12 April 1996
Supreme Court


Bench: AGRAWAL,S.C. (J)
Case number: C.A. No.-003806-003806 / 1992
Diary number: 79060 / 1992






DATE OF JUDGMENT:       12/04/1996


CITATION:  1996 AIR 1738            1996 SCC  (3) 672  JT 1996 (5)   193        1996 SCALE  (3)519



JUDGMENT:                       J U D G M E N T S.C. AGRAWAL. J.:      This appeal  by special  leave is  directed against the judgment of  the Central Administrative Tribunal, Chandigarh Bench, (hereinafter  referred to  as ’the  Tribunal’)  dated January 31,  1992 in  O.A. No.  668 P.B./1987  filed by  the respondent wherein  he had  challenged the  validity of  the order of compulsory retirement dated January 28, 1987 passed under Fundamental  Rule 56(j).  The said order of compulsory retirement has  been quashed by the Tribunal by the impugned judgment .      The respondent  was practising  as an  advocate in  the High Court  of Punjab  and  Haryana.  He  was  appointed  on probation as  a Judicial  Member of the Income Tax Appellate Tribunal (for  short ’ITAT’)  by order  dated  February  25, 1978. The period of probation was two years. The said period of probation  was, however,  extended from  time to time and the respondent  continued on  probation till March 31, 1985. By order  dated May  24, 1985  the respondent  was deemed to have completed  his period  of probation  satisfactorily  on March 31, 1985. By order dated June 3, 1985 he was confirmed in the  post of Member, ITAT with effect from April 1, 1985. As  member   of  the  ITAT  the  respondent  was  posted  at Allahabad, Bombay,  Madras,  Ahmedabad  and  Amritsar.  Ever since his  appointment as  a member  of the  ITAT complaints were  being   received  against   the  respondent  from  his colleagues, staff  of the ITAT and members of the Bar. There was an  adverse entry in the Annual Confidential Report (for short ‘ACR’)  of the  respondent  for  the  year  1983.  The respondent  submitted  a  representation  against  the  said adverse remarks  which came  up for consideration before the Appointments Committee  of the  Cabinet (for  short  ‘ACC’). While rejecting  the said  representation the  ACC  observed that the  respondent had  completed the  age of 55 years and that this  was a  fit case  for the  competent authority  to



consider whether  action for  his premature  retirement from service  should  be  initiated.  Before  initiating  further action against  him the  respondent was called for a hearing by the  Minister for Law and Justice on November 5, 1986. In the meanwhile, a complaint was received from the wife of the respondent about  his having  deserted her  and  his  openly living with  another lady.  In the  ACR for  the year ending December  31,  1985,  there  were  adverse  remarks  by  the Reporting Officer  with  which  the  Reviewing  Officer  had agreed.  When  he  met  the  Law  Minister,  the  respondent admitted that  he was living with a lady and stated that she was cooking  for him and that he had to live with her as his wife and  children had  left him.  Since the Ministry of Law and Justice  was the  cadre controlling  authority, the  Law Secretary to  the Government  of India,  vide his note dated December 22,  1986,  submitted  his  recommendation  to  the Cabinet Secretary  for  the  compulsory  retirement  of  the respondent. The  Cabinet Secretary  placed the matter before the ACC  with his  recommendation and  the ACC  approved the premature retirement  of the  respondent under  FR 56(j) and thereupon the  order  dated  January  28,  1987  was  passed whereby    the  respondent  was  compulsorily  retired  from service. the  respondent filed  an  application  before  the Tribunal  challenging   the   said   order   of   compulsory retirement.  The   said  application  was  followed  by  the Tribunal  by   the  impugned   judgment  and  the  order  of compulsory retirement has been quashed. Hence this appeal .      One of  the contentions  urged before  the Tribunal  on behalf  of   the  respondent  was  that  FR  56(j)  was  not applicable to  members of  the ITAT  in view  Rule 11 of the Income  Tax  Appellate  Tribunal  Members  (Recruitment  and Conditions of  Service) Rules, 1963 (hereinafter referred to as ‘the Rules’) whereby the age of retirement of a member of the ITAT  has been  fixed at  62 years  and  it  is  further provided that  the date of compulsory retirement of a member would be  the date  of his attaining the age of 62 years and not the  last date  of the  month as  in the  case of  other Government servants.  It was submitted that since a specific provision has  been made in Rule 11 of the Rules with regard to retirement  of the  members of  the ITAT  and no  express provision  is   contained  in   the  Rules   for   premature retirement, the respondent could not be retired prior to his attaining the  age of  62 years under FR 56(j). The Tribunal has rejected  the said  contention of the respondent in view of Rule  13 of  the Rules  where  in  it  is  provided  that conditions of  service of a member in respect of matters for which no provision is made in the Rules shall be the same as may, for the time being, be applicable to other employees of the Government  of India  of  a  corresponding  status.  The Tribunal  has   held  that  Rule  11,  whereby  the  age  of retirement is  prescribed at  62  years,  only  provides  an exception to  the general rule and could not be construed to mean  that  it  completely  substitutes  or  supersedes  the provisions of  FR 56.  The Tribunal  has also  rejected  the contention urged  on  behalf  of  the  respondent  that  the impugned order  of compulsory retirement was penal in nature since the respondent has been retired before he completed 10 years of  qualifying service which would have enabled him to draw pensionary  benefits. The Tribunal has held that in the matter of  pensionary benefits after retirement the position has to  be adjudged as per the existing rules on the subject on the  relevant date of retirement/premature retirement and that the  respondent having  put in  nearly  nine  years  of service on  the date  of his  premature retirement  has been paid service gratuity as admissible to him. The Tribunal has



