Dr.G. Sreekumar Menon v. Union of India

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 28-01-2009CORAMTHE HONOURABLE MR. JUSTICE P.K. MISRAANDTHE HONOURABLE MR. JUSTICE A. KULASEKARANWRIT PETITION NO.15356 OF 2007andM.P.NO.2 OF 2007Dr.G. Sreekumar MenonCommissioner AppealsCentral Excise,No.605, Mahabir Towers,Ranchi 834 001.Jharkand State.. PetitionerVs.1.Union of India,Rep. by its Secretary (Revenue),Ministry of Finance,Department of Revenue,Central Board of Excise and Customs,(Service through under Secretary to the Government of India Ad.V)Ministry of Finance,Department of Revenue,C.B.E.C., New Delhi 110 001.2.The Director General,Directorate of Vigilance,Customs and Central Excise,1st Floor, Samrat Hotel,Kautiya Marg, Chanakyapuri,New Delhi 110 021.3.The Chief Commissioner of Central Excise,No.121, Central Excise Office III Floor,Chennai 600 034.4.The Central Administrative Tribunal, Rep by RegistrarMadras Bench,Madras... Respondents https://hcservices.ecourts.gov.in/hcservices/ Petition filed under Article 226 of the Constitution of India forthe issuance of Writ of Certiorari to call for the records of theorder of 4th respondent in O.A.No.968 of 2005, dated 30.11.2006, onthe file of the Central Administrative Tribunal, Madras Bench,Madras, and to quash the same.For Petitioner: Mr. Vijay Narayan Senior Advocate for M/s.R. Parthiban & Narmada SampathFor Respondents 1to3: Mr.P. Mahadevan, SCCG- - -JUDGMENTP.K. MISRA, JThe petitioner had filed O.A.No.968 of 2005 before theCentral Administrative Tribunal, Madras Bench, (hereinafter referredto as "the Tribunal") for quashing the Memorandum No.46/2005 dated20.10.2005, whereunder departmental proceedings had been initiatedagainst the present petitioner. Such Original Application havingbeen dismissed, the present writ petition has been filed.2. The facts which were indicated in the OriginalApplication in substance indicate that the applicant had joined theIndian Revenue Service (Customs & Excise) as Group-A Officer in 1978and in course of time he was promoted and, subsequently between April1995 and August 2000, he was functioning as Deputy Commissioner /Joint Commissioner. During the said period he had decided anadjudication proceeding. Subsequently, he received a letter from theDirectorate of Vigilance, New Delhi, to clarify certain points and tosend a preliminary submission on 28.8.2003. On 2.11.2005, he wasserved with a Memorandum dated 20.10.2005 proposing to hold enquiryunder Rue 14 of the CCS (CCA) Rules 1965. Memorandum dated20.10.2005 was challenged before the Tribunal by raising contentionto the effect that Memorandum of charges relate to infirmities in anorder passed while exercising quasi judicial function and in factsuch order passed by the petitioner had been ultimately upheld inappeal. It was also indicated that charge memo was issued at theinstance of the then Commissioner of Central Excise on personalgrounds and had been issued after a delay of five years.3. A reply was filed by the Department, wherein it wasindicated that pertaining to such order passed by the petitioner, acomplaint was given by the then Commissioner requesting the DirectorGeneral of Vigilance to conduct investigation and such investigationrevealed that the applicant had committed lapses in deciding the casein haste and had accepted the assertion of the party to such https://hcservices.ecourts.gov.in/hcservices/ assessment proceedings and he had also misinterpreted the technicaland legal issues involved in the adjudication and had acted blatantlyin favour of the party and against the instructions and circulars ofthe Government. Even though the petitioner had tried to explain thatsimilar orders had been passed by the Commissioner and some counterallegations have been made, after consultation with the CVC., thecharge memo dated 20.10.2005 has been issued and there is nojustification to interfere with the charge-memo at the threshold.4. The Tribunal posted the following questions forconsideration :-"(i) Whether the disciplinary proceedings could beinitiated as against the orders passed by the quasijudicial authority in that capacity?(ii) Whether the impugned charge memo is sustainable?