TMI Blog2018 (3) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Authority and held that recusal will not stall hearing and decision of the appeal. Contention of lack of quorum on account of recusal of one member of the five member Appellate Authority for the aforesaid reasons fails and is rejected. The Appellate Authority of four members can hear and decide the appeal, in spite of recusal of one of the members, namely, Mr. Sunil Goyal - petition dismissed - decided against petitioner. - W.P.(C) 8341/2017 - - - Dated:- 12-3-2018 - MR. SANJIV KHANNA AND MR. CHANDER SHEKHAR JJ. Petitioner Through: Mr. A.N. Haksar, Sr. Advocate with Mr. R. Sudhinder, Ms. Prerna Amitabh and Mr. Anurag Tripathi, Advocates. Respondent Through: Mr. Vijay Joshi, Sr. Panel Counsel for Respondent No.1. Ms. Pooja M. Saigal, Adv. for Respondent No.2. Mr. Kirtiman Singh, Waize Ali Noor, Mr. Prateek Dhanda and Mr. Saeed Qadri, Advocates for Respondent No.3. SANJIV KHANNA, J. Talluri Srinivas, a chartered accountant, by the present writ petition impugns and seeks quashing of the order dated 26th July, 2017 passed by the Appellate Authority, rejecting his plea and contention of lack of quorum as his appeal was being heard by four (4) members on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Term of office of Chairperson and members of Authority.-- (1) A person appointed as the Chairperson shall hold office for a term of three years from the date on which he enters upon his office or until he attains the age of sixty-five years, whichever is earlier. (2) A person appointed as a member shall hold office for a term of three years from the date on which he enters upon his office or until he attains the age of sixty-two years, whichever is earlier. 22D. Procedure to be regulated by Authority.-- (1) The office of the Authority shall be at Delhi. (2) The Authority shall regulate its own procedure. (3) All orders and decisions of the Authority shall be authenticated by an officer duly authorised by the Chairperson in this behalf. 22E. Officers and other staff of Authority.-- (1) The Council shall make available to the Authority such officers and other staff members as may be necessary for the efficient performance of the functions of the Authority. (2) The salaries and allowances and conditions of service of the officers and other staff members of the Authority shall be such as may be prescribed. 22F. Resignation and removal of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give an opportunity of being heard to the parties concerned before passing any order. 5. Section 22A of the CA Act requires and mandates that the Central Government by notification would constitute an Appellate Authority consisting of a person, who is or has been a Judge of a High Court as its Chairperson and four other members. Two members nominated by the Central Government should be from persons who have been members of the Council for at least one full term and were not sitting members of the Council. The Central Government has to nominate two members from persons having knowledge and practical experience in the field of law, economics, business, finance or accountancy. 6. In terms of the aforesaid power, the Central Government by notification dated 31st December, 2016 read with notification dated 3rd November, 2015, had constituted an Appellate Authority of Mr. Justice Mool Chand Garg, Judge (Retd.), Dr. Navrang Saini, Mr. Praveen Garg, Mr. Kamlesh S. Vikamsey and Mr. Sunil Goyal. 7. Controversy which has arisen is on account of the fact that Mr. Sunil Goyal has recused and declined from participating and deciding the appeal preferred by the petitioner, as he has ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case. His term has not come to an end. Mr. Sunil Goyal has not been removed by recourse to procedure under Section 22F(2) of the CA Act. A Chairperson or a member, as per sub-section (2), cannot be removed except by the Central Government on the ground of proved misbehavior or incapacity after an inquiry made by such person as the Central Government may appoint for this purpose. For removal, the Chairperson or the member has to be informed of the charges and he has to be given a reasonable opportunity of being heard. The said position does not arise in the present case. 11. Aforesaid provisions reflect the legislative intent in constituting the Appellate Authority as a body of five nominated members for a fixed tenure with protection against removal except on the ground of misbehaviour or incapacity after inquiry. This ensures independence, fairness and objectivity in the decisions taken. Appointments of members of the Appellate Authority if made selectively in each appeal would necessarily affect integrity, independence and consequently reputation of the Appellate Authority. It extenuates chances of bias, partiality in selection and fear of consequences. 12. Given the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to continue with their functioning. Nor does the statute ordain a minimum quoram for the hearing of appeals. It, therefore, appears that the statute is neutral about the consequences which follow in the event of a member s absence from the Tribunal for a temporary period, as in this case. This aspect is important, because the absence of any prohibition either in the negative form, enjoining members from functioning and hearing appeals during the absence of one of them, or absence of a provision mandating a minimum quoram, implies that the Legislature did not contemplate a logjam, in the Tribunal s functioning. The argument of the revenue about a restrictive class of cases which deals with absence of a member, i.e. in terms of Regulation 35, is insubstantial. For one, that Regulation is not part of the statute; secondly, it states an obvious rule, which all members of judicial and quasi judicial bodies have to follow. Its absence would in no whit undermine the principle it gives shape to. It would be useful to recollect that every Tribunal is clothed with incidental and ancillary powers to effectuate its orders, and carry out its functions effectively (Ref. Union of India v Paras L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the meetings were chaired by the Director, SCERT. The learned counsel for the petitioners placed reliance on two decisions of the Supreme Court in the case of Ishwar Chandra v. Satyanarain Sinha Ors (1972) 3 SSC 383 and People s Union for Civil Liberties v. Union of India and Anr. (2005) 5 SCC 363 in support of the aforesaid contention. 