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CASE NO.: Writ Petition (crl.)  197-198 of 2004

PETITIONER: Rajiv Ranjan Singh ’Lalan’ & Anr.        

RESPONDENT: Union of India & Ors.                    

DATE OF JUDGMENT: 21/08/2006

BENCH: S.H. KAPADIA

JUDGMENT: J U D G M E N T S.H. KAPADIA, J.         I have had the privilege of reading the opinions  of Brother Justice Balakrishnan and Brother  Justice Lakshmanan, I have to record my respectful  dissent with the views expressed by my learned  brothers.

       In these writ petitions under Article 32 of the  Constitution, filed to enforce Article 14 of the  Constitution, following three issues arise for  determination:

(a)     Whether the writ petitions were  maintainable as Public Interest Litigation; (b)     whether there was failure of statutory  and public duty on the part of the  Revenue in not preferring an appeal to  the High Court under Section 260A of the  Income Tax Act, 1961; and (c)     whether the procedure adopted at the  time of posting Mr. Munni Lal Paswan,  ADJ as Special Judge, CBI, Patna (Fodder  Scam Cases) on 22.06.2005, needs to be  relooked by the Patna High Court.

(a)     WHETHER THE WRIT PETITIONS WERE  MAINTAINABLE AS PUBLIC INTEREST  LITIGATION:

BACKGROUND FACTS:

Large-scale defalcation of public funds,  fraudulent transactions and falsification of  accounts, of around Rs.500 crores, came to light in  the Animal Husbandry Department of the State of  Bihar.  This scam took place during the period 1977  to 1996.  A similar situation existed in the  Education, Corporation and Fisheries Departments.   By judgment dated 11.03.1996 delivered by the  Division Bench of the Patna High Court in Writ  Petition No.459 of 1996 the High Court, in exercise  of its powers under Article 226 of the Constitution,  took away the investigation from the State police  and entrusted it to CBI.  The said decision of the

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Patna High Court was challenged by the State vide  Civil Appeal Nos. 5177-81 of 1996.  By judgment  dated 19.03.96, this Court observed that the  exercise of the power under Article 226 in a public  interest litigation was not to give any advantage to a  political party or group of people but it was done to  investigate corruption in public administration,  misconduct by the bureaucracy, fabrication of  official records and misappropriation of public  funds.  Therefore, this Court refused to interfere  with the impugned judgment of the Patna High  Court [See: State of Bihar and Another v. Ranchi  Zila Samta Party and Another \026 (1996) 3 SCC 682.

In the case of Union of India and Others v.  Sushil Kumar Modi and Others \026 (1996) 6 SCC 500  certain allegations were made against the then  Director, CBI, in the context of investigations into  the above fodder scam.  The relevant paragraphs 11  and 14 of the said judgment are quoted  hereinbelow: "11. We deem it proper to emphasise that  every officer of the CBI associated with  the investigation has to function as a  member of a cohesive team which is  engaged in the common pursuit of a fair,  honest and complete investigation into  the crimes alleged. It is needless to  further emphasise that the exercise has  to be performed objectively and fairly,  mindful of the fact that the majesty of law  has to be upheld and the ’rule of law’  preserved, which does not discriminate  between individuals on the basis of their  status, position or power. The law treats  everyone as equal before it and this has  to be kept in view constantly in every  State action to avoid violation of the ’right  to equality’ guaranteed in Article 14 of  the Constitution. 14. It appears necessary to add that the  Court, in this proceeding, is concerned  with ensuring proper and honest  performance of its duty by the CBI and  not the merits of the accusations being  investigated, which are to be determined  at the trial on the filing of the  chargesheet in the competent court,  according to the ordinary procedure  prescribed by law. Care must, therefore,  be taken by the High Court to avoid  making any observation which may be  construed as the expression of its opinion  on merits relating to the accusation  against any individual. Any such  observation made on the merits of the  accusation so far by the High Court,  including those in Para 8 of the  impugned order are not to be treated as  final, or having the approval of this  Court. Such observations should not, in  any manner influence the decision on  merits at the trial on the filing of the  chargesheet. The directions given by this  Court in its aforesaid order dated March

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19, 1996 have to be understood in this  manner by all concerned, including the  High Court."

PLEADINGS

On 31.08.2004 the present Writ Petition (Crl.)  Nos.197-198 of 2004 were filed for enforcement of  Article 14 of the Constitution.  Briefly, it is alleged  that the Union of India (respondent no.1) and other  respondents (including respondent nos.4 and 5) are  allegedly committing acts of misfeasance in relation  to the corruption cases pending before the Special  Judge, CBI, Patna as well as in the appeals  preferred by the accused before the Income Tax  Appellate Tribunal.  Respondent no.4 is Smt. Rabri  Devi, former Chief Minister of Bihar and respondent  no.5 is Mr. Lalu Prasad, former Chief Minister of  Bihar.  In the writ petitions it is alleged that trial  judge as well as the Member (Judicial) of the Income  Tax Appellate Tribunal who are found to be  inconvenient are being transferred and supplanted  with the chosen ones.  That, even the judgment of  the Income Tax Appellate Tribunal (for short, ’the  Tribunal’) allowing the appeal in favour of the  assessees for the assessment years 1986-87 to  1996-97, though involving substantial questions of  law, has not been challenged by the Revenue by  filing appeals under Section 260A of the Income Tax  Act, 1961 (for short, ’the I.T. Act’) in order to protect  some of the respondents-accused.