(iii) Whether there is any delay in initiation ofdisciplinary proceedings against the applicant?"5. The Tribunal by referring to the decision of the SupremeCourt in 1994(27) ATC 200 (UNION OF INDIA v. UPENDRA SINGH) held thatthe Tribunal could not go into the correctness or truth of the chargeat the preliminary stage as the truth or otherwise of the charge is amatter for the disciplinary authority to decide. In this connection,the Tribunal also referred to the decision of the Supreme Court inC.A.No.2168 of 2006 dated 21.5.2006 (UNION OF INDIA v. Duli Chand).The Tribunal also negatived the contention relating to delay ininitiation of the proceedings as the Department has explained thereason for the same.6. In this writ petition, the petitioner has raised thefollowing contentions :-(1) Since the petitioner was discharging his quasi-judicialfunction, departmental proceedings could not have been initiated inthe absence of any imputation of mala fides, extraneousconsideration, corruption or negligence while discharging such quasi-judicial function.(2) The order passed by the petitioner, which was the basis forinitiation of the departmental proceedings, itself had been confirmedby CESTAT by order dated 20.12.2006 and, in view of the subsequentdevelopment, there is no justification to continue the proceedings.7. Learned counsel appearing for the Respondents hassupported the conclusion made by the Tribunal and had contended thatthere is no justification to interfere with the order passed by theTribunal. https://hcservices.ecourts.gov.in/hcservices/

8. The charge memo dated 20.10.2005 is to the followingeffect :-"Article-IShri G. Sreekumar, while functioning as JointCommissioner of Central Excise, Mangalore favoured M/s.PALSMicro Systems Ltd., Mangalore, vide his order No.14/2000dated 2/9.8.2000 by adjudicating the case totally ignoringthe evidence in favour of the Revenue which as adjudicatingauthority he was bound to consider and relying on thebelated retraction of the party and absolved them of dutyliability and the interest leviable thereon and alsopenalty. By doing so Shri G. Sreekumar, failed to maintainabsolute integrity and devotion to duty and acted in amanner unbecoming of a Govt. servant and thereby contravenedthe provisions of Rule 3(1)(i), (ii) and (iii) of the CCS(Conduct) Rules, 1964.Article-IIShri G. Sreekumar, vide his order No.14/2000 dated2/9.8.2000, favoured PALS Micro Systems Ltd., Mangalore bysuppressing the presence of the sale bills of Modvat inputs.By doing so, Shri G. Sreekumar acted in a manner unbecomingof a Government servant and failed in proper discharge ofhis duties and failed to maintain absolute integritycontravening the provisions of Rule 3(1)(i), (ii) and (iii)of the CCS (Conduct) Rules, 1964.Article-IIIShri G. Sreekumar, vide his order No.14/2000 dated2/9.8.2000 favoured PALS Micro Systems Ltd., Mangalore byraising irrelevant issues, like relevant date andcorrelation between input invoices and sales bills. Bydoing so he failed in proper discharge of his duties andfailed to maintain absolute integrity and devotion to dutyand thereby contravened Rule 3(1)(i), (ii) and (iii) of theCCS (Conduct) Rules, 1964.Article-IVShri G. Sreekumar, in his order No.14/2000 dated2/9.8.2000 misinterpreted the technical and legal issuesinvolved in the adjudication as well as the material factsand evidence associated with the adjudication proceedings ina biased manner. He called for details/report fromconcerned Division vide letter C.No.V/84/15/30/2000 Hqrs. https://hcservices.ecourts.gov.in/hcservices/ Adjn., dated 2.8.2000. However, without waiting for thereply from the Division, Shri G. Sreekumar hastily passedthe cited order-in-original in favour of the assessee. Bydoing so he failed in proper discharge of his duties andfailed to maintain absolute integrity and devotion to dutyand acted in a manner unbecoming of a Govt. Servant andthereby contravened Rule 3(1)(i), (ii) and (iii) of the CCS(Conduct) Rules, 1964.Article-VShri G. Sreekumar, hurriedly issued the Show CauseNotice dated 26.6.2000 without waiting for the details andevidence he himself sought from the Deputy Commissioner,Mangalore-II Division. He also failed to issuecorrigendum / addendum to the show cause notice when thedetails and documents sought by him for the issue of showcause notice were received subsequently from the Division.He thus failed in proper discharge of his duties and failedto maintain absolute integrity and devotion to duty andacted in a manner becoming of a Govt. servant and therebycontravened Rule 3(1)(i), (ii) and (iii) of the CCS(Conduct) Rules, 1964."9. There is no doubt that disciplinary proceeding has beeninitiated on the basis of a quasi-judicial order passed by thepetitioner in his capacity as Joint Commissioner of the CentralExcise, Managalore, as per Order No.14/2000 dated 2/9.8.2008. 