TMI Blog2014 (5) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly recorded. However, there is no independent requirement - either statutory or constitutional - to consider seniority - Even independently, given the array of responsibilities assumed by the Vice-President of the ITAT, the importance of merit cannot be downplayed in any manner - there was no comparison chart prepared by the Selection Committee, nor was any material other than the ACRs before it, the ACRs - as it appears from the record - constituted the only basis on which the decision was made – Thus, the ACR grading was important - The ACR remarks for the five years preceding the selection process indicate that Mr.Tolani had five ‘Very Good’ remarks, Mr. Yadav had one ‘Very Good’ and four ‘Good’ remarks. The Selection Committee was not bound by the ACRs, it adopted some other consideration in the absence of any material - The Selection Committee could have adopted the view that the petitioners were not merited, if it formed the opinion on the basis of other material present before it, as for example, sample judgments of the members, their disposal rates, cases turned on appeal etc. - If such a course had been followed, the assessment of the Selection Committee would lie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - - Dated:- 23-5-2014 - MR. S. RAVINDRA BHAT AND MR. NAJMI WAZIRI, JJ. For the Appellant : Sh. M.S. Singhvi, Sr. Advocate with Sh. K.K.L. Gautam and Sh. Suresh. P. Tolani, Advocates, Sh. Vinay Kumar Garg, Sh. Vivek Sharma and Sh. Neeraj Kumar Sharma, Advocates. For the Respondent : Sh. B.V. Niren and Sh. P. Jain, Advocates, Ms. Rekha Palli with Sh. Hemant , Gupta, Advocates JUDGEMENT Per: S Ravindra Bhat: 1. The present judgment disposes two writ petitions which impugn the order of the Central Administrative Tribunal ( CAT ) dated 28.10.2010, dismissing OA No. 2839/2009 and OA No. 526/2010. The challenge in both the Original Applications stems from the selection process for three posts of the Vice-President of the Income Tax Appellate Tribunal ( ITAT ), in which both Petitioners were not selected. 2. Briefly, the facts in this case are that the petitioner in WP(C) 8369/2010, (referred to as Tolani ) was selected as a Judicial Member of the ITAT on 9.2.1998 and Mr. S.K. Yadav (hereafter Yadav ) was selected on 21.3.1998 (after undergoing a two years probationary period from 21.3.1996). The grievance in both cases arises from an order of the Central Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and terms as to the selection, which was not open to it. It was argued that in terms of Rule 13 of the Service Rules, the seniority-cum-merit method bond the Selection Committee, and as such, supersession was impermissible. Rule 13 provides that: [t]he conditions of service of a member in respect of matters for which no provision is made in these rules shall be the same as may be for the time being applicable to other employees of the Govt. of India of a corresponding status , 6. It was lastly argued that the Selection Committee did not prepare any chart of comparison between the various members being considered for the post of Vice-President, and as no other material was available before the Selection Committee except for the ACRs (which, the petitioners claim record their diligence and excellence in service), the decision-making process is liable to be interfered with. 7. The CAT rejected all three grounds. On the first ground, the CAT held that the observations in its earlier decision, in G.E. Veerabhadrappa v. Union of India, OA No. 463/2009, to the effect that the appointment to the post of Vice-President was by way of direct recruitment was obiter, and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible and in the zone of consideration and that only seniority would matter, Even if the selection committee was to note that the pay scales of Members and Vice-President, ITAT have been bracketed and for that purpose necessary amendment in the rules had been carried out, the same also would have made no difference in the matter of selection of those who were under consideration. It would be seen that Accountant Member, Judicial Member, Vice-President and President have been separately defined under rule 2 of the Rules of 1963. The eligibility criteria for appointment on the post of Member - Judicial or Accountant, is separately prescribed under rule 3. XXXXX XXXXX XXXXX The mere fact that the pay scale of Member and Vice- President has been bracketed would not make the post of Member equivalent to that of Vice-President and there would be no question in teeth of the rules as mentioned above for a senior Member to be automatically appointed as Vice-President. Even the senior most Member has to go through a process of selection as envisaged under rule 7C. It is in consideration of the provisions of the rules that we have said hereinbefore that the mere fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he may come within the zone of consideration but not an automatic right of selection or promotion, as the case may be. 10. Finally, on the last ground, the CAT relied on the decision of the Supreme Court in National Institute of Mental Health and Neuro Sciences v. Dr. K. Kalyana Raman Ors., AIR 1992 SC 1806, to the effect that the function of the Selection Committee is neither judicial nor adjudicatory. It is purely administrative There is no rule or regulation brought to our notice requiring the Selection Committee to record reasons. and held that: the mere fact that the selection committee did not prepare any chart or sheet of comparison regarding performance of Members would not mean that comparative merit was not considered by the selection committee. It is absolutely inherent in the method of selection that the respective merit of all the Members would have been considered. There was no requirement at all to make a mention of the respective merits of the Members under consideration for appointment on the post of Vice-President, Mention of comparative merit may: not have been made, and it appears to us was rightly not made, as that would be rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rules by ignoring the recruitment rules possessing a statutory flavour. 