Vs. Union of India & Ors  INSC 443
(1 September 1998)
Ahmad, K.T. Thomas Thomas,J.
had a steep rise in the hierarchy of Indian Revenue Service and was held in
great esteem by his superiors until the dawn of 1985 which market the beginning
of his downfall. he suddenly fell from grace as his integrity was eclipsed by
the dark clouds of doubts entertained by his superiors. Consequently at the age
of 52 he was asked to quit the department by terming the action as
"compulsory retirement". If appellant's stand is correct he would
have felt the same way as Cardinal Thomas Wolsey had lamented four centuries
ago when his master Henry VIII king of England suddenly stripped him of his high office and indicted him to face a
trial. "If I had served God as diligently as I have done the King, He
would not have given me over in my grey hairs".
On 9-10-1985, Government of India (Ministry of Finance) axed the
appellant down by serving an order of compulsory retirement. Though he
challenged the order before Central Administrative Tribunal (New Delhi Bench)
he was unsuccessful. Hence he has filed this appeal by special leave.
resume of facts which led to the said necking off is the following:
joined Indian Revenue Service in the year 1958 and was absorbed in the Excise
Department. He has a quick rise in the ladder which in 1980 reached him to the
level of Director Enforcement and in 1983 as Appellate Collector of Customs and
Excise since he earned a high standard of reputation by then as "a very
good officer all round". As he proved to be efficient and trustworthy he
was entrusted with the high sensitive post of Director of Anti Evasion Wing in
1984 which post he held till June 1985.
the said period a series of raids was conducted by Anti Evasion Squad headed by
the appellant and a whopping sum of escaped excise duty was unearthed through
became the subject matter of extensive media coverage and praises were showered
on the department for carrying out such daring operation in big business houses
and hoarding places. But the above raids became the commencement of a volte
face in the official career of the appellant.
Screening committee which considered the cases of several officials of the Revenue
Department found that in the interest of the department some officials should
be weeded out. On 9-4-1985, the committee delved into the
files relating to such persons including the appellant and in the case of
appellant they focussed on three specific instances which are the following:
Pursuant to search made in the premises of M/s. Orkay Silk Mills Ltd.
adjudication proceedings were initiated and in the end a penalty and fine of
Rs.10 crores have been imposed on the said Mills. But certain derelictions were
noted as against the appellant in the above operations. They are:
The order of adjudication ran into nearly 100 pages and it was passed on the
day following the last day of the hearing. It indicated that the order must
have already been got ready even before the hearing was complete.
penalty of Rs.50 lakhs was imposed on the proprietor of the Mills without
issuing a show cause notice on him.
Huge sums of duty have been demanded in respect of unaccounted production in
the factory without fully going through the claims of the party that those
accounts were wastage claimed by him.
Important cases relating to M/s. Golden Tobacco Co. were lying unattended for a
very long time and instructions were issued by the Deputy Director Shri Bhattacharjee
to the units under him to keep further investigation in abeyance.
Screening Committee held that Shri Bhattacharjee would have given such
instructions at the behest of the Director.
One Ashok Jain and his brother imported components of Honda cars from abroad
and assembled them in India in violation of Central Excise
Laws. On 1-12-1984, officers of the Anti Evasion Wing
raided the premises where those cars were garaged and the Jain Brothers were
subjected to interrogation. They were arrested and produced before the court.
When they were released on bail the appellant persisted with the steps and
moved for cancellation of their bail order. In this operation what was viewed
against the appellant was that he had demanded Rs.10 lakhs from Jain Brothers
and when it was not paid he invigorated the steps against those two brothers.
Screening committee after considering the files relating to the aforesaid three
instances (which were recorded in a document market by the department as
Annexure IV) reached the following conclusion:
the basis of the specific cases and other material at Annexure IV hereto, he is
found to be of unreliable integrity and unfit to be entrusted with any position
of responsibility in the Government service as he has widely and systematically
indulged in extortion of money from the parties and adopted methods which have
the effect of bringing down the esteem of the Government in the public
eye." The revenue Committee upheld the said conclusion and thereafter
Government of India passed the order prematurely retiring the appellant.
made a scathing attack against the aforesaid order mainly on three premises.