10. The primary contention of the learned Senior Counsel forthe petitioner is to the effect that since the petitioner wasexercising quasi-judicial power, no departmental proceedings shouldbe initiated merely because such quasi-judicial order was found to beillegal or erroneous. Learned Senior Counsel has placed relianceupon several decisions of the Supreme Court in support of thecontention that disciplinary proceedings should not be initiatedmerely because the order passed by a judicial or quasi-judicialauthority is found to be illegal or erroneous on fact.11. Learned counsel appearing for the Respondents, on theother hand, has placed reliance upon several decisions of the SupremeCourt, which lay down that in appropriate cases disciplinary actioncan be initiated against the judicial or quasi-judicial authority andmerely because such judicial or quasi-judicial orders have beenpassed, would not give a complete immunity.12. Learned Senior Counsel for the petitioner has inter aliarelied upon the decisions of the Supreme Court reported in (1999) 7SCC 409 (ZUNJARRAO BHIKAJI NAGARKAR v. UNION OF INDIA AND OTHERS),(2007) 4 SCC 247 (RAMESH CHANDER SINGH v. HIGH COURT OF ALLAHABAD AND https://hcservices.ecourts.gov.in/hcservices/ ANOTHER) and (2007) 4 SCC 566 (INSPECTOR PREM CHAND v. GOVT. OF NCTOF DELHI AND OTHERS), whereas the learned counsel for the Departmenthas placed reliance upon the decision reported in (1993) 2 SCC 56(UNION OF INDIA AND OTHERS v. K.K. DHAWAN). The relevant facts inthe words of the Supreme Court are extracted hereunder :-"2. The respondent, while working as Income TaxOfficer, Muktsar during the year 1982-83 completed certainassessments. A charge-memorandum dated May 2, 1989 wasserved on him to the effect it was proposed to hold aninquiry against him under Rule 14 of the Central CivilServices (Classification, Control and Appeal) Rules, 1965.A statement of article of charge framed against him was tothe following effect:Statement of article of charge framed against Shri K.K.Dhawan, A Group ‘A’ now posted as Assistant Commissioner ofIncome Tax, Bombay.Article IShri K.K. Dhawan, while functioning as I.T.O. "A" Ward,Muktsar during 1982-1983 completed nine assessments in thecase of:. . . (names omitted as not necessary)in an irregular manner, in undue haste and apparently witha view to conferring undue favour upon the assesseesconcerned.By his above acts Shri Dhawan failed to maintainabsolute integrity and devotion to duty and exhibited aconduct unbecoming of a Government servant, therebyviolating provisions of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS (Conduct) Rules, 1964.This was accompanied by a statement of imputation of hismisconduct or misbehaviour in support of the article ofcharge framed against him.3. In each of the nine cases of the assessees above-referred to, the details relating to misconduct ormisbehaviour were furnished. Therefore, it was charged thatthe respondent had violated the provisions of Rule 3(1)(i),3(1)(ii) and 3(1)(iii) of the Central Civil Services(Conduct) Rules, 1964. The necessary documents in supportof these allegations were also enclosed."(Emphasis added)The Central Administrative Tribunal quashed the aforesaid chargememo on the ground that "the action taken by the officer was quasi- https://hcservices.ecourts.gov.in/hcservices/ judicial and should not have formed the basis of disciplinaryaction." While allowing the appeal, the Supreme Court observed as follows:-"28. Certainly, therefore, the officer who exercisesjudicial or quasi-judicial powers acts negligently orrecklessly or in order to confer undue favour on a person isnot acting as a Judge. Accordingly, the contention of therespondent has to be rejected. It is important to bear inmind that in the present case, we are not concerned with thecorrectness or legality of the decision of the respondentbut