Respondent nos.4 and 5 as well as Union of  India have categorically denied the allegations made  by the petitioners.  It is the case of the respondents  that irresponsible statements have been made in  the petitions without having any basis; that,  political battles were being fought in the name of  public interest litigation (for short, ’PIL’) by  politicians and that respondent nos.4 and 5 had no  role to play either in the transfer of lawyers in the  criminal case, in the transfer of the trial judge or in  the constitution of the Special Bench of the  Tribunal.  They have further submitted that they  have no role to play in Revenue Department not  going in appeal to the High Court under Section  260A of the I.T. Act.  It is submitted that the  Revenue Department took the opinion of Additional  Solicitor General of India who has certified that no  substantial questions of law arise for determination  by the High Court under Section 260A of the I.T.  Act.  Accordingly, it is submitted by the respondents  that the writ petitions deserve to be dismissed with  heavy costs.

SUBMISSIONS

Mr. Ram Jethmalani, learned senior counsel  appearing on behalf of respondent nos.4 and 5,  raised the preliminary objection stating that PIL has  no role to play in pending criminal proceedings.  He  submitted that if the petitioner is a politician and if  it is found that the object is to win political battle  then PIL should be dismissed with costs.  He

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submitted that in the present case the PIL is  politically motivated; that, in the present petitions  there is no breach of Article 14 and, therefore, it  deserves to be dismissed with strictures against the  petitioners.  Learned senior counsel submitted that  PIL is meant for the benefit of the lost and lonely  who have no access to courts or the legal system.   Learned senior counsel submitted that when the  provisions of the Constitution are violated and loss  is caused to a group of persons who are  handicapped then PIL is maintainable, if it is shown  that they have no access to legal system.  It is  submitted that respondents 4 and 5 are the accused  persons before the criminal court and the liberty  cannot be taken away except by the procedure  established by law; that, the criminal procedure  code requires that the guilt of the accused must be  determined by a special judge in the present case  which is the court of exclusive jurisdiction and if  anybody, aggrieved by the decision of the special  judge, is free to hold appeal.  Learned senior  counsel submitted that the assessment orders  passed by the Revenue Department under the I.T.  Act cannot be used to prove holding of  disproportionate assets by respondent nos.4 and 5.   He submitted that in the present case the CBI  pressurized the assessing officer to pass assessment  order against respondent nos.4 and 5.  Learned  senior counsel further alleged that in some cases  even the Commissioner of Income Tax (Appeals) was  persuaded to make order of assessment against  respondent nos.4 and 5 and in such circumstances  and even otherwise orders of assessment cannot  form the basis of trials dealing with accusation of  disproportionate assets by respondent nos.4 and 5.   Learned senior counsel submitted that in fact a  bare perusal of the decision of the Tribunal in the  present case indicates although the appeal is  allowed in favour of the assessees the Tribunal has  decided every point against the assessee and in the  circumstances the Department was right in not  moving the High Court in appeal under Section  260A of the I.T. Act.  Learned senior counsel further  urged that respondent nos.4 and 5, who are the  accused in the criminal trial, should be allowed to  pursue their defence.  Learned senior counsel stated  that admittedly there was a scam and  misappropriation of public property but that should  not give right to the petitioners to obstruct the  course of justice or obstruct the rights given to the  accused under Criminal Procedure Code, Evidence  Act and the Constitution.   

Learned senior counsel submitted three  propositions in the context of the parameters of the  PIL.  He submitted that \026 firstly, every criminal trial  has to proceed according to the procedure  established by law and every deviation from that  procedure, even if by a judicial order could violate  Article 21 of the Constitution; secondly, in every PIL  the locus standi of the petitioner should be  examined at the threshold; and thirdly, the source  of his information must be subjected to strict  scrutiny.  Learned senior counsel submitted that if  any of the three conditions are not fulfilled then PIL

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should be dismissed.  In this connection, learned  senior counsel relied upon the judgments of this  Court in support of his above submissions.

In the case of Janata Dal v. H.S. Chowdhary  and others \026 (1992) 4 SCC 305 this Court observed  that violation of a fundamental right is the sine qua  non of the exercise of the right conferred by Article  32; that, PIL is part of the process of participatory  justice and in a competition between courts and  streets the rule of law must win and, therefore, the  rule of locus standi must be liberalized to meet the  challenges of the times.  This Court, further, noted  the judgment in A.R. Antulay v. Ramadas Sriniwas  Nayak and another \026 (1984) 2  SCC 500 in which it  has been observed that locus standi of the  complainant is a concept foreign to criminal  procedure jurisprudence except where the statute  creates an offence which provides for the eligibility  of the complainant to set the criminal case in  motion.   

In para 92 of the said judgment the concept of  PIL has been explained.  Any member of the public  having sufficient interest can maintain an action for  judicial redress for public injury arising from breach  of duty or violation of the Constitution.  This is  absolutely essential for maintaining the rule of law,  furthering the cause of justice and achieving the  constitutional goals, subject to a caveat which  states that the member of the public who  approaches by way of PIL should be acting bona fide  and not for personal gain, private profit or political  motivation.

