High Court · 2009

The factual background of the case is as follows :- The respondent joined the Indian Revenue Service in the year 197 3 as a Group-A Income Tax Officer. In due course he came to be promoted as a Com missioner of Income Tax on 15-9-97. In the year 2002 the respondent was working as one of the Commissioners of Income Tax at Chennai. While working so he was al so a member of a multi member body called Appropriate Authority functioning unde r Chapter XXII-A of the Income Tax Act as it existed at that point of time. It m ay be mentioned here that Chapter XXII-A was inserted by Taxation Laws (Amendmen t) Act, 1970 w.e.f. 15-11-72 which in substance provided an option to the Union of India to purchase immoveable properties of values higher than the ones specif ied under the above mentioned Chapter and it is also necessary to mention that t he value so specified in the Chapter kept on varying from time to time and at th e relevant point of time the value specified was Rs.25 lakhs. The heading of the Chapter was (cid:28)Acquisition of Immoveable Properties in Certain Cases of Transfer to Counteract Evasion of Tax (cid:29). The purchase such as the one contemplated under C hapter XXII-A came to be called preemptive purchase by the State and eventually the provisions of Chapter XXII-A insofar they are related to immoveable properti es ceased to operate after 30-9-86. The respondent as a member of the above ment ioned Appropriate Authority was a signatory to the orders (1) a no objection ce rtificate dated 11-2-02 u/s 269 UL(3) of the Income Tax Act and (2) a purchase o rder u/s 269 UD(1) in another case on 27-6-02. It appears from the record that the CBI lodged an FIR on 14-11- 03 in the context of the no objection certificate dated 11-2-02 against the resp ondent and others alleging commission of offence u/s 120B read with Section 420 of the IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Cor ruption Act, 1988. A Second case came to be registered by the CBI in the context of the purchase order dated 27-6-02 referred to earlier which was registered as CC No.26/06 on the file of the Principal Special Judge, CBI, Chennai. Eventuall y the case came to be registered as CC No.23/06 before the Principal Special Jud ge, CBI, Chennai. The respondent was eventually discharged by an order of the ab ove mentioned court dated 3-4-07. On 4-10-05 the 4th appellant issued a memorandum of charge under Rule 14 of the Central Civil Services (Classification, Control and Appeal) Rule s, 1965 against the respondent. The charge relates to the issuance of the no obj ection certificate date 11-2-02, referred to earlier, the further details of the charge may not be relevant for the present. The respondent submitted his explan ation on 7-11-05. On 24-1-066 the respondent submitted a representation that an early decision be taken on the charges framed against him as the respondent was due for promotion as Chief Commissioner of Income Tax and the pendency of the di sciplinary proceedings would jeopardize his prospects of promotion. On 31-1-06 t he DPC was convened. The decision regarding the suitability of the respondent fo r promotion was kept in a sealed cover in view of the pendency of the department al proceeding. Some other officers were promoted. On 7-2-06 an Enquiry Officer a nd a Presenting Officer were appointed in the context of the memorandum of charg es dated 4-10-05. At that stage on 14-6-06 another memorandum of charges came to be issued against the respondent alleging misconduct in the context of the purc hase order dated 27-6-02. On receipt of the above mentioned second memorandum of charges the respondent submitted his reply on 22-6-06. The disciplinary proceed ings pursuant to both the above mentioned two memoranda of charges continued wit hout any culmination.

4. In the above mentioned background the respondent filed OA No.15/ 05 before the Central Administrative Tribunal, Gauhati bench. By an interim orde r dated 30-1-08 the Tribunal permitted the appellants to proceed with the discip linary proceedings and also directed the appellants to consider the case of the respondent herein for promotion to the next higher post. The above mentioned Ori ginal Application came to be disposed of by an order dated 8-4-08 directing that the disciplinary proceedings initiated pursuant to the two charge sheets referr ed to above dated 4-10-05 and 14-6-06 be disposed of expeditiously by the end of June, 2008. The order became final. Inspite of the above mentioned order the disciplinary proceeding 5. s relating to the memorandum of charges dated 4-10-05 is not concluded by the en d of June, 2008. On the other hand on 30-6-08 the appellants chose to appoint an Enquiry Officer and a Presenting Officer in respect of the second memo of charg es dated 14-6-06 and the said fact was communicated to the respondent herein on 7-8-08.

