Singh 'Lalan' & Anr Vs. Union of India & Ors  Insc 511 (21 August 2006)
Kapadia S.H. Kapadia, J.
had the privilege of reading the opinions of Brother Justice Balakrishnan and
Brother Justice Lakshmanan, I have to record my respectful dissent with the
views expressed by my learned brothers.
these writ petitions under Article 32 of the Constitution, filed to enforce
Article 14 of the Constitution, following three issues arise for determination:
Whether the writ
petitions were maintainable as Public Interest Litigation;
there was failure of statutory and public duty on the part of the Revenue in not
preferring an appeal to the High Court under Section 260A of the Income Tax Act,
the procedure adopted at the time of posting Mr. Munni Lal Paswan, ADJ as
Special Judge, CBI, Patna (Fodder Scam Cases) on 22.06.2005, needs to be relooked by the Patna High Court.
WHETHER THE WRIT PETITIONS WERE MAINTAINABLE AS PUBLIC INTEREST LITIGATION:
defalcation of public funds, fraudulent transactions and falsification of
accounts, of around Rs.500 crores, came to light in the Animal Husbandry
Department of the State of Bihar. This
scam took place during the period 1977 to 1996. A similar situation existed in
the Education, Corporation and Fisheries Departments.
judgment dated 11.03.1996 delivered by the Division Bench of the Patna High
Court in Writ Petition No.459 of 1996 the High Court, in exercise of its powers
under Article 226 of the Constitution, took away the investigation from the
State police and entrusted it to CBI. The said decision of the Patna High Court was challenged by the
State vide Civil Appeal Nos. 5177-81 of 1996. By judgment dated 19.03.96, this
Court observed that the exercise of the power under Article 226 in a public
interest litigation was not to give any advantage to a political party or group
of people but it was done to investigate corruption in public administration,
misconduct by the bureaucracy, fabrication of official records and
misappropriation of public funds. Therefore, this Court refused to interfere
with the impugned judgment of the Patna High Court [See: State of Bihar and Another v. Ranchi Zila Samta
Party and Another (1996) 3 SCC 682.
case of Union of India and Others v. Sushil Kumar Modi and Others (1996) 6 SCC
500 certain allegations were made against the then Director, CBI, in the
context of investigations into the above fodder scam. The relevant paragraphs
11 and 14 of the said judgment are quoted hereinbelow:
"We deem it proper to emphasise
that every officer of the CBI associated with the investigation has to function
as a member of a cohesive team which is engaged in the common pursuit of a
fair, honest and complete investigation into the crimes alleged. It is needless
to further emphasise that the exercise has to be performed objectively and
fairly, mindful of the fact that the majesty of law has to be upheld and the
'rule of law' preserved, which does not discriminate between individuals on the
basis of their status, position or power. The law treats everyone as equal
before it and this has to be kept in view constantly in every State action to
avoid violation of the 'right to equality' guaranteed in Article 14 of the
It appears necessary to add that the
Court, in this proceeding, is concerned with ensuring proper and honest
performance of its duty by the CBI and not the merits of the accusations being
investigated, which are to be determined at the trial on the filing of the chargesheet
in the competent court, according to the ordinary procedure prescribed by law.
Care must, therefore, be taken by the High Court to avoid making any
observation which may be construed as the expression of its opinion on merits
relating to the accusation against any individual. Any such observation made on
the merits of the accusation so far by the High Court, including those in Para
8 of the impugned order are not to be treated as final, or having the approval
of this Court. Such observations should not, in any manner influence the
decision on merits at the trial on the filing of the chargesheet. The
directions given by this Court in its aforesaid order dated March 19, 1996 have to be understood in this
manner by all concerned, including the High Court."
31.08.2004 the present Writ Petition (Crl.) Nos.197-198 of 2004 were filed for
enforcement of Article 14 of the Constitution. Briefly, it is alleged that the
Union of India (respondent no.1) and other respondents (including respondent
nos.4 and 5) are allegedly committing acts of misfeasance in relation to the
corruption cases pending before the Special Judge, CBI, Patna as well as in the
appeals preferred by the accused before the Income Tax Appellate Tribunal.
Respondent no.4 is Smt. Rabri Devi, former Chief Minister of Bihar and
respondent no.5 is Mr. Lalu Prasad, former Chief Minister of Bihar. In the writ
petitions it is alleged that trial judge as well as the Member (Judicial) of
the Income Tax Appellate Tribunal who are found to be inconvenient are being
transferred and supplanted with the chosen ones. That, even the judgment of the
Income Tax Appellate Tribunal (for short, 'the Tribunal') allowing the appeal
in favour of the assessees for the assessment years 1986-87 to 1996-97, though
involving substantial questions of law, has not been challenged by the Revenue
by filing appeals under Section 260A of the Income Tax Act, 1961 (for short,
'the I.T. Act') in order to protect some of the respondents-accused.
nos.4 and 5 as well as Union of India have categorically denied the allegations
made by the petitioners. It is the case of the respondents that irresponsible
statements have been made in the petitions without having any basis; that,
political battles were being fought in the name of public interest litigation
(for short, 'PIL') by politicians and that respondent nos.4 and 5 had no role
to play either in the transfer of lawyers in the criminal case, in the transfer
of the trial judge or in the constitution of the Special Bench of the Tribunal.
