CAPTAIN PRAMOD KUMAR BAJAJ Versus UNION OF INDIA AND ANOTHER
CAPTAIN PRAMOD KUMAR BAJAJ Versus UNION OF INDIA AND ANOTHER
Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले
Civil Appeal No. 6161 of 2022
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6161 OF 2022
CAPTAIN PRAMOD KUMAR BAJAJ ..… APPELLANT
Versus
UNION OF INDIA AND ANOTHER ….. RESPONDENTS
J U D G M E N T
HIMA KOHLI, J.
1. The appellant is aggrieved by the judgment dated 31st May, 2022 passed by the High
Court of Judicature at Allahabad, Lucknow Bench upholding the order dated 9th December, 2020
passed by the Central Administrative Tribunal1
, Principal Bench, that had turned down the
challenge laid by him to an order dated 27th September, 2019, passed by the Central Board of
Direct Taxes, Department of Revenue, Ministry of Finance, Government of India communicating
the decision of the President of India to compulsorily retire him, in exercise of powers conferred
under Rule 56(j) of the Fundamental Rules2
.
1 For short ‘Tribunal’
2 For short ‘FR 56(j)’
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Civil Appeal No. 6161 of 2022
FACTS OF THE CASE
2. The present case has a chequered history with multiple rounds of litigations spewed
between the appellant and the respondents. To have an overview of the matter, we may briefly
refer to some facts relevant for deciding the present Appeal. The appellant was a Permanent
Commissioned Officer in the Indian Army, inducted in the year 1980. Due to a physical disability
suffered by him in the course of Army operations, he was demobilized and released from service.
In the year 1989, the appellant qualified the Civil Services Examination. He was appointed as an
Officer and allocated to the 1990 Batch in the Indian Revenue Service. In due course of his
service, the appellant was promoted to higher posts and on 12th January, 2012, he was promoted
to the rank of Commissioner, in the Department of Income Tax. On 7th July, 2014, the appellant
was selected and empanelled for appointment as a Member of the Income Tax Appellate Tribunal3
by the Selection Committee headed by a sitting Judge of the Supreme Court nominated by the
then Chief Justice of India. On 15th July, 2015, the respondents forwarded the name of the
appellant to the Appointments Committee of the Cabinet4
along with his vigilance clearance for
appointment as Member (Accountant), ITAT. In the year 2016, the appellant was empanelled by
the ACC for appointment as Joint Secretary to the Government of India. From the year 2017
onwards, started a saga of litigations between the appellant and the respondents, as a result
whereof, his appointment as a Member of the ITAT, did not mature.
3. The first hurdle he faced was an adverse Intelligence Bureau5
report. This made the
appellant approach the Tribunal for relief. Vide judgment dated 10th February, 2017, the Tribunal
disposed of the Original Application filed by the appellant with a direction issued to the
respondents to resubmit his adverse IB Report to the Selection Committee for it to take a final
3 For short ‘ITAT’
4 For short ‘ACC’
5 For short ‘IB’
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Civil Appeal No. 6161 of 2022
view on his appointment to the subject post. The said judgment passed by the Tribunal was
assailed by the respondents in a writ petition before the High Court, which came to be dismissed
on 30th May, 2017, with further directions issued to make the entire process of reconsideration of
the appellant’s candidature by the Selection Committee, timebound. The Petition for Special
Leave to Appeal preferred by the respondent – Union of India against the order dated 30th May,
2017 passed by the High Court, was also dismissed by this Court on 15th November, 2017.
4. On 29th November, 2017, a vigilance inspection was carried out in the office of the
appellant. Based on the said vigilance inspection, the respondents issued a show cause notice to
him on 31st January, 2018. Ten days before that, on 21st January, 2018, the vigilance clearance
earlier granted in favour of the appellant, was withheld by the respondents. Both the aforesaid
orders were assailed by the appellant by filing separate Original Applications before the Tribunal.
Initially, an interim order was passed by the Tribunal observing that the show cause notice issued
by the respondents would not impede the appellant’s consideration for appointment to the post of
Member, ITAT. On 4th May 2018, another interim order was passed by the Tribunal, observing that
withholding of the vigilance clearance of the appellant will not come in his way for appointment to
the subject post. In the interregnum, on 11th April, 2018, the appellant was placed in the “Agreed
List”, which is a list of Gazetted Officers of suspect integrity prepared by the Department.
Pertinently, a second Petition for Special Leave to Appeal filed by the respondents against the
interim relief granted by the Tribunal in favour of the appellant and duly confirmed by the High
Court in WP (C) No. 22179-22187 of 2018 on 06.08.2018, was dismissed by this Court on
29.03.2019.
5. Aggrieved by the aforesaid action taken by the respondents of placing his name in the
Suspect List, the appellant approached the Tribunal for a third time and in the said proceedings,
an interim order was granted in his favour. Finally, vide common judgment dated 6th March, 2019,
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Civil Appeal No. 6161 of 2022
the Tribunal allowed two Original Applications filed by the appellant [O.A. No.137 of 2018 and
O.A. No.279 of 2018], quashing inclusion of his name in the “Agreed List” and the consequential
proceedings as also the decision taken by the respondents to deny him vigilance clearance. The
Tribunal also directed the respondents to forward the name of the appellant to the appropriate
Authority for selection/appointment to the post of Member, ITAT. However, the respondents did
not comply with the said order and filed a writ petition before the High Court. Admittedly, no
interim order was passed by the High Court staying the operation of the judgment dated 06th
March, 2019, passed by the Tribunal.
