TMI Blog2023 (3) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... COURT ] this Court has once again highlighted the permissibility of ascertaining the existence of valid material by a Court for the authorities to pass an order of compulsory retirement. In a recent judgment in the case of Nisha Priya Bhatia v. Union of India [ 2020 (4) TMI 890 - SUPREME COURT ], confronted with the question as to whether action taken under Rule 135 of the Research and Analysis Wing (Recruitment Cadre and Service) Rules, 1975 is in the nature of a penalty or a dismissal clothed as compulsory retirement so as to attract Article 311 of the Constitution of India, this Court has held that the real test for this examination is to see whether the order of compulsory retirement is occasioned by the concern of unsuitability or as a punishment for misconduct . In the present case, as per the material placed on record, the APARs of the appellant reflect that over the past several years, his integrity was being regularly assessed as Beyond doubt and this remained the position till as late as 31st July, 2019, when his work performance was assessed for the period from 1st April, 2018 to 31st March, 2019 and found to be upto the mark. In his APARs for the past one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dated 31st May, 2022 and quash and set aside the order dated 27th September, 2019 passed by the respondents, compulsorily retiring the appellant. Resultantly, the adverse consequences if any, flowing from the said order of compulsory retirement imposed on the appellant, are also set aside - Appeal allowed. - CIVIL APPEAL NO. 6161 OF 2022 - - - Dated:- 3-3-2023 - [ A. S. Bopanna ] And [ Hima Kohli ] , JJ. JUDGMENT HIMA KOHLI, J. 1. The appellant is aggrieved by the judgment dated 31st May, 2022 passed by the High Court of Judicature at Allahabad, Lucknow Bench upholding the order dated 9th December, 2020 passed by the Central Administrative Tribunal For short Tribunal , Principal Bench, that had turned down the challenge laid by him to an order dated 27th September, 2019, passed by the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India communicating the decision of the President of India to compulsorily retire him, in exercise of powers conferred under Rule 56(j) of the Fundamental Rules For short FR 56(j) . FACTS OF THE CASE 2. The present case has a chequered history with multiple rounds of litigations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, was also dismissed by this Court on 15th November, 2017. 4. On 29th November, 2017, a vigilance inspection was carried out in the office of the appellant. Based on the said vigilance inspection, the respondents issued a show cause notice to him on 31st January, 2018. Ten days before that, on 21st January, 2018, the vigilance clearance earlier granted in favour of the appellant, was withheld by the respondents. Both the aforesaid orders were assailed by the appellant by filing separate Original Applications before the Tribunal. Initially, an interim order was passed by the Tribunal observing that the show cause notice issued by the respondents would not impede the appellant s consideration for appointment to the post of Member, ITAT. On 4th May 2018, another interim order was passed by the Tribunal, observing that withholding of the vigilance clearance of the appellant will not come in his way for appointment to the subject post. In the interregnum, on 11th April, 2018, the appellant was placed in the Agreed List , which is a list of Gazetted Officers of suspect integrity prepared by the Department. Pertinently, a second Petition for Special Leave to Appeal filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a writ petition before the High Court against the charge memorandum issued to him wherein the High Court granted stay orders in his favour. While the said proceedings were still pending, the respondents proceeded to compulsorily retire the appellant on 27th September, 2019, which was about three months short of the date of his superannuation in January 2020. The list of promotions made to the post of Principal Commissioner was declared on 11.11.2019, by which date the appellant was no longer in the reckoning. 8. It may be noted here that the mechanism in place within the department for arriving at a conclusion as to who amongst the Group-A Officers in the CBDT deserve to be prematurely retired, starts with an assessment to be conducted by the Internal Committee that identifies and recommends the names of the officers and places it before the Review Committee. The next stage is before the Review Committee that includes the Chairman, CBDT and the Revenue Secretary as Members. If satisfied by the records and comments forwarded by the Internal Committee that the pre-mature retirement of a Group-A Officer is desirable in public interest, the Review Committee makes a recommendation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Committee in the year 2018, but did not reach fruition due to persistent obstructions created by the respondents, who withheld his vigilance clearance without a valid reason