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2000 (11) TMI 1237 - SUPREME COURT OF INDIA

2000 (11) TMI 1237 - SUPREME COURT OF INDIA - TMI - Appeal (Civil) No. 6963 2000 - Dated:- 30-11-2000 - U. C. Banerjee And M. J. Rao, J. JUDGMENT U. C. Banerjee, J. Leave granted. The concept of fairness in administrative action has been the subject matter of considerable judicial debate but there is total unanimity on the basic element of the concept to the effect that the same is dependant upon the facts and circumstances of each matter pending scrutiny before the Court and no straight jacket .....

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that in a democratic polity, the verdict of the people determines the continuance of an elected Government a negative trend in the elections brings forth a change in the Government it is on this formula that one dominant political party overturns another dominant political party and thereby places itself at the helm of the affairs in the matter of the formation of a new Government after the election. The dispute in the appeals pertain to the last phase of the earlier Government and the first pha .....

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n Administrative Service and working in the State of Punjab as a bureaucrat, was placed as the Chief Secretary and within a period of 10 days of his entry at the Secretariat, a notification was issued, though with the authority and consent of the Chief Minister pertaining to cancellation of two earlier notifications initiating a Central Bureau of Investigation (CBI) enquiry - The charges being acquisition of assets much beyond the known source of income and grant of sanction of a Government plot .....

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malafide and hence the appeal before this Court. Whereas fairness is synonymous with reasonableness bias stands included within the attributes and broader purview of the word malice which in common acceptation means and implies spite or ill will. One redeeming feature in the matter of attributing bias or malice and is now well settled that mere general statements will not be sufficient for the purposes of indication of ill will. There must be cogent evidence available on record to come to the co .....

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. 275) the Court of Appeal has stated upon reliance on the decision of Lumley v. Gye (2 E & B. 216) as below: For this purpose maliciously means no more than knowingly. This was distinctly laid down in Lumley v. Gye, where Crompton, J. said that it was clear that a person who wrongfully and maliciously, or, which is the same thing, with notice, interrupts the relation of master and servant by harbouring and keeping the servant after he has quitted his master during his period of service comm .....

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ciety stated that the modernisation of the society with the passage of time, has its due impact on the concept of bias as well. Tracing the test of real likelihood and reasonable suspicion, reliance was placed in the decision in the case of Parthasarthy (S. Parthasarthy v. State of Andhra Pradesh: 1974 (3) SCC 459) wherein Mathew, J. observed: 16. The tests of real likelihood and reasonable suspicion are really inconsistent with each other. We think that the reviewing authority must make a deter .....

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. Surmise or conjecture would not be enough. There must exist circumstances from which reasonable men would think it probable or likely that the inquiring officer will be prejudiced against the delinquent. The Court will not inquire whether he was really prejudiced. If a reasonable man would think on the basis of the existing circumstances that he is likely to be prejudiced, that is sufficient to quash the decision (see per Lord Denning, H.R. in Metropolitan Properties Co. (F.G.C.) Ltd. v. Lanno .....

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he English Courts in the mann er following: 27. Recently however, the English Courts have sounded a different note, though may not be substantial but the automatic disqualification theory rule stands to some extent diluted. The affirmation of this dilution however is dependent upon the facts and circumstances of the matter in issue. The House of Lords in the case of Reg. v. Bow Street Metropolitan Stipendiary Magistrate, Ex parte Pinochet Ugarte (No.2) [2000 (1) A.C. 119] observed: ..In civil li .....

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ed together with one of the parties. Lord Brown Wilkinson at page 136 of the report stated: It is important not to overstate what is being decided. It was suggested in argument that a decision setting aside the order of 25 November 1998 would lead to a position where judges would be unable to sit on cases involving charities in whose work they are involved. It is suggested that, because of such involvement, a judge would be disqualified. That is not correct, The facts of this present case are ex .....