the conduct of the respondent in discharge of his dutiesas an officer. The legality of the orders with reference tothe nine assessments may be questioned in appeal or revisionunder the Act. But we have no doubt in our mind that theGovernment is not precluded from taking the disciplinaryaction for violation of the Conduct Rules. Thus, we concludethat the disciplinary action can be taken in the followingcases:(i)Where the officer had acted in a manner as wouldreflect on his reputation for integrity or good faith ordevotion to duty;(ii)if there is prima facie material to showrecklessness or misconduct in the discharge of his duty;(iii) if he has acted in a manner which is unbecomingof a Government servant;(iv)if he had acted negligently or that he omitted theprescribed conditions which are essential for the exerciseof the statutory powers;(v)if he had acted in order to unduly favour a party;(vi)if he had been actuated by corrupt motive, howeversmall the bribe may be because Lord Coke said long ago"though the bribe may be small, yet the fault is great". 29. The instances above catalogued are not exhaustive.However, we may add that for a mere technical violation ormerely because the order is wrong and the action not fallingunder the above enumerated instances, disciplinary action isnot warranted. Here, we may utter a word of caution. Eachcase will depend upon the facts and no absolute rule can bepostulated.13. In (1997) 7 SCC 409 (cited supra), the appellant beforethe Supreme Court had challenged initiation of the disciplinaryproceedings unsuccessfully, initially before the Tribunal andsubsequently before the High Court. Two Judge Bench of the Supreme https://hcservices.ecourts.gov.in/hcservices/ Court, while allowing the appeal and quashing the charge memo, theSupreme Court observed :-"41. When penalty is not levied, the assesseecertainly benefits. But it cannot be said that by notlevying the penalty the officer has favoured the assesseeor shown undue favour to him. There has to be some basisfor the disciplinary authority to reach such a conclusioneven prima facie. The record in the present case does notshow if the disciplinary authority had any informationwithin its possession from where it could form an opinionthat the appellant showed "favour" to the assessee by notimposing the penalty. He may have wrongly exercised hisjurisdiction. But that wrong can be corrected in appeal.That cannot always form a basis for initiating disciplinaryproceedings against an officer while he is acting as aquasi-judicial authority. It must be kept in mind thatbeing a quasi-judicial authority, he is always subject tojudicial supervision in appeal.42. Initiation of disciplinary proceedings against anofficer cannot take place on information which is vague orindefinite. Suspicion has no role to play in such matter.There must exist reasonable basis for the disciplinaryauthority to proceed against the delinquent officer. Merelybecause penalty was not imposed and the Board in theexercise of its power directed filing of appeal againstthat order in the Appellate Tribunal could not be enough toproceed against the appellant. There is no other instanceto show that in similar case the appellant invariablyimposed penalty.43. If every error of law were to constitute a chargeof misconduct, it would impinge upon the independentfunctioning of quasi-judicial officers like the appellant.Since in sum and substance misconduct is sought to beinferred by the appellant having committed an error of law,the charge-sheet on the face of it does not proceed on anylegal premise rendering it liable to be quashed. In otherwords, to maintain any charge-sheet against a quasi-judicial authority something more has to be alleged than amere mistake of law, e.g., in the nature of some extraneousconsideration influencing the quasi-judicial order. Sincenothing of the sort is alleged herein the impugned charge-sheet is rendered illegal. The charge-sheet, if sustained,will thus impinge upon the confidence and independentfunctioning of a quasi-judicial authority. The entiresystem of administrative adjudication whereunder quasi-judicial powers are conferred on administrativeauthorities, would fall into disrepute if officers https://hcservices.ecourts.gov.in/hcservices/ performing such functions are inhibited in performing theirfunctions without fear or favour because of the constantthreat of disciplinary proceedings."