6. Aggrieved by the non-compliance of the order dated 30th May, 2017, passed by the High
Court in his favour, the appellant filed a contempt petition before the High Court. Vide order dated
13th August, 2019, the High Court permitted impleadment of the then Chairman of the Central
Board of Direct Taxes6
in the contempt petition and issued him a notice to show cause as to why
he should not be punished for wilful disobedience of the order dated 30th May, 2017, passed in the
writ proceedings.
7. Similar notices were issued by the Tribunal on two contempt petitions filed by the
appellant against the respondents for non-compliance of the orders dated 30th May, 2017 and 6th
March, 2019. In the meantime, the respondents initiated disciplinary proceedings against the
appellant by issuing him a chargesheet on 17th June, 2019. In July 2019, a Departmental
Promotion Committee7
was convened by the Union Public Service Commission8
to consider
promoting the appellant to the post of Principal Commissioner but the decision taken qua him,
was placed in the sealed cover due to the pending disciplinary proceedings. The appellant had
filed a writ petition before the High Court against the charge memorandum issued to him wherein
6 For short ‘CBDT’
7 For short ‘DPC’
8 For short ‘UPSC’
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Civil Appeal No. 6161 of 2022
the High Court granted stay orders in his favour. While the said proceedings were still pending,
the respondents proceeded to compulsorily retire the appellant on 27th September, 2019, which
was about three months short of the date of his superannuation in January 2020. The list of
promotions made to the post of Principal Commissioner was declared on 11.11.2019, by which
date the appellant was no longer in the reckoning.
8. It may be noted here that the mechanism in place within the department for arriving at a
conclusion as to who amongst the Group-A Officers in the CBDT deserve to be prematurely
retired, starts with an assessment to be conducted by the Internal Committee that identifies and
recommends the names of the officers and places it before the Review Committee. The next
stage is before the Review Committee that includes the Chairman, CBDT and the Revenue
Secretary as Members. If satisfied by the records and comments forwarded by the Internal
Committee that the pre-mature retirement of a Group-A Officer is desirable in public interest, the
Review Committee makes a recommendation to the Appointing Authority in this regard. The
Appointing Authority is then required to examine the recommendations of the Review Committee
and if satisfied, pass an order of pre-mature retirement of the concerned Officer. Once the
Competent Authority passes an order of pre-mature retirement under FR 56(j), the aggrieved
Officer is entitled to submit a representation to the Representation Committee. As per the records,
the appellant had submitted a representation to the Representation Committee, which was turned
down on 2nd January 2020.
9. The appellant challenged the final order of compulsory retirement issued against the
appellant on 27th September, 2019 and the subsequent order dated 2nd January, 2020, passed by
the Representation Committee declining to interfere in the order of compulsory retirement, before
the Tribunal. The said petition was dismissed, vide judgment dated 9th December, 2020 and
upheld by the High Court by the impugned judgment dated 31st May, 2022.
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Civil Appeal No. 6161 of 2022
THREEFOLD CHALLENGE
10. A threefold challenge has been laid by the appellant to the impugned judgment. Firstly, on
the ground of serious prejudice caused to him due to the active participation of the Additional
Director General (Vigilance) as a Member of the Internal Committee when he had a bias against
the appellant and the participation of the then Chairman of the CBDT in the meeting of the Review
Committee, convened to examine the recommendations of the Internal Committee for prematurely retiring him, when he ought to have recused himself knowing that he was facing three
contempt notices, one issued by the High Court on 13th August, 2019 [Contempt Petition
No.2681/2017] and two notices issued by the Tribunal [CCP No.15/2019 and CCP No.25/2019]
for failing to forward the appellant’s vigilance clearance required for processing his case for
appointment as Member, ITAT, to the Selection Committee. Secondly, it has been argued that the
impugned order of his pre-mature retirement is punitive in nature and has been passed solely to
deprive him of an opportunity to be appointed as Member ITAT, a post for which he was selected
by the Selection Committee headed by a sitting Judge of the Supreme Court and his name was
placed at Serial No.1 in the All India Ranking, as long back as in the year 2014. This selection of
the appellant was reiterated by a subsequently constituted Selection Committee in the year 2018,
but did not reach fruition due to persistent obstructions created by the respondents, who withheld
his vigilance clearance without a valid reason and subsequently placed his name in the “Agreed
List”, followed by initiation of a disciplinary enquiry against him on baseless charges which was
not taken to its logical conclusion, as he was prematurely retired in September, 2019. Lastly, it
was urged that the High Court has completely overlooked the fact that all the Annual Performance
Assessment Reports9
of the appellant over the past 30 years were blemishless. In fact, the
appellant was graded as ‘Outstanding’ and his integrity was assessed as ‘Beyond Doubt’ for the
9 For short ‘APAR’
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Civil Appeal No. 6161 of 2022
immediately preceding 10 years’ APARs, after he was promoted to the post of Commissioner,
Income Tax in the year 2012.
