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PETITIONER: UNION OF INDIA AND ORS.

       Vs.

RESPONDENT: A.N. SAXENA

DATE OF JUDGMENT27/03/1992

BENCH: KANIA, M.H. (CJ) BENCH: KANIA, M.H. (CJ) MOHAN, S. (J)

CITATION:  1992 AIR 1233            1992 SCR  (2) 364  1992 SCC  (3) 124        JT 1992 (2)   532  1992 SCALE  (1)800

ACT:      Administrative Tribunals Act, 1985 : Section 24      Tribunal-power   to  make  interim  orders-Income   Tax Officer,  performing judicial or  quasi-judicial  functions- Charge of making irregular assessments-Whether  disciplinary proceeding could be initiated against him-Power of  Tribunal to stay departmental proceedings-voluntary retirement during pendency of enquiry, Fundamental Rule 56  (k)-Permissibility of-Payment  of provisional pension-Whether could be  stopped pending enquiry.

HEADNOTE:      The  respondent,  an Income Tax Officer, was  served  a charge-sheet  on  the  ground  that  he  completed   certain assessments  in  an  irregular  manner  designed  to  confer benefits   on   the  assesses.    Accordingly   disciplinary proceedings  were  initiated  against  him.   He  filed   an application  before the Central Administrative Tribunal  for setting  aside  the  charge-sheet and  for  restraining  the appellant from taking disciplinary proceedings against  him. By  its  order  dated 27.6.91 the  Tribunal  restrained  the appellant  from  proceeding with  disciplinary  proceedings. During  the  pendency of the  departmental  proceedings  the respondent   was   allowed  to  retire   voluntarily   under Fundamental Rule 56(k).  By its second order dated July  15, 1991  the Tribunal directed that in case the commuted  value of  the pension payable to the respondent was  refunded,  he should  be paid the full value of the pension from  the  due date  including the arrears pending the  proceedings  before the  tribunal.  Against both the orders of the Tribunal  the Union  of  India  filed  appeals  in  this  Court.   It  was contended  on  behalf  of  the respondent  that  as  he  was performing  judicial or quasi-judicial functions  in  making the  assessment order, even if his actions were wrong,  they could  be  corrected  in an appeal or  in  revision  and  no disciplinary  proceedings  could  be  taken  regarding  such actions.      Allowing the appeals, this Court :      HELD  : 1. The Tribunal should have been  very  careful before grant                                                        365

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ing  stay in a disciplinary proceeding at  an  interlocutory stage.   The  imputations made against the  respondent  were extremely  serious and the facts alleged, if  proved,  would have   established  misconduct  and  misbehaviour.   It   is surprising  that without even a counter being filed,  at  an interim stage, the Tribunal, without giving any reasons  and without  apparently  considering whether the  memorandum  of charges deserved to be enquired into or not, granted a  stay of  disciplinary  proceedings  as  it  has  done.   If   the disciplinary proceedings in such serious matters are  stayed so lightly as the Tribunal appears to have done, it would be extremely  difficult  to  bring  any  wrong-doer  to   book. Therefore,  the impugned order of the Tribunal is set  aside and it is directed that the disciplinary proceedings against the  respondent  shall be proceeded with according  to  law. [368A-D]      1.1.  In the facts and circumstances of the case it  is desirable  that  the same Bench of the Tribunal  should  not proceed with further hearing of the application made by  the respondent. [369D]      2.  It  is  true that when  an  officer  is  performing judicial    or   quasi-judicial    functions    disciplinary proceedings  regarding any of his actions in the  course  of such  proceedings should be taken only after  great  caution and  a  close  scrutiny  of  his  action  and  only  if  the circumstance so warrant.  The initiation of such proceedings is  likely  to  shake the confidence of the  public  in  the officer  concerned  and  also if  lightly  taken  likely  to undermine his independence.  Hence the need for extreme care and  caution before initiation of  disciplinary  proceedings against  an  officer performing judicial  or  quasi-judicial functions  in  respect of his actions in  the  discharge  or purported  to discharge his functions.  But it is not as  if such  action cannot be taken at all.  Where the  actions  of such  an officer indicate culpability, namely, a  desire  to oblige  himself  or unduly favour one of the parties  or  an improper  motive there is no reason why disciplinary  action should not be taken. [368-H, 369-A]      3.  It  is surprising that in  a  disciplinary  enquiry pertaining to serious charges the respondent was allowed  to retire voluntarily under Fundamental Rule 56(k).  It is  not known whether it was duly considered whether his application for voluntary retirement ought to have been rejected in view of  the  seriousness of the charges  levelled  against  him. However, nothing more can be done in that connection. [369E- F]                                                        366

JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.  50-51 of 1992.      From  the  Judgment and order dated  27.6.1991  of  the Central  Administrative Tribunal, Delhi in O.A. No. 1307  of 1991.      K.T.S.   Tulsi,  Addl.  Solicitor  General   Ashok   K. Srivastava,   Hemant  Sharma  and  P.  Parmeswarn  for   the Appellants.      A.K. Sanghi for the Respondent.      The Judgment of the Court was delivered by      KANIA,  CJ.  These  appeals are  directed  against  two orders   passed  by  the  Central  Administrative   Tribunal (Principal  Bench).  New Delhi (hereinafter referred  to  as "The tribunal").  By the first impugned order the  appellant

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was restrained from proceeding further with the disciplinary proceedings  against the respondent in terms of the  charge- sheet  dated March 13, 1989, filed by the  appellant.   This order  was passed by the Vacation Bench of the  tribunal  on June 27, 1991.      The  second order sought to be challenged is  an  order dated  July 15, 1991, whereby the tribunal directed that  in case  the  commuted  value of the  pension  payable  to  the respondent  was refunded, the respondent should be paid  the full  value of the pension from the due date  including  the arrears pending the proceedings before the tribunal.      We propose to set out only a few facts: At the relevant time, the respondent was an Income Tax Officer posted at New Delhi.   On  March  13, 1989, a  memorandum  of  charges  or charge-sheet  was  served  on  the  respondent.   The  first article  of  charge was to the effect  that  the  respondent while functioning as an Income Tax Officer completed certain assessments in an irregular manner, designed to confer undue benefit  on  the  assessees  concerned.   The  statement  of imputations  for misconduct and misbehaviour  was  forwarded along with the charge-sheet.      The first case dealt with is that of Master Raju Sehgal Trust.   The assessment year in question was  1979-80.   The statement  of imputations is to the effect that the  private discretionary trust of the aforesaid name created on July 1, 1977,  by  one Shri Vinay Sehgal, the settlor, was  for  the benefit of the sole beneficiary, Master Raju Sehgal, younger brother of the                                                        367 settlor.   The trustees were the parents of the settlor  and the beneficiary, while the trust was created with corpus  of only  Rs. 1,000.  The trustees were given power  to  receive donations and gifts from relations, friends and so on.   The assessee-trust  filed  the first return of  income  for  the assessment year 1979-80 declaring their income nil.  In  the accounting year relevant to the assessment year 1979-80, the trust  claimed  having received donations amounting  to  Rs. 16,52,053.  The respondent completed the assessment on March 29, 1982 accepting the receipt of the aforesaid donations as genuine.    A  scrutiny  of  the  record  showed  that   179 certificates were produced by the assessee from the  alleged donors  showing  donations amounting  to  Rs.9,49,200.   The alleged  donors  were  mostly  from  Calcutta  whereas   the beneficiary,  the  trustees and the settlor  were  all  from Delhi.   Thus,  the bulk of the donations were made  by  the parties  in  a different city far away. A good part  of  the funds  of the trust was utilised by the trustees  and  other members  of  the Sehgal family, including  the  beneficiary. Details of such amounts have been given in the statement  of imputations.  Loans were also taken for substantial  amounts from the trust by members of the Sehgal family for which  no interest was charged.  Curiously enough, none of the  donors was ever assessed at an income exceeding Rs. 15,000 till the assessment  year  1982-83 and most of the donors  have  been assessed  to  incomes less than Rs. 10,000  each.   All  the donors  deposited  in their bank account cash equal  to  the amount  of  the gift a day or two before the  issue  of  the cheques towards making of the gift.  None of the donors  was related to the family of the beneficiary.  The statement  of imputations alleged that the trust was used apparently  only as  a  device for converting the unaccounted income  of  the Sehgal  family into an accounted income.  The allegation  is that  the  respondent  without making any  enquiry,  in  the assessment  order held that the donations made to the  trust were found to be genuine, rendering it difficult even to re-