In the case of Union of India v. Sushil Kumar  Modi and others \026 (1998) 8 SCC 661 this Court has  held that once a chargesheet is filed in the  competent court after completion of investigation  the process of monitoring for the purposes of  making the CBI and other investigating agencies to  perform their function comes to an end and,  thereafter, it is only the court in which the  chargesheet is filed has to deal with all matters  relating to the trial of the accused, including  matters falling within Section 173(8) of Cr.P.C.   Relying on this judgment, learned senior counsel for  respondent nos.4 and 5 stated that in the present  case the chargesheet has been filed and, therefore,  the process of monitoring has ended.  It is urged  that since the chargesheet has been filed the  criminal trial should be allowed to take its own  course without any further interference from any  court outside the trial court.    

In the case of Dattaraj Nathuji Thaware v.  State of Maharashtra and Others \026 (2005) 1 SCC  590 the Division Bench of this Court on facts found  that the petitioner was a lawyer who had filed PIL.   He was a blackmailer.  In the circumstances the PIL  was dismissed with costs.  It is in that light, that  the Division Bench of the Court speaking through  Pasayat, J. stated the parameters of PIL.  Learned  senior counsel for respondent nos.4 and 5 has  referred to para 4 of the said judgment in support of

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his contention that PIL is maintainable to help poor  and needy who have no access to the legal system.   I quote hereinbelow para 4 of the said judgment. "4. When there is material to show that a  petition styled as a public interest  litigation is nothing but a camouflage to  foster personal disputes, the said petition  is to be thrown out. Before we grapple  with the issue involved in the present  case, we feel it necessary to consider the  issue regarding public interest aspect.  Public Interest Litigation which has now  come to occupy an important field in the  administration of law should not be  "publicity interest litigation" or ’’private  interest litigation" or "politics interest  litigation’’ or the latest trend ’’paise  income litigation". The High Court has  found that the case at hand belongs to  the last category. If not properly regulated  and abuse averted, it becomes also a tool  in unscrupulous hands to release  vendetta and wreck vengeance, as well.  There must be real and genuine public  interest involved in the litigation and not  merely an adventure of knight errant  borne out of wishful thinking. It cannot  also be invoked by a person or a body of  persons to further his or their personal  causes or satisfy his or their personal  grudge and enmity. Courts of justice  should not be all-owed to be polluted by  unscrupulous litigants by resorting to the  extraordinary jurisdiction. A person  acting bona fide and having sufficient  interest in the proceeding of public  interest litigation will alone have a locus  standi and can approach the Court to  wipe out violation of fundamental rights  and genuine infraction of statutory  provisions, but not for personal gain or  private profit or political motive or any  oblique consideration. These aspects were  highlighted by this Court in The Janta  Dal v. H.S. Chowdhary \026 (1992) 4 SCC  305 and Kazi Lhendup Dorji v. Central  Bureau of Investigation \026 1994 Supp (2)  SCC 116. A writ petitioner who comes to  the Court for relief in public interest must  come not only with clean hands like any  other writ petitioner but also with a clean  heart, clean mind and clean objective.  (See Ramjas Foundation v. Union of India  \026 1993 Supp (2) SCC 20 and K.R.  Srinivas v. R.M. Premchand \026 (1994) 6  SCC 620."

To the same effect is the ratio of the decision of  the Division Bench of this Court in the case of  Gurpal Singh v.  State of Punjab and Others \026  (2005) 5 SCC 136.  In the said judgment it has been  held that PIL will not lie in cases of personal and  political rivalry.  While laying down the parameters  the Division Bench speaking through Pasayat, J.  observed that in the PIL nobody should be allowed

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to make wild and reckless allegations spoiling the  characters of others; that, PIL is not maintainable in  cases of personal vendetta.  However, in the said  judgment it has been held that the court can act if it  is satisfied with the correctness or the nature of the  information given by the petitioner.

Mr. Goolamhusein E. Vahanvati, Learned  Solicitor General of India, appearing for Union of  India, adopted the arguments advanced by Mr. Ram  Jethmalani, learned senior counsel, on the  preliminary issue.  He, however, added that in the  present case reckless allegations have been made  without any basis against important functionaries,  judges and authorities under the I.T. Act.  He  submitted that the petitioners cannot destroy the  service careers of the government officers without  any reason on basis except for their own political  rivalry with respondent no.5.  He submitted that  there is no violation of law or the Constitution,  particularly, when Mr. Yogender Prasad, the earlier  trial judge who had extensively heard the matter,  was promoted as District Judge.  Learned counsel  further submitted that constitution of the Special  Bench by the President of the Tribunal was done in  the circumstances spelt out in the various  affidavits; that the matter was required to be  expeditiously heard which led to the constitution of  the Special Bench; and that decision was not  arbitrary, as alleged.  There is nothing on record to  indicate that favoured judges/members were  appointed and that inconvenient judges/members  were dispensed with to favour the accused in the  present case.   