SUBMISSIONS MADE BY THE COUNSEL FOR THE UNION OF INDIA
11. Refuting the allegations levelled by the appellant and defending the impugned judgment,
Mr. Sanjay Jain, learned Additional Solicitor General10 who appeared for the respondents – Union
of India urged that the impugned judgment is a well-reasoned one and does not deserve
interference; that the order of compulsory retirement was passed in the case of the appellant after
duly considering his entire service record; that the material relied upon by the respondents for
passing an order under FR 56(j), was carefully considered by the Tribunal before dismissing the
Original Application filed by the appellant, as meritless and that the allegations of institutional
malice and bias levelled by the appellant are ill-founded. Learned ASG contended that unlike
departmental enquiries, the scope of an enquiry under FR 56(j) is fairly limited and the standard of
adjudication is prima facie a subjective opinion as to the suitability of an officer to continue in
service, keeping in mind public interest. No stigma can be attached to an employee who is
compulsorily retired, as compulsory retirement does not amount to dismissal or removal. The
appellant is still entitled to all retiral benefits and also entitled to be considered for other
appointments. It was stated that a chargesheet was pending against the appellant for major
penalty proceedings which had been unsuccessfully challenged by him before the Tribunal. Citing
several decisions of this Court on the limited scope of interference in an order of compulsory
retirement, it was submitted on behalf of the respondents – Union of India that courts should
ordinarily refrain from returning findings on merits of the allegations against the concerned officer.
Once an order of compulsory retirement has been passed bona fide and without any extraneous
motive, there is no justification for interference.
10 For short ‘ASG’
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Civil Appeal No. 6161 of 2022
ANALYSIS AND CASE LAWS RELATING TO COMPULORY RETIREMENT
12. We have given our thoughtful consideration to the arguments advanced by learned
counsel for the parties, perused the records and the judgments cited by both sides.
13. The provision of Fundamental Rule 56(j) reads as under:
“FR 56(j) :- The Appropriate Authority shall, if it is of the opinion that it
is in the public interest so to do, have the absolute right to retire any
Government servant by giving him notice of not less than three months
in writing or three months' pay and allowances in lieu of such notice :-
(i) If he is, in Group 'A' or Group 'B' service or post in a substantive, quasipermanent or temporary capacity and had entered Government service
before attaining the age of 35 years, after he has attained the age of 50
years;
(ii) In any other case after he has attained the age of 55 years.
14. As is apparent from a perusal of the aforesaid provision, it takes in its fold two elements –
the first one is the absolute right of the Government to retire an employee and the second is the
requirement of meeting the condition of public interest for doing so. The provision also provides
for a prior notice of at least three months to the outgoing employee and mandates that the said
provision can be invoked to retire a government servant only after he has attained the age of 55
years.
15. We are conscious of the fact that the scope of judicial review in respect of an order of
compulsory retirement from the service, is fairly limited. The law relating to compulsory retirement
has been the subject matter of discussion in a number of cases where certain settled legal
principles have been laid down which are being elucidated hereinbelow.
16. The object of compulsory retirement of a government servant was highlighted by this
Court in Allahabad Bank Officers’ Association and Another vs. Allahabad Bank and Others11
in the following words: -
11 1996(4) SCC 504
Page 8 of 27
Civil Appeal No. 6161 of 2022
“5. The power to compulsorily retire a government
servant is one of the facets of the doctrine of pleasure
incorporated in Article 310 of the Constitution. The object of
compulsory retirement is to weed out the deed wood in order to
maintain efficiency and initiative in the service and also to
dispense with the services of those whose integrity is doubtful
so as to preserve purity in the administration. Generally speaking,
Service Rules provide for compulsory retirement of a government
servant on his completing certain number of years of service or
attaining the prescribed age. His service record is reviewed at that
stage and a decision is taken whether he should be compulsorily
retired or continued further in service. There is no levelling of a
charge or imputation requiring an explanation from the government
servant. While misconduct and inefficiency are factors that enter into
the account where the order is one of dismissal or removal or of
retirement, there is this difference that while in the case of retirement
they merely furnish the background and the enquiry, if held – and
there is no duty to hold an enquiry – is only for the satisfaction of the
authorities who have to take action, in the case of dismissal or
removal they form the very basis on which the order is made, as
pointed out by this Court in Shyam Lal v. State of U.P. and State of
Bombay v. Saubhagchand M. Doshi. Thus, by its very nature the
power to compulsorily retire a government servant is dismissal etc. for
misconduct. A government servant who is compulsorily retired does
not lose any part of the benefit that he has earned during service.
Thus, compulsory retirement differs both from dismissal and removal
as it involves no penal consequences.”
“………………
17. The above discussion of case-law makes it clear that if the
order of compulsory retirement casts a stigma on the Government
servant in the sense that it contains a statement casting aspersion on
his conduct or character, then the court will treat that order as an
order of punishment, attracting provisions of Article 311(2) of the
Constitution. The reason is that as a charge or imputation is made the
condition for passing the order, the court would infer therefrom that
the real intention of the Government was to punish the government
servant on the basis of that charge or imputation and not to exercise
the power of compulsory retirement. But mere reference to the rule,
even if it mentions grounds for compulsory retirement, cannot be
regarded as sufficient for treating the order of compulsory retirement
as an order of punishment. In such a case, the order can be said to
have been passed in terms of the rule and, therefore, a different
intention cannot be inferred. So also, if the statement in the order
refers only to the assessment of his work and does not at the same
time cast an aspersion on the conduct or character of the
Government servant, then it will not be proper to hold that the order of
compulsory retirement is in reality an order of punishment. Whether
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Civil Appeal No. 6161 of 2022
the statement in the order is stigmatic or not will have to be judged by
adopting the test of how a reasonable person would read or
understand it.”
[emphasis added]
17. In Union of India v. Col. J.N. Sinha and Another12 it has been observed that :
“Fundamental Rule 56(j) does not in terms require that any opportunity
should be given to the concerned government servant to show cause
against his compulsory retirement. It says that the appropriate
authority has the absolute right to retire a government servant if it is of
the opinion that it is in the public interest to do so. If that authority
bona fide forms that opinion the correctness of that opinion cannot be
challenged before courts though it is open to an aggrieved party to
contend that the requisite opinion has not been formed or the decision
is based on collateral grounds or that it is an arbitrary decision.”