6. The learned counsel for the respondents, who were applicants before the Tribunal, reiterated their stand before the Tribunal and supported the decision of the Tribunal. In addition, they referred the decision in the case of State of Andhra Pradesh Anr. v. Dr. Mohanjit Singh and Ors. 1988 (Supp) SCC 562. It was contended that because of the said decision, the absence of a person from the Selection Committee vitiated the selection process. 7. Having heard the learned counsel for the parties, we are of the view that the decision rendered by the Tribunal is not in accordance with law and has to be set aside. The reason is that the two Supreme Court s decisions cited by the learned counsel for the petitioners clearly hold the field and in so far as the decision cited by the learned counsel for the respondents is concerned, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion in the constitution, the major part must be present at the meeting, and of that major part there must be a majority in favour of the act or resolution contemplated. Where, therefore, a corporation consists of thirteen members, there ought to be at least seven present to form a valid meeting, and the act of the majority of these seven or greater number will bind the corporation. In considering whether the requisite number is present, only those members must be included who are competent to take part in the particular business before the meeting. The power of doing a corporate act may, however, be specially delegated to a particular number of members, in which case, in the absence of any other provision, the method of procedure applicable to the body at large will be applied to the select body. If a corporate act is to be done by a definite body along, or by a definite body coupled with an indefinite body, a majority of the definite body must be present. Where a corporation is composed of several select bodies, the general rule is that a majority of each select body must be present at a corporate meeting; but this rule will not be applied in the absence of express dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airs in the Government of India, Leader of Opposition in the House of People and Deputy Chairman of the Council of States having agreed on the appointment of the second respondent, we find no statutory error in the appointment of the second respondent. 16. The aforesaid quotation refers to two decisions of the Supreme Court in Ishwar Chandra v. Satyanarain Sinha Ors. (1972) 3 SSC 383 and People s Union for Civil Liberties v. Union of India and Anr. (2005) 5 SCC 363. In Ishwar Chandra (supra) issue arised related to the validity of constitution of the Selection Committee constituted under the statute. It was held that if for one reason or the other, one of the members of the Selection Committee did not attend a meeting, it would not make the meeting of others illegal. This was stated as the correct position in law, unless there was a rule or regulation to the contrary fixing a specified quorum to constitute a valid meeting. Thus, in the absence of a specific stipulation prescribing and fixing a minimum quorum, majority of the members present would constitute a valid quorum. Reference was specifically made to Halsbury's Laws of England, Third Edition (Vol. IX, page 48, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Full Bench of the Patna High Court had examined the question whether a rule prescribing quorum for Assessment Sub-Committee constituted under Section 27-A(1) of the Bihar Agricultural Produce Market Act, 1961 was ultra vires the main provision or the rule making power. Section 27A(1) had stipulated that an Assessment Sub-Committee shall consist of Chairman, Vice Chairman and Secretary of the Market Committee for the purpose of assessment of levy and fee. It did not prescribe any minimum quorum. Quorum for Assessment Sub-Committee prescribed by Rule 88 was two members who had the discretion to refer the case to a Bench of all members of the Sub-Committee. For several reasons, the challenge was rejected. What is of importance for the present decision are the observations in paragraph 20 of the said judgment which reads : 20. In this context one may perhaps equally highlight the anomalous result which must flow herein from holding that each and every member of the Assessment Sub-Committee must always attend throughout each and every proceeding of an assessment. Would it be necessary that all the three members must sit together like a regular Full Bench of a Court of Law to hear a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1976 P H 143 was reversed approving the minority opinion and holding that if the quorum consists of two members then any two out of three can perform functions of the Standing Committee. Referring to the requirement of unanimity in the Regulation, it was observed that it refers to unanimity of the members who for the time being were sitting in the Committee and were the quorum. 