set aside  the order of compulsory retirement for the reason that the  adverse material  against the  respondent prior to April  1,   1985,  the   date  with  effect  from  which  he wasconfirmed on  the post of member of the ITAT , has to be disregarded and after excluding the same, there was only one adverse entry  relating to  the year  1985 against which the respondent had  submitted a representation. The Tribunal was also of  the view  that the  respondent  had  submitted  his explanation vide  his letter  dated January  20, 1987 to the complaint sent  by his  wife and  that the  services of  the respondent were  terminated by  order dated January 28, 1987 before this  explanation reached  the concerned  quarters or was taken  into consideration.  The Tribunal  has also  held that in  the matter  of  passing  the  order  of  compulsory retirement safeguards  contained in the guidelines laid down in OM  dated January  5, 1978  were not followed inasmuch as the proposal  was initiated  by the  Law Minister,  on whose direction a  note was  submitted by the Law Secretary to the Cabinet Secretary  and that  the Cabinet  Secretary had  not made the  recommendation direct  to the  ACC.  The  Tribunal further held  that there  was non  compliance with  the said guidelines  also   in  the   matter  of   consideration   of representation submitted by the respondent against the order of compulsory  retirement inasmuch  as under  the guidelines the representation  was required  to be  considered  by  the Senior Selection  Board and  it  is  required  to  make  its recommendations to  the ACC  for taking  final decision  and that, in  the present  case, the representation submitted by the respondent  was examined only in the Ministry of Law and Justice and  the matter  was submitted  directly to  the ACC without it being considered by the Senior Selection Board.      FR 56(j), as it stood at the relevant time, provided as follows :-      "FR   56(j)    :    Notwithstanding      anything contained  in  this  rule,      the appropriate authority shall be,      if it  is of the opinion that it is      in the  public interest  so to  do,      have the  absolute right  to retire      any Government  servant  by  giving      him notice  of not  less than three      months’ in  writing or three months      pay and  allowances in lieu of such      notice.           (i) if  he is  in Class  I  or           Class II  service or  post and           had entered Government service           before attaining  the  age  of           thirty-five  years,  after  he           has attained  the age of fifty           years.           (ii) in  any other  case after           he has  attained  the  age  of           fifty-five years;           Provided that  nothing in this      clause shall  apply to a Government      servant referred  to in  clause (a)      who entered    Government   service      on or before 23rd July, 1966."      The respondent  was appointed  as member  of  the  ITAT after he  had attained  the age of thirty five years. Action for his  compulsory retirement under FR 56(j) could be taken on his  attaining the  age of  fifty five years. The date of birth of  the respondent being June 8, 1931, he had attained the age  of 55  years on  June 8,  1986. The  order for  his



