K. Doshi Vs. Union of India  Insc 128 (2 March 2001)
Mohapatra & S.N. Variava S. N. Variava. J.
Appeal (civil) 1693 of 2001 Appeal (civil) 1694 of 2001
Appeals are directed against the Judgment dated 20th December, 1999 of the Delhi High Court. They are being disposed of
by this common Judgment. In this Judgment parties will be referred to in their
capacity in Civil Appeal arising from SLP No. 19580 of 1999. Briefly stated the
facts are as follows:
1997 some posts of Member, Company Law Board had fallen vacant. A Selection
Committee headed by Mr. Justice S. C. Agarwal, a nominee of the Chief Justice
of India, was constituted to make the selection. The minutes of the Selection
Committee, dt. 2nd June
1997, read as follows:
the basis of the performance of the candidates in the interview and taking into
consideration all the relevant factors, the Selection Committee found the
following candidates suitable, in order of merit, and accordingly recommended
them for appointment as Members of the Company Law Board :-
S. B. Mathur - Member (Technical)
C. D. Paik - Member (Judicial) (ST)
The reserve panel, to be used for this post of Member, Technical in the event
of Shri SB Mathur not joining, shall be as follows in the order of priority
indicated below :-
A. K. Doshi
These candidates, if appointed, will rank junior to Shri C. D. Paik.
Selection Committee did not find any candidate suitable for the post of Member
the Selection Committee had selected the 2nd Respondent. The reserve panel
consisted of the names of the Appellant and Shri R. Vasudevan. As per this
selection only the name of the 2nd Respondent and Shri C. D. Paik could be sent
to the Appointments Committee. It was not denied that in normal course the
Appointments Committee would act on the recommendations of the Selection
Committee and these two persons would have been appointed. Shri C. D. Paik has
been appointed as Member (Judicial). In these Appeals the dispute relates only
in respect of appointment to the post of Member (Technical).
On 10th October 1997 the Secretary to the Appointments
Committee, whilst forwarding the name of the 2nd Respondent to the Appointments
Committee, gave the following note on the relevant file:
view of the chequered background of Shri S. B. Mathur, he does not seem to be a
fit person of character and unblemished record, for occupying the position of
Member, Company Law Board." We were informed that the Appointments
Committee was also informed by the Secretary that a penalty of reduction of pay
by one step in the pay-scale for a period of one year with restoration to original
stage on the expiry of that period had been imposed on the 2nd Respondent and
that he had got published a brief analysis on the report of the Working Group
on Companies Act through one Bharat Law House Private Limited, New Delhi and
thereafter requested permission to accept Rs.10,000/- as honorarium from the
Publisher. For this act he had been issued a warning for not obtaining the
prior approval and had been directed to credit to the Government that entire
amount. The 2nd Respondent had complied with those directions. The Appointments
Committee was also informed that against the 2nd Respondent there was a
complaint pertaining to publication of an advertisement for shifting of the
Office of Regional Director, Kanpur to Ghaziabad or NOIDA on which Rs. 1000/- was
spent. On a query from Court we were informed that the first allegation had
been brought to the notice of the Selection Committee but the other two
allegations had not been brought to the notice of the Selection Committee even
though they related to a period prior to the date when the Selection Committee
met to select suitable candidates for the post. We were informed that the other
two allegations were not brought to the notice of the Selection Committee as in
those cases only a warning had been issued and no entry had been made in the
confidential records. One wonders how such material could have been placed
before the Appointments Committee when admittedly it was not considered serious
enough to be placed before the Selection Committee.
placing on file the above mentioned comments and materials, which had not been
placed before the Selection Committee, the Secretary of the Appointments
Committee effectively ensures that the 2nd respondent was not appointed. On the
facts on record it is clear to us that the name of 2nd respondent was rejected
by the Appointments Committee, on 4th December, 1997 because of the unwarranted
interference by the Secretary. By its Order dated 4th December, 1997 the
Appointments Committee also directed that a fresh proposal for appointment of
Member (Technical) Company Law Board be submitted.
reserve panel was to be used in even of 2nd respondent not joining. As the
Appointments Committee rejected the name of the 2nd Respondent steps should
have been taken to place the names of the candidates included in the reserved
panel before the Appointments Committee.
on 4th December, 1997, a charge sheet had been issued against the Appellant for
a major penalty under Rule 14 of the C.C.S. (C.C.A.) Rules, 1965. This was an
event which took place subsequent to the selection by the Selection Committee.