and subsequently placed his name in the Agreed List , followed by initiation of a disciplinary enquiry against him on baseless charges which was not taken to its logical conclusion, as he was prematurely retired in September, 2019. Lastly, it was urged that the High Court has completely overlooked the fact that all the Annual Performance Assessment Reports For short APAR of the appellant over the past 30 years were blemishless. In fact, the appellant was graded as Outstanding and his integrity was assessed as Beyond Doubt for the immediately preceding 10 years APARs, after he was promoted to the post of Commissioner, Income Tax in the year 2012. SUBMISSIONS MADE BY THE COUNSEL FOR THE UNION OF INDIA 11. Refuting the allegations levelled by the appellant and defending the impugned judgment, Mr. Sanjay Jain, learned Additional Solicitor General For short ASG who appeared for the respondents Union of India urged that the impugned judgment is a well-reasoned one and does not deserve inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has attained the age of 50 years; (ii) In any other case after he has attained the age of 55 years. 14. As is apparent from a perusal of the aforesaid provision, it takes in its fold two elements the first one is the absolute right of the Government to retire an employee and the second is the requirement of meeting the condition of public interest for doing so. The provision also provides for a prior notice of at least three months to the outgoing employee and mandates that the said provision can be invoked to retire a government servant only after he has attained the age of 55 years. 15. We are conscious of the fact that the scope of judicial review in respect of an order of compulsory retirement from the service, is fairly limited. The law relating to compulsory retirement has been the subject matter of discussion in a number of cases where certain settled legal principles have been laid down which are being elucidated hereinbelow. 16. The object of compulsory retirement of a government servant was highlighted by this Court in Allahabad Bank Officers Association and Another vs. Allahabad Bank and Others 1996(4) SCC 504 in the following words: - 5. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. But mere reference to the rule, even if it mentions grounds for compulsory retirement, cannot be regarded as sufficient for treating the order of compulsory retirement as an order of punishment. In such a case, the order can be said to have been passed in terms of the rule and, therefore, a different intention cannot be inferred. So also, if the statement in the order refers only to the assessment of his work and does not at the same time cast an aspersion on the conduct or character of the Government servant, then it will not be proper to hold that the order of compulsory retirement is in reality an order of punishment. Whether the statement in the order is stigmatic or not will have to be judged by adopting the test of how a reasonable person would read or understand it. [emphasis added] 17. In Union of India v. Col. J.N. Sinha and Another (1970) 2 SCC 458 it has been observed that : Fundamental Rule 56(j) does not in terms require that any opportunity should be given to the concerned government servant to show cause against his compulsory retirement. It says that the appropriate authority has the absolute right to retire a government servant if it is of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 321 , emphasizing the fact that exercise of powers under Fundamental Rule 56(j) must be bona fide and promote public interest, this Court observed that : - 25. The whole purpose of Fundamental Rule 56(j) is to weed out the worthless without the punitive extremes covered by Article 311 of the Constitution. But under the guise of public interest if unlimited discretion is regarded acceptable for making an order of premature retirement, it will be the surest menace to public interest and must fail for unreasonableness, arbitrariness and disguised dismissal. The exercise of power must be bona fide and promote public interest. 26. An officer in continuous service for 14 years crossing the efficiency bar and reaching the maximum salary in the scale and with no adverse entries at least for five years immediately before the compulsory retirement cannot be compulsorily retired on the score that long years ago, his performance had been poor, although his superiors had allowed him to cross the efficiency bar without qualms. 20. In Ram Ekbal Sharma v. State of Bihar and Another (1990) 3 SCC 504 it was observed that in order to find out whether an order of compulsory r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rupt but sufficient evidence was not available to take disciplinary action in accordance with the rules so as to inculcate a sense of discipline in the service. But the Government, before taking the decision to retire a government employee compulsorily from service, has to consider the entire record of the government servant including the latest reports. 