They have further submitted that they have no role to play in Revenue
Department not going in appeal to the High Court under Section 260A of the I.T.
Act. It is submitted that the Revenue Department took the opinion of Additional
Solicitor General of India who has certified that no substantial questions of
law arise for determination by the High Court under Section 260A of the I.T.
Act. Accordingly, it is submitted by the respondents that the writ petitions
deserve to be dismissed with heavy costs.
Ram Jethmalani, learned senior counsel appearing on behalf of respondent nos.4
and 5, raised the preliminary objection stating that PIL has no role to play in
pending criminal proceedings. He submitted that if the petitioner is a
politician and if it is found that the object is to win political battle then
PIL should be dismissed with costs. He submitted that in the present case the
PIL is politically motivated; that, in the present petitions there is no breach
of Article 14 and, therefore, it deserves to be dismissed with strictures
against the petitioners. Learned senior counsel submitted that PIL is meant for
the benefit of the lost and lonely who have no access to courts or the legal
senior counsel submitted that when the provisions of the Constitution are
violated and loss is caused to a group of persons who are handicapped then PIL
is maintainable, if it is shown that they have no access to legal system. It is
submitted that respondents 4 and 5 are the accused persons before the criminal
court and the liberty cannot be taken away except by the procedure established
by law; that, the criminal procedure code requires that the guilt of the
accused must be determined by a special judge in the present case which is the
court of exclusive jurisdiction and if anybody, aggrieved by the decision of
the special judge, is free to hold appeal. Learned senior counsel submitted
that the assessment orders passed by the Revenue Department under the I.T. Act
cannot be used to prove holding of disproportionate assets by respondent nos.4
submitted that in the present case the CBI pressurized the assessing officer to
pass assessment order against respondent nos.4 and 5. Learned senior counsel
further alleged that in some cases even the Commissioner of Income Tax
(Appeals) was persuaded to make order of assessment against respondent nos.4
and 5 and in such circumstances and even otherwise orders of assessment cannot
form the basis of trials dealing with accusation of disproportionate assets by
respondent nos.4 and 5.
senior counsel submitted that in fact a bare perusal of the decision of the
Tribunal in the present case indicates although the appeal is allowed in favour
of the assessees the Tribunal has decided every point against the assessee and
in the circumstances the Department was right in not moving the High Court in
appeal under Section 260A of the I.T. Act. Learned senior counsel further urged
that respondent nos.4 and 5, who are the accused in the criminal trial, should
be allowed to pursue their defence. Learned senior counsel stated that
admittedly there was a scam and misappropriation of public property but that
should not give right to the petitioners to obstruct the course of justice or
obstruct the rights given to the accused under Criminal Procedure Code,
Evidence Act and the Constitution.
senior counsel submitted three propositions in the context of the parameters of
the PIL. He submitted that firstly, every criminal trial has to proceed
according to the procedure established by law and every deviation from that
procedure, even if by a judicial order could violate Article 21 of the
Constitution; secondly, in every PIL the locus standi of the petitioner should
be examined at the threshold; and thirdly, the source of his information must
be subjected to strict scrutiny. Learned senior counsel submitted that if any
of the three conditions are not fulfilled then PIL should be dismissed. In this
connection, learned senior counsel relied upon the judgments of this Court in
support of his above submissions.
case of Janata Dal v. H.S. Chowdhary and others (1992) 4 SCC 305 this Court
observed that violation of a fundamental right is the sine qua non of the
exercise of the right conferred by Article 32; that, PIL is part of the process
of participatory justice and in a competition between courts and streets the
rule of law must win and, therefore, the rule of locus standi must be
liberalized to meet the challenges of the times. This Court, further, noted the
judgment in A.R. Antulay v. Ramadas Sriniwas Nayak and another (1984) 2 SCC
500 in which it has been observed that locus standi of the complainant is a
concept foreign to criminal procedure jurisprudence except where the statute
creates an offence which provides for the eligibility of the complainant to set
the criminal case in motion.