This event necessarily had to be brought to the notice of the Appointments
Committee. Had this been brought to the notice of the Appointments Committee,
there could be no doubt that the Appointments Committee would have rejected the
name of the Appellant. No further names were forwarded to the Appointments
Committee and no step to initiate fresh proposal for appointment to the posts
was initiated. In the meantime the 2nd Respondent had also made a
representation against rejection of his name. That representation should have
been placed before the Appointments Committee. The representation was not
placed before the Appointments Committee. Nothing was done till May 1998 when
the Appellant got exonerated by the Disciplinary Authority. Thereafter almost
immediately the representation of the 2nd Respondent along with the name of the
Appellant was sent to the Appointments Committee. Even at this stage the
following noting dated 14th May, 1988 was made by the Secretary of the
Regarding Shri Mathur, it may be stated that the ACC had considered him not fit
for appointment as Member (Technical) in view of the chequered background and
other considerations in December, 1997. The note that led to the said decision
is on pp. 7-13/N (L.F. No. 18 (35) EO/97 (ACC). In addition, it has come to
light that he had been warned twice for some improprieties committed by him, as
discussed in paras 17.2. and 17.3. above. It is, therefore, felt that even on
reconsideration Shri Mathur's claim for the post does not merit acceptance. As
regards Dr. Doshi, after his having been exonerated of all the charges against
him, it appears that his appointment can be approved. ACC may like to approve
the appointment of Dr. A. K. Doshi as Member (Technical), Company Law Board
till the date of his superannuation on attaining the age of 60 years."
Thus even at that stage it was made sure that the Appointments Committee did
not consider and/or accept the name of the 2nd Respondent but considers the
name of the Appellant. It is under these circumstances that the Appellant came
to be appointed as Member (Technical), Company Law Board.
appointment of the Appellant was challenged by the 2nd Respondent before the
Central Administrative Tribunal.
Central Administrative Tribunal by an Order dated 3rd February, 1999 quashed the appointment of the Appellant.
Appellant challenged the Order dated 3rd February, 1999 in a Writ Petition before the High
Court at Delhi. This Writ Petition came to be
dismissed by the impugned Judgment dated 20th December, 1999.
Appeal arising out of SLP No. 19580 of 1999 is filed by the Appellant. The
Appellant is aggrieved by his appointment being set aside by the Central
Administrative Tribunal and the confirmation of that Order by the High Court.
Civil Appeal arising out of SLP(C) No CC 4869 of 2000 is filed by the 2nd
Respondent. 2nd Respondent seeks to challenge that portion of the High Court
Judgment where it is held that he had not challenged his rejection by the
Appointments Committee. Civil Appeal arising out of SLP No. 6435 of 2000 is by
the 1st Respondent. The 1st Respondent is aggrieved by the strictures passed
against them for their conduct in showing favouritism and the fact that they
have been directed to initiate process of selection of fresh candidates by the
behalf of the Appellant Mr. Goburdhan submitted that the 2nd Respondent had no
locus standi to file the Petition before the Central Administrative Tribunal.
It was submitted that the Appointments Committee had already rejected the name
of the 2nd Respondent and that rejection had not been challenged by him. It was
submitted that once the 2nd Respondent had not challenged his rejection, he had
no locus standi to challenge the appointment of the Appellant. On behalf of the
2nd Respondent it was submitted that he had challenged both the selection of
the Appellant as well the rejection of his name.
view, on the facts of this case the contention raised on behalf of the
Appellant that the 2nd respondent could not challenge the Appellant's
appointment since he (2nd respondent) had not challenged the rejection of his
name by the Appointment Committee, cannot be accepted. Even assuming that the
2nd Respondent could have challenged the rejection of his name by the
Appointment Committee he would have a cause of action to challenge the
appointment of the Appellant who was undisputedly placed below him in the panel
drawn up by the Selection Committee.
next submission was that once the name of the 2nd Respondent was rejected then
the Appellant automatically became entitled to be appointed as his name was
second in the Select List. In support of this submission reliance was placed on
the case of A. P. Aggarwal vs Govt. of NCT of Delhi and Another, reported in
2000 (1) S.C.C. Pg. 600.
this case the Appellant (therein) and another candidate were the only two
included in the panel prepared for the post of Member, Sales Tax Appellate
Tribunal. The other candidate joined but left soon thereafter. Instead of
appointing the Appellant the Government initiated process for fresh selection.
This was challenged by the Appellant and his challenge was upheld by this
Court. It must however be noted that, in that case the selected candidate had
Appellant's contention was also upheld on basis of a OM dt. 14th May 1975,
issued by the Central Government which provided that vacancy could be filled in
from the reserve panel. Further this Court directed the Government to appoint
that Appellant as there was nothing against him.
on this case it was submitted that the 1st Respondent was bound to appoint the
Appellant (herein) once the name of the 2nd Respondent had been rejected.