The big business houses whose premises were subjected to series of raids were
so influenced as to spread canards about the appellant as part of a retaliatory
measure against him.
The Screening Committee was actuated by mala fides as one of its members (Shri
M.L. Wadhawan) who was a member of Central Board of Excise and Customs had been
inimical to him on account of serious differences which can be discerned from a
file (number of which appellant has cited in the Special Leave Petition).
The conclusion made against the appellant by the Screening committee is
perverse in the sense that the material on which that conclusion was reached
could never have afforded scope to reach such conclusion to any reasonable
person. In other words, there was utter dearth of evidence for the Screening
committee to conclude that appellant was a case of doubtful or unreliable
Judge Bench of this Court has held in Union Of India vs. Col. J.N.Sinha and
ors. (1970 2 SCC 458) that "If the appropriate authority forms the
requisite opinion bona fide its opinion cannot be challenged before the courts
though it is open to an aggrieved party to contend that the requisite opinion
has not been formed or that it is based on collateral grounds or that it is an
arbitrary decision." Approving the above principle, a three Judge Bench of
this Court has laid down in Baikuntha Nath Das and anr. vs. Chief District
medical Officer and anr. (1992 2 Scc 299) that five principles should borne in
mind while considering a case of compulsory premature retirement. It is not
necessary to extract all the five principles here except No.
of natural justice have no place in the context of an order of compulsory
retirement. This does not mean that judicial scrutiny is excluded altogether.
While the High Court or this Court would not examine the matter as an appellate
court, they may interfere if they are satisfied that the order is passed
it is based on no evidence or
it is arbitrary - in the sense that no reasonable person would form the
requisite opinion on the given material; in short, if it is found to be a
was reiterated very soon by another three Judge Bench in Posts and Telegraphs
Board and ors. vs. C.S.N. Murthy (1992 2 SCC 317) in which their Lordships
further added thus:
order of compulsory retirement is not an order of punishment. F.R.56 (j) authorises
the Government to review the working of its employees at the end of their
period of service referred to therein and to require the servant to retire from
service if, in its opinion, public interest calls for such an order.
the conduct of the employee is such as to justify such a conclusion is
primarily for the departmental authorities to decide.
nature of the delinquency and whether it is of such a degree as to require the
compulsory retirement of the employee are primarily for the Government to
decide upon. The courts will not interfere with the exercise of this power, if
arrived at bona fide and on the basis of material available on the
record." (emphasis supplied) Therefore, judicial scrutiny of any order
imposing premature compulsory retirement is permissible if the order is either
arbitrary or mala fide or if it is based on no evidence. The observation that
principles of natural justice have no place in the context of compulsory
retirement does not mean that if the version of the delinquent officer is
necessary to reach the correct conclusion the same can be obviated on the
assumption that other materials alone need be looked into.
this case, appellant made an endeavour to show that the order is tainted by mala
fides as one of the members of the Screening Committee (M.L. Wadhawan) had some
axe to grind against him. But we are not persuaded to believe that merely
because appellant has such a version against either that member or other
members of the Screening Committee, the Committee would have gone against the
appellant on account of that reason. So we repell the contention based on the
allegation of mala fides While viewing this case from the next angle for
judicial scrutiny i.e. want of evidence or material to reach such a conclusion,
we may add that want of any material is almost equivalent to the next situation
that from the available materials no reasonable man would reach such a
conclusion. While evaluating the materials the authority should not altogether
ignore the reputation in which the officer was held till recently.
maxim "Nemo Firut Repente Turpissimus" (no one becomes dishonest all
on a sudden) is not unexceptional but still it is a salutary guideline to judge
human conduct, particularly in the field of Administrative Law. The authorities
should not keep the eyes totally closed towards the overall estimation in which
the delinquent officer was held in the recent past by those who were
supervising him earlier. To dunk an officer into the puddle of "doubtful
integrity" it is not enough that the doubt fringes on a mere hunch. That
doubt should be of such a nature as would reasonably and consciously be entertainable
by a reasonable man on the given material. Mere possibility is hardly
sufficient to assume that it would have happened. There must be preponderance
of probability for the reasonable man to entertain doubt regarding that
possibility. Only then there is justification to ram an officer with the label
out of the three instances on which the Screening committee relied to dub the
officer as a case of "doubtful integrity" the first is his action
against M/s. Orkay Silk Mills. The fact is that it was the appellant who headed
the operation. A task which unearthed such a huge sum of concealed excise duty
would normally evoke appreciation for his work. But what was noted against him
in that affair is that he willfully created lacunae in the confiscation
proceedings for providing an escape route to the defaulter.