92 of the said judgment the concept of PIL has been explained. Any member of
the public having sufficient interest can maintain an action for judicial
redress for public injury arising from breach of duty or violation of the
Constitution. This is absolutely essential for maintaining the rule of law,
furthering the cause of justice and achieving the constitutional goals, subject
to a caveat which states that the member of the public who approaches by way of
PIL should be acting bona fide and not for personal gain, private profit or
case of Union of India v. Sushil Kumar Modi and others (1998) 8 SCC 661 this
Court has held that once a chargesheet is filed in the competent court after
completion of investigation the process of monitoring for the purposes of
making the CBI and other investigating agencies to perform their function comes
to an end and, thereafter, it is only the court in which the chargesheet is
filed has to deal with all matters relating to the trial of the accused,
including matters falling within Section 173(8) of Cr.P.C.
on this judgment, learned senior counsel for respondent nos.4 and 5 stated that
in the present case the chargesheet has been filed and, therefore, the process
of monitoring has ended. It is urged that since the chargesheet has been filed
the criminal trial should be allowed to take its own course without any further
interference from any court outside the trial court.
case of Dattaraj Nathuji Thaware v. State of Maharashtra and Others (2005) 1 SCC 590 the Division Bench of this
Court on facts found that the petitioner was a lawyer who had filed PIL.
a blackmailer. In the circumstances the PIL was dismissed with costs. It is in
that light, that the Division Bench of the Court speaking through Pasayat, J.
stated the parameters of PIL. Learned senior counsel for respondent nos.4 and 5
has referred to para 4 of the said judgment in support of his contention that
PIL is maintainable to help poor and needy who have no access to the legal
quote hereinbelow para 4 of the said judgment.
is material to show that a petition styled as a public interest litigation is
nothing but a camouflage to foster personal disputes, the said petition is to
be thrown out. Before we grapple with the issue involved in the present case,
we feel it necessary to consider the issue regarding public interest aspect.
Interest Litigation which has now come to occupy an important field in the
administration of law should not be "publicity interest litigation"
or ''private interest litigation" or "politics interest litigation''
or the latest trend ''paise income litigation". The High Court has found
that the case at hand belongs to the last category. If not properly regulated
and abuse averted, it becomes also a tool in unscrupulous hands to release
vendetta and wreck vengeance, as well.
must be real and genuine public interest involved in the litigation and not
merely an adventure of knight errant borne out of wishful thinking. It cannot
also be invoked by a person or a body of persons to further his or their
personal causes or satisfy his or their personal grudge and enmity. Courts of
justice should not be all-owed to be polluted by unscrupulous litigants by
resorting to the extraordinary jurisdiction. A person acting bona fide and
having sufficient interest in the proceeding of public interest litigation will
alone have a locus standi and can approach the Court to wipe out violation of
fundamental rights and genuine infraction of statutory provisions, but not for
personal gain or private profit or political motive or any oblique
consideration. These aspects were highlighted by this Court in The Janta Dal v.
H.S. Chowdhary (1992) 4 SCC 305 and Kazi Lhendup Dorji v. Central Bureau of
Investigation 1994 Supp (2) SCC 116. A writ petitioner who comes to the Court
for relief in public interest must come not only with clean hands like any
other writ petitioner but also with a clean heart, clean mind and clean
Foundation v. Union of India 1993 Supp (2) SCC 20 and K.R. Srinivas v. R.M. Premchand (1994)
6 SCC 620." To the same effect is the ratio of the decision of the
Division Bench of this Court in the case of Gurpal Singh v. State of Punjab and
Others (2005) 5 SCC 136. In the said judgment it has been held that PIL will
not lie in cases of personal and political rivalry. While laying down the
parameters the Division Bench speaking through Pasayat, J.
that in the PIL nobody should be allowed to make wild and reckless allegations
spoiling the characters of others; that, PIL is not maintainable in cases of
personal vendetta. However, in the said judgment it has been held that the
court can act if it is satisfied with the correctness or the nature of the
information given by the petitioner.
E. Vahanvati, Learned Solicitor General of India, appearing for Union of India,
adopted the arguments advanced by Mr. Ram Jethmalani, learned senior counsel,
on the preliminary issue. He, however, added that in the present case reckless
allegations have been made without any basis against important functionaries,
judges and authorities under the I.T. Act. He submitted that the petitioners
cannot destroy the service careers of the government officers without any
reason on basis except for their own political rivalry with respondent no.5. He
submitted that there is no violation of law or the Constitution, particularly,
when Mr. Yogender Prasad, the earlier trial judge who had extensively heard the
matter, was promoted as District Judge. Learned counsel further submitted that
constitution of the Special Bench by the President of the Tribunal was done in
the circumstances spelt out in the various affidavits; that the matter was
required to be expeditiously heard which led to the constitution of the Special
Bench; and that decision was not arbitrary, as alleged. There is nothing on
record to indicate that favoured judges/members were appointed and that
inconvenient judges/members were dispensed with to favour the accused in the
senior counsel relied upon the judgment of this Court in the case of T.N. Godavarman
Thirumulpad (98) v. Union of India and Others (2006) 5 SCC 28 where this Court
speaking through learned Chief Justice of India has held vide para 26 as
"For the last few years, inflow
of public interest litigation has increased manifold. Considerable judicial
time is spent in dealing with such cases. A person acting bona fide alone can
approach the court in public interest.