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tion to the parties. However, there may well be other exceptional cases in which the judge would be well advised to disclose a possible interest. Lord Hutton also in Pinochets case (supra) observed: there could be cases where the interest of the judge in the subject matter of the proceedings arising from his strong commitment to some cause or belief or his association with a person or body involved in the proceedings could shake public confidence in the administration of justice as much as a sha .....

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999 (161) A.L.R. 557) and on the decision of the Constitutional Court of Sourth Africa in President of the Republic of South Africa v. South African Rugby Football Union (1999 (4) S.A. 147) stated that it would be rather dangerous and futile to attempt to define or list the factors which may or may not give rise to a real danger of bias. The Court of Appeal continued to the effect that everything will depend upon facts which may include the nature of the issue to be decided. It further observed: .....

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rejected the evidence of that person in such outspoken terms as to throw doubt on his ability to approach such persons evidence with an open mind on any later occasion; or if on any question at issue in the proceedings before him the judge had expressed views, particularly in the course of the hearing, in such extreme and unbalanced terms as to throw doubt on his ability to try the issue with an objective judicial mind (see Vakuta v. Kelly (1989) 167 C.L.R. 568); or if, for any other reason, th .....

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us. But if in any case there is real ground for doubt, that doubt should be resolved in favour of recusal. We repeat: every application must be decided on the facts and circumstances of the individual case. The greater the passage of time between the event relied on as showing a danger of bias and the case in which the objection is raised, the weaker (other things being equal) the objection will be. 29. The Court of Appeal judgment in Locabail (supra) though apparently as noticed above sounded a .....

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this score that the surrounding circumstances must and ought to be collated and necessary conclusion drawn therefrom. In the event, however, the conclusion is otherwise that there is existing a real danger of bias administrative action cannot be sustained: If on the other hand allegations pertain to rather fanciful apprehension in administrative action, question of declaring them to be unsustainable on the basis therefor would not arise. It is in the same vein this Court termed it as reasonable .....

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ive action invalid. Rattan Lal Sharmas case (supra) thus, in fact, has not expressed any opinion which runs counter to that in Girja Shankars case (supra) and the decision in the last noted case thus follows the earlier judgment in Rattan Lals case even though not specifically noticed therein. Before adverting to the rival contentions as raised in the matter, it would also be convenient to note the other perspective of the issue of bias to wit: malafides. It is trite knowledge that bias is inclu .....

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retary of the State in terms of the specific orders of the then Chief Minister referred two cases to the Central Bureau of Investigation: The first being accumulation of assets in the hands of Shri Bikramjit Singh, IAS being disproportionate to the known source of income and secondly allotment of land and release of funds to the Punjab Cricket Association the Government, however, changed and soon thereafter the petitioner was chargesheeted inter alia for acting in a manner which cannot but be as .....

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der the Government headed by Mrs. Rajinder Kaur Bhattal as the Chief Minister. The Tribunal, however, answered the issue against Shri Khanna upon due reliance on the decision of this Court in the case of Union of India & Anr. vs. Ashok Kacker [1995 SCC (L&S) 375] wherein this court in paragraph 4 of the report was pleased to observe: 4. Admittedly, the respondent has not yet submitted his reply to the charge-sheet and the respondent rushed to the Central Administrative Tribunal merely on .....

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learned counsel for the respondent. In our opinion, this was not the stage at which the Tribunal ought to have entertained such an application for quashing the charge-sheet and appropriate course for the respondent to adopt is to file his reply to the charge-sheet and invite the decision of the disciplinary authority thereon. This being the stage at which the respondent had rushed to the Tribunal, we do not consider it necessary to require the Tribunal at this stage to examine any other point w .....

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nvite the decision of the disciplinary authority thereon. The Tribunal also recorded that during the course of hearing before the Tribunal, it has been made known by both the parties that the Inquiry Officer has already been appointed by the State of Punjab and he happened to be a retired Honble Judge of the High Court and it is on this perspective the apprehensions of the applicant Shri Khanna should be allayed and resultantly the Tribunal dismissed the OA No.651/CH of 1997. The matter was ther .....