13. Learned counsels argued that the decision of the CAT that there was no requirement to mention the reasons for not choosing the petitioners herein was erroneous, because even though the Selection Committee is an administrative body, it is bound by the rule of law and thus, must provide justification for its decisions. Further, learned counsels argue that the limited consideration of the ACRs, and no other material, is an extremely selective and restricted manner of taking decisions. Relying on the decisions of the Supreme Court in, learned cou Guman Singh v. State of Rajasthan, (1971) 2 SCC 452, and N. Suresh Nathan v. Union of India and Ors., (2010) 5 SCC 692 nsels argued that merit constitutes the sum total of various qualities and attributes, including past performance and other relevant factors, which cannot all lie within the limited content of the ACRs placed before the Selection Committee. Moreover, it was argued that even in a selection based on merit, the Selection Committee is nonetheless obligated to consider seniority of the candidates, which remains an important factor in such decisions. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Central Government officers in its service. However, in respect of matters of procedure such as the number of officers to be considered for selection, the silence in the Rules meant that by reason of Rule 13, the Office Memorandum, to the extent it provided for the zone of consideration from amongst those to be considered, was applicable. 17. It was argued that the Selection Committee had the right to decide what ought to be the criteria to judge merit. Though the committee had the benefit of the ACRs, the experience of the Chairman, a sitting Supreme Court judge, with knowledge of taxation laws and rulings of courts throughout the country, as well as the knowledge and input provided by the President, who had occasion to interact with the candidates routinely and therefore in a position to assess whoever was most suitable to be appointed. The ASG emphasised that since the position or post involved was essentially judicial, the collective experience of the Chairman and the President, ITAT was sufficient in the circumstances. It was emphasized that the petitioners could only claim a right to be considered and not an overriding entitlement, solely based on their ACR gradings t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atters for which no provision is made in these rules shall be same as may for the time being be applicable to other employees of the Govt. of India of a responding status. 21. The Service Rules apart, pay scales of ITAT members underwent a change since the coming in force of the Rules. At the time the two petitioners were appointed a judicial members, the existing pay scale was Rs. 22,400-26,000. The post of Vice-President at the time was in the pay scale of Rs. 24,050-26,000 and thus, hierarchically superior to that of accountant and judicial members. Subsequently, after the recommendation of the 6th CPC, the Government of India abolished the different between the pay scales of members and Vice-Presidents, by merging both the scales in the new pay band/scale of Rs. 75,000- with annual increment of 3%-i.e. Rs. 80,000. Thus, after the implementation of the recommendations of the 6th CPC, there is pay parity as between the post of member and Vice- President. 22. The question that arises before the Court, therefore, is whether the manner of selection, including the decision-making process adopted by the Selection Committee, is consistent with the terms of the Service Rules, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as placed before the Selection Committee, which comprised - as per Rule 7C - a sitting Supreme Court judge nominated by the Chief Justice of India (Justice S.H. Kapadia), the President of the ITAT (Mr.Vimal Gandhi), and the Secretary, Ministry of Law and Justice (Department of Legal Affairs) (Mr. T.K. Vishwanathan). The Selection Committee met on 7.2.2009, 5.9.2009 and 9.9.2009, for considering appointment to the post of Vice- President, and indicated the selection of five members. Amongst the 14 members, Mr. SK Yadav was at Serial No. 5, and Mr. R.P. Tolani at Sr. No. 6, in terms of the seniority. 4 of the 5 members chosen for the post of Vice-President were ranked below in the seniority list, at Serial Nos. 8, 10, 12 and 14). 27. It is important at this stage, to consider the minutes of the Selection Committee meeting, which provide an insight into the decision-making process. On 9.9.2009, the operative meeting of the Selection Committee, the minutes recorded as follows: The Committee examined the character rolls of the following members of the Tribunal The above Officers have been reported to be free from Vigilance angle by the Department of Legal Affairs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B. V. Sivaiah Ors. v K. Addanki Babu Ors. 1998 (6) SCC 720: The principle of 'merit-cum-seniority' lays greater emphasis on merit and ability and seniority plays a less significant role. Seniority is to be given weight only when merit and ability are approximately equal. In the context of Rule 5(2) of the Indian Administrative Service/Indian Police Service (Appointment by promotion) Regulations, 1955 which prescribed that selection for inclusion in such list shall be based on merit and suitability in all respects with due regard to seniority Mathew. J. in Union of India v. Mohan Lal Capoor Ors., 1974 (1) SCR 797, has said :- .... for inclusion in the list, merit and suitability in all respects should be the governing consideration and that seniority should play a secondary role. It is only when merit and suitability are roughly equal that seniority will be a determining factor, or if it is not fairly possible to make an assessment inter se of the merit and suitability of two eligible candidates and come to a firm conclusion, seniority would tilt the scale. Similarly, Beg J. (as the learned Chief Justice then was) has said :- Thus, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision-making process is not disputed in this case, nor can it be questioned. 