6. In the above mentioned background the respondent once again appr oached the Administrative Tribunal by way of Original Application No.120/08. The Administrative Tribunal by the order under challenge in the present writ petiti on on an elaborate consideration of the various facts and circumstances and the legal position allowed the Original Application and quashed both the memoranda o f charges referred to earlier and further directed the appellants herein to open the sealed cover which contained the assessment of the DPC regarding the suitab ility of the respondent for promotion to the next higher post of Chief Commissio ner of Income Tax and directed that such exercise be completed within 60 days fr om the date of the order. The relevant portion of the Tribunal’s order is as fol lows :- (cid:28)14. In any event, the Respondent Department of this case having sat over the ma tter [in the 1st Departmental Proceeding dated 04.10.2005] for almost 2 years by now without any explanation and having not taken any expeditious action in the 2nd Departmental Proceeding dated 14.06.2006 having not proceeded for over 2 yea rs without any explanation and a Competent Criminal Court having held absence of evidences even to frame charges against the Applicant, we proceed to quash both the Departmental Proceedings [those were drawn up against the Applicant on 04.1 0.2005 and 14.06.2006] and direct the Respondents to open the opinion of the DPC kept in Sealed Cover and grant necessary consequential relief to the Applicant within next 60 days. (cid:29)

7. The appellants waited for 60 days and approached this court by w ay of the present writ petition on 21-11-08. At the admission stage a Division B ench of this court by its order dated 3-12-08 declined to suspend the impugned o rder of the Administrative Tribunal. However, the appellants were permitted to c onclude the pending departmental proceedings with a rider that the decision, if any, reached in the departmental proceedings shall not be given effect to pendin g final order in the present writ petition.

8. The respondent filed Contempt Case (C) No.161/09 complaining tha t though there was no suspension of the impugned order the appellants are not im plementing the order of the Tribunal on a wrong interpretation of the order of t his court dated 3-12-08. When the said contempt case was listed on 22-4-09 befor e this court it was opined by this court that it is better that the contempt cas e and the writ petition be heard together. Accordingly both the matters were dir ected to be listed in the next week. When the matters were listed on 4-5-09 at t he request of the learned counsel for the appellants the matters were again adjo urned to 5-5-09 to enable him to obtain instructions as to the fate of the disci plinary proceeding against the respondent.

9. The learned counsel for the appellants on 5-5-09 stated that the disciplinary proceedings have not yet been concluded and submitted that the hea ring of the writ petition be deferred to enable the appellants to finalise the d isciplinary proceedings against the respondent. The said request was rejected by this court for reasons to be assigned later in this judgment.

10. The issue in the present writ petition is whether the Administra tive Tribunal was right in allowing the OA No.120/08 on the ground that the disc iplinary proceedings were unduly delayed thereby quashing the two memoranda of c harges against the respondent, referred to earlier, and granting the consequenti al reliefs. The issue of delay is to be determined with reference to the date of the decision of the Administrative Tribunal. The interim order of this court da ted 3-12-08 permitting the appellants to proceed with the disciplinary enquiry a gainst the respondent was to enable the appellants to expeditiously conclude the proceedings if the appellants are serious about their allegations against the r espondent and in the event of the appellants’ success in the present writ petiti on not to give scope for a complaint that the disciplinary proceedings are furth er protracted in view of the pendency of the writ petition. The said order canno t be construed as an order entitling the appellants to continue the disciplinary proceedings against the respondent ad infinitum. The learned counsel for the ap pellants vaguely suggested that in view of the above interim order the hearing o f the writ petition should be deferred until the appellants conclude the discipl inary proceedings. We are afraid that the appellants have no such right to ask f or deferment of hearing of the writ petition. The impugned order stands or falls on its own merits and on the correctness of the logic of the order and does not depend upon subsequent events .

11. We have already noticed the events which led to the framing of t he two charges against the respondent. The impugned order is dated 19-9-08, more than six years after the alleged acts of misconduct. Another important fact is that the respondent eventually retired on 31-12-08. The progress of the discipli nary proceedings was outlined earlier in this judgment. The Administrative Tribu nal in its order elaborately discussed the tardy progress of the disciplinary pr oceedings. The fact remains that inspite of opportunity given by this court the appellants could still not conclude the disciplinary proceedings. The Tribunal a lso noticed the law laid down by the Supreme Court in (1998) 4SCC 154 and (2005) 6 SCC 636 and came to the conclusion that having regard to the facts and circum stances the delay in the instant case is without any proper explanation and cert ainly not attributable to anything on the part of the respondent. The Supreme Court in (1998) 4 SCC 1541 at para 90 held as follow