remedy is not open to an unscrupulous person who acts, in fact, for someone
else. The liberal rule of locus standi exercised in favour of bona fide public
interest litigants has immensely helped the cause of justice. Such litigants
have been instrumental in drawing attention of this Court and High Courts in
matters of utmost importance and in securing orders and directions for many
under-privileged such as, pavement dwellers, bonded labour, prisoners'
conditions, children, sexual harassment of girls and women, cases of communal
riots, innocent killings, torture, long custody in prison without trial or in
the matters of environment, illegal stone quarries, illegal mining, pollution
of air and water, clean fuel, hazardous and polluting industries or
preservation of forest as in the T.N. Godavarman Thirumulpad (I) v. Union of
India (1997) 2 SCC 267. While this Court has laid down a chain of notable
decisions with all emphasis at their command about the importance and
significance of this newly developed doctrine of PIL, it has also hastened to
sound a red alert and a note of severe warning that courts should not allow
their process to be abused by a mere busybody or a meddlesome interloper or
wayfarer or officious intervener without any interest or concern except for
personal gain or private profit or other oblique' consideration. (See Janata Dal
v. H.S. Chowdhary and Ors. (1992) 4 SCC 305)"
outset, it needs to be noted that in this case we are concerned not with the
merits of the allegations but with the decision-making process, be it in the
posting of Mr. Munni Lal Paswan, Special Judge, CBI, Patna or in the matter of
the Revenue Department not moving in appeal to the High Court under Section
260A of the I.T. Act despite there being substantial questions of law arising
from the impugned judgment of the Tribunal. It is submitted on behalf of the
petitioners that the present writ petitions should be seen in the context of
the earlier two decisions of the Supreme Court under which investigations were
handed over to CBI as an amount of around Rs.500 crores stands misappropriated
in the fodder scam.
the case of the petitioners that the present case should be seen in the light
of the directions given by the Supreme Court in the cases of Ranchi Zila Samta
Party (supra) and Sushil Kumar Modi (supra).
present petitions are filed on the alleged acts of misfeasance. The test which
one has to apply to decide the maintainability of the PIL concerns sufficiency
of the petitioner's interest.
this test it is necessary to consider the subject matter to which the PIL
relates. It is wrong in law for the court to judge the applicant's interest
without looking at the subject matter of his complaint. If the petitioner shows
failure of public duty, the court would be in error in dismissing his PIL.
case of Inland Revenue Commissioners v. National Federation of Self-employed
and Small Business Ltd. reported in 1982 Appeal Cases 617, a declaration was
sought that the Revenue had acted unlawfully in granting amnesty to the trade
union of casual workers and accordingly a writ of mandamus was sought to assess
and collect income tax from casual workers according to law. In the Divisional Court when the motion for judicial review
came, the point of locus standi was treated as a preliminary point. The Divisional Court refused the leave saying that the
petitioner had no power to bring such an action. The Court of Appeal by
majority reversed the decision of the Divisional Court and made a declaration that the applicants have sufficient
interest to apply for judicial review. Upholding the decision of the Division Court it was held by the House of Lords
that the question of sufficient interest of the petitioner cannot be considered
in the abstract. It must be taken together with the legal and factual context.
It was held that the management of tax recovery falls within the domain of the
Revenue but if that act of management is found to be based on exercise of its
authority for extraneous reasons, then judicial review would certainly lie. It
was held that the Revenue Department was incharge of assessment and collection
of taxes for the welfare of the State; that, it was responsible for good
management under the statute; that, if it was found that the Board was
proposing to exercise its authority or if the Board was refraining itself from
exercising its power not for good reasons of good management but for some
extraneous or ulterior reasons then that action or inaction by the Board would
be ultra vires and such a matter would be a proper matter for judicial review.
In this respect the following observation made by the House of Lords at pages
636-637 is quoted hereinbelow:
is, in my view, very much to be regretted that a case of such importance to the
development of English public law under this new procedure should have come
before this House in the form that it does as a result of what my noble and
learned friend, Lord Wilberforce, has described as the unfortunate course that
was taken in the courts below when, leave to apply for judicial review having
been previously granted ex parte, the application itself came on for hearing.
has had the result of deflecting the Divisional Court and the Court of Appeal from giving consideration to the
what was the
public duty of the Board of Inland Revenue of which it was alleged to be in
what was the
nature of the breaches of that duty that were relied upon by the federation.
of this, the judgment of the Court of Appeal, against which appeal to your
Lordships' House is brought, takes the form of an interlocutory judgment
declaring that the federation "have a sufficient interest to apply for
judicial review herein." As my noble and learned friend has pointed out,
these two omitted questions need to be answered in the instant case before it
is possible to say whether the federation have "a sufficient interest in
the matter to which the application relates," since, until they are
answered, that matter cannot be identified. This is likely also to be the case
in most applications for judicial review that are not on the face of them frivolous
or vexatious. Your Lordships have accordingly heard full argument on both these
respects the statutory powers and duties of the Board of Inland Revenue, these
are described and dealt with in several of your Lordships' speeches. It would
be wearisome if I were to repeat what already has been, and later will be,
better said by others. All that I need say here is that the board are charged
by statute with the care, management and collection on behalf of the Crown of
Income tax, corporation tax and capital gains tax. In the exercise of these
functions the board have a wide managerial discretion as to the best means of
obtaining for the national exchequer from the taxes committed to their charge,
the highest net return that is practicable having regard to the staff available
to them and the cost of collection. The board and the inspectors and collectors
who act under their directions are under a statutory duty of confidentiality
with respect to information about individual taxpayers' affairs that has been
obtained in the course of their duties in making assessments and collecting the
taxes; and this imposes a limitation on their managerial discretion.