Learned senior counsel relied upon the  judgment of this Court in the case of T.N.  Godavarman Thirumulpad (98)  v.  Union of India  and Others \026 (2006) 5 SCC 28 where this Court  speaking through learned Chief Justice of India has  held vide para 26 as follows: "26. For the last few years, inflow of  public interest litigation has increased  manifold. Considerable judicial time is  spent in dealing with such cases. A  person acting bona fide alone can  approach the court in public interest.  Such a remedy is not open to an  unscrupulous person who acts, in fact,  for someone else. The liberal rule of locus  standi exercised in favour of bona fide  public interest litigants has immensely  helped the cause of justice. Such litigants  have been instrumental in drawing  attention of this Court and High Courts  in matters of utmost importance and in  securing orders and directions for many  under-privileged such as, pavement  dwellers, bonded labour, prisoners’  conditions, children, sexual harassment  of girls and women, cases of communal  riots, innocent killings, torture, long  custody in prison without trial or in the  matters of environment, illegal stone  quarries, illegal mining, pollution of air

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and water, clean fuel, hazardous and  polluting industries or preservation of  forest as in the T.N. Godavarman  Thirumulpad (I) v. Union of India \026  (1997) 2 SCC 267. While this Court has  laid down a chain of notable decisions  with all emphasis at their command  about the importance and significance of  this newly developed doctrine of PIL, it  has also hastened to sound a red alert  and a note of severe warning that courts  should not allow their process to be  abused by a mere busybody or a  meddlesome interloper or wayfarer or  officious intervener without any interest  or concern except for personal gain or  private profit or other oblique’  consideration. (See Janata Dal v. H.S.  Chowdhary and Ors. \026 (1992) 4 SCC  305)."

FINDINGS:

At the outset, it needs to be noted that in this  case we are concerned not with the merits of the  allegations but with the decision-making process,  be it in the posting of Mr. Munni Lal Paswan,  Special Judge, CBI, Patna or in the matter of the  Revenue Department not moving in appeal to the  High Court under Section 260A of the I.T. Act  despite there being substantial questions of law  arising from the impugned judgment of the  Tribunal.  It is submitted on behalf of the  petitioners that the present writ petitions should be  seen in the context of the earlier two decisions of  the Supreme Court under which investigations were  handed over to CBI as an amount of around Rs.500  crores stands misappropriated in the fodder scam.   It is the case of the petitioners that the present case  should be seen in the light of the directions given by  the Supreme Court in the cases of Ranchi Zila  Samta Party (supra) and Sushil Kumar Modi  (supra).   

The present petitions are filed on the alleged  acts of misfeasance.  The test which one has to  apply to decide the maintainability of the PIL  concerns sufficiency of the petitioner’s interest.   Under this test it is necessary to consider the  subject matter to which the PIL relates.  It is wrong  in law for the court to judge the applicant’s interest  without looking at the subject matter of his  complaint.  If the petitioner shows failure of public  duty, the court would be in error in dismissing his  PIL.   

In the case of Inland Revenue Commissioners   v.  National Federation of Self-employed and Small  Business Ltd. reported in 1982 Appeal Cases 617, a  declaration was sought that the Revenue had acted  unlawfully in granting amnesty to the trade union of

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casual workers and accordingly a writ of mandamus  was sought to assess and collect income tax from  casual workers according to law.  In the Divisional  Court when the motion for judicial review came, the  point of locus standi was treated as a preliminary  point.  The Divisional Court refused the leave saying  that the petitioner had no power to bring such an  action.  The Court of Appeal by majority reversed  the decision of the Divisional Court and made a  declaration that the applicants have sufficient  interest to apply for judicial review.  Upholding the  decision of the Division Court it was held by the  House of Lords that the question of sufficient  interest of the petitioner cannot be considered in the  abstract.  It must be taken together with the legal  and factual context.  It was held that the  management of tax recovery falls within the domain  of the Revenue but if that act of management is  found to be based on exercise of its authority for  extraneous reasons, then judicial review would  certainly lie.  It was held that the Revenue  Department was incharge of assessment and  collection of taxes for the welfare of the State; that,  it was responsible for good management under the  statute; that, if it was found that the Board was  proposing to exercise its authority or if the Board  was refraining itself from exercising its power not  for good reasons of good management but for some  extraneous or ulterior reasons then that action or  inaction by the Board would be ultra vires and such  a matter would be a proper matter for judicial  review.  In this respect the following observation  made by the House of Lords at pages 636-637 is  quoted hereinbelow:  "It is, in my view, very much to be  regretted that a case of such importance  to the development of English public law  under this new procedure should have  come before this House in the form that it  does as a result of what my noble and  learned friend, Lord Wilberforce, has  described as the unfortunate course that  was taken in the courts below when,  leave to apply for judicial review having  been previously granted ex parte, the  application itself came on for hearing.   This has had the result of deflecting the  Divisional Court and the Court of Appeal  from giving consideration to the questions  (1) what was the public duty of the Board  of Inland Revenue of which it was alleged  to be in breach, and (2) what was the  nature of the breaches of that duty that  were relied upon by the federation.   Because of this, the judgment of the  Court of Appeal, against which appeal to  your Lordships’ House is brought, takes  the form of an interlocutory judgment  declaring that the federation "have a  sufficient interest to apply for judicial  review herein."

As my noble and learned friend has  pointed out, these two omitted questions  need to be answered in the instant case

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before it is possible to say whether the  federation have "a sufficient interest in  the matter to which the application  relates," since, until they are answered,  that matter cannot be identified.  This is  likely also to be the case in most  applications for judicial review that are  not on the face of them frivolous or  vexatious.  Your Lordships have  accordingly heard full argument on both  these questions.