18. On similar lines were the observations made by this Court in Swami Saran Saxena v.
State of U.P.13 :-
“3. Several contentions have been raised in this appeal by the
appellant, who appears in person. In our judgment, one of them
suffices to dispose of the appeal. The contention which has found
favour with us is that on a perusal of the material on the record and
having regard to the entries in the personal file and character roll of the
appellant, it is not possible reasonably to come to the conclusion that
the compulsory retirement of the appellant was called for. This
conclusion follows inevitably from the particular circumstances, among
others, that the appellant was found worthy of being permitted to cross
the second efficiency bar only a few months before. Ordinarily, the
court does not interfere with the judgment of the relevant authority on
the point whether it is in the public interest to compulsorily retire a
government servant. And we would have been even more reluctant to
reach the conclusion we have, when the impugned order of
compulsory retirement was made on the recommendation of the High
Court itself. But on the material before us we are unable to reconcile
the apparent contradiction that although for the purpose of crossing
the second efficiency bar the appellant was considered to have worked
with distinct ability and with integrity beyond question yet within a few
months thereafter he was found so unfit as to deserve compulsory
retirement. The entries in between in the records pertaining to the
12 (1970) 2 SCC 458
13 (1980) 1 SCC 12
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Civil Appeal No. 6161 of 2022
appellant need to be examined and appraised in that context. There is
no evidence to show that suddenly there was such deterioration in the
quality of the appellant's work or integrity that he deserved to be
compulsorily retired. For all these reasons, we are of opinion that the
order of compulsory retirement should be quashed. The appellant will
be deemed to have continued in service on the date of the impugned
order.
19. In Baldev Raj Chadha v. Union of India14
, emphasizing the fact that exercise of powers
under Fundamental Rule 56(j) must be bona fide and promote public interest, this Court observed
that : -
“25. The whole purpose of Fundamental Rule 56(j) is to weed out
the worthless without the punitive extremes covered by Article 311 of
the Constitution. But under the guise of ‘public interest’ if unlimited
discretion is regarded acceptable for making an order of premature
retirement, it will be the surest menace to public interest and must fail
for unreasonableness, arbitrariness and disguised dismissal. The
exercise of power must be bona fide and promote public interest.”
26. “An officer in continuous service for 14 years crossing the
efficiency bar and reaching the maximum salary in the scale and with
no adverse entries at least for five years immediately before the
compulsory retirement cannot be compulsorily retired on the score
that long years ago, his performance had been poor, although his
superiors had allowed him to cross the efficiency bar without qualms.”
20. In Ram Ekbal Sharma v. State of Bihar and Another15 it was observed that in order to
find out whether an order of compulsory retirement is based on any misconduct of the
government servant or the said order has been made bona fide, without any oblique or
extraneous purpose, the veil can be lifted. Following are the pertinent observations made in the
said decision:
“32. On a consideration of the above decisions the legal
position that now emerges is that even though the order of
compulsory retirement is couched in innocuous language
without making any imputations against the government servant
14 (1980) 4 SCC 321
15 (1990) 3 SCC 504
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Civil Appeal No. 6161 of 2022
who is directed to be compulsorily retired from service, the
court, if challenged, in appropriate cases can lift veil to find out
whether the order is based on any misconduct of the
government servant concerned or the order has been made bona
fide and not with any oblique or extraneous purposes. Mere form
of the order in such case cannot deter the court from delving into the
basis of the order if the order in question is challenged by the
concerned government servant as has been held by this Court in
‘Anoop Jaiswal case’. This being the position the respondent-State
cannot defend the order of compulsory retirement of the appellant in
the instant case on the mere plea that the order has been made in
accordance with the provisions of Rule 74(b)(ii) of the Bihar Service
Code which prima facie does not make any imputation or does not
cast any stigma on the service career of the appellant. But in view of
the clear and specific averments made by the respondent-State that
the impugned order has been made to compulsorily retire the
appellant from service under the aforesaid rule as the appellant was
found to have committed grave financial irregularities leading to
financial loss to the State, the impugned order cannot but be said to
have been made by way of punishment. As such, such an order is in
contravention of Article 311 of the Constitution of India as well as it is
arbitrary as it violates principles of natural justice and the same has
not been made bona fide.
[emphasis added]
21. In State of Orissa and Others vs. Ram Chandra Das16 this Court observed as follows: -
“It is needless to reiterate that the settled legal position is that the
Government is empowered and would be entitled to compulsorily
retire a government servant in public interest with a view to improve
efficiency of the administration or to weed out the people of doubtful
integrity or who are corrupt but sufficient evidence was not available
to take disciplinary action in accordance with the rules so as to
inculcate a sense of discipline in the service. But the Government,
before taking the decision to retire a government employee
compulsorily from service, has to consider the entire record of the
government servant including the latest reports.”
22. In State of Gujarat and Another vs. Suryakant Chunilal Shah17, a case where the State
Government had challenged the judgment of the Division Bench of the High Court of Gujarat that
16 (1996) 5 SCC 331
17 (1999) 1 SCC 529
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Civil Appeal No. 6161 of 2022
had held that the order of compulsory retirement passed against the respondent therein was bad,
as there were no adverse entries in his Confidential Report and his integrity was not doubtful at
any stage, this Court held thus : -
“28. There being no material before the Review Committee,
inasmuch as there were no adverse remarks in the character roll
entries, the integrity was not doubted at any time, the character roll
subsequent to the respondent’s promotion to the post of Assistant
Food Controller (Class II) were not available, it could not come to
the conclusion that the respondent was a man of doubtful integrity
nor could have anyone else come to the conclusion that the
respondent was a fit person to be retired compulsorily from service.
