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PETITIONER: M.S. BINDRA

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT:       01/09/1998

BENCH: S. SAGHIR AHMAD, K.T. THOMAS

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T THOMAS,J.      Appellant had  a steep  rise in the hierarchy of Indian Revenue  Service  and  was  held  in  great  esteem  by  his superiors until  the dawn of 1985 which market the beginning of  his  downfall.  he  suddenly  fell  from  grace  as  his integrity  was   eclipsed  by  the  dark  clouds  of  doubts entertained by  his superiors. Consequently at the age of 52 he was asked to quit the department by terming the action as "compulsory retirement".  If appellant’s stand is correct he would have  felt the  same way as Cardinal Thomas Wolsey had lamented four  centuries ago when his master Henry VIII king of England  suddenly stripped  him of  his high  office  and indicted him  to face  a trial.  "If I  had  served  God  as diligently as  I have done the King, He would not have given me over in my grey hairs".      On 9-10-1985, Government of India (Ministry of Finance) axed the  appellant down  by serving  an order of compulsory retirement. Though  he challenged  the order  before Central Administrative   Tribunal   (New   Delhi   Bench)   he   was unsuccessful. Hence  he has  filed this  appeal  by  special leave.      A resume  of facts which led to the said necking off is the following:      Appellant joined  Indian Revenue  Service in  the  year 1958 and  was absorbed  in the  Excise Department.  He has a quick rise  in the  ladder which  in 1980 reached him to the level of  Director Enforcement  and  in  1983  as  Appellate Collector of  Customs and  Excise since  he  earned  a  high standard of  reputation by  then as "a very good officer all round". As  he proved to be efficient and trustworthy he was entrusted with  the high  sensitive post of Director of Anti Evasion Wing  in 1984  which post  he held  till June  1985. During the  said period  a series  of raids was conducted by Anti Evasion  Squad headed  by the  appellant and a whopping sum of escaped excise duty was unearthed through such raids. This became  the subject  matter of extensive media coverage and praises were showered on the department for carrying out such daring  operation in  big business  houses and hoarding places. But  the above  raids became  the commencement  of a

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volte face in the official career of the appellant.      A Screening  committee which  considered the  cases  of several officials  of the  Revenue Department  found that in the interest  of the  department some  officials  should  be weeded out. On 9-4-1985, the committee delved into the files relating to  such persons including the appellant and in the case of  appellant they focussed on three specific instances which are the following: (1) Pursuant  to search  made in  the premises of M/s. Orkay Silk Mills  Ltd. adjudication proceedings were initiated and in the  end a  penalty and  fine of  Rs.10 crores  have been imposed on  the said  Mills. But  certain derelictions  were noted as against the appellant in the above operations. They are:      (a) The order of adjudication ran into nearly 100 pages      and it  was passed on the day following the last day of      the hearing.  It indicated  that the  order  must  have      already been  got ready  even before  the  hearing  was      complete.      (b) A  penalty  of  Rs.50  lakhs  was  imposed  on  the      proprietor of  the Mills  without issuing  a show cause      notice on him.      (c) Huge  sums of duty have been demanded in respect of      unaccounted production  in the  factory  without  fully      going through  the  claims  of  the  party  that  those      accounts were wastage claimed by him.      (2) Important cases relating to M/s. Golden Tobacco Co. were lying  unattended for a very long time and instructions were issued by the Deputy Director Shri Bhattacharjee to the units under  him to  keep further investigation in abeyance. The Screening  Committee held  that Shri Bhattacharjee would have given such instructions at the behest of the Director.      (3) One  Ashok Jain and his brother imported components of Honda  cars from  abroad and  assembled them  in India in violation of  Central Excise Laws. On 1-12-1984, officers of the Anti  Evasion Wing raided the premises  where those cars were  garaged  and  the  Jain  Brothers  were  subjected  to interrogation. They  were arrested  and produced  before the court.  When  they  were  released  on  bail  the  appellant persisted with the steps and moved for cancellation of their bail order.  In this  operation what  was viewed against the appellant was  that he  had demanded  Rs.10 lakhs  from Jain Brothers and  when it  was not paid he invigorated the steps against those two brothers.      The Screening  committee after  considering  the  files relating  to  the  aforesaid  three  instances  (which  were recorded in  a document market by the department as Annexure IV) reached the following conclusion:      "On the basis of the specific cases      and other  material at  Annexure IV      hereto,  he   is  found  to  be  of      unreliable integrity  and unfit  to      be entrusted  with any  position of      responsibility  in  the  Government      service  as   he  has   widely  and      systematically     indulged      in      extortion of money from the parties      and adopted  methods which have the      effect of  bringing down the esteem      of the  Government  in  the  public      eye."      The revenue  Committee upheld  the said  conclusion and thereafter Government  of India passed the order prematurely retiring the appellant.      Appellant made  a scathing attack against the aforesaid