22. In State of Gujarat and Another vs. Suryakant Chunilal Shah (1999) 1 SCC 529 , a case where the State Government had challenged the judgment of the Division Bench of the High Court of Gujarat that had held that the order of compulsory retirement passed against the respondent therein was bad, as there were no adverse entries in his Confidential Report and his integrity was not doubtful at any stage, this Court held thus : - 28. There being no material before the Review Committee, inasmuch as there were no adverse remarks in the character roll entries, the integrity was not doubted at any time, the character roll subsequent to the respondent s promotion to the post of Assistant Food Controller (Class II) were not available, it could not come to the conclusion that the respondent was a man of doubtful integrity nor cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority is based. In the present matter, what we see is that the High Court, while holding that the track record and service record of the appellant was unsatisfactory, has selectively taken into consideration the service record for certain years only while making extracts of those contents of the ACRs. There appears to be some discrepancy .. [emphasis added] 25. In a recent judgment in the case of Nisha Priya Bhatia v. Union of India (2020) 13 SCC 56 , confronted with the question as to whether action taken under Rule 135 of the Research and Analysis Wing (Recruitment Cadre and Service) Rules, 1975 is in the nature of a penalty or a dismissal clothed as compulsory retirement so as to attract Article 311 of the Constitution of India, this Court has held that the real test for this examination is to see whether the order of compulsory retirement is occasioned by the concern of unsuitability or as a punishment for misconduct . For drawing this distinction, reliance has been placed on the judgment in State of Bombay v. Saubhag Chand M. Doshi AIR 1957 SC 892 , where a distinction was made between an order of dismissal and order of compulsory retirement in the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27. Coming next to the stand taken by the respondents that several complaints were received against the appellant that had cast a cloud on his integrity, it is noteworthy that the respondents have referred to nine complaints against the appellant, stated to be pending in the Vigilance Directorate that have been pithily summarized by the Tribunal in a tabulated format in para 30 of its judgment dated 6th March, 2019. Juxtaposed against the said tabulated statement of complaints listed by the respondents, is a separate tabulation of the response of the appellant to each of the said complaints. For ready reference, the two tables of contents are extracted below :- S. No . Name of officer Status 1 Sh. P.K. Bajaj Addl CIT, Range 6 (2), Mumbai Shri O.P. Jangre Charges of harassment interference in work by subordinate officer Shri Jangre on Shri P.K. Bajaj Under Examination. 2 Sh. P.K. Bajaj, CIT E, Lucknow Closed dated 03.05.2018 3 Sh. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lank/ Closed dated 03.05.18 No details mentioned 3 Sh. P.K. Bajaj CIT (E), Lucknow Complaint made by Driving Training and Scientific Research Lucknow in January 2016 Under Examination File taken for inspection on 03.02.2016 returned after 17 months on 09.08.2017 with the remarks that this record is no longer required and matter closed by ADG(VIG)(NZ on 10.02.16. (Annexure no.A2) (ii) NBW issued by Ld. CJM Lucknow against complainant (Annexure no.A3) 4 Sh. P.K. Bajaj CIT (E), Lucknow Sh. Dharam Veer Kapil IFS Retd Dated 17.10.2017 ID issued dt. 13.112017 ID responded dt. 18.11.17. under examination Father in Law of Mrs. Naina Kapil So in, IRS posted earlier in DG(V) office Delhi. (ii) Application rejected because even PAN was not provided in spite of two opportunities given (copy of order as Annexure No.A4) 5 Sh. P.K. Bajaj CIT (E), Lucknow Sh. Balesh Singh, through PMOPG/E20 17/0597795 dated 17.11.17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruption Bureau of the Central Bureau of Investigation For short CBI had at a later date, arrested the said officer on charges of corruption. The appellant has also stated in the remarks column that no explanation had ever been called for from him on the said complaint, status whereof is shown as Under examination . In respect of the complaints at Sr. Nos. 3 and 4, the respondents have stated that they are Under examination . In reply, the appellant has stated that the complaint at Sr. No.3, of the year 2016 was closed by the ADG (Vigilance)(NZ) on 10th February, 2016 and the complaint at Sr. No.4, made by a relative of an officer within the Department, was rejected because the complainant did not provide his PAN number despite being afforded two opportunities. There is no rebuttal to the said assertions. Coming to the complaint at Sr. No. 5, the Review Committee constituted by the respondents has recorded the status of the said complaint as having been closed on 22nd January, 2019. This is apparent from a perusal of para 26 of the judgment dated 09th December, 2020, passed by the Tribunal. Now remains the complaint at