The order, in the circumstances of the case, was punitive having
been passed for the collateral purpose of his immediate removal,
rather than in public interest.”
23. In State of Gujarat vs. Umedbhai M. Patel18, this Court has delineated the following
broad principles that ought to be followed in matters relating to compulsory retirement : -
“11. The law relating to compulsory retirement has now crystallized
into a definite principle, which could be broadly summarized thus:
(i) Whenever the services of a public servant are no longer useful
to the general administration, the officer can be compulsorily retired
for the sake of public interest.
(ii) Ordinarily, the order of compulsory retirement is not to be
treated as a punishment coming under Article 311 of the Constitution.
(iii) For better administration, it is necessary to chop off dead
wood, but the order of compulsory retirement can be passed after
having the regard to the entire service record of the officer.
(iv) Any adverse entries made in the confidential record shall be
taken note of and be given due weightage in passing such order.
(v) Even uncommunicated entries in the confidential record can
also be taken into consideration.
(vi) The order of compulsory retirement shall not be passed as a
short cut to avoid departmental enquiry when such course is more
desirable.
(vii) If the officer was given a promotion despite adverse entries
made in the confidential record, that is a fact in favour of the officer.
(viii) Compulsory retirement shall not be imposed as a punitive measure.
18 (2001) 3 SCC 314
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Civil Appeal No. 6161 of 2022
24. In Nand Kumar Verma v. State of Jharkhand and Others19 this Court has once again
highlighted the permissibility of ascertaining the existence of valid material by a Court for the
authorities to pass an order of compulsory retirement and observed thus: -
“34. It is also well settled that the formation of opinion for
compulsory retirement is based on the subjective satisfaction
of the authority concerned but such satisfaction must be
based on a valid material. It is permissible for the Courts to
ascertain whether a valid material exists or otherwise, on
which the subjective satisfaction of the administrative
authority is based. In the present matter, what we see is that the
High Court, while holding that the track record and service record of
the appellant was unsatisfactory, has selectively taken into
consideration the service record for certain years only while making
extracts of those contents of the ACRs. There appears to be some
discrepancy………..”
[emphasis added]
25. In a recent judgment in the case of Nisha Priya Bhatia v. Union of India20
, confronted
with the question as to whether action taken under Rule 135 of the Research and Analysis Wing
(Recruitment Cadre and Service) Rules, 1975 is in the nature of “a penalty or a dismissal clothed
as compulsory retirement” so as to attract Article 311 of the Constitution of India, this Court has
held that “the real test for this examination is to see whether the order of compulsory retirement is
occasioned by the concern of unsuitability or as a punishment for misconduct”. For drawing this
distinction, reliance has been placed on the judgment in State of Bombay v. Saubhag Chand M.
Doshi21, where a distinction was made between an order of dismissal and order of compulsory
retirement in the following words :
“9 … Under the rules, an order of dismissal is a punishment laid on
a government servant, when it is found that he has been guilty of
19 (2012) 3 SCC 580
20 (2020) 13 SCC 56
21 AIR 1957 SC 892
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Civil Appeal No. 6161 of 2022
misconduct or inefficiency or the like, and it is penal in character, because it involves loss of pension which under the rules would have
accrued in respect of the service already put in.
An order of removal also stands on the same footing as an order of
dismissal, and involves the same consequences, the only difference
between them being that while a servant who is dismissed is not eligible for re-appointment, one who is removed is. An order of retirement differs both from an order of dismissal and an order of removal, in that it is not a form of punishment prescribed by the
rules, and involves no penal consequences, inasmuch as the
person retired is entitled to pension proportionate to the period
of service standing to his credit.”
[emphasis added]
EXAMINATION AND ANALYSIS OF THE CASE ON HAND
26. We may now proceed to examine the facts of the case in hand in the light of the case laws
discussed above in order to find out as to whether the order of compulsory retirement passed by
the respondents in respect of the appellant was based on valid material and was in public interest.
First, we propose to examine the personal file and character roll of the appellant. As per the
material placed on record, the APARs of the appellant reflect that over the past several years, his
integrity was being regularly assessed as “Beyond doubt” and this remained the position till as
late as 31st July, 2019, when his work performance was assessed for the period from 1st April,
2018 to 31st March, 2019 and found to be upto the mark. In his APARs for the past one decade,
till the period just prior to the order of his premature retirement, the respondents were consistently
grading the appellant as “Outstanding”. No adverse entries were made by his superiors in the
APARs of the appellant insofar as his work performance was concerned. No aspersion was cast
either on his conduct or character during all this period. As per the service records, his efficiency
and integrity remained unimpeachable throughout his career. The inference drawn from the above
is that the appellant’s service record being impeccable could not have been a factor that went
against him for the respondents to have compulsorily retired him.
Page 15 of 27
Civil Appeal No. 6161 of 2022
27. Coming next to the stand taken by the respondents that several complaints were received
against the appellant that had cast a cloud on his integrity, it is noteworthy that the respondents
have referred to nine complaints against the appellant, stated to be pending in the Vigilance
Directorate that have been pithily summarized by the Tribunal in a tabulated format in para 30 of
its judgment dated 6th March, 2019. Juxtaposed against the said tabulated statement of
complaints listed by the respondents, is a separate tabulation of the response of the appellant to
each of the said complaints. For ready reference, the two tables of contents are extracted
below :-
S.