As respects the statutory powers  and duties of the Board of Inland  Revenue, these are described and dealt  with in several of your Lordships’  speeches.  It would be wearisome if I were  to repeat what already has been, and  later will be, better said by others.  All  that I need say here is that the board are  charged by statute with the care,  management and collection on behalf of  the Crown of Income tax, corporation tax  and capital gains tax.  In the exercise of  these functions the board have a wide  managerial discretion as to the best  means of obtaining for the national  exchequer from the taxes committed to  their charge, the highest net return that  is practicable having regard to the staff  available to them and the cost of  collection.  The board and the inspectors  and collectors who act under their  directions are under a statutory duty of  confidentiality with respect to information  about individual taxpayers’ affairs that  has been obtained in the course of their  duties in making assessments and  collecting the taxes; and this imposes a  limitation on their managerial discretion.   I do not doubt, however, and I do not  understand any of your Lordships to  doubt, that if it were established that the  board were proposing to exercise or to  refrain from exercising its powers not for  reasons of "good management" but for  some extraneous or ulterior reason, that  action or inaction of the board would be  ultra vires and would be a proper matter  for judicial review if it were brought to the  attention of the court by an applicant  with "a sufficient interest" in having the  board compelled to observe the law."  (emphasis supplied)   

Applying the above test we have to ascertain in  the present case whether the decision of the  Government in not preferring the appeal to the High  Court under Section 260A of the I.T. Act constituted  inaction on the part of the Department.  This  question needs to be answered not in an abstract  but having regard to position in law and having  regard to the facts of the present case.

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(b) WHETHER THERE WAS FAILURE OF  STATUTORY AND PUBLIC DUTY ON THE  PART OF THE REVENUE IN NOT  PREFERRING AN APPEAL TO THE HIGH  COURT UNDER SECTION 260A OF THE  INCOME TAX ACT, 1961:     

The facts of the case of the assessee, Smt.  Rabri Devi, are as follows:  On 14.10.1996 the  assessee filed voluntary returns for assessment  years 1995-96 and 1996-97.  On 14.11.1996 she  filed voluntary returns for assessment years 1986- 87 to 1994-95 declaring various incomes which had  escaped assessment as she had not filed her  returns earlier.  The assessee also applied for waiver  of interest and penalty under Section 273A of the  I.T. Act.  In the voluntary returns, the assessee  disclosed income derived from dairy farming,  agriculture and rent from house property.  Upon  receipt of returns for the assessment years 1995-96  and 1996-97 the Assistant Commissioner of Income  Tax issued notice of defecting returns under Section  139 of the I.T. Act in which it was alleged that  regular books of accounts were not maintained;  that, return was not accompanied by a statement  indicating the amount of turn-over, gross receipts,  gross profits and net profits from  business/profession.  The assessee also received  notices under Section 148 of the I.T. Act for the  period 1986-87 to 1994-95.  The Assessing Officer  recorded the reasons for reopening the assessment  for each of the above years.  For example, the  reasons for reopening the assessment for the year  1986-87 are as follows: "A notice u/s 131 A of the I.T. Act’ 61 was  issued to the husband of the assessee,  asking him to furnish, among other  things, details of income of other family  members and details of assets owned by  such family members.  In reply to the  said notice the assessee’ husband  submitted that the assessee had been  deriving k rental income from house  property at Sheikhoura since 1983-84  and from dairy farms since 1975.   Subsequently, the assessee on 25.10.96  filed details of her immovable and  movable properties before the ADIT (Inv.),  Patna.  From a perusal of this, it is  noticed that the assessee has made  substantial investments in residential  house at Sheikhoura, in agricultural land  at Saran and Patna and land at Danapur,  Patna.  It is also noticed that she has  made substantial investments in FDs,  Kisan Vikas Patras and National Savings  Certificates, besides having a number of  bank a/cs.  The assessee has also  contributed to the construction of her  husband’s house property at Phulwari.

Despite having made such large  investments, the assessee has never filed  Income-tax returns, nor has she be  assessed to Income-tax in past.  Recently,

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the assessee had filed a petition u/s 273  A of the I.T. Act’61 before the CIT, Patna.   Pursuant to this petition, she had also  filed a disclosure of income Rs.70,000 for  the A/Y in question in order to explain  the capital required for the investment  that she has made.

All these information in our possession  give us reason to believe that at the very  least a sum of Rs.70,000 has escaped  assessment for the A/Y 1986-87.  Owing  to the failure of the assessee to file return  within stipulated time limit and to  disclose material facts relevant to have  assessment at the appropriate time.

As more than four years from end of the  assessment year have lapsed, approval is  solicited from DCIT, Range-1, Patna to  issue notice u/s 148 of the I.T. Act’61.  It  is clarified that notice u/s 148 of the I.T.  Act is issuable as income escaping  assessment exceeds the amount  stipulated in section 149(1)(b).

Sd/- Nikhil Choudhary 20.11.96 Asst. Commissioner of Income-tax, Spl. Inv. Circle-1, Patna." I need not go into further details regarding the  alleged undisclosed income for each assessment  year.  Suffice it to state that additions have been  made by the Department to the income of the  assessee under various orders passed by the  Assessing Officer and the Commissioner of Income  Tax (Appeals).  These orders were challenged by the  assessee before the Tribunal.