33. It is also undisputed - as a matter of fact - that the Selection Committee did not conduct interviews or meet the candidates at any point in the selection process, nor were orders written by the candidates in their capacity as members of the ITAT placed before the Selection Committee. The only material before the Selection Committee was the Annual Confidential Reports ( ACRs ) of the candidates. It is on this basis that the selection of five candidates was made, as the minutes of the Selection Committee records, on the basis of available character rolls, knowledge and suitability. 34. Considering, first, the argument of the petitioners that the decision of the Selection Committee disregarded the inter se seniority of the candidates, by selecting 4 candidates who were below the petitioners in the seniority list admitted by both parties. The argument here is that amongst those graded fit , by the relevant benchmark, in their ACRs, no supersession is permissible. For this, the petitioners argue that since Rule 7C of the Service Rules is silent on the procedure, or more accurately, the criterion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions of service , and thus, no reference to that Office Memorandum is mandated. 37. In considering this issue, while the Court must remain conscious that the Office Memorandum in question marks a departure from the previous nomenclature, and prescribes a clear procedure for selection , as grading followed by seniority, it is important first and foremost to note the terms of Rule 7C, which is the primary rule applicable in this case. Rule 7C notes that the: Selection Committee based on merit, shall recommend persons for appointment as Vice- Presidents. (emphasis supplied). 38. Thus, Rule 7C itself gives specific guidance on the criterion on which the Selection Committee is to base its decision, leaving little scope for either the Selection Committee to devise its own criterion (as the order of the CAT indicates) or incorporate the Office Memorandum dated 8th February, 2002 (as the petitioner argues). While, concededly, the Selection Committee may decide - in its discretion - what constitutes merit for the purposes of appointing an individual to the post of Vice-President, the fact that the criterion is merit, and merit alone, is prescribed within Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violating of any statutorily scope of interference and other relatable It is for the employer to stipulate the criteria for promotion, the same pertaining really to the area of policy making. It was, therefore, permissible for the respondent to have their own criteria for adjudging claims on the principle of seniority-cum- merit giving primacy to merit as well, depending upon the class, category and nature of posts in the hierarchy of administration and the requirements of efficiency for such posts. 42. In this case, seniority is not completely excluded from the selection process. The zone of consideration prepared as the first step in the process was on the basis of seniority, as the minutes of the Selection Committee clearly recorded. However, there is no independent requirement - either statutory or constitutional - to consider seniority. Even independently, given the array of responsibilities assumed by the Vice-President of the ITAT, the importance of merit cannot be downplayed in any manner. Indeed, a similar question came up before the Supreme Court in RR Das v. Union of India, 1986 Supp (1) SCC 617, where the Court noted as follows: Indeed the amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided by the duly constituted Selection Committee which has the expertise on the subject. The Court has no such expertise. The decision of the Selection Committee can be interfered with only on limited grounds, such as illegality or patent material irregularity in the constitution of the Committee or its procedure vitiating the selection, or proved mala fides affecting the selection etc. 44. Similarly, and directly relevant to this case, the Supreme Court held in Major General IPS Dewan v. Union of India, (1995) 3 SCC 383, that: 18. Sri Ramaswamy then relied upon the decision in The Manager, Government Branch Press and Anr. v. D.B. Belliappa, (1979) ILLJ 156 SC in support of his submission that administrative orders affecting the rights of citizens should contain reasons therefore. We are afraid, the said principle cannot be extended to matters of selection. Unless the rules so require, the Selection Committee/Selection Board is not obliged to record reasons why they are not selecting a particular person and/or why they are selecting a particular person, as the case may be. 45. The Court, in view of the above decisions, has to be cautious in ensuring that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision was made. Thus, in this case, the ACR grading was important. The ACR remarks for the five years preceding the selection process indicate that Mr.Tolani had five Very Good remarks, Mr.Yadav had one Very Good and four Good remarks. Amongst the candidates selected for the post, their grading was as follows: (1) five Good , (2) four Very Good plus one Outstanding , (3) two Very Good plus three Good , (4) five Very Good , and (5) One Average plus one Good plus three Very Good . 