21. We would at this stage refer to the decision in Vijay Singh Lamba (supra) wherein the Supreme Court held that quorum denotes minimum number of members of any body or persons whose presence is necessary in order to enable that body to transact its business validly so that its acts may be lawful. Generally, it would be left to the Committees/Bodies themselves to fix the quorums for the meetings. However, in the said case, the syndicate which had appointed the Standing Committee had fixed the quorum, which it was held, was valid. Pertinently it was observed that it would be inappropriate to draw parallels between such cases and a court proceeding where a matter by law, the case was required to be heard by Benches of three Judges. Reliance placed by the petitioner on the said observations would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Section 6 relating to constitution of Court of Inquiry to hold that the Award pronounced was by an Industrial Tribunal improperly constituted and therefore not vested with jurisdiction. To understand the distinction and the ratio of the majority judgment, we would like to quote the relevant sections i.e., Sections 5 to 8:- 5. (1) The appropriate Government may as occasion arises by notification in the official Gazette constitute a Board of Conciliation for promoting the settlement of an industrial dispute. (2) A Board shall consist of a chairman and two or four other members, as the appropriate Government thinks fit. (3) The chairman shall be an independent person and the other members shall be persons appointed in equal numbers to represent the parties to the dispute and any person appointed to represent a party shall be appointed on the recommendation of that party: (4) A Board, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in ifs number. Provided that if the appropriate Government notifies the Board that the services of the chairman or any other member have ceased to be availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) Where the services of any member of a Board other than the chairman have ceased to be available, the appropriate Government shall appoint in the manner specified in sub-section (3) of section 5 another person to take his place, and the proceedings shall be continued before the Board so reconstituted. Referring to the statutory position it was opined that in case of Conciliation Board or Court of Inquiry, meetings and deliberations could be held in absence of a member or even if there was a vacancy, provided there was prescribed quorum fixed by the Rules. However, if the appropriate Government had notified the Conciliation Board that services of the Chairman or any other member had ceased to be available, the Conciliation Board was not to act until new Chairman or member was appointed. In the case of Court of Inquiry where the appropriate Government had notified that services of the Chairman had ceased, the Court was not to proceed until a new Chairman was appointed. However in the case of constitution of the Industrial Tribunal, Section 7 was conspicuously differently worded and had stipulated that the Tribunal would consist of two or more members, one of them would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgone a change as per the statutory mandate. The majority decision referred to the subsequent notification issued in May, 1950 by which the third member was permitted to resume as a member of the Industrial Tribunal. This, it was held, was contrary to law as a third member had ceased to be a member of the Industrial Tribunal and therefore a fresh notification for appointment and constitution of the Industrial Tribunal was required. 26. Fazl Ali, J. gave a dissenting judgment holding that Award was valid. Patanjali Sastri, J. had agreed with Fazl Ali J. Mukherjea, J.in conclusion had concurred with the opinion expressed by Fazl Ali, J. for different reasons. On several aspects Mukherjea, J. had concurred with the reasoning of Kania, CJ regarding the earlier Awards or matters dealt with by the Industrial Tribunal in the absence of the third member between January and February, 1950. Mukherjea J. had also accepted and agreed on the difference in language of Sections 5 and 6 that had empowered the Conciliation Board and the Court of Inquiry to continue with the proceedings in the absence of member(s) provided the prescribed quorum was present. Hon'ble Judge observed that such st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 104 , challenge was made to participation of the the Chief Election Commissioner as head of the three member Election Commission on the ground that conflict of interest and impartiality. In that context, issue had arisen whether under the law the three member Election Commission must sit en banc or not at all. In other words, the legal question was whether Constitution had made it imperative for the Chief Election Commissioner to be a participant in each and every decision of the three m ember Election Commission. The answer was in negative and against the contention. Constitution, it was observed, was silent on the said aspect as it was thought unnecessary, perhaps improper to provide for the same having regard to the constitutional status of the Commission. Constitution had relied on sagacity and wisdom of the persons, who would man the Commission. Reference was made to the earlier decision, reported as T.N. Seshan, Chief Election Commissioner of India Vs. Union of India Ors. (1995) 4 SCC 611 challenging conversion of one member election commission into a three member Commission. T.N. Seshan (supra) had affirmatively rejected the contention that the Election Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st do so if the case cannot be heard otherwise. The rationale behind the Rule is that the litigation cannot be a non sequitur. In other words, there cannot be a litigation system in which it is impossible to litigate a given case. It is on the aforesaid principle that we have examined the statutory provisions of the CA Act and the effect of recusal of one member of the five-members of the Appellate Authority and held that recusal will not stall hearing and decision of the appeal. Contention of lack of quorum on account of recusal of one member of the five member Appellate Authority for the aforesaid reasons fails and is rejected. 30. We are not, therefore, examining the last contention challenging vires of Rules 13 and 16 of the of the Procedure to be followed for Appeals by the Appellate Authority, 2013, for we are satisfied that the Appellate Authority of four members can hear and decide the appeal, in spite of recusal of one of the members, namely, Mr. Sunil Goyal, for he reasons set out above. 31. In view of the aforesaid discussion, we do not find any merit in the present writ petition and uphold the impugned order dated 26th July, 2017 passed by the Appellate Autho ..... 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