No
.
Name of officer Status
1 Sh. P.K. Bajaj Addl CIT,
Range 6 (2), Mumbai
Shri O.P. Jangre Charges of harassment &
interference in work by
subordinate officer Shri
Jangre on Shri P.K. Bajaj
Under Examination.
2 Sh. P.K. Bajaj, CIT E,
Lucknow
Closed dated 03.05.2018
3 Sh. P.K. Bajaj, CIT E,
Lucknow
Complaint made by
Driving Training and
Scientific Research
Lucknow in January
2016
Under examination
4 Sh. P.K. Bajaj, CIT E,
Lucknow
Sh. Dharam Veer
Kapil IFS Retd Dated
17.10.2017
ID issued dated 13.11.17. ID
responded dt. 18.11.17 under
examination
5 Sh. P.K. Bajaj, CIT E,
Lucknow
Sh. Balesh Singh,
through
PMOPG/E2017/0597
795 dated 17.11.17
ID issued dated 27.12.17
6 Sh. P.K. Bajaj, CIT
(Exemption), Lucknow
Shri Ashok Verma,
Lucknow
ID issued dated 08/04/16.
Reminder dated 11.05.16. ID
neither responded nor
received back date. Closed
dated 19.07.16
Page 16 of 27
Civil Appeal No. 6161 of 2022
7 Sh. P.K. Bajaj, CIT E,
Lucknow
Sh. Jagat Pandey,
28/42, Civil Lines,
Bareilly, U.P. Dated
29.06.16
ID issued dated 03.08.16
Reminder dated 09.09.16
letter received back
undelivered till date.
Closed dated 07.10.16.
8 Shri Pramod Bajaj, CIT
(Exemption), Lucknow
Sh. Ashish Rastogi, A
70, Gandhi Nagar,
Prince Road
Muradabad, U.P.
ID issued dated 25.02.16.
Reminder dated 11.05.16. ID
Neither received back nor
responded. Closed dated
29.08.16.
9 CAPT. P.K. Bajaj Addl.
CIT
Smt. Renu Bajaj W/o
Capt P.K. Bajaj
Letter dated 28.01.15 to CIT,
Ajmer for providing
information on case in court
matter. A letter to Pr. CCIT,
Jaipur for status report dated
20.01.16 & reminder dated
28.09.16 sent.
Response of the Appellant
S.
No
.
Name of
officer
Status 5. Facts as per petitioner
1 Sh. P.K. Bajaj
Addl. CIT,
Sh. O.P.
Jangre
No explanation ever called for
from petitioner in last 13 years
in this regard. Shri S.K.
Jangre was arrested by
ACB/CBI on 12.12.15, and is
under suspension. (Annexure
No.A1).
2 Sh. P.K. Bajaj
CIT (E),
Lucknow
Blank/ Closed dated
03.05.18
No details mentioned
3 Sh. P.K. Bajaj
CIT (E),
Lucknow
Complaint
made by
Driving
Training and
Scientific
Research
Lucknow in
January 2016
Under
Examination
File taken for inspection on
03.02.2016 returned after 17
months on 09.08.2017 with
the remarks that this record is
no longer required and matter
closed by ADG(VIG)(NZ on
10.02.16. (Annexure no.A2)
(ii) NBW issued by Ld. CJM
Lucknow against complainant
Page 17 of 27
Civil Appeal No. 6161 of 2022
(Annexure no.A3)
4 Sh. P.K. Bajaj
CIT (E),
Lucknow
Sh. Dharam
Veer Kapil
IFS Retd
Dated
17.10.2017
ID issued dt.
13.112017 ID
responded dt.
18.11.17.
under
examination
Father in Law of Mrs. Naina
Kapil So in, IRS posted earlier
in DG(V) office Delhi.
(ii) Application rejected
because even PAN was not
provided in spite of two
opportunities given (copy of
order as Annexure No.A4)
5 Sh. P.K. Bajaj
CIT (E),
Lucknow
Sh. Balesh
Singh,
through
PMOPG/E20
17/0597795
dated
17.11.17
ID issued dt.
27/12/17
No details provided by
Respondents. No query ever
raised till date.
6 Sh. P.K. Bajaj
CIT
(Exemption),
Lucknow
Shri Ashok
Verma,
Lucknow
ID issued dt.
08/04/16
Reminder dt.
11.05.16 ID
neither
responded nor
received back
undelivered till
dated Closed
dt./19.7.16.
Fictitious/Pseudo anonymous
complaint. Still connected
files taken during inspection
on 29.11.2017.
7 Sh. P.K. Bajaj
CIT
(Exemption),
Lucknow
Sh. Jagat
Pandey,
28/42, Civil
Lines,
Bareilly, U.P.
Dated
29.06.16
ID issued
dated
03.08.16
Reminder dt.
09.09.16. ID
letter received
back
undelivered.
Closed/dt.07.
10.16.
Fictitious/Pseudo anonymous
complaint still connected files
taken during inspection on
29.11.2017
8 Sh. P.K. Bajaj
CIT
(Exemption),
Lucknow
Sh. Ashish
Rastogi, A
70, Gandhi
Nagar, Prince
Road
Muradabad,
U.P.
ID issued
dated
25.02.16
reminder
dated
11.05.16. ID
neither
received back
nor
Fictitious/Pseudo anonymous
complaint still connected files
taken during inspection on
29.11.2017.