By the impugned judgment the appeals filed by  the assessee were allowed by the Tribunal.  While  allowing the appeal of the assessee the Tribunal  held that the case involved highly intricate issues;  that, these issues were extremely difficult to  understand; that, but for the assistance of the  learned advocates on both sides it was difficult to  adjudicate such disputes.  At the same time the  Tribunal without any basis castigated the officers of  the Department including the Commissioner  (Appeals) saying that rampant additions were made  to destroy the case of the assessees and to destroy  the political career of respondent no.5 (See: para 40  of the judgment of the Tribunal).  Similarly, the  Tribunal has castigated the higher officers of the  Department saying that they were biased and that  they had acted at the behest of the Centre in  clubbing the income of respondent no.4 with that of  respondent no.5 who was going through political  crisis (See: para 54 of the said judgment).

There is no basis given in the impugned  decision of the Tribunal for making such strong  observations against the officers of the Revenue.   Although the High Court under Section 260A of the  I.T. Act would not have enquired into the sufficiency  of materials or substituted its judgment for that of

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the Tribunal in regard to facts, nevertheless, if the  conclusion drawn by the Tribunal is without any  basis or based on irrelevant considerations then the  High Court was required to interfere under Section  260A.  

PIL is not maintainable to probe or enquire  into the returns of another taxpayer except in  special circumstances.  It is the ratio of the decision  of House of Lords in the case of National Federation  of Self-employed (supra).  However, when scams  take place, accusation of disproportionate assets are  required to be looked into.   In the case of M.C. Mehta v. Union of India  and others (Taj Trapezium Matter) \026 (2003) 8 SCC  696 the Division Bench of this Court not only  directed CBI to investigate the cases against the  bureaucrats but also to enquire the outflow of Rs.17  crores released by the State of U.P. in respect of  project undertaken by NPCC.  In that matter the  income tax returns of the former Chief Minister and  other officials were ordered to be collected by this  Court.  They were directed to be collected from  various income tax authorities.  The point to be  noted is that the source of the funds plays a crucial  role in investigations by CBI in matters involving  misappropriation of public funds.  Departments  have to work in tandem.  The evidentiary value of  the collected material in the criminal trial is a  matter different from the collection of information  by the officers of the Revenue Department.  In the  present case officers of the Revenue have been  condemned by the aforesaid judgment of the  Tribunal.  Comments have been made without any  basis and yet till today appeals have not been filed  by the government under Section 260A of the I.T.  Act.  As stated above, even the Tribunal has  observed in its judgment that complicated legal  issues were involved in the matter; that, even the  members of the Tribunal found it very difficult to  understand those issues, particularly, matters  involving interpretation of Sections 131, 131(1A),  273A and 147/148 of the I.T. Act.  If the issues  were so difficult for the members to understand, one  fails to appreciate why high-ranking officers of the  Department were castigated by the Tribunal.  This  Court has noticed in number of cases that even an  innocuous statement of the tribunal against the  Revenue Officers is challenged before the higher  courts on the ground that such observations are  aspersions against the officers who have performed  their duty and that they need to be expunged.   Surprisingly, in this particular case till today no  such appeal has been filed under Section 260A of  the I.T. Act.  There is one more reason which is  required to be mentioned.  The judgment of the  jurisdictional tribunal on the scope and  interpretation of the above sections which the  Tribunal itself says involve complex legal issues, is  binding on assessing officers and the appellate  authority within that jurisdiction.  If  so,  one fails  to understand  why  the  Department  has  not  moved in appeal under Section 260A of the I.T. Act.   In the circumstances of this case, Union of India  should apply its mind afresh and take its decision

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keeping in mind the factors referred to hereinabove.

Before concluding, it may be noted that  arguments have been vehemently advanced on  behalf of respondent no.1 saying that these  petitions need to be dismissed as the petitioners  have made irresponsible statements against judicial  officers and members of the Tribunal whose service  records are sought to be tarnished.  Applying the  same yardstick one fails to understand as to why  the Revenue has not moved in appeal even when its  own higher officers are branded as biased in  deciding matters against respondent nos.4 and 5.   Their service records are as important as the service  records of members of the trial court or the judicial  officers.              

(c)  WHETHER THE PROCEDURE ADOPTED AT  THE TIME OF POSTING MR. MUNNI LAL  PASWAN, ADJ AS SPECIAL JUDGE, CBI,  PATNA (FODDER SCAM CASES) ON  22.06.2005, NEEDS TO BE RELOOKED BY  THE PATNA HIGH COURT:

Institutional autonomy of the High Court on its  administrative side under Article 233 and Article  235 is a well-known concept.  It is based on public  trust and confidence.  Existence of the power, as a  concept, is different from exercise of power.   Promotions and posting of judicial officers fall  within its domain on its administrative side.  At the  same time it is important to note that choice of the  candidate falls in the domain of public law and,  therefore, that choice has to be exercised on some  standard, failing which judicial review steps in.  Standards of evaluation in matters of promotion  and posting have to be uniformly applied otherwise  arbitrariness comes in.  Integration of the  evaluation process has to be maintained.  If  different standards or no standards are applied it  breaks the integrity of the process which brings in  discrimination and arbitrariness which violates  Article 14 and therefore judicial review.   

In the present case we are required to see  whether the standards applied to evaluate Mr. J.P.  Ratnesh and Mr. Ram Niwas Prasad, trial judges,  appointed as Special Judges vide Minutes of the  meeting of the Standing Committee dated  22.06.2005 were equally applied while posting Mr.  Munni Lal Paswan as Special Judge, CBI, Patna  (fodder scam cases).

