;;j:i5n;’«1-.::+;; matter one way (yr
the other. Ne §g’os;s;
sd/% Judge ,-J . w " . 'Li: ..