Page 18 of 27
Civil Appeal No. 6161 of 2022
responded.
Closed
Dt/29.08.16
9 Sh. P.K. Bajaj
Addl. CIT
Smt. Renu
Bajaj W/o
Capt P.K.
Bajaj
Letter dt.
28.01.15 to
CIT, Ajmer for
providing
information on
case in court
matter. A
letter to Pr.
CCIT Jaipur
for status
report dt.
20.1.16 &
reminder dt.
28.09.16 sent
Divorced on 31.05.2008. No
query ever raised by DGIT
(V) till date but copies of
Hon’ble SC/HC orders
handed over to DGIT (V) on
21.03.2018 (old settled
matrimonial dispute), but still
kept pending by DGIT (V)
(copy as Annexure No. A5)
28. As can be seen from the above, out of the aforesaid nine complaints, four complaints
mentioned at Sr. Nos. 2, 6, 7 and 8 had already been closed by the department in the year 2016-
2017. With regard to the complaint listed at Sr. No.1, is stated to have been levelled by another
officer of the department against the appellant, relating to harassment and interference in work.
The Tribunal has noted the submission of the appellant, which has gone unrefuted that the AntiCorruption Bureau of the Central Bureau of Investigation22 had at a later date, arrested the said
officer on charges of corruption. The appellant has also stated in the remarks column that no
explanation had ever been called for from him on the said complaint, status whereof is shown as
“Under examination”. In respect of the complaints at Sr. Nos. 3 and 4, the respondents have
stated that they are “Under examination”. In reply, the appellant has stated that the complaint at
Sr. No.3, of the year 2016 was closed by the ADG (Vigilance)(NZ) on 10th February, 2016 and the
complaint at Sr. No.4, made by a relative of an officer within the Department, was rejected
because the complainant did not provide his PAN number despite being afforded two
22 For short ‘ CBI’
Page 19 of 27
Civil Appeal No. 6161 of 2022
opportunities. There is no rebuttal to the said assertions. Coming to the complaint at Sr. No. 5,
the Review Committee constituted by the respondents has recorded the status of the said
complaint as having been closed on 22nd January, 2019. This is apparent from a perusal of para
26 of the judgment dated 09th December, 2020, passed by the Tribunal. Now remains the
complaint at Sr. No.9, which was made by the appellant’s ex-wife alleging bigamy, moral turpitude
etc. against the appellant. In the remarks column, the respondents have stated that necessary
information in respect of the said court proceedings between the parties was sought by the
department. The appellant has clarified that a decree of divorce was granted to the parties by the
concerned Court and a copy of the said order was duly supplied to the department against receipt
on 21st March, 2018.
29. Insofar as the matrimonial dispute of the appellant is concerned, the material placed on
record reveals that the same had attained quietus by virtue of a settlement arrived at between him
and his estranged wife, vide Settlement Agreement dated 18th June, 2016 recorded by the learned
Mediator appointed by the Delhi High Court Mediation and Conciliation Centre. The said
Settlement Agreement was duly taken on record by the Division Bench of the High Court of Delhi
vide order dated 14th July, 2016 passed in MAT. APP. (F.C.) Nos.148 of 2014, 34 of 2016 and 36
of 2016. Both the parties had agreed that they would take joint steps to get their marriage
dissolved by filing a petition before the concerned Family Court. One of the terms and conditions
of the Settlement was that the appellant would arrange a residential flat for his wife, which his
brother had agreed to purchase in her name, as a one-time settlement towards all her claims of
maintenance, alimony, stridhan, etc. This condition was subsequently complied with and is borne
out from the Sale Document of the flat dated 3rd October, 2016 that records the fact that a sum of
₹ 6,00,000/- (Rupees six lakhs) was paid by the appellant’s brother to the seller towards the sale
price of the flat.
Page 20 of 27
Civil Appeal No. 6161 of 2022
30. Once the parties had arrived at a settlement and a decree of divorce by mutual consent
was passed by the concerned Court, the allegations of bigamy etc. levelled by the appellant’s wife
loses significance since the case was never taken to trial for any findings to be returned by the
Court on this aspect. In the above backdrop, there appears no justification for the respondents to
have raised the spectre of a series of complaints received against the appellant during the course
of his service that had weighed against him for compulsorily retiring him, more so, when these
complaints were to the knowledge of the respondents and yet, his service record remained
unblemished throughout. Nothing has been placed on record to show a sudden decline in the
work conduct of the appellant so as to have compulsorily retired him.
31. We may now proceed to examine the background in which vigilance clearances were
initially given to the appellant and subsequently withheld by the respondents. It is not in dispute
that in the year 2013, the appellant had applied for the post of Member, ITAT and in the year
2014, the Selection Committee had placed him on the top of the list of 48 selected candidates.
Based on the vigilance clearance issued by the department in August, 2013 and once again on
15th July 2015, the appellant was recommended by the respondents to the ACC for his
appointment to the subject post.
32. However, sometime later, the respondents withheld the vigilance clearance given earlier
on the ground that there was an adverse IB Report against the appellant. It is not out of place to
mention here that the aforesaid adverse IB report had also arisen from the complaint received
from the appellant’s wife during the very same matrimonial dispute which had already been
amicably settled in Court. The factum of the said settlement was well within the knowledge of the
respondents, who had stated in O.M. dated 15th July, 2015 that “the alleged acts of bigamy
against Shri Bajaj emanating from matrimonial dispute is not established”. Aggrieved by the
withholding of his vigilance report, the appellant had approached the Tribunal for relief in OA
Page 21 of 27
Civil Appeal No. 6161 of 2022
No.95 of 2016. Vide interim order dated 10th February, 2017, the Tribunal directed the
respondents to resubmit the adverse IB report in respect of the appellant before the Selection
Committee within one month for the said Committee to take a view in the matter. As noted earlier,
the aforesaid order dated 10th February, 2017, passed by the Tribunal was upheld by the High
Court, on 30th May, 2017 and affirmed by this Court, vide order dated 15th November, 2017.