not doubt, however, and I do not understand any of your Lordships to doubt,
that if it were established that the board were proposing to exercise or to
refrain from exercising its powers not for reasons of "good
management" but for some extraneous or ulterior reason, that action or
inaction of the board would be ultra vires and would be a proper matter for
judicial review if it were brought to the attention of the court by an
applicant with "a sufficient interest" in having the board compelled
to observe the law." (emphasis supplied) Applying the above test we have
to ascertain in the present case whether the decision of the Government in not
preferring the appeal to the High Court under Section 260A of the I.T. Act
constituted inaction on the part of the Department. This question needs to be
answered not in an abstract but having regard to position in law and having
regard to the facts of the present case.
WAS FAILURE OF STATUTORY AND PUBLIC DUTY ON THE PART OF THE REVENUE IN NOT
PREFERRING AN APPEAL TO THE HIGH COURT UNDER SECTION 260A OF THE INCOME TAX
facts of the case of the assessee, Smt. Rabri Devi, are as follows: On
14.10.1996 the assessee filed voluntary returns for assessment years 1995-96
and 1996-97. On 14.11.1996 she filed voluntary returns for assessment years
1986- 87 to 1994-95 declaring various incomes which had escaped assessment as
she had not filed her returns earlier. The assessee also applied for waiver of
interest and penalty under Section 273A of the I.T. Act. In the voluntary
returns, the assessee disclosed income derived from dairy farming, agriculture
and rent from house property. Upon receipt of returns for the assessment years
1995-96 and 1996-97 the Assistant Commissioner of Income Tax issued notice of
defecting returns under Section 139 of the I.T. Act in which it was alleged
that regular books of accounts were not maintained;
return was not accompanied by a statement indicating the amount of turn-over,
gross receipts, gross profits and net profits from business/profession. The assessee
also received notices under Section 148 of the I.T. Act for the period 1986-87
to 1994-95. The Assessing Officer recorded the reasons for reopening the
assessment for each of the above years. For example, the reasons for reopening
the assessment for the year 1986-87 are as follows:
notice u/s 131 A of the I.T. Act' 61 was issued to the husband of the assessee,
asking him to furnish, among other things, details of income of other family
members and details of assets owned by such family members. In reply to the
said notice the assessee' husband submitted that the assessee had been deriving
k rental income from house property at Sheikhoura since 1983-84 and from dairy
farms since 1975.
the assessee on 25.10.96 filed details of her immovable and movable properties
before the ADIT (Inv.), Patna. From a perusal of this, it is
noticed that the assessee has made substantial investments in residential house
at Sheikhoura, in agricultural land at Saran and Patna and land at Danapur, Patna. It is also noticed that she has made substantial investments in FDs, Kisan
Vikas Patras and National Savings Certificates, besides having a number of bank
a/cs. The assessee has also contributed to the construction of her husband's
house property at Phulwari.
having made such large investments, the assessee has never filed Income-tax
returns, nor has she be assessed to Income-tax in past. Recently, the assessee
had filed a petition u/s 273 A of the I.T. Act'61 before the CIT, Patna.
to this petition, she had also filed a disclosure of income Rs.70,000 for the
A/Y in question in order to explain the capital required for the investment
that she has made.
these information in our possession give us reason to believe that at the very
least a sum of Rs.70,000 has escaped assessment for the A/Y 1986-87. Owing to
the failure of the assessee to file return within stipulated time limit and to
disclose material facts relevant to have assessment at the appropriate time.
more than four years from end of the assessment year have lapsed, approval is
solicited from DCIT, Range-1, Patna to issue
notice u/s 148 of the I.T. Act'61. It is clarified that notice u/s 148 of the
I.T. Act is issuable as income escaping assessment exceeds the amount
stipulated in section 149(1)(b).
Choudhary 20.11.96 Asst. Commissioner of Income-tax, Spl. Inv. Circle-1, Patna." I need not go into further
details regarding the alleged undisclosed income for each assessment year.
Suffice it to state that additions have been made by the Department to the
income of the assessee under various orders passed by the Assessing Officer and
the Commissioner of Income Tax (Appeals). These orders were challenged by the assessee
before the Tribunal.
impugned judgment the appeals filed by the assessee were allowed by the Tribunal.