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h the issues as raised in the affirmative and thus resultantly the appeal before this Court by the grant of special leave. Rival Contentions: The appellant, State of Punjab & Ors in one singular voice deprecated the judgment under appeal as wholly unsustainable since the same violates even the basic tenets of law. Absence of malice has been the main thirst of submissions in support of the appeal and adaptation of a simple method of disciplinary inquiry is the key issue as urged by the appell .....

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s pertaining to above-noted two cases at this juncture. Reference of two cases to the CBI Brief facts relating to the issuance of the two notifications to the CBI are as below:- (a) Shri Khanna was appointed to the Indian Administrative Service in the year 1963 and thus in the IAS Cadre for the last 37 years during which however, Shri Khanna was appointed as the Chief Secretary on July 2, 1996 by Shri Harcharan Singh Brar being the then Chief Minister of the State of Punjab. Subsequently, Mrs. B .....

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own observations and forwarded the files to the Chief Minister on the same day and thereupon the Chief Minister issued two several orders on the same date. Before however, adverting to the orders as passed by the Chief Minister, it is worthwhile noticing the allegations levelled against Bikramjit Singh and in the fitness of things, the report of the Vigilance Bureau of the State of Punjab may be referred at this juncture, which in fact probed the matter. The report records inter alia that the o .....

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officer of having one-fourth share in a house built on two-kanal plot bearing No.110 South Model Gram in Ludhiana and the finding of the Vigilance Bureau is that this property was acquired by the officer through inheritance. The report of the Vigilance Bureau further assessed the income of the officer to ₹ 31,51,302/- for the period from 1.1.1984 to 31.12.1993 whereas the expenditure was to the tune of ₹ 34,27,437/- thus showing an excess expenditure of ₹ 3,42,765/-. The Vigila .....

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ll pending for consideration at the level as above, the Chief Minister wanted to have a look at the file and as such asked for the same on 6.2.1997. It is on this factual backdrop as above the Chief Minister notes in the file as below: I have gone through the Enquiry Report of Vigilance Bureau as well as other portions of the file. I am in agreement with Chief Secretary that this case has not been properly probed. Since officer is senior and influential, another enquiry by the State machinery ma .....

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ent Act 1946 entrusting the case to the CBI for investigation for an offence of having assets dis-proportionate to the known source of income in this case.. While the detail submission on this score would be dealt with later but it would be convenient to note that the learned Solicitor General with some amount of emphasis posed a question as a part of his submission to the effect as to why this hot haste? We however have not been able to appreciate the submission. Vigilance Bureau reported in Ma .....

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n organisation which is known in the country to be fair and impartial but having regard to the factum of ensuing elections in the event the administrative expediency prompt the Chief Minister to take a step urgently so that the matter can be enquired into in detail, can any exception be taken by reason of the fact that the actions were in very hot haste? Incidentally, detailed submissions have been made as regards pre- dating the notes so as to reach 7th February, 1997 when in fact, the same was .....

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he Chief Minister administratively is desirous of having a further probe in the matter, we suppose no inference can be drawn as a malafide move therefrom: Administrative decision is taken on the expediency of the situation urgently and not otherwise. The answers to these questions raised above will be made available in the later part of this judgment but for the present it is significant to note that if hot haste is to be attributed to Mr. V.K. Khanna, the same can also be ascribed to Shri Mann, .....

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lafide considerations. Interestingly the note records that the Government should rectify the mistakes in the larger interest of justice and fair play. The records further depict that the file was sent back to the Chief Secretary on the same day and the latter sent the same to the Chief Minister with a note to the following effect: I endorse the view of the A.G. C.M. may kindly agree to the proposal to rescind the notification in question and to withdraw the case from the CBI. Sd/- (Mann)@@ IIIII .....

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etted immediately because notification in extra-ordinary Gazette has to be issued today. Subsequent confirmation of the notification being issued and a note from the Chief Secretary records the same. It is in this perspective Mr. Subramaniam, learned senior counsel appearing for respondent No.1 with equal vehemence contended as to the haste in which the Department acted. Mr. Subramaniam, learned senior counsel, contended that on 25th of February, 1997 a rather longish and detailed note has been .....