unable to accept this argument. The Government of India has framed Company Law
Board (Qualifications, Experience and Other Conditions of Service of Members)
Rules, 1993 (hereinafter called the said Rules). These Rules were notified on 28th April, 1993. Rule 4 provides for the method of
recruitment of Members. It provides that the selection of Members shall be made
by the Government of India in consultation with the Chief Justice of India or
his nominee. Thus the appointment can only be in consultation with the Chief Justice
of India or his nominee. It is for that reason that a Selection Committee
headed by a nominee of the Chief Justice of India is constituted for the
purposes of selecting a Member. All materials, which are relevant, are to be
placed before the Selection Committee.
the Selection Committee which makes the selection on the basis of relevant
materials. After the Selection Committee completes the exercise and recommends
one or more names for appointment the recommendation along with the materials
considered by the Selection Committee should be placed before the Appointments
Committee without any further addition or alteration. If in an exceptional case
the Appointments Committee feels that certain material which was not available
to be considered by the Selection Committee has come into existence in the
meantime, and the material is relevant for the purpose of appointment, then,
the matter should be placed before the Appointments Committee with the
additional material for its consideration. Such a course, in our view, will be
in accordance with the scheme of the Rules and the purpose of making
appointment to the important public office. We are constrained to observe that
the notings made by the Secretary of the Appointments Committee in the file, as
noted earlier, was an attempt to interfere with the process of selection, which
was neither permissible under the Rules nor desirable otherwise. By indulging
in such unhealthy process the sanctity of the selection by the Selection
Committee was attempted to be set at naught. Such conduct on the part of a
senior and experienced Government officer does not commend us. It must be
ensured that in future such a practice is not repeated. In this case the facts
indicate that, even though the Selection Committee made a recommendation, the
appointment of that candidate was got rejected/stalled. Thereafter even though
directed to do so by the Appointments Committee, process of fresh selection was
not initiated. The file was kept pending till name of the Appellant could be
sent to the Appointments Committee.
facts lead to the only conclusion that there was rank favouritism and a blatant
attempt to get the Appellant appointed as Member (Technical), Company Law
Board. On these facts the ratio in Aggarwal's case has no application.
in the present case there is no office memorandum requiring selection from the
view of the facts set out herein above, we are of the opinion that the Central
Administrative Tribunal as well as the High Court were right in setting aside
the appointment of the Appellant. The Appellant had been unduly favoured and
the candidate selected by the Selection Committee and placed on the merit list
had been deprived of appointment.
also submitted that the Central Administrative Tribunal had no jurisdiction to
entertain the Petition of the 2nd Respondent. It was submitted that the
Appellant had already become a Member of the Company Law Board. It was
submitted that by virtue of Section 14 of the Central Administrative Tribunal Act,
1985, the Central Administrative Tribunal could only exercise jurisdiction,
powers and authority in respect of an All India Service or to any Civil service
of the Union or a Civil post under the Union or to a post connected with defence
or in the defence services, being a post filled by a civilian. It was submitted
that the post of a Member (Technical) Company Law Board was neither an All
India Service nor a Civil Service of the Union
nor a Civil post under the Union. Reliance
was placed upon the authority in the case of Canara Bank v/s Nuclear Power
Corporation of India Ltd. and Ors. reported in 1995 Supp. (3) S.C.C. Pg. 81. In
this case it was held that the Company Law Board was a Court. Based on this
authority it was submitted that since the Company Law Board is a Court, its
Members could not be holding civil posts under the Union. It was submitted that both the Central
Administrative Tribunal and the High Court erred in holding that the post of a
Member, Company Law Board was a civil post.
the Central Administrative Tribunal and the High Court have relied upon various
Rules, notably Rules 6, 7, 10 and 13 of the said Rules and concluded that these
Rules indicated control by the Government. It was held that as the Government
had control, thus the post was a civil post.
must be mentioned that we have reservation in accepting this view. However for
all these years the post has lain vacant. Even if we were to hold in favour of
the Appellant no useful purpose would be served. The 2nd Respondent would have
to be given time to challenge in a proper forum. On facts set out hereinabove
the end result would be the same.
selection of the Appellant would be set aside. The post would then lie vacant
for the period it takes to dispose of that matter. The only sufferer would be
the litigating public. As in this case the facts are very gross, we see no
reason to interfere. We leave this question open to be decided in an
have held that the appointment of the Appellant was correctly set aside his
civil Appeal should be dismissed.
as the post of the Member (Technical), Company Law Board has remained vacant
for a long time, it is absolutely necessary that this post be filled up as
expeditiously as possible. In our view it is not at all necessary to send the
matter to another Selection Committee for selecting afresh. In our view
interest of justice would be served if the three names selected by the
Selection Committee along with the materials placed before it are placed before
the Appointments Committee without any nothings or comments by anybody. Only
the Report of the Selection Committee and the materials placed before it must
be placed before the Appointments Committee for its consideration. The
Appointments Committee must now select from amongst these names.
these directions all the Civil Appeals are disposed of. There will be no Order
as to costs.