Case: H.V.Nirmala Vs. Karnataka State Financial Corpn

n was constituted under the State Financial Corporations Act, 1951 (1951 Act). Appellant was appointed as Trainee Assistant Manager in the Corporation in June 1983. She was promoted and posted as Branch Manager at Chikkaballapur Branch. A disciplinary proceeding was initiated against her in April, 1996. The imputation of charges against her pertained to sanction and disbursal of amount of loan in four cases. As many as four charges were framed against her. The disciplinary proceeding was initiated by the Managing Director of Corporation, wherein one Sri B. Rudregowda, a legal advisor of the company, was appointed as an Enquiry Officer on 4th July, 1996.A finding of guilt was arrived at by the said Enquiry Officer, a copy whereof was made available to the appellant. The records of the disciplinary proceeding were placed before the Board of Directors of the Corporation. By an order dated 9th June, 1998 a penalty of dismissal from services was imposed upon her. Appellant preferred an appeal thereagainst before the Board itself on or about 4th December, 1998. The said appeal was treated to be a petition for review which by reason of an order dated 2nd March, 1999 was dismissed. Aggrieved by and dissatisfied therewith, the appellant filed a writ petition before the High Court of Karnataka at Bangalore. By reason of a judgment and order dated 23rd June, 2005 a learned Single Judge of the said Court dismissed the writ petition. An intra court appeal was preferred thereagainst which has been dismissed by a Division Bench of the said High Court by reason of the impugned judgment and order dated 22nd February, 2006.

Court's reasoning:
18. Prejudice doctrine, in our opinion, may also be applied in such a contingency. We, therefore, are of the opinion that the first contention of Mr. Patil has no merit.19. Submission of Mr. Patil that the Managing Director could not have directed the proceeding to be placed before the Board, in our opinion, has equally no merit. Appointing authority of Class `A Officers is the Board. Managing Director is the disciplinary authority only in respect of minor punishments. When a major punishment is proposed to be imposed, the Board of Directors alone will have the jurisdiction to consider the gravity of the alleged misconduct so as to enable it to pass an appropriate order. It is idle to contend that had Managing Director passed an order, an appeal could have been preferred thereagainst. If the entire Board is the appropriate authority for taking a decision, it is only that authority which was required to take decision and not any other. (See Indian Airlines Ltd. vs. Prabha D, Kanan : (2006) 11 SC 67) .20. For the said purpose an express provision in the Regulation was not imperative. Managing Director of the Corporation initiated a proceeding but he could not impose a major penalty and in that view of the matter he will have the incidental power to place the findings of the Enquiry Officer before the Board. Such an incidental power must be held to be existing with all the statutory authorities. Absence of any Rule as is obtaining in Rule 13 of the CCS (CCA) Rules would not, in our opinion, vitiate thedo not agree. Appointment of an incompetent enquiry officer may not vitiate the entire proceeding. Such a right can be waived. In relation thereto even the principle of Estoppel and Acquiescence wouldin the said decisions, applicability of the prejudice doctrine was not considered being not necessary to do so. Jurisdictional issue should be raised at the earliest possible opportunity. A disciplinary proceeding is not a judicial proceeding. It is a domestic tribunal. There exists a distinction between a domestic tribunal and a court. Appellant does not contend that any procedure in holding the enquiry has been violated or that there was no compliance of principles of naturaltherein also all consequential benefits were not given. In that case the Enquiry Officer had no jurisdiction at all. Even the defecto doctrine could not be applied as he was not the holder of the office but merely anwho could not have been appointed as an Enquirysaid decisions, to our mind, are not applicable to the fact of the present case.15. Appellant himself has quoted the said Regulation which was corrected merely upto 31st October,the Regulation, which was produced by Ms. Suri is corrected upto 1st April, 2002, but it is not clear as to whether the necessary amendment has been carried out prior to 14th July, 1996 or not. We hope that the said assertion of the learned counsel is correct. We are, however, in this case proceed on the basis that Regulation 41(3) remained unchanged and according to learned counsel in terms of the Regulation which was prevalent at the relevant point of time, an outsider could have been appointed as the Enquiry Officer.We may, however, notice that in a case of this nature where appointment of the Enquiry Officer may have something to do only for carrying out the procedural aspect of the mater, strict adherence to the Rules may not be insisted upon. Superior courts in a case of this nature may not permit such a question to be raised for the first time. (SeeSohan Singh and others vs. The General Manager, Ordnance Factory, Khamaraia, Jabalpur and others : AIR 1981 SC 1862 ).Prejudice doctrine, in our opinion, may also be applied in such a contingency. We, therefore, are of the opinion that the first contention of Mr. Patil has no merit.