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e motive on the part of Shri V.K. Khanna, we wonder as to whether the same can also be attributed to the appellants herein the answer to this question would also be available in the later part of this judgment. (b) The second notification pertains to the allotment of land to the Punjab Cricket Association and the note of the Chief Minister on 6th February, 1997 reads as below: The illegal occupation of the Cricket Association should be got vacated So far as the culpability of the officers involv .....

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, 1997 that two notifications were issued as above. Before adverting to the contentions certain other factual details are required to be noticed at this juncture: Elections to the State Legislative Assembly were held on 7th February, 1997 and votes were counted on 9th February, 1997. The party in power at the Punjab Assembly however, having lost the election, the Chief Minister Mrs. Bhattal resigned from the office and Shri Prakash Singh Badal was sworn in as the Chief Minister on 12th February, .....

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the file apropos Shri Mann but so far as Bikramjit Singh is concerned, it has been noted that one vigilance enquiry was pending against Shri Bikramjit Singh this did not, however, impress the authority and resultantly in spite of the noting as above, both these two officers were appointed in the posts noted above. Though Mr. Subramaniam has been very critical about these appointment specially when an allegation of corruption involving an officer of the Administrative Service, pending further en .....

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ld be better if the notings would have been given its proper weightage. Another significant feature on the factual score is that the Central Bureau of Investigation registered two cases on 25th February, 1997 being FIR Nos.7 and 8 against Shri Bikramjit Singh and the second one pertaining to the allotment of land to the Punjab Cricket Association and as noticed above on 26th February itself notification was issued rescinding the earlier notification thereby the request to investigate on to the t .....

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y to Government, Punjab, issued two notifications in the Delhi Special Police Establishment Act empowering the CBI to enquire into the two matters viz.:- (i) Amassing assets disproportionate to the known means of income by Shri Bikramjit Singh, IAS; and (ii) Allotment of land and funds to the Punjab Cricket Association. The CBI registered FIRs in these two cases. In processing these cases, Shri V.K. Khanna, IAS, acted in a malafide manner and in gross violation of established norms and procedure .....

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s completed on 6th February and on 7th February which was a holiday. The papers traveled thrice between Chandigarh and Lehragaga on Feburary 6. (ii) Neither in her first note of 6th February nor in her second note of the same day did the C..M. direct that the cases were to be handled at breakneck speed. (iii) The statutory notifications issued on 7th February were neither sent to the L.R. as required by Rules of Business of Punjab Government nor were they sent for gazetting as required by law. 3 .....

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na, IAS, with malicious intent kept the entire operation a closely guarded secret until the CBI had completed all formalities and had registered the FIRs. This is demonstrated by the following facts/events:- (i) All papers pertaining to these cases were taken away from the personal staff of C.S. and were handled and retained entirely by Shri Khanna himself including delivery of the Notification and letters to CBI. (ii) He took away the files and retained them till the night of 24th February, 199 .....

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14.2.1997, while pendency of Vigilance enquiries against him was referred to, no reference whatsoever, was made to the most relevant fact that less than a week earlier, a case of corruption against him had been sent to CBI a fact which was known only to Shri Khanna and which must have been very fresh in his mind in view of the unusual interest taken in it by him. 5. Shri V.K. Khanna, IAS, failed in the proper discharge of his duties as Chief Secretary, when while putting up to C.M. the file per .....

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ton 14.2.1997 A.N. returned the two files on the above two cases on 15.2.1997 to an officer of the Vigilance Department. The same day he summoned the two files without authority and detained them for a long time with ulterior motives. He recalled both the files on the plea that the files being top secret in nature would be handed over to the Additional Secretary Vigilance. However, the two files were returned on 24th and 26th February 1997. He, therefore, remained in unauthorised possession of t .....