that the confiscation order contains nearly 100 pages and the period was too
short for preparing such an order.
is the inference to be drawn? Normally it is an achievement that an order of
100 pages was made during such a short period. So what is then to be thought of
against it? Is it that he would have taken too much pain to finish his work or
is it that he would have caused it to be written by somebody else? Is there not
a clear possibility that the officer hearing the adjudication case for several
days would have prepared its prefatory portion as well as statement of evidence
during the days when arguments were proceeding and before conclusion of the
hearing, leaving out the crucial discussion to be dictated after conclusion of
the hearing? That is not an objectionable course. If so, the achievement in
preparing an order of confiscation within such a short span should not have
been frowned at, instead there is scope to pay admiration fro its promptitude.
lacuna is that he imposed a huge penalty and fine without issuing a show cause
notice. To say that he did it for helping the defaulter is too far-fetched. The
appellate authority which may be persuaded to set aside such an order on that
ground could as well direct the authority to pass a fresh order after issuing
the show cause notice.
is unreasonable to conclude that the imposition of penalty was made
calculatedly to have it upset by the superior authority.
feel that the two lacunae ferretted out from the proceedings relating to M/s. Orkay
Silk Mills are grossly insufficient to reach a conclusion that the delinquent
officer was trying to help the defaulting manufacturer.
second instance concerning the file of M/s. Indian Tobacco Company the
inference made against the defaulter is too tenuous. The minimum thing which
should have been done was to ascertain from Shri Bhattacharjee, the Deputy
Director, the circumstances under which instructions were issued by him to keep
the investigation in abeyance.
a sinister motive to the appellant for what Shri Bhattacharjee had done was
seemingly unfair, without adopting such a minimum precaution.
third is the case relating to import of spare parts which the Jain Brothers
assembled for making Honda cars. In that case the ostensible role of the
appellant was to detect the offence through investigation and then to follow it
up seriously, When the defaulters were granted bail the appellant moved for
cancellation of the bail it is prima facie a point in favour of the appellant's
tenacity to pursue the steps adopted. Thus far the role played by the appellant
was that of a dutiful and efficient officer of the department. But the reason
for the Screening committee to doubt the integrity of the appellant in the
aforesaid case is that the Jain Brothers have alleged that one Mr. Kapoor told
them that appellant was to be paid Rs.10 lakhs to save them from the
perused the statement of Jains. They never said that appellant made the above
demand to them at any time. The only material before the Screening committee
was that the two accused had stated that Kapoor gave them such an impression.
It must be noted that nobody had checked up the truth of it with the person to
whom it was attributed. The most unfortunate feature is that nobody has checked
it up even with Mr. Kapoor who is alleged to have told like that to the Jain
Brothers. If integrity of senior officers, who established unblemished
reputation and earned encomiums from all concerned till then, is proclaimed as
doubtful merely on the strength of statements of persons prosecuted by such
officers, what is the safety of such officers more so when they have to embark
on hazardous operations risking their lives against big business houses.
N.N. Goswami, Senior Advocate arguing for Union of India submitted to us that
members of the Screening Committee are very reputed persons and hence their
conclusion must be given full weight. It is not a question of doubting the calibre
of the members of the Screening committee. While declining to agree with their
conclusion no particle of mud is slung on any member of the Screening
committee. Even if such a conclusion was made by a judicial personage the
higher court which overrules it does not cast any stigma on the judicial
have no doubt that there is utter dearth of evidence for the Screening
committee to conclude that appellant had doubtful integrity. Such a conclusion
does not stand judicial scrutiny even within the limited permissible scope.
therefore, allow this appeal and set aside the order under attack including the
order by which premature compulsory retirement was imposed on the appellant.
The department concerned shall now work out the reliefs to be granted to the
appellant as sequel to this judgment.