(Emphasis added)It is to be noted that the Supreme Court in the above case hadreferred to earlier decision in K.K. Dhawan's case.14. In a subsequent decision of the Supreme Court in (2001)6 SCC 491 (P.C. JOSHI v. STATE OF U.P. AND OTHERS, the Supreme Court,while referring to the law laid down in A.N. SAXENA's case [(1992) 3SCC 124] and K.K. DHAWAN'S case [(1993) 2 SCC 56] to the effect thatdisciplinary action can be initiated in respect of judicial or quasi-judicial order under certain contingencies, quashed the ultimatepunishment on the basis of factual finding that there was noallegation nor any proof of any recklessness or misconduct in duty.15. In (2006) 5 SCC 680 (UNION OF INDIA v. DULI CHAND), athree Judge Bench, while reiterating the views expressed in K.K.Dhawan's case, observed :-"9. In our opinion, Nagarkar case was contrary to theview expressed in K.K. Dhawan case. The decision in K.K.Dhawan being that of a larger Bench would prevail. Thedecision in Nagarkar case therefore does not correctlyrepresent the law. Inasmuch as the impugned orders of theTribunal and the High Court were passed on the lawenunciated in Nagarkar case this appeal must be allowed. Theimpugned decisions are accordingly set aside and the orderof punishment upheld."16. Subsequently, however, the Supreme Court in the decisionreported in (2007) 4 SCC 247 (RAMESH CHANDER SINGH v. HIGH COURT OFALLAHABAD AND ANOHER) has observed as follows :-"17. In Zunjarrao Bhikaji Nagarkar v. Union of Indiathis Court held that wrong exercise of jurisdiction by aquasi-judicial authority or mistake of law or wronginterpretation of law cannot be the basis for initiatingdisciplinary proceeding. Of course, if the judicial officerconducted in a manner as would reflect on his reputation orintegrity or good faith or there is a prima facie materialto show recklessness or misconduct in discharge of hisduties or he had acted in a manner to unduly favour a partyor had passed an order actuated by corrupt motive, the HighCourt by virtue of its power under Article 235 of theConstitution may exercise its supervisory jurisdiction.Nevertheless, under such circumstances it should be kept inmind that the Judges at all levels have to administerjustice without fear or favour. Fearlessness and maintenance https://hcservices.ecourts.gov.in/hcservices/ of judicial independence are very essential for anefficacious judicial system. Making adverse comments againstsubordinate judicial officers and subjecting them to severedisciplinary proceedings would ultimately harm the judicialsystem at the grassroot level."(Emphasis added)17. It is to be noted that in the above decision of theSupreme Court, there is no specific reference to the earlier decisionof the Supreme Court in K.K. Dhawan's case or Duli Chand's case.However, the observations made in para 17, which have been emphasisedby us, clearly indicate that the Division Bench of the Supreme Courtwas clearly conscious of the specific instances as recognised in K.K.Dhawan's case and reiterated in Duli Chand's case justifyinginitiation of a disciplinary proceedings against the officer inrespect of judicial or quasi-judicial order. In other words, in our humble opinion, even though there is nospecific reference to those decisions, it is obvious that the Benchwas conscious of the principles already elucidated in the aforesaidtwo decisions. 18. In our considered opinion, on an in-depth perusal of thedecisions of the Supreme Court in K.K. Dhawan's case, which wasfollowed in Duli Chand's case and Nagarkar's case, which was followedin Ramesh Chander Singh's case,is no real conflict in the principleselucidated in these decisions. As a matter of fact, in K.K. Dhawan'scase, it has been clearly indicated that each case will depend uponthe facts and no absolute rule can be postulated.19. In Nagarkar's case, there is specific reference to K.K.Dhawan's case. It is obvious that two Judge Bench decision inNagarkar's case was conscious of the law laid in K.K. Dhawan's caseand that is why even while quashing the proceedings it was observedthat "The record in the present case does not show if thedisciplinary authority had any information within its