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ant. No serious effect was made to ascertain the full facts. Whereas the record shows that the decision to give land at nominal cost and the release of funds had the clear and repeated approval of the Housing Board/PUDA, Finance Department and the then C.M. and whereas the Council of Ministers and even Vidhan Sabha had categorically endorsed these decisions, none of these facts was brought on the file. His entire conduct was malicious and premeditated and amounted to total abuse of the authority .....

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e attention paid by Shri V.K. Khanna. In fact, there was a clear intention on the part of Shri V.K. Khanna to complete all action in these cases before the new Ministry took office. Shri V.K. Khanna, further failed to put up these cases for the information/approval of the new Chief Minister till he handed over the charge as Chief Secretary late on 14.2.1997. EVENTS THEREAFTER: Soon after the issuance of the charge-sheet however, the Press reported a statement of the Chief Minister on 27th April, .....

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to humiliate the former Chief Secretary. The time has not expired for assessment of the situation as to whether there is any misconduct involved if any credence is to be attached to the Press report, we are afraid Mr. Subramaniams comment might find some justification. The records further disclose that copies of certain documntary evidence were sought for pertaining to charge No.8 as regards the release of fund and approval of the Housing Board and Punjab Urban Development Authority but the same .....

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te and Mr. Harish N. Salve, Solicitor General of India strongly contended that propriety of the situation demanded confirmation of the disciplinary proceedings rather than its quashing by the High Court since, the issuance of notification has been contrary to the rules of business. Before delving into the contentions, we feel it proper to note the general principles of law as recorded by the High Court pertaining to discharge of duty of a civil servant. The High Court observed: Indisputably, dut .....

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date. It requires every citizen to strive towards excellence in all spheres of individual and collective activity, so that the nation constantly rises to higher levels of endeavour and achievement. This provision can be the beacon light for every citizen and the mantra for every civil servant. So long as he performs this duty as imposed by the Constitution and strives towards excellence, he has none and nothing to fear. Even God would be by his side. At the same time it is undeniably true that w .....

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malice should not taint it. Bias is like a drop of poison in a cup of pure milk. It is enough to ruin it. The slightest bias would vitiate the whole action. Bias admittedly negates fairness and reasonableness by reason of which arbitrariness and malafide move creep in issuance of the two notifications assuming in hot haste but no particulars of any malafides move or action has been brought out on record on the part of Shri V.K. Khanna while it is true that the notings prepared for Advocate Gener .....

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se bonafide, however, by themselves would not amount to be malafide unless the same is inaccompanymen with some other factors which would depict a bad motive or intent on the part of the doer of the act. It is in this sphere let us now analyse the factual elements in slightly more detail the Chief Minister is desirous of having the files pertaining to two of the senior officers of the administration and concerning two specific instances in normal course of events, we suppose the Chief Secretary .....

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ent a note to the Chief Minister recording therein that a further probe may be effected if so thought fit by the Chief Minister and in the event the Chief Minister agrees therewith and a probe is directed through an independent and impartial agency can any exception be taken therefor? Mr. Solicitor General answers the same generally that it is the personal vendetta which has prompted the Chief Secretary to initiate this move but general allegation of personal vendetta without any definite eviden .....

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no evidence apart from bare allegation of any spite or ill will, more so by reason of the fact that the same involves factual element, in the absence of which no credence can be attributed thereto. Incidentally, be it noted that submissions in support of the appeal have been rather elaborate and in detail but a significant part of which pertain to the issuance of the two notifications spoken hereinabove: the High Court decried the action as being tainted with malice and quashed the chargesheet .....

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ressly but can be inferred therefrom. The charge-sheet records that Shri Khanna has acted in a malafide manner and in gross violation of established norms and procedure of Government functioning and in utter disregard of All India Service Rules, principles of objectivity, fair play, integrity and the high morals expected of a senior civil servant (emphasis supplied). The notification pertains to acquisition of assets disproportionate to the known source of income by a civil servant and it is in .....