By order dated 26.10.2005 this Court directed  the Registrar General, Patna High Court, to forward  this Court A.C.Rs recorded by the Inspecting Judges  of the High Court in the case of Mr. Munni Lal  Paswan.  In reply the Registrar General has stated  as follows: "The A.C.Rs, recorded by the Hon’ble  Inspecting Judges in the years 1985,  1990 and by the Chairman of CAT in  1997, have been placed before the  Supreme Court.  Besides them no ACRs

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of Sri Munni Lal Paswan have ever been  recorded by the Hon’ble Inspecting  Judges.  The A.C.Rs of Additional District  and Sessions Judges are recorded by the  Hon’ble Inspecting Judges." (emphasis supplied)

Mr. Munni Lal Paswan was promoted to the  post of ADJ on 17th June, 2003.  Therefore, when  Mr. Paswan was promoted as A.D.J. there was no  categorization available.   In the report submitted by the Registrar  General to this Court on 18.12.2005 pursuant to  our order dated 26.10.2005,  the Registrar General  has forwarded the consolidated statement showing  the Outturn of the work done by Mr. Paswan during  the period 1998, 1999, 2000, 2001, 2002, 2003,  2004 and 2005 (partly).  This statement refers to  various parameters like disposal, remarks of P.O.,  remark of D.J. etc. as approved by the court.  At  this stage, I do not wish to comment about the  remarks mentioned therein.  These remarks have  been approved by the District Judge and by the  Courts.  These remarks are heavily weighted against  Mr. Paswan.  It is not clear whether these remarks  were ever noticed by the Committee and if not they  need to be relooked by the High Court.

One more aspect needs to be stressed.  There  is a prescribed form in which the C.Rs are recorded.   That form indicates various parameters, namely,  knowledge of law, whether the officer is  hardworking, the rating to be given in respect of the  judgments, namely, A+(outstanding), A(very good),  B+(good), B(satisfactory).  The point to be noted is  that apart from honesty and integrity there are  other parameters to be fulfilled by the judicial  officers and that is where the disposals, ability and  all other relevant factors come.

On 26th July, 2006 this Court put up the  following three questions in the form of order to the  Registrar General of the Patna High Court:

"1.  Is it the practice in the High Court of  Patna to prepare gradation/ remarks  of the Judicial Officers by the  Inspecting Judges?

2.  As regards the three officers, including  Shri M.L. Paswan, who were  appointed as Special Judges on  22.6.2005 by the Standing  Committee of the High Court,  whether any remarks/gradation  expressed by the Inspecting Judges  were available to the Standing  Committee?

3.  Whether the gradation/remarks of the  Inspecting Judges were made as  regards these three officers?"    

In reply, the Registrar General of the Patna

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High Court stated as follows in paras 2 to 4: "2. That in regard to Query No.1 of this  Hon’ble Court as mentioned in the Order  dated 26.7.2006, I respectfully say and  submit that there is a practice in the  High Court of Patna to record remarks of  Judicial Officers by the Hon’ble  Inspecting Judges of the concerned  Judgeships which is known as Annual  Confidential Remarks.  The Annual  Confidential remarks recorded by the  Hon’ble Inspecting Judges which includes  knowledge of law, integrity, behaviour  with Bar, general reputation,  industriousness, efficiency, behaviour  towards superiors and subordinate  colleagues and categorization made by  the Hon’ble Inspecting Judges and net  result categorization is to be placed  before the Standing Committee where the  gradation is given to the Officer by the  Hon’ble Standing Committee.

3. That in regard to Query No.2 of this  Hon’ble Court as mentioned in the Order  dated 26.7.2006, I respectfully say and  submit that the 3 Officers, namely, Shri  Jawahar Prasad Ratnesh, Shri Ram  Niwas Prasad and Shri Munni Lal Paswan  who were appointed as Special Judge on  22.6.2005 by the Standing Committee,  the remarks of the Hon’ble Inspecting  Judges as maintained in the Guard Files  which are maintained separately of each  officers, were available to the Hon’ble  Standing Committee.  The said fact also  finds mention in the decision dated  22.6.2005 of the Hon’ble Standing  Committee.

4. That in regard to Query No.3 of this  Hon’ble Court as mentioned in the Order  dated 26.7.2006, I respectfully say and  submit that the remarks of the Hon’ble  Inspecting Judge in case of Mr. Jawahar  Prasad Ratnesh was of the year 1985,  1986-87, 1988, 2001, 2003 and 2005  (And remarks recorded by P.O., Industrial  Tribunal, Patna in 1998).  In respect of  Shri Ram Niwas Prasad, the remarks  recorded by the Hon’ble Inspecting Judge  was of 1985, 1986, 1997 and 2002.  As  regards Shri Munni Lal Paswan, the  remarks recorded by the Hon’ble  Inspecting Judge was of 1985 and 1990  and by Vice-Chairman, Industrial  Tribunal, Patna Bench in 1997. (emphasis supplied)

Reading para 4 it is clear that the remarks of  Inspecting Judge, in the case of Mr. J.P. Ratnesh,  were duly updated when they were placed before the  Standing Committee of the High Court.  In respect  of Mr. Ram Niwas Prasad the remarks recorded by

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the Inspecting Judge for the years 1985, 1986, 1997  and 2002 were updated and placed before the  Standing Committee of the High Court.  However, in  case of Mr. Munni Lal Paswan the remarks of the  Inspecting Judge duly recorded are only of 1985  and 1990.  Mr. Munni Lal Paswan was promoted as  A.D.J. on 17.06.2003.  He was posted as Special  Judge on 22.06.2005.  Therefore, it is clear that  there is no gradation/categorisation of the  confidential reports of Mr. Munni Lal Paswan by the  Inspecting Judge of the High Court particularly  after becoming A.D.J.   

