Case Note & Summary
The petitioner, Bahubali, served as Chief Executive Officer of Vikas Urban Co-operative Bank Ltd. from 01.05.1997. He was dismissed from service on 30.06.2016 on charges of misconduct. The dismissal was stayed by the Joint Registrar of Co-operative Societies, who rejected his challenge, but on appeal the Karnataka Appellate Tribunal by order dated 24.08.2023 set aside the dismissal, finding gross violation of natural justice. However, the Tribunal reserved liberty to the Bank to hold a de novo enquiry. The petitioner, having retired on 31.05.2020, approached the High Court of Karnataka, Dharwad Bench, under Articles 226 and 227 of the Constitution, seeking to quash the direction for fresh enquiry. He contended that no law permits disciplinary proceedings after retirement. The respondents argued that they were willing to settle and had initially reached an agreement with the petitioner, but he proceeded with litigation. The Court observed that the Tribunal had rightly found natural justice violations: the charge sheet was not accompanied by documents and witness list; additional documents were introduced without communication to the delinquent; and the enquiry did not follow the Bank’s own service rules. However, the key issue was the permissibility of a de novo enquiry post-retirement. Relying on Rule 18(1) of the Karnataka Co-operative Societies Rules, 1960, and a Government Order dated 18.03.1996, the Court held that disciplinary proceedings cannot continue after retirement except for recovery of pecuniary loss. The employer-employee relationship ceases on retirement, and no fresh enquiry can be ordered. Accordingly, the writ petition was allowed in part, and the portion of the Tribunal’s order reserving liberty for de novo enquiry was quashed, while the setting aside of dismissal was affirmed.
Headnote
A) Co-operative Societies - Disciplinary Proceedings - Post-Retirement De Novo Enquiry - Karnataka Co-operative Societies Rules, 1960, Rule 18(1) - Government Order dated 18.03.1996 - The petitioner, a dismissed Chief Executive Officer of a co-operative bank, challenged the Karnataka Appellate Tribunal's order which set aside his dismissal for violation of natural justice but granted liberty for a fresh enquiry. The petitioner had retired on 31.05.2020. The High Court held that disciplinary proceedings cannot continue after retirement except to recover pecuniary loss. The direction for de novo enquiry was quashed as contrary to law. (Paras 7-10).
Issue of Consideration
Whether the Karnataka Appellate Tribunal was justified in reserving liberty to the employer to initiate a fresh de novo enquiry against the petitioner after his retirement.
Final Decision
The writ petition was allowed in part. The portion of the Karnataka Appellate Tribunal's order dated 24.08.2023 reserving liberty to initiate a fresh de novo enquiry was quashed. The rest of the order confirming the setting aside of dismissal was upheld.
Law Points
- Legal points not extracted
- Disciplinary proceedings cannot be continued or initiated after retirement except for recovery of pecuniary loss
- employer-employee relationship ceases on retirement
- de novo enquiry after retirement is contrary to Rule 18(1) of Karnataka Co-operative Societies Rules 1960
- violation of natural justice vitiates disciplinary order but fresh enquiry cannot be ordered if employee has retired
Case Details
2026 LawText (KAR) (05) 5
Citation not available, 2025:KHC-D:17242
Sri. Nagaraj S. Jain, Sri. Ravi Hegde, Smt. Girija S. Hiremath, Dr. B.B. Ballari
Bahubali s/o late Nemiraj Gouda alias Jain
Joint Registrar of Co-operative Societies (Rule-441), Arbitrator, and Vikas Urban Co-op Bank Ltd. (represented by its President and General Manager)
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution challenging the order of the Karnataka Appellate Tribunal which reserved liberty for a de novo enquiry against the petitioner.
Remedy Sought
Quashing of the direction for de novo enquiry in the Tribunal's order dated 24.08.2023.
Filing Reason
The Karnataka Appellate Tribunal had set aside the petitioner's dismissal for violation of natural justice but directed a fresh enquiry; the petitioner, having retired on 31.05.2020, contended that such an enquiry was impermissible under law.
Previous Decisions
The Joint Registrar of Co-operative Societies rejected the challenge to dismissal. The Karnataka Appellate Tribunal set aside the dismissal but allowed a de novo enquiry. The present writ petition challenges only the liberty for fresh enquiry.
Issues
Whether de novo disciplinary enquiry can be ordered against an employee after his retirement under the Karnataka Co-operative Societies Rules, 1960.
Submissions/Arguments
Petitioner contended that he retired on 31.05.2020 and no regulation permits holding a de novo enquiry after retirement.
Respondents submitted that they were willing to settle, a settlement proposal was made and initially agreed to by the petitioner, but he later proceeded with the appeal.
Ratio Decidendi
Disciplinary proceedings against an employee cannot be continued or initiated after retirement under Rule 18(1) of the Karnataka Co-operative Societies Rules, 1960, except for the purpose of recovering pecuniary loss caused to the society. Once the employer-employee relationship ceases upon retirement, there is no authority to conduct a de novo enquiry. The direction for fresh enquiry by the Karnataka Appellate Tribunal is contrary to law and must be set aside.
Judgment Excerpts
The petitioner is before this Court calling in question an order of the Karnataka Appellate Tribunal, which sets aside the order passed by the respondent Nos.2 and 3 imposing penalty of dismissal from service.
The Appellate Tribunal after a detailed order, allows the petition, sets aside the order of dismissal, on the ground that it was in gross violation of principles of natural justice.
The direction of the Tribunal to hold a de novo enquiry is completely contrary to law. Rule 18(1) of the Karnataka Co-operative Societies Rules, 1960, as interpreted by a Government Order dated 18.03.1996, makes it clear that disciplinary proceedings cannot continue after retirement except for recovery of pecuniary loss.
The writ petition is allowed in part. The order dated 24-08-2023 passed by the Karnataka Appellate Tribunal in Co-op Appeal No. 88/2020, insofar as it reserves liberty to the 3rd respondent to initiate a fresh de novo enquiry, is quashed. The rest of the order stands confirmed.
Procedural History
Petitioner joined as CEO on 01.05.1997. Charge sheet issued on 02.11.2015. Dismissed from service on 30.06.2016. Challenged dismissal before Joint Registrar of Co-operative Societies, who rejected the claim. Appeal to Karnataka Appellate Tribunal, which by order dated 24.08.2023 set aside the dismissal for violation of natural justice but reserved liberty for de novo enquiry. Petitioner retired on 31.05.2020. Filed writ petition in High Court challenging the liberty for fresh enquiry. High Court allowed the petition in part, quashing the direction for de novo enquiry.
Acts & Sections
- Constitution of India: Articles 226, 227
- Karnataka Co-operative Societies Rules, 1960: Rule 18(1)