Sr. No.9, which was made by the appellant s ex-wife alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing has been placed on record to show a sudden decline in the work conduct of the appellant so as to have compulsorily retired him. 31. We may now proceed to examine the background in which vigilance clearances were initially given to the appellant and subsequently withheld by the respondents. It is not in dispute that in the year 2013, the appellant had applied for the post of Member, ITAT and in the year 2014, the Selection Committee had placed him on the top of the list of 48 selected candidates. Based on the vigilance clearance issued by the department in August, 2013 and once again on 15th July 2015, the appellant was recommended by the respondents to the ACC for his appointment to the subject post. 32. However, sometime later, the respondents withheld the vigilance clearance given earlier on the ground that there was an adverse IB Report against the appellant. It is not out of place to mention here that the aforesaid adverse IB report had also arisen from the complaint received from the appellant s wife during the very same matrimonial dispute which had already been amicably settled in Court. The factum of the said settlement was well within the knowledge of the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant before the Tribunal in O.A. No. 279 of 2018. Ultimately, both the captioned Original Applications were collectively decided by the Tribunal in favour of the appellant by a detailed judgement dated 6th March, 201, which has not been stayed by any superior Court. 35. Aggrieved by a separate Memo dated 30th January 2018 issued by the respondents on the basis of the aforesaid inspection of his office conducted on 29th and 30th November, 2017 calling for his explanation in respect of some orders passed by him in his judicial/quasi-judicial capacity as Commissioner of Income Tax (Exemption), the appellant had to file O.A. No.332 of 2018 that was decided by the Tribunal in his favour vide judgment dated 28th May, 2019. In its judgment, the Tribunal relied on the order dated 15th May 2018, passed by the High Court in W.P. No.13390 of 2018 (SB), declaring that the inspection conducted by the Department was without jurisdiction and that there was no justification for withholding the vigilance clearance of the appellant on the basis of the said inspection. Noting that the Memo dated 30th January 2018 issued by the respondents calling for an explanation from the appellant was premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the wife, was not purchased by the appellant but by his brother, which fact is amply borne out from the documents placed on record. The matrimonial dispute between the parties stood closed on a decree of divorce being granted on the basis of mutual consent. That the respondents were also cognizant of the said fact, is apparent from the contents of O.M. dated 15th July, 2015 which records inter alia that the said allegations levelled by the wife had not been established. The third charge was relating to the appellant having attended Court hearings without sanctioned leave. However, the disciplinary proceedings initiated against the appellant on 17th July, 2019 were abandoned by the respondents on the order of compulsory retirement being passed against him in less than three months reckoned therefrom, on 27th September, 2019. 38. The appellant has made allegations of institutional bias and malice against the respondents on the plea that the Chairman, CBDT who was a Member of the Review Committee, was facing three contempt proceedings relating to the appellant s service dispute, wherein notices had been issued by the High Court as well as the Tribunal. There is no doubt that rule o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retired. If the appellant was worthy of being continued in service for little short of a decade after he had attained the age of 50 years and of being granted an overall grade of 9 on the scale of 1 - 10 on 31st July, 2019 it has not been shown as to what had transpired thereafter that made the respondents resort to FR 56(j) and invoke the public interest doctrine to compulsorily retire him with just three months of service left for his retirement, in routine. In such a case, this Court is inclined to pierce the smoke screen and on doing so, we are of the firm view that the order of compulsory retirement in the given facts and circumstances of the case cannot be sustained. The said order is punitive in nature and was passed to short-circuit the disciplinary proceedings pending against the appellant and ensure his immediate removal. The impugned order passed by the respondents does not pass muster as it fails to satisfy the underlying test of serving the interest of the public. 40. In view of the above discussion, it is deemed appropriate to reverse the impugned judgment dated 31st May, 2022 and quash and set aside the order dated 27th September, 2019 passed by the respondents, c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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