While allowing the appeal of the assessee the Tribunal held that the case
involved highly intricate issues;
these issues were extremely difficult to understand; that, but for the
assistance of the learned advocates on both sides it was difficult to
adjudicate such disputes. At the same time the Tribunal without any basis
castigated the officers of the Department including the Commissioner (Appeals)
saying that rampant additions were made to destroy the case of the assessees
and to destroy the political career of respondent no.5 (See: para 40 of the
judgment of the Tribunal). Similarly, the Tribunal has castigated the higher
officers of the Department saying that they were biased and that they had acted
at the behest of the Centre in clubbing the income of respondent no.4 with that
of respondent no.5 who was going through political crisis (See: para 54 of the
is no basis given in the impugned decision of the Tribunal for making such
strong observations against the officers of the Revenue.
the High Court under Section 260A of the I.T. Act would not have enquired into
the sufficiency of materials or substituted its judgment for that of the
Tribunal in regard to facts, nevertheless, if the conclusion drawn by the
Tribunal is without any basis or based on irrelevant considerations then the
High Court was required to interfere under Section 260A.
not maintainable to probe or enquire into the returns of another taxpayer
except in special circumstances. It is the ratio of the decision of House of
Lords in the case of National Federation of Self-employed (supra). However,
when scams take place, accusation of disproportionate assets are required to be
case of M.C. Mehta v. Union of India and others (Taj Trapezium Matter) (2003)
8 SCC 696 the Division Bench of this Court not only directed CBI to investigate
the cases against the bureaucrats but also to enquire the outflow of Rs.17 crores
released by the State of U.P. in respect of project undertaken by NPCC. In that
matter the income tax returns of the former Chief Minister and other officials
were ordered to be collected by this Court. They were directed to be collected
from various income tax authorities. The point to be noted is that the source
of the funds plays a crucial role in investigations by CBI in matters involving
misappropriation of public funds. Departments have to work in tandem. The
evidentiary value of the collected material in the criminal trial is a matter
different from the collection of information by the officers of the Revenue
Department. In the present case officers of the Revenue have been condemned by
the aforesaid judgment of the Tribunal. Comments have been made without any
basis and yet till today appeals have not been filed by the government under
Section 260A of the I.T. Act. As stated above, even the Tribunal has observed
in its judgment that complicated legal issues were involved in the matter;
that, even the members of the Tribunal found it very difficult to understand those
issues, particularly, matters involving interpretation of Sections 131,
131(1A), 273A and 147/148 of the I.T. Act. If the issues were so difficult for
the members to understand, one fails to appreciate why high-ranking officers of
the Department were castigated by the Tribunal. This Court has noticed in
number of cases that even an innocuous statement of the tribunal against the
Revenue Officers is challenged before the higher courts on the ground that such
observations are aspersions against the officers who have performed their duty
and that they need to be expunged.
in this particular case till today no such appeal has been filed under Section
260A of the I.T. Act. There is one more reason which is required to be
mentioned. The judgment of the jurisdictional tribunal on the scope and
interpretation of the above sections which the Tribunal itself says involve
complex legal issues, is binding on assessing officers and the appellate
authority within that jurisdiction. If so, one fails to understand why the
Department has not moved in appeal under Section 260A of the I.T. Act.
circumstances of this case, Union of India should apply its mind afresh and
take its decision keeping in mind the factors referred to hereinabove.
concluding, it may be noted that arguments have been vehemently advanced on
behalf of respondent no.1 saying that these petitions need to be dismissed as
the petitioners have made irresponsible statements against judicial officers
and members of the Tribunal whose service records are sought to be tarnished.
Applying the same yardstick one fails to understand as to why the Revenue has
not moved in appeal even when its own higher officers are branded as biased in
deciding matters against respondent nos.4 and 5.
service records are as important as the service records of members of the trial
court or the judicial officers.
PROCEDURE ADOPTED AT THE TIME OF POSTING MR. MUNNI LAL PASWAN, ADJ AS SPECIAL
JUDGE, CBI, PATNA (FODDER SCAM CASES) ON 22.06.2005,
NEEDS TO BE RELOOKED BY THE PATNA HIGH
autonomy of the High Court on its administrative side under Article 233 and
Article 235 is a well-known concept. It is based on public trust and
confidence. Existence of the power, as a concept, is different from exercise of
and posting of judicial officers fall within its domain on its administrative
side. At the same time it is important to note that choice of the candidate
falls in the domain of public law and, therefore, that choice has to be
exercised on some standard, failing which judicial review steps in.
of evaluation in matters of promotion and posting have to be uniformly applied
otherwise arbitrariness comes in. Integration of the evaluation process has to
be maintained. If different standards or no standards are applied it breaks the
integrity of the process which brings in discrimination and arbitrariness which
violates Article 14 and therefore judicial review.
present case we are required to see whether the standards applied to evaluate
Mr. J.P. Ratnesh and Mr. Ram Niwas Prasad, trial judges, appointed as Special
Judges vide Minutes of the meeting of the Standing Committee dated 22.06.2005
were equally applied while posting Mr. Munni Lal Paswan as Special Judge, CBI, Patna (fodder scam cases).
order dated 26.10.2005 this Court directed the Registrar General, Patna High
Court, to forward this Court A.C.Rs recorded by the Inspecting Judges of the
High Court in the case of Mr. Munni Lal Paswan. In reply the Registrar General
has stated as follows:
A.C.Rs, recorded by the Hon'ble Inspecting Judges in the years 1985, 1990 and
by the Chairman of CAT in 1997, have been placed before the Supreme Court.