48. Thus, on the basis of this grading - which was the only material that the Selection Committee had to assess merit - the conclusion that the two petitioners were not selected, whilst others, with a lower cumulative grading, were, appears to be anomalous. This is not to say that the two petitioners are more merited or qualified than those selected by the Selection Committee. That determination lies outside the domain of the Court. While the Selection Committee determines which candidate possesses greater merit, such a determination must be based on some objective fact which is capable of leading to that conclusion. Needless to say, a Very Good grade is better than a Good grade, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al evidence of the merit of the candidates, it would seem unclear how the Selection Committee decided to select those with lower grading in their ACRs. Having decided not to consider any independent material, the reasonableness of the Selection Committee s conclusion contrary to the ACRs placed before has to be considered. The observations of the Supreme Court in State Bank of India v. Kashinath Kher, (1996) 8 SCC 762, are extremely pertinent here, as the Court considers exactly how such a selection process can be fair and comprehensive without restricting the prerogative of the DPC to consider the merit. In that case, the Court considered the process adopted by the DPC in selecting individuals for promotion from the Middle Management Grade Scale II to Scale III in the Bhopal Circle of the State Bank of India, and in setting aside the decision of the DPC held: 16. It would also appear from the record that the confidential reports submitted were adopted in toto by the Committee considering promotion without any cross verification from the character rolls or the record and independent assessment of merit and ability. That would also be clearly illegal. Being a competent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an administrative body, the Selection Committee is not obliged - as in a quasi-judicial setting - to provide reasons for its decision. Nevertheless, the decision-making process should be fair and reasonable, and ensure that promotions are made on the basis of the statutory criteria, and through a fair consideration of the relative merit of the candidates to the posts in question. Thus, if inferences drawn (that) are such that no reasonable person can reach such conclusions. (Badrinath v Government of Tamil Nadu and Ors., (2000) 8 SCC 395), then the Court must exercise its jurisdiction under Article 226 to quash the decision-making process. 53. Leaving the precise factors and material to be considered in making such appointments to the Selection Committee, it is important to note that in this case no attempt was made to conduct an independent assessment of the candidates. Only one source of information, the ACRs, was before the Committee, and no additional material was sought or at any time brought on record. The Minutes of the meetings of the Selection Committee indicate that the decision was made on the basis of the available character rolls, knowledge and suitability , thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed departmental competitive examination for which the qualifying service as a Civil Judge (Senior Division) should be not less than five years. The High Courts will have to frame a rule in this regard. (emphasis supplied) 55. Thus, while it would not be possible or practical to measure the respective merits for the purpose of seniority with mathematical precision by a barometer and some formula doing largest good to the largest number had to be evolved (Joginder Nath v. Union of India, [1975] 2 SCR 533), Courts have - in analogous instances of promotion - identified various factors that speak of a candidate s merit, and lead to a comprehensive consideration of the comparative merit of the candidates. This line of thought applies equally to highposts such as that of ITAT, Vice President, where the screening of the candidates should be thorough and detailed. As noted above, this is not to dictate the precise factors relevant, or to indicate a preferred procedure for selection, to be adopted by the Selection Committee, but only to demonstrate the various ways in which the Supreme Court has previously considered merit to be judged - through written tests, interviews/meetings, exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, Senior Vice President and President, in regard to the last three years or five years performance, such as the number of orders written or delivered, each year; the units/appeals disposed of; a certain number of orders, i.e. about five or ten (may be chosen in advance by the Chairman of the Committee) to assess their quality, and personal interaction. The committee might, for its own assistance, in accordance with such guidelines, evolve an appropriate marking mechanism. This would lend objectivity and a greater degree of scrutiny of the quality of candidates and avoid the odium of arbitrary or unfair procedure. 59. This Court is of the opinion that members of tribunals such as the ITAT perform crucial judicial functions, which can have an adverse bearing on individuals, and at times, vast commercial and fiscal ramifications. In these circumstances, the Central Government should seriously consider continuous oversight through the concerned High Courts, given that High Courts exercise appellate (and supervisory writ) jurisdiction over the orders and proceedings of ITAT and its benches. Some reporting mechanism, preferably centralized, to oversee the quality of the orders of I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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