12. s :- (cid:28)19. It is not possible to lay down any pre-determined principles applicabl e to all cases and in all situations where there is delay in concluding the disciplinary proceedings. Whether on that ground the disciplinary proce employee has a right that edings are to be terminated each case has to be examined on the facts a nd circumstances in that case. The essence of the matter is that the court h as to take into consideration all relevant factors and to balance and weight the m to determine if it is in the interest of clean and honest administration that the disciplinary proceedings should be allowed to terminate after delay particularly when delay is abnormal and there is no explanation for the delay. T disciplinary proceedings against he delinquent him are concluded expeditiously and he is not made to undergo mental agony and also monetary loss when these are unnecessarily prolonged without any fault o n his part in delaying the proceedings. In considering whether delay has vitiat ed the disciplinary proceedings the Court has to consider the nature of c harge, its complexity and on what account the delay has occurred. if the delay is unexplained prejudice to the delinquent employee is writ lar ge on the face of it. It could also be seen as to how much disciplinary auth ority is serious in pursuing the charges against its employee. It is the basic principle of administrative justi officer entrusted with a particular job has to perform h is duties honestly, efficiently and in accordance with the rules. If he devia tes from this path he is to suffer a penalty prescribed. Normally, disciplin ary proceedings should be allowed to take its course as per relevant rules bu t then delay defeats justice. Delay causes prejudice to the charged office r unless it can be shown that he is to or when there is proper explanat ion for the delay in conducting the disciplinary proceedings. Ultimately , the court is to balance these two diverse consideration. (cid:29) that an In (2005) 6SCC 6362 the Supreme Court took note of the earlier d ecision of the Supreme Court on this issue including the decision in (1998) 4SCC 1541 . It can be seen from the above authorities and more particularly from the decision in (1998) 4SCC 1541 that the relevant consideration for quashi ng the charges in a departmental proceeding are - 1) the delinquent employee has a right that the disciplinary proceedings should conclude expeditiously; 2) the nature of the charge, its complexity and the reasons for the delay and 3) wheth er the delinquent employee is in any way responsible for the delay.

13. The Tribunal by the impugned order gave very elaborate and cogen t reasons to establish that the appellants did not pursue the disciplinary proce edings with sincerity and diligence. We have carefully gone through the impugned order and do not see any reason to take a different view on the conclusions rea ched by the Tribunal

14. Coming to the nature of the charges the crux of the first of the two charges is that the respondent by issuing the NOC dated 11-2-02 enabled the applicant u/s 269 to avoid payment of an amount of Rs.2,10,20,835/- stamp duty payable to the State of Tamul Nadu. It was a case where the NOC was already gran ted in favour of the applicant for sale of land and building at the rate of Rs.2 6,01,47,327/-. It appears from the charge that the applicant made a second appli cation seeking a fresh NOC indicating the land and building separately and such an NOC was granted by the Appropriate Authority of which the respondent was one of the members. On a charge like this the enquiry to our mind is purely in the r 15. ealm of law where the issues would be - firstly, whether the Appropriate Authori ty, of which the respondent is a member, had the jurisdiction to issue a fresh N OC and secondly whether the Govt of Tamul Nadu was bound by the valuation made b y the Appropriate Authority in the matter of fixation of stamp duty while regist ering the transfer of property which is the subject matter of the NOC. It is not the case of the appellants that by issuing the NOC the Appropriate Authority, o f which the respondent is a member, facilitated the evasion of income tax by the beneficiary of the NOC. As a matter of fact the original NOC was issued by the Appropriate Authority at a point of time when the respondent was not a member of that body. The decision to issue the NOC by the predecessor body was never cons idered either inappropriate or illegal and was allowed to become final. Therefor e the enquiry, if any, against the respondent is purely in the realm of law but not of fact. Such being the case pendency of such an enquiry, in our opinion, fo r a period of three years is certainly protracted and cannot be said to have bee n diligently pursued by the appellants.

16. Coming to the second charge, it was a case where the Appropriate Authority (of which the respondent is a member) issued a purchase order u/s 269 UD of a certain property obviously on the belief that by the proposed transactio n the applicant was likely to avoid the incidence of a higher amount of income t ax. The allegation against the Appropriate Authority appears to be the issuance of the NOC in favour of a person who did not have the requisite title. From the charge it appears that the property which was the subject of the said NOC was al legedly owned by the Tamil Nadu Housing Board. We agree that if the Appropriate Authority passes a compulsory purchase order u/s 269UD thereby leading to a cons equence of payment of money in favour of some person who has no title to the pro perty. Such an action would have the consequence of the Govt of India parting wi th money in favour of a person who is legally not entitled to receive the money. The enquiry into this issue requires a verification of the fact whether the ord er was issued bona fide and whether the members of the Appropriate Authority exe rcised due diligence to ascertain the title of the person seeking the NOC. But w ith reference to the said charge the appellants did not even appoint an Enquiry Officer and a Presiding Officer for a period of more than two years from the dat e of the charge sheet which delay by any standard cannot be said to be a reasona ble delay.

17. e with the order under challenge. The writ petition is dismissed. For all the above mentioned reasons we see no reason to interfer

18. The Contempt Case is disposed of directing the respondents there in (appellants in the writ petition) to forthwith open the sealed cover of the p roceedings of the DPC referred to earlier and take all necessary consequential a ction pursuant to the report.