compulsory retirement  was passed  on January 28, 1987 after he had attained the age of fifty five years.      By OM  dated January  5, 1978  instructions  have  been issued for guidance of the authorities concerned with regard to  exercise  of  power  to  retire  a  Government  employee prematurely under  FR 56(j).  The said instructions envisage review of  the case of the employee covered by FR 56(j) by a Review Committee and the appropriate authority takes further action on  the recommendation  of the  Review Committee. The said  instructions   also  provide   for  submission   of  a representation by  the  government  employee  who  has  been served with  a  notice/order  of  premature  retirement  and consideration of the said representation by a committee. The provision with regard to composition of the Review Committee and the  Representation Committee  are contained in Appendix II to  the said  office memorandum.  In respect  of  various categories  of  officers  holding  Gazetted  posts,  initial appointment to  which is referable to the ACC, the following provision is  made with  regard to  the composition  of  the Review Committee :      "The  Senior   Selection  Board  in      respect of  officers in the rank of      Joint Secretary  or  equivalent  or      the Central  Establishment Board in      respect of  officers above the rank      of Under  Secretary, but  below the      rank   of    Joint   Secretary   or      equivalent as the case may be, will      make its recommendations which will      be placed  before the  Appointments      Committee  of   the   Cabinet   for      orders. In  respect of  officers of      the rank  of Additional  Secretary,      Special Secretary  and Secretary to      the Government  of  India.  Cabinet      Secretary     will     make     his      recommendation  directly   to   the      Appointments  Committee   of   the,      Cabinet for orders.      X        X        X      X      X"      A member  of the  ITAT is  an officer  of the  rank  of Additional Secretary  and in  his Case the Cabinet Secretary is required  to make  his recommendation directly to the ACC for orders.      In  the   present  case,  the  proposal  for  premature retirement of  the respondent  was initiated in the Ministry of Law  and Justice,  the  concerned  ministry,  and  before initiating the  proposal the  respondent was given a hearing by the  Law Minister  on November  5, 1986  as  regards  the various  complaints  that  had  been  received  against  the respondent with regard to his performance as a member of the ITAT as  well as the complaint sent by his wife. Thereafter, the  recommendation   for  compulsory   retirement  of   the respondent was  sent by  the Law  Secretary to  the  Cabinet Secretary and  the Cabinet  Secretary placed  the matter for consideration before  the ACC  with his  recommendation. The proposal was  accepted by  the ACC  and thereafter the order for compulsory  retirement of  the respondent was passed. We are unable  to hold  that there  was non compliance with the guidelines laid down in OM dated January 5, 1978 inasmuch as the proposal  was initiated  by  the  Ministry  of  Law  and Justice  end   not  by  the  Cabinet  Secretary.  Since  the respondent as  functioning under  the Ministry  of  Law  and Justice and  his record of service was kept in that ministry it was  the said  Ministry alone  that  could  initiate  the