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order mainly on three premises.      (1)  The   big  business  houses  whose  premises  were subjected to series of raids were so influenced as to spread canards about the appellant as part of a retaliatory measure against him.      (2) The  Screening Committee was actuated by mala fides as one  of its members (Shri M.L. Wadhawan) who was a member of Central  Board of Excise and Customs had been inimical to him on account of serious differences which can be discerned from a  file (number  of which  appellant has  cited in  the Special Leave Petition).      (3) The  conclusion made  against the  appellant by the Screening committee  is  perverse  in  the  sense  that  the material on  which that  conclusion was  reached could never have  afforded   scope  to  reach  such  conclusion  to  any reasonable person. In other words, there was utter dearth of evidence  for  the  Screening  committee  to  conclude  that appellant was a case of doubtful or unreliable integrity.      A two  Judge Bench  of this  Court has held in Union Of India vs.  Col. J.N.Sinha and ors. (1970 2 SCC 458) that "If the appropriate  authority forms  the requisite opinion bona fide its  opinion cannot  be challenged  before  the  courts though it  is open to an aggrieved party to contend that the requisite opinion has not been formed or that it is based on collateral grounds or that it is an arbitrary decision."      Approving the  above principle,  a three Judge Bench of this Court  has laid down in Baikuntha Nath Das and anr. vs. Chief District  medical Officer  and anr.  (1992 2  Scc 299) that five  principles should borne in mind while considering a  case  of  compulsory  premature  retirement.  It  is  not necessary to extract all the five principles here except No. (iii) which reads thus:      "Principles of natural justice have      no place in the context of an order      of compulsory retirement. This does      not mean  that judicial scrutiny is      excluded altogether. While the High      Court  or   this  Court  would  not      examine the  matter as an appellate      court, they  may interfere  if they      are satisfied  that  the  order  is      passed (a) mala fide or (b) that it      is based on no evidence or (c) that      it is arbitrary - in the sense that      no reasonable person would form the      requisite  opinion   on  the  given      material; in  short, if it is found      to be a perverse order."      This was  reiterated very  soon by  another three Judge Bench in  Posts and  Telegraphs Board  and ors.  vs.  C.S.N. Murthy (1992  2 SCC  317) in  which their  Lordships further added thus:      "An order  of compulsory retirement      is not an order of punishment. F.R.      56 (j) authorises the Government to      review the working of its employees      at  the  end  of  their  period  of      service referred  to therein and to      require the  servant to retire from      service if,  in its opinion, public      interest calls  for such  an order.      Whether the conduct of the employee      is  such   as  to  justify  such  a      conclusion  is  primarily  for  the      departmental authorities to decide.

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    The nature  of the  delinquency and      whether it  is of  such a degree as      to    require     the    compulsory      retirement  of   the  employee  are      primarily  for  the  Government  to      decide upon.  The courts  will  not      interfere with the exercise of this      power, if  arrived at bona fide and      on the  basis of material available      on the record."           (emphasis supplied)      Therefore, judicial  scrutiny  of  any  order  imposing premature compulsory  retirement is permissible if the order is either  arbitrary or  mala fide  or if  it is based on no evidence. The observation that principles of natural justice have no  place in  the context of compulsory retirement does not mean  that if  the version  of the delinquent officer is necessary to  reach the  correct conclusion  the same can be obviated on  the assumption  that other materials alone need be looked into.      In this  case, appellant made an endeavour to show that the order  is tainted by mala fides as one of the members of the Screening  Committee (M.L.  Wadhawan) had  some  axe  to grind against  him. But we are not persuaded to believe that merely because  appellant has  such a version against either that member or other members of the Screening Committee, the Committee would  have gone  against the appellant on account of that  reason. So  we repell  the contention  based on the allegation of mala fides      While  viewing  this  case  from  the  next  angle  for judicial scrutiny i.e. want of evidence or material to reach such a  conclusion, we  may add that want of any material is almost equivalent  to  the  next  situation  that  from  the available materials  no reasonable  man would  reach such  a conclusion. While  evaluating the  materials  the  authority should not  altogether ignore  the reputation  in which  the officer was held till recently.      The maxim  "Nemo Firut  Repente  Turpissimus"  (no  one becomes dishonest  all on a sudden) is not unexceptional but still it  is a  salutary guideline  to judge  human conduct, particularly  in   the  field  of  Administrative  Law.  The authorities should  not keep the eyes totally closed towards the overall  estimation in  which the delinquent officer was held in  the recent  past by  those who were supervising him earlier. To  dunk an  officer into  the puddle  of "doubtful integrity" it is not enough that the doubt fringes on a mere hunch. That  doubt should  be of  such  a  nature  as  would reasonably and  consciously be entertainable by a reasonable man on  the  given  material.  Mere  possibility  is  hardly sufficient to assume that it would have happened. There must be preponderance  of probability  for the  reasonable man to entertain doubt  regarding that possibility. Only then there is justification  to ram an officer with the label "doubtful integrity".      Here, out of the three instances on which the Screening committee relied  to dub  the officer as a case of "doubtful integrity" the  first is  his action against M/s. Orkay Silk Mills. The  fact is that it was the appellant who headed the operation. A  task  which  unearthed  such  a  huge  sum  of concealed excise  duty would normally evoke appreciation for his work.  But what  was noted against him in that affair is that  he  willfully  created  lacunae  in  the  confiscation proceedings for  providing an escape route to the defaulter. One is that the confiscation order contains nearly 100 pages and the  period was  too short  for preparing such an order.