In the case of High Court of Punjab &  Haryana, through Registrar General v. Ishwar  Chand Jain and Another \026 (1999) 4 SCC 579 this  Court has held as follows: "32.  Since late this Court is watching the  spectre of either judicial officers or the  High Courts coming to this Court when  there is an order prematurely retiring a  judicial officer.  Under Article 235 of the  Constitution the High Court exercises  complete control over subordinate courts  which include District Courts.  Inspection  of the subordinate courts is one of the  most important functions which the High  Court performs for control over the  subordinate courts.  The object of such  inspection is for the purpose of  assessment of the work performed by the  Subordinate Judge, his capability,  integrity and competency.  Since Judges  are human beings and also prone to all  the human failings inspection provides  an opportunity for pointing out mistakes  so that they are avoided in future and  deficiencies, if any, in the working of the  subordinate court, remedied.  Inspection  should act as a catalyst in inspiring  Subordinate Judges to give the best  results.  They should feel a sense of  achievement.  They need encouragement.   They work under great stress and man  the courts while working under great  discomfort and hardship.  A satisfactory  judicial system depends largely on the  satisfactory functioning of courts at the  grass-roots level.  Remarks recorded by  the Inspecting Judge are normally  endorsed by the Full Court and become  part of the annual confidential reports  and are foundations on which the career  of a judicial officer is made or marred.   Inspection of a subordinate court is thus  of vital importance.  It has to be both  effective and productive.  It can be so  only if it is well regulated and is  workman-like.  Inspection of subordinate  courts is not a one-day or an hour or a  few minutes’ affair.  It has to go on all the  year round by monitoring the work of the  court by the Inspecting Judge.  A casual  inspection can hardly be beneficial to a  judicial system.  It does more harm than

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good.  As noticed in the case of Registrar,  High Court of Madras v. R. Rajiah \026 (1988)  3 SCC 211 there could be ill-conceived or  motivated complaints.  Rumour- mongering is to be avoided at all costs as  it seriously jeopardizes the efficient  working of the subordinate courts.

33. Time has come that a proper and  uniform system of inspection of  subordinate courts should be devised by  the High Courts.  In fact the whole  system of inspection needs  rationalization.  There should be some  scope of self-assessment by the officer  concerned.  We are informed that the  First National Judicial Pay Commission is  also looking into the matter.  This  subject, however, can be well considered  in a Chief Justices’ Conference as the  High Court itself can devise an effective  system of inspection of the subordinate  courts.  The Registrar General shall place  a copy of this judgment before the  Hon’ble Chief Justice of India for him to  consider if the method of inspection of  subordinate courts could be a matter of  the agenda for the Chief Justices’  Conference."   (emphasis supplied)

The above judgment emphasizes the  importance of the remarks given by the Inspecting  Judge.  The object of Inspection is to assess the  work performed, capability, competency besides  integrity of the candidate.  Those  gradations/categorisations given by Inspecting  Judges are required to be placed before the Full  Court.  In the present case, that exercise is done for  two out of three judicial officers when they were  posted.  However, it appears from the affidavit of the  Registrar General that no gradation/categorisation  has been done after 1990 by the Inspecting Judge  vis-‘-vis the judgments of Mr. Munni Lal Paswan.

It is important to bear in mind that in the  matter of economic scams be it security  transactions or fodder scams or Taj corridor it is the  economic interest of the country which is at stake.   These cases are highly complicated in which  complicated questions are involved and, therefore,  posting plays a vital role.  In the circumstances, it seems that the  procedure followed by the High Court in the meeting  on 22.06.05 has lost sight of the above criteria.  In  the circumstances, a request is being made to the  Chief Justice of the Patna High Court to convene an  urgent meeting of Administrative Judges and  complete the exercise of giving appropriate  gradation/categorisation after looking at the  judgments and orders delivered by the concerned  judge, Mr. Paswan.  I may make it clear that this is  just a request to the High Court and not a direction  so that the evaluation standards are commonly

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applied to all the three candidates.

Before concluding it may be pointed out that  this decision is confined strictly to the decision- making process and it is not concerned with the  merits of the allegations made in the petitions.  The  allegations made in the petitions are not only  against the accused, they are also directed against  number of functionaries.  It is, therefore, made clear  that this decision is only to rectify the procedure of  decision-making at the High Court level and at the  Revenue level so that in future such anomalies do  not arise.   

To sum up, the Chief Justice of the Patna High  Court is requested to convene a meeting of  Administrative Judges and have a fresh look at the  evaluation in the case of posting of Sri Paswan as  Special Judge for C.B.I. (Fodder Scam Cases) at  Patna, vide Minutes of Meeting dated 22.06.2005.   At the same time, Union of India is directed to  reconsider approaching the High Court against the  decision of the Tribunal dated 2.7.2004 under  Section 260A of the Income Tax Act, 1961 in the  light of what is stated above.

In the end it may be stated that true value of a  decision lies in its propriety and not in the decision  being right or wrong. Writ Petition (Crl.) Nos.197-198 of 2004 are  accordingly allowed to the extent indicated above.