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ts disproportionate to the known source of income can be termed to be in disregard of the service rules or fair play, integrity and morals: Do the service rules or concept of fair play, integrity or morals expected of a senior civil servant provide a prohibition for such an initiation or such processing, if that is so, then, of course one set of consequence would follow but if it is other way round then and in that event, question of any violation or a malafide move would not arise. The second c .....

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to mean undue haste and if acted accordingly then again one set of consequence follow but in the normal course of events, such a direction from the Chief Minister ought to be adhered to with promptitude and no exception can thus be taken in that regard. Shri V.K. Khanna was also said to have faulted Government instructions under which it is stipulated that in the event of any impending change, no important decisions would be taken by the Secretaries without having its seen by the new Ministers .....

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then he cannot possibly be accused of not acting, as required by the rules of business or as required by law. One of the basic charge of malafides as ascribed by Mr. Solicitor General, is that the papers pertaining to one of the cases was retained till the night of 24th February, 1997 and till 26th February, 1997 in another, and the same is unbecoming of the Chief Secretary of the State, more so by reason of the fact that when a new Secretary has already taken over charge. The issue undoubtedly .....

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ay occurs for about two weeks, in our view, no exception can be taken therefor neither it calls for any further explanation. During the course of submission, strong emphasis has been laid on a linkage between the CBIs endeavour to initiate proceedings and the retention of the file, however, does not stand any factual justification since one of the files were returned to the Chief Secretary on 24th February itself whereas CBI lodged the FIR on 25th February, 1997. Mr. Subramaniam however, contend .....

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th the issue to the effect that no exception can be taken as regard the action of the Respondent No.1 As regards the allotment of land to Punjab Cricket Association Mr. Solicitor General contended that as a matter of fact, there was a total disregard to ascertain the full facts and emphatic statement has also been made during the course of hearing and which finds support from the chargesheet that even the Assembly had categorically endorsed the decision of grant of land at nominal cost together .....

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e relevant record, cross- checked the facts and exercised due care and caution while submitting the factual report to the Chief Minister on 6.2.1997. Before submission of the factual report to the Chief Minister, the petitioner inter-alia found the following material on record: (i) There was no Cabinet approval, mandatory under the Rules of Business, for either construction of the Cricket Stadium or the transfer of about 15 acres of land to the Punjab Cricket Association, a private entity. Appar .....

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ministrator PUDA brought out many serious irregularities in regard to grant of funds for the Cricket Stadium and the PCA Club. (v) It had also come to the Petitioners notice that Sh. Bindra directed other companies like Punjab Tractors Ltd., Punwire, PACL etc. not to furnish any information to the Chief Secretary about payments made by them to the Punjab Cricket Association. (vi) The glaring fact that Sh. Bindra had transferred the land to the Punjab Cricket Association at his own level, without .....

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ousing Board connived at serious encroachments made by the PCA which is actually in occupation of about 20 acres, as against 10.5 acres, as against 10.5 acres mentioned in the decision of the Governor-in-Council (order dated 29.4.91) which in any case was not for a Cricket Stadium, but for a Sports Complex/Velodrome. It is on this score Mr. Subramaniam for respondent No.1 contended that the factual context as noted hereinbefore prompted the Chief Secretary to submit the note to the Chief Ministe .....

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l show and the conclusions are well known then and in that event law courts are otherwise justified in interfering at the earliest stage so as to avoid the harassment and humiliation of a public official. It is not a question of shielding any misdeed that the Court would be anxious, it is the due process of law which should permeate in the society and in the event of there being any affectation of such process of law that law courts ought to rise up to the occasion and the High Court in the cont .....

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bstantiate the frame of mind of the authorities and thus depicting bias What bias means has already been dealt with by us earlier in this judgment, as such it does not require any further dilation but the factum of announcement has been taken note of as an illustration to a mindset viz.: the inquiry shall proceed irrespective of the reply Is it an indication of a free and fair attitude towards the concerned officer? The answer cannot possibly be in the affirmative. It is well settled in Service .....

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