Rao, who had resisted growing calls for stepping down following the allegation, had tendered his resignation on Monday and it was accepted by Governor Vajubhai R Vala today, ending months of uncertainty hanging over the institution.
"Hon'ble Governor of Karnataka is pleased to accept the resignation of Dr. Justice Y. Bhaskar Rao, as Lokayukta of Karnataka State with immediate effect," a Raj Bhavan communique said today.
Rao is on a long leave since July last after his son Ashwin Rao was arrested by the Special Investigation Team (SIT) in connection with the case.
According to the Lokayukta Act, recently amended to simplify rules for removal of the anti-graft ombudsman, on admission of the motion, the presiding officers shall refer the matter to the High Court Chief Justice for investigation into the grounds over which the removal is sought.
If the charges against the Lokayukta are proved by the inquiry, it is then taken up for consideration and adoption of the motion and sent to the Governor for assent.
The SIT has arrested 11 persons, including Ashwin Rao,
and registered five cases in connection with the alleged racket.
In another development, a motion seeking removal of Upa Lokayukta Subhash Adi, moved by the Congress but not supported by BJP and JDS, is also before the Assembly.
In their petition against Adi, the ruling party members have accused him of "misuse of office, misconduct and inefficiency". The Opposition maintains there are no specific charges against Adi and the move against him is an attempt to shut down the Lokayukta institution itself.
The Congress leaders had also alleged that the medical officer was a relative of Opposition BJP leader in the Assembly Jagadish Shettar, during whose Chief Ministership Adi was appointed as the Upa Lokayukta.
Procedure for removal of the Upa Lokayukta is similar to that for a Lokayukta.
The Assembly Speaker has, however, said that he is not convinced with the evidence produced that alleged Adi had shown favouritism and exceeded his jurisdiction.
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