Besides them no ACRs of Sri Munni Lal Paswan have ever been recorded by the Hon'ble
Inspecting Judges. The A.C.Rs of Additional District and Sessions Judges are
recorded by the Hon'ble Inspecting Judges." (emphasis supplied) Mr. Munni Lal
Paswan was promoted to the post of ADJ on 17th June, 2003. Therefore, when Mr. Paswan was
promoted as A.D.J. there was no categorization available.
report submitted by the Registrar General to this Court on 18.12.2005 pursuant
to our order dated 26.10.2005, the Registrar General has forwarded the consolidated
statement showing the Outturn of the work done by Mr. Paswan during the period
1998, 1999, 2000, 2001, 2002, 2003, 2004 and 2005 (partly). This statement
refers to various parameters like disposal, remarks of P.O., remark of D.J.
etc. as approved by the court. At this stage, I do not wish to comment about
the remarks mentioned therein. These remarks have been approved by the District
Judge and by the Courts. These remarks are heavily weighted against Mr. Paswan.
It is not clear whether these remarks were ever noticed by the Committee and if
not they need to be relooked by the High Court.
more aspect needs to be stressed. There is a prescribed form in which the C.Rs are
form indicates various parameters, namely, knowledge of law, whether the
officer is hardworking, the rating to be given in respect of the judgments,
namely, A+(outstanding), A(very good), B+(good), B(satisfactory). The point to
be noted is that apart from honesty and integrity there are other parameters to
be fulfilled by the judicial officers and that is where the disposals, ability
and all other relevant factors come.
On 26th July, 2006 this Court put up the following
three questions in the form of order to the Registrar General of the Patna High
"Is it the
practice in the High Court of Patna to prepare gradation/ remarks of the
Judicial Officers by the Inspecting Judges?
As regards the
three officers, including Shri M.L. Paswan, who were appointed as Special
Judges on 22.6.2005 by the Standing Committee of the High Court, whether any
remarks/gradation expressed by the Inspecting Judges were available to the
gradation/remarks of the Inspecting Judges were made as regards these three
officers?" In reply, the Registrar General of the Patna High Court stated
as follows in paras 2 to 4:
regard to Query No.1 of this Hon'ble Court
as mentioned in the Order dated 26.7.2006, I respectfully say and submit that
there is a practice in the High Court of Patna to record remarks of Judicial
Officers by the Hon'ble Inspecting Judges of the concerned Judgeships which is
known as Annual Confidential Remarks. The Annual Confidential remarks recorded
by the Hon'ble Inspecting Judges which includes knowledge of law, integrity, behaviour
with Bar, general reputation, industriousness, efficiency, behaviour towards
superiors and subordinate colleagues and categorization made by the Hon'ble
Inspecting Judges and net result categorization is to be placed before the
Standing Committee where the gradation is given to the Officer by the Hon'ble
That in regard
to Query No.2 of this Hon'ble Court as mentioned in the Order dated 26.7.2006,
I respectfully say and submit that the 3 Officers, namely, Shri Jawahar Prasad Ratnesh,
Shri Ram Niwas Prasad and Shri Munni Lal Paswan who were appointed as Special
Judge on 22.6.2005 by the Standing Committee, the remarks of the Hon'ble
Inspecting Judges as maintained in the Guard Files which are maintained
separately of each officers, were available to the Hon'ble Standing Committee.
The said fact also finds mention in the decision dated 22.6.2005 of the Hon'ble
That in regard
to Query No.3 of this Hon'ble Court as mentioned in the Order dated 26.7.2006,
I respectfully say and submit that the remarks of the Hon'ble Inspecting Judge
in case of Mr. Jawahar Prasad Ratnesh was of the year 1985, 1986-87, 1988,
2001, 2003 and 2005 (And remarks recorded by P.O., Industrial Tribunal, Patna
in 1998). In respect of Shri Ram Niwas Prasad, the remarks recorded by the Hon'ble
Inspecting Judge was of 1985, 1986, 1997 and 2002. As regards Shri Munni Lal Paswan,
the remarks recorded by the Hon'ble Inspecting Judge was of 1985 and 1990 and
by Vice-Chairman, Industrial Tribunal, Patna Bench in 1997.
supplied) Reading para 4 it is clear that the remarks of Inspecting Judge, in
the case of Mr. J.P. Ratnesh, were duly updated when they were placed before
the Standing Committee of the High Court. In respect of Mr. Ram Niwas Prasad
the remarks recorded by the Inspecting Judge for the years 1985, 1986, 1997 and
2002 were updated and placed before the Standing Committee of the High Court.