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open  the  assessment of the trust for the  said  assessment year,  without  considering and determining  the  issues  in volved.   As per imputations, the order enabled  the  Sehgal family  to legalist their unaccounted income of over Rs.  16 lacs on which tax of Rs.10 lacs would have been payable.      The respondent filed an application before the tribunal for  setting  aside  this charge-sheet  and  prayed  for  an interim   relief  restraining  the  appellant  from   taking disciplinary  proceedings against him, pending  decision  of the  tribunal.  It is on this application that the  tribunal granted  interim relief by the order which is sought  to  be impugned before us.                                                        368      In   the   first  place,  cannot,   but   confess   out astonishment  at the impugned order passed by the  tribunal. In a case like this the tribunal, we feel, should have  been very   careful  before  granting  stay  in  a   disciplinary proceeding at an interlocutory stage.  The imputations  made against the respondent were extremely serious and the  facts alleged,  if proved, would have established  misconduct  and misbehaviour.  It is surprising that without even a  counter being  filed,  at  an interim stage,  the  tribunal  without giving  any  reasons  and  without  apparently   considering whether  the memorandum of charges deserved to  be  enquired into  or not, granted a stay of disciplinary proceedings  as it  has  done.   If the  disciplinary  proceedings  in  such serious  matters  are  stayed so  lightly  as  the  tribunal appears  to  have done, it would be extremely  difficult  to bring  any  wrong-doer  to book.   We  have,  therefore,  no hesitation  in  setting  aside the  impugned  order  of  the tribunal  and  we direct that the  disciplinary  proceedings against  the respondent in terms of the  charge-sheet  dated March 13, 1989 shall be proceeded with according to law.  In fact, we would suggest that disciplinary proceedings  should be proceeded with as early as possible and with utmost zeal.      It  was  urged  before us by learned  Counsel  for  the respondent that as the respondent was performing judicial or quasi-judicial functions in making the assessment orders  in question  even  if  his actions were  wrong  they  could  be corrected  in an appeal or in revision and  no  disciplinary proceedings could be taken regarding such actions.      In  our view, an argument that no  disciplinary  action can  be taken in regard to action taken or purported  to  be done in the course of judicial or quasi-judicial proceedings is  not  correct.   It  is true  that  when  an  officer  is performing judicial or quasi-judicial functions disciplinary proceedings  regarding any of his actions in the  course  of such  proceedings should be taken only after  great  caution and  a  close  scrutiny  of his  actions  and  only  if  the circumstances   so   warrant.   The   initiation   of   such proceedings,  it is true, is likely to shake the  confidence of  the public in the officer concerned and also if  lightly taken likely to undermine his independence.  Hence the  need for   extreme   care  and  caution  before   initiation   of disciplinary  proceedings  against  an  officer   performing judicial  or  quasi-judicial  functions in  respect  of  his actions  in  the  discharge or purported  to  discharge  his functions.  But it is not as if such action cannot be  taken at  all.  Where  the actions of  such  an  officer  indicate culpability,  namely, a desire to oblige himself  or  unduly favour one of the parties or an improper motive there is                                                        369 no reason why disciplinary action should not be taken.      Appellants  have  also  sought  to  impugne the   order relating  to the payment of pension, which we have  referred

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to earlier.  However, learned counsel for the appellants  is unable to point out any provision under which the payment of provisional  pension could be stopped pending  enquiry.   In the circumstances, we decline to interfere with that part of the order leaving it open to the appellants, if so  advised, to  make  an  application to the  tribunal  for  varying  or vacating the relief granted in connection with the pension.      Considering  all  the facts and  circumstances  of  the case,  we  direct  that  a copy  of  this  order  should  be forwarded  to  the Chairman of  the  Central  Administrative Tribunal so that he may consider whether further hearing  of the  application made by the respondent should be  proceeded with  by a bench presided over by him or a Bench other  than the  one  which  has passed the impugned order.  We  do  not intend to cast any aspersions on the members of the tribunal who  have passed the order, in the absence of more  concrete material.   But  we  certainly feel that in  the  facts  and circumstances  it  is desirable that the same Bench  of  the tribunal  should  not proceed with further  hearing  of  the application.      We  are  somewhat  surprised  that  in  a  disciplinary enquiry pertaining to serious charges which we have referred to earlier, the respondent was allowed to retire voluntarily under  Fundamental  Rule 56(k) by an order dated  March  28, 1989.  We do not know whether it was duly considered whether his application for voluntary retirement ought to have  been rejected in view of pending enquiry against him and in  view of  the  seriousness of the charges  levelled  against  him. However, nothing more can be done in that connection.      Finally, we direct that a copy of this order be sent to the  Chairman, Central Board of Direct Taxes,  Secretary  of the   Ministry   of  Finance  and   the   Finance   Minister respectively for such action as they deem fit.  The  appeals are allowed with no order as to costs.      We  may make it clear, in fairness to the   respondent, that  although we have made strong observations it  must  be remembered that they are in an appeal from an interim  order and  cannot be regarded as conclusive.  When the case is  to be finally heard by the tribunal it shall be decided on                                                        370 the  material  before  it on merits  according  to  law  and without being unduly guided by our observations.      Mr. Sanghi, learned counsel for the respondent,   urged that  the pending application of the respondent  before  the Tribunal it may be directed to be heard expeditiously.  That application may be made to the tribunal and we have no doubt that  the tribunal will give it due consideration  according to law.  It has further been pointed out by Mr. Sanghi  that as  the  allegations levelled against his  client  are  very serious, the relevant documents must be supplied and all the rules  of  fair play must be adhered to.  We have  no  doubt that this will be done by the tribunal. T.N.A.                                       Appeals allowed.                                                        371