proposal for  premature retirement  of the  respondent.  The matter could  reach the  Cabinet Secretary  only  after  the proposal was  initiated by  the Ministry of Law and Justice. It is  difficult to  appreciate how the Cabinet Secretary in the absence  of the  proposal from  the Ministry  of Law and Justice could  have sent  his recommendation  to the ACC. It cannot, therefore,  be said  that there  was  non-compliance with the  instructions laid  down in the OM dated January 5, 1978 in  the matter of submission of recommendations for the compulsory retirement  of the  respondent before  A.C.C. and the order  of compulsory  retirement cannot  be held  to  be vitiated on that account.      As  regards   the  composition  of  the  Representation Committee, the following provision is made in Appendix II to OM dated January 5, 1978 :      "The Senior  Selection Board  shall      make  its  recommendations  to  the      Appointments   Committee   of   the      Cabinet  for   orders.   For   this      purpose, the representations of the      officers concerned  may be  sent by      the Cadre  Controlling Authority or      the                  Administrative      Ministry/Department to  the  Office      of the establishment Officer in the      Department of Personnel B.A.R."      In view  of the  said provision,  the Tribunal has held that it  was necessary  that the  representation should have been considered  by the  Senior Selection Board and the said Board should  have  sent  the  same  to  the  ACC  with  its recommendations. In taking this view the Tribunal has failed to note  that the Senior Selection Board has no role to play at the stage of review in respect of officers of The rank of Additional Secretary, Special Secretary and Secretary to the Government of  India and  in respect of these officers it is the Cabinet Secretary who has been constituted as the Review Committee and  who makes his recommendation directly to ACC. It would  be anomalous that though at the stage of review it is the  Cabinet-Secretary who  has to  consider and make its recommendation directly  to the ACC he should be excluded at the stage  of consideration  of the  representation and  the Senior Selection  Board which  had no  role to  play at  the stage of  review should  be entrusted  with consideration of representation   in respect  of  officers  of  the  rank  of Additional Secretary, Special Secretary and Secretary to the Government. This  anomaly would  be avoided if the provision regarding composition  of Representation Committee contained in Appendix  II to  OM dated January 5, 1978 is construed as applicable in  respect of  officers upto  the rank  of Joint Secretary to  the Government  and in  respect of officers of the rank  of Additional  Secretary,  Special  Secretary  and Secretary to the Government, the authority competent to deal with the  representation and  to make  the recommendation to the ACC  is the  Cabinet Secretary  who had  considered  the matter of  compulsory retirement  at the stage of review. On that  view   of  the   matter;  the  representation  of  the respondent against  the order  for his compulsory retirement was required to be dealt with by the ACC on the basis of the recommendation of  the Cabinet  Secretary  and  it  was  not necessary  to   refer  the   representation  to  the  Senior Selection Board.  This was done in the instant case inasmuch as  the  representation  submitted  by  the  respondent  was forwarded to  the ACC  by the  Cabinet  Secretary  with  his recommendations. There  was, therefore,  no infirmity in the consideration  of   the  representation   submitted  by  the



respondent against the order for his compulsory retirement.      Assailing  the   finding  of   the  Tribunal  regarding sufficiency of  material to justify the passing of the under of compulsory  retirement.  Shri  V.R.  Reddy,  the  learned Additional Solicitor  General, has  pointed  out  that  ever since the  appointment of  the respondent as Judicial Member of the  ITAT there were complaints against him on account of which he  was transferred  to various places but in spite of transfer the  complaints continued.  It was  submitted  that although his  performance was  not found  satisfactory but a lenient view was taken and his probation period was extended from time  to time  and, at the same time, he was advised to improve his behaviuor and that after granting six extensions in the  period of  probation the  respondent was  ultimately confirmed on the post of member of the ITAT with effect from April 1,  1985 by  order dated  June 3,  1985.  The  learned Additional  Solicitor   General  has  submitted  that  while issuing the  order of  confirmation, a  separate  letter  of admonition dated  May 29,  1985 was  addressed  by  the  Law Secretary to the Government of India to the respondent which reads as under :      "Dear Shri Dhillon,           I am  glad to  inform you that      the competent authority has decided      to confirm  you as  Judicial Member      of   the   Income   Tax   Appellate      Tribunal with  effect from 1.4.1985      and a  copy of  the order  in  this      regard is  enclosed.  However,  the      competent   authority    has   also      decided   that    you   should   be      confirmed with proper admonition. I      have been  directed to  convey that      you   are    warned   that   strict      disciplinary action  will be  taken      against you  in  case  you  do  not      function  judiciously   with   your      colleagues or Members of the Bar.      2. Please acknowledge receipt.         With regards,                         Yours sincerely,                               sd/-                          (B.S. Sekhon)"      The letter  contained the following note by way of post script :      "P.S.   I    have    marked    this      communication as personal to you so      as    to     avoid    any    likely      embarrassment if it were to be sent      through    the    usual    official      channel."      The representation  submitted by the respondent against the  said   letter   of   admonition   was   rejected   vide communication dated January 13, 1986.      After his  confirmation as  member  of  the  ITAT,  the following remarks  were made by the Reporting Office. in the ACR for the year ending on December 31, 1985 :      "While  his   relations  with   the      senior colleague  Shri P.K.  Mehta,      seemed  to   be  satisfactory,  the      members  of   the   Bar   and   the      Authorised Representatives  of  the      Department are not very happy...."      "I consider  that Shri  Dhillon has      shown some  improvement, though  he