However, in case of Mr. Munni Lal Paswan the remarks of the Inspecting Judge
duly recorded are only of 1985 and 1990. Mr. Munni Lal Paswan was promoted as
A.D.J. on 17.06.2003. He was posted as Special Judge on 22.06.2005. Therefore,
it is clear that there is no gradation/categorisation of the confidential
reports of Mr. Munni Lal Paswan by the Inspecting Judge of the High Court
particularly after becoming A.D.J.
case of High Court of Punjab & Haryana, through Registrar General v. Ishwar
Chand Jain and Another (1999) 4 SCC 579 this Court has held as follows:
this Court is watching the spectre of either judicial officers or the High
Courts coming to this Court when there is an order prematurely retiring a
judicial officer. Under Article 235 of the Constitution the High Court
exercises complete control over subordinate courts which include District
Courts. Inspection of the subordinate courts is one of the most important
functions which the High Court performs for control over the subordinate
courts. The object of such inspection is for the purpose of assessment of the
work performed by the Subordinate Judge, his capability, integrity and
competency. Since Judges are human beings and also prone to all the human
failings inspection provides an opportunity for pointing out mistakes so that
they are avoided in future and deficiencies, if any, in the working of the
subordinate court, remedied. Inspection should act as a catalyst in inspiring
Subordinate Judges to give the best results. They should feel a sense of
achievement. They need encouragement.
work under great stress and man the courts while working under great discomfort
and hardship. A satisfactory judicial system depends largely on the
satisfactory functioning of courts at the grass-roots level. Remarks recorded
by the Inspecting Judge are normally endorsed by the Full Court and become part of the annual
confidential reports and are foundations on which the career of a judicial
officer is made or marred.
of a subordinate court is thus of vital importance. It has to be both effective
and productive. It can be so only if it is well regulated and is workman-like.
Inspection of subordinate courts is not a one-day or an hour or a few minutes'
affair. It has to go on all the year round by monitoring the work of the court
by the Inspecting Judge. A casual inspection can hardly be beneficial to a
judicial system. It does more harm than good. As noticed in the case of
Registrar, High Court of Madras v. R. Rajiah (1988) 3 SCC 211 there could be
ill-conceived or motivated complaints. Rumour- mongering is to be avoided at
all costs as it seriously jeopardizes the efficient working of the subordinate
Time has come
that a proper and uniform system of inspection of subordinate courts should be
devised by the High Courts. In fact the whole system of inspection needs
rationalization. There should be some scope of self-assessment by the officer
concerned. We are informed that the First National Judicial Pay Commission is
also looking into the matter. This subject, however, can be well considered in
a Chief Justices' Conference as the High Court itself can devise an effective
system of inspection of the subordinate courts. The Registrar General shall
place a copy of this judgment before the Hon'ble Chief Justice of India for him
to consider if the method of inspection of subordinate courts could be a matter
of the agenda for the Chief Justices' Conference." (emphasis supplied) The
above judgment emphasizes the importance of the remarks given by the Inspecting
Judge. The object of Inspection is to assess the work performed, capability, competency
besides integrity of the candidate. Those gradations/categorisations given by
Inspecting Judges are required to be placed before the Full Court. In the present case, that exercise
is done for two out of three judicial officers when they were posted. However,
it appears from the affidavit of the Registrar General that no gradation/categorisation
has been done after 1990 by the Inspecting Judge vis-`-vis the judgments of Mr.
Munni Lal Paswan.
important to bear in mind that in the matter of economic scams be it security
transactions or fodder scams or Taj corridor it is the economic interest of the
country which is at stake.
cases are highly complicated in which complicated questions are involved and,
therefore, posting plays a vital role.
circumstances, it seems that the procedure followed by the High Court in the
meeting on 22.06.05 has lost sight of the above criteria. In the circumstances,
a request is being made to the Chief Justice of the Patna High Court to convene
an urgent meeting of Administrative Judges and complete the exercise of giving
appropriate gradation/categorisation after looking at the judgments and orders
delivered by the concerned judge, Mr. Paswan. I may make it clear that this is
just a request to the High Court and not a direction so that the evaluation
standards are commonly applied to all the three candidates.
concluding it may be pointed out that this decision is confined strictly to the
decision- making process and it is not concerned with the merits of the
allegations made in the petitions. The allegations made in the petitions are
not only against the accused, they are also directed against number of
functionaries. It is, therefore, made clear that this decision is only to
rectify the procedure of decision-making at the High Court level and at the
Revenue level so that in future such anomalies do not arise.
up, the Chief Justice of the Patna High Court is requested to convene a meeting
of Administrative Judges and have a fresh look at the evaluation in the case of
posting of Sri Paswan as Special Judge for C.B.I. (Fodder Scam Cases) at Patna,
vide Minutes of Meeting dated 22.06.2005.
same time, Union of India is directed to reconsider approaching the High Court
against the decision of the Tribunal dated 2.7.2004 under Section 260A of the
Income Tax Act, 1961 in the light of what is stated above.
end it may be stated that true value of a decision lies in its propriety and
not in the decision being right or wrong.
Petition (Crl.) Nos.197-198 of 2004 are accordingly allowed to the extent