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What is  the inference  to  be  drawn?  Normally  it  is  an achievement that  an order of 100 pages was made during such a short period. So what is then to be thought of against it? Is it  that he  would have taken too much pain to finish his work or  is it that he would have caused it to be written by somebody else?  Is there  not a  clear possibility  that the officer hearing the adjudication case for several days would have prepared  its prefatory portion as well as statement of evidence during  the days when arguments were proceeding and before conclusion  of the  hearing, leaving  out the crucial discussion to  be dictated  after conclusion of the hearing? That is  not an objectionable course. If so, the achievement in preparing  an order  of confiscation  within such a short span should not have been frowned at, instead there is scope to pay admiration fro its promptitude.      Another lacuna  is that  he imposed  a huge penalty and fine without issuing a show cause notice. To say that he did it  for  helping  the  defaulter  is  too  far-fetched.  The appellate authority which may be persuaded to set aside such an order  on that  ground could as well direct the authority to pass  a fresh  order after issuing the show cause notice. So it  is unreasonable  to   conclude that the imposition of penalty was  made calculatedly  to  have  it  upset  by  the superior authority.      We feel  that the  two lacunae  ferretted out  from the proceedings relating  to M/s.  Orkay Silk  Mills are grossly insufficient to  reach  a  conclusion  that  the  delinquent officer was trying to help the defaulting manufacturer.      In the  second instance  concerning the  file  of  M/s. Indian  Tobacco  Company  the  inference  made  against  the defaulter is  too tenuous.  The minimum  thing which  should have been done was to ascertain from Shri Bhattacharjee, the Deputy Director,  the circumstances under which instructions were issued  by him  to keep  the investigation in abeyance. Attributing a sinister motive to the appellant for what Shri Bhattacharjee  had   done  was   seemingly  unfair,  without adopting such a minimum precaution.      The third is the case relating to import of spare parts which the  Jain Brothers assembled for making Honda cars. In that case the ostensible role of the appellant was to detect the offence  through investigation  and then to follow it up seriously,  When   the  defaulters  were  granted  bail  the appellant moved  for cancellation  of the  bail it  is prima facie a  point in  favour of  the  appellant’s  tenacity  to pursue the  steps adopted.  Thus far  the role played by the appellant was that of a dutiful and efficient officer of the department. But  the reason  for the  Screening committee to doubt the  integrity of  the appellant in the aforesaid case is that  the Jain  Brothers have alleged that one Mr. Kapoor told them  that appellant was to be paid Rs.10 lakhs to save them from the proceedings.      We perused the statement of Jains. They never said that appellant made  the above  demand to  them at  any time. The only material  before the  Screening committee  was that the two accused  had  stated  that  Kapoor  gave  them  such  an impression. It  must be noted that nobody had checked up the truth of  it with  the person to whom it was attributed. The most unfortunate  feature is  that nobody  has checked it up even with  Mr. Kapoor  who is alleged to have told like that to the  Jain Brothers.  If integrity of senior officers, who established unblemished reputation and earned encomiums from all concerned till then, is proclaimed as doubtful merely on the strength  of statements  of persons  prosecuted by  such officers, what  is the  safety of such officers more so when they have  to embark  on hazardous  operations risking their

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lives against big business houses.      Shri N.N. Goswami, Senior Advocate arguing for Union of India  submitted   to  us  that  members  of  the  Screening Committee  are   very  reputed   persons  and   hence  their conclusion must  be given  full weight. It is not a question of doubting  the calibre  of the  members of  the  Screening committee. While declining to agree with their conclusion no particle of  mud is  slung on  any member  of the  Screening committee. Even  if such a conclusion was made by a judicial personage the  higher court which overrules it does not cast any stigma on the judicial officer concerned.      We have no doubt that there is utter dearth of evidence for the  Screening committee  to conclude that appellant had doubtful  integrity.   Such  a  conclusion  does  not  stand judicial scrutiny even within the limited permissible scope. We, therefore,  allow this  appeal and  set aside  the order under  attack   including  the   order  by  which  premature compulsory retirement  was imposed  on  the  appellant.  The department concerned  shall now  work out  the reliefs to be granted to the appellant as sequel to this judgment.