    continues to exhibit rigid attitude      at times  both as  regards judicial      and administrative work."      "Quality of orders average."      The Reviewing  Officer agreed  with the said assessment made by the Reporting Officer.      The wife  of the  respondent made a complaint about the character and  conduct of the respondent and his living with another lady  without marriage.  The respondent  was given a personal hearing by the Law Minister and he did not deny the fact that he was living with another lady.      Keeping in  view the  circumstances  attendant  to  his confirmation as  member of  the ITAT with effect: from April 1, 1985. we are unable to agree with tie Tribunal that after such confirmation the adverse material on the record for the period prior  to April 1, 1985 should be disregarded. In our opinion,  the   entire  service  record  of  the  respondent including the  record for  the period prior to April 1, 1985 had to  be  taken  into  consideration  by  the  appropriate authority. The service record of the respondent shows (i) There  were complaints  about  his  behaviour  from  the members of  the Bar  and his colleagues and the staff in the ITAT and  his confirmation  as member was delayed till April 1, 1985  and he  was given  six extensions  in the period of probation. (ii) The remarks in the ACR of the year December 31 December 1985 show  that there  was no Government in his behaviour as well as his performance. (iii) There was complaint about his conduct by his wife that he was  living with another lady which fact Was not disputed by him  when he  was given  a hearing by the Law Minister on November 5, 1986.      Having  regard   to  these  circumstances,  it  is  not possible to  say that  there was  no sufficient material for the appropriate authority to form the requisite opinion that further retention  of the  respondent in  service was not in public interest.      Shri Ujagar Singh, the learned senior counsel appearing for the  respondent, has submitted that since the respondent was compulsorily  retired before  he completed  10 years  of qualifying  service,  the  order  of  compulsory  retirement should be  held to  be an order of punishment. We are unable to agree.  Under FR  56(j) an  officer could be compulsorily retired on attaining the age of 50 years if he was appointed before he  completed the  age of 35 years and an officer who was appointed after attaining the age of 35 could be retired on completing  the age  of  55  years.  The  respondent  was appointed as  a member of the ITAT after he had attained the age of  35 years  and in  his case  the power  of compulsory retirement could  be invoked  after he attained the  age the age of  55 years. Admittedly the respondent had attained the age of  55 years  when the order dated January 28, 1987 with regard to his compulsory retirement was passed. The decision Gurudev Singh  Sidhu v. State of Punjab & Anr., 1964 (7) SCR 587, on  which reliance has been placed by Shri Ujagar Singh has no  application in  the present  case because in Gurudev Singh Sidhu  (supra) this  Court has struck down Article 9.1 of  the   Pepsu  Services   Regulation  which  provided  for compulsory retirement  of  a  Government  servant  after  he completed 10  yedrs of  qualifying service  on the view that termination of  the service  of a  permanent public  servant under such a rule, though called compulsory retirement, was, in  substance.   removal  under   Article  311(2)   of   the Constitution. The  provision contained in FR 55(j) cannot be equated with  aforementioned provision in Article 9.1 of the



Pepsu Services Regulation because it provides for compulsory retirement at  the age  of 50  or 55  years and it cannot be said that  it does  not provide for a reasonable long period of service. Merely because the period of service rendered by the respondent  was less  than 10 years, which is the period of qualifying  service  required  for  grant  of  pensionary benefits, it cannot be said that the order dated January 28, 1986 was  an order of removal of service and not an order of compulsory retirement.      For the reasons aforementioned, we are unable to uphold the judgment  of  the  Tribunal  quashing  the  order  dated January 28,  1987 regarding  compulsory  retirement  of  the respondent and  the appeal has to be allowed.      By order  dated September  14, 1992,  this Court, while staying the operation of the impugned order of the Tribunal, directed the  appellant to  deposit the salary including the arrears due  to respondent in the Tribunal within four weeks from the  date of the said order and it was further directed that the respondent would be at liberty to withdraw the same on his  giving personal  undertaking to return the same when called upon  to do so and further giving sufficient security to the  satisfaction of the Registrar of the Tribunal. It is directed that  in case  the  respondent  has  withdrawn  the amount as  per the  directions contained  in the order dated September 14,  1992, he  would return  the same  as per  his personal undertaking in terms of the said order.      In the  result, the  appeal is  allowed,  the  impugned judgment of the Tribunal dated January 31, 1992 is set aside and OA No. 668 PB/1987 filed by the respondent is dismissed. But in the circumstances there is no order as to costs.