possession fromwhere it could form an opinion that the appellant showed "favour" tothe assessee by not imposing the penalty."It was further observed "In other words, to maintain any charge-sheet against a quasi-judicial authority something more has to bealleged than a mere mistake of law, e.g., in the nature of someextraneous consideration influencing the quasi-judicial order. Sincenothing of the sort is alleged herein the impugned charge-sheet isrendered illegal."20. Similarly in Ramesh Chander Singh's case, it is apparentthat the Bench was conscious of the exposition of law made in K.K.Dhawan's case as apparent from the observation made in para 17, whichwe have extracted earlier. https://hcservices.ecourts.gov.in/hcservices/

21. As a matter of fact, in a very recent Division Benchdecision of this Court reported in 2008(226)E.L.T. 696 (Mad) (UNIONOF INDIA v. P. PARAMESWARAN), to which one of us (P.K. Misra,J) was aparty, after referring to all the above decisions of the SupremeCourt, it was observed:-"15. Therefore, if the decisions in K.K.Dhawan case,Nagarkar case, Duli Chand case, Ramesh Chander Singh caseand Inspector Prem Chand case are read together, it isnecessary that before initiating disciplinary action, theDepartment must have a prima facie material to showrecklessness and that the officer had acted negligently orby his order unduly favoured a party and his action wasactuated by corrupt motive. In fact, K.G. Balakrishnan,CJ in Rameh Chander Singh's case even took an exception tothe practice of initiating disciplinary action againstOfficers merely because the orders passed by them werewrong." 22. We may venture to add that, even though the SupremeCourt in Duli chand's case said that Nagarkar's case cannot befollowed, in our humble opinion, the factual scenario in Nagarkar'scase was completely different from the facts in K.K. Dhawan's caseand Nagarkar's case can be said to have been resurrected in RameshChander Singh's case. 23. It has to be seen whether in the present case initiationof the disciplinary proceeding was justified. We have already extracted the articles of charges. It isapparent that charges were based upon the order passed by thepetitioner which was perceived to be erroneous by the appellateauthority. Entire articles of charges read as a whole would indicatethat there is no specific allegation of recklessness or utternegligence of the quasi-judicial function and similarly there is nospecific allegation of any overt misconduct. 24. In our considered opinion, the ratio of the latestdecision of the Supreme Court in Ramesh Chander Singh's case would beapplicable in the absence of specific imputation of dishonesty, lackof bona fide or utter negligence in discharge of duties andinitiation of departmental proceedings is required to be quashed.Incidentally it may be pointed out that even though the appellateauthority had set aside the order passed by the present petitioner,subsequently, in further appeal, CESTAT had set aside the order ofthe appellate authority and had restored the order which had beenpassed by the present petitioner. In view of this subsequent event,even the main basis for the initiation of the disciplinaryproceedings, namely, the alleged illegal and erroneous order,is nolonger available. In the changed circumstances it would not beappropriate to continue the disciplinary proceedings. https://hcservices.ecourts.gov.in/hcservices/

25. For the aforesaid reasons, the order of the Tribunal isset aside and accordingly the writ petition is allowed. No costs.Consequently, the connected miscellaneous petition is closed.Sd/Asst.Registrar/true copy/Sub Asst.RegistrardpkTo1.Union of India,Rep. by its Secretary (Revenue),Ministry of Finance,Department of Revenue,Central Board of Excise and Customs,(Service through under Secretary to the Government of India Ad.V)Ministry of Finance,Department of Revenue,C.B.E.C., New Delhi 110 001.2.The Director General,Directorate of Vigilance,Customs and Central Excise,1st Floor, Samrat Hotel,Kautiya Marg, Chanakyapuri,New Delhi 110 021.3.The Chief Commissioner of Central Excise,No.121, Central Excise Office III Floor,Chennai 600 034.4.The Registrar The Central Administrative Tribunal,Madras Bench,Madras.1 cc To Mr.R.Parthiban, Advocate, SR.4163 WP.NO.15356/2007GV(CO)SRA(03/02/2009)