33. Undeterred by the aforesaid judicial orders, the respondents continued to withhold the
vigilance clearance of the appellant, this time claiming that there were some adverse findings
against him in an Inspection Report dated 20th April, 2018 stated to have been prepared on the
basis of an inspection of the office of the appellant conducted on 29th and 30th November, 2017
which was done within a few days of this Court upholding the order dated 10th February, 2017
passed by the Tribunal, calling upon the respondents to place his adverse IB report before the
Selection Committee, for it to take a view in the matter. It is rather ironical that the irregularities
noticed by the respondents in the Inspection Report dated 20th April, 2018, that made them
withhold the vigilance clearance of the appellant were to their knowledge ten days before and yet
they had issued a letter dated 11th April, 2018, giving him vigilance clearance.
34. It is noteworthy that the appellant had challenged the proceedings initiated against him by
the respondents on the basis of the inspections conducted on 29th and 30th November, 2017 in OA
No.77 of 2018. In the said proceedings, the Tribunal had passed an interim order on 2nd February,
2018 directing that the said proceedings will not come in the way of promotion, appointment and
deputation prospects of the appellant. Regardless of the above directions, the respondents not
only denied vigilance clearance to the appellant on 20th April, 2018 they went a step ahead and
proceeded to place his name in the “Agreed List” i.e., the list of suspected officers. This act of the
respondents was also assailed by the appellant before the Tribunal in O.A. No. 279 of 2018.
Ultimately, both the captioned Original Applications were collectively decided by the Tribunal in
Page 22 of 27
Civil Appeal No. 6161 of 2022
favour of the appellant by a detailed judgement dated 6th March, 201, which has not been stayed
by any superior Court.
35. Aggrieved by a separate Memo dated 30th January 2018 issued by the respondents on the
basis of the aforesaid inspection of his office conducted on 29th and 30th November, 2017 calling
for his explanation in respect of some orders passed by him in his judicial/quasi-judicial capacity
as Commissioner of Income Tax (Exemption), the appellant had to file O.A. No.332 of 2018 that
was decided by the Tribunal in his favour vide judgment dated 28th May, 2019. In its judgment,
the Tribunal relied on the order dated 15th May 2018, passed by the High Court in W.P. No.13390
of 2018 (SB), declaring that the inspection conducted by the Department was without jurisdiction
and that there was no justification for withholding the vigilance clearance of the appellant on the
basis of the said inspection. Noting that the Memo dated 30th January 2018 issued by the
respondents calling for an explanation from the appellant was premised on the very same
inspection conducted by the Department, the Tribunal reiterated the string of findings returned by
it in favour of the appellant in its earlier common judgment dated 6th March 2019 [passed in O.A.
No. 137 of 2018 and O.A. No. 279 of 2018] and proceeded to quash the Memo dated 30th January
2018 issued by the respondents. It was further held that the said order will not adversely impact
forwarding of the name of the appellant as Member, ITAT, in terms of the recommendations made
by the Selection Committee in its meeting held on 26th August 2018.
36. In the teeth of the series of orders passed by the Tribunal and the High Court in favour of
the appellant, the respondents elected to withhold his vigilance clearance, thereby compelling the
appellant to file contempt petitions against the concerned officers for non-compliance of the
orders passed. Both, the High Court as well as the Tribunal, issued notices for wilful disobedience
of the orders passed. In the proceedings before the High Court, on the one hand, the respondents
kept seeking adjournments on the ground that steps were being taken to forward the appellant’s
Page 23 of 27
Civil Appeal No. 6161 of 2022
name to the ACC for being processed for his appointment as Member, ITAT, till as late as on 31st
May 2019 on which date they were granted one last opportunity for making compliances and at
their request, the matter was adjourned to 9th July 2019 and on the other hand, the respondents
slapped the appellant with a Charge Memorandum dated 17th June 2019 and suspended him on
1
st July, 2019.
37. Having regard to the fact that the respondents did not take the disciplinary proceedings
initiated against the appellant to its logical conclusion and instead issued an order compulsorily
retiring him, this Court does not deem it expedient to delve into the allegations levelled in the said
Charge Memorandum; all the same, we have cursorily gone through the Charge Memorandum
that mentions three charges – one alleging that the appellant failed to seek permission from the
department to purchase a flat in relation to the matrimonial dispute between him and his
estranged wife and the second one is in respect of the allegation of bigamy levelled against him
by his estranged wife. We have already noted earlier that during the course of the matrimonial
dispute, the parties had arrived at a settlement and the flat that was agreed to be given to the
wife, was not purchased by the appellant but by his brother, which fact is amply borne out from
the documents placed on record. The matrimonial dispute between the parties stood closed on a
decree of divorce being granted on the basis of mutual consent. That the respondents were also
cognizant of the said fact, is apparent from the contents of O.M. dated 15th July, 2015 which
records inter alia that the said allegations levelled by the wife had not been established. The third
charge was relating to the appellant having attended Court hearings without sanctioned leave.
However, the disciplinary proceedings initiated against the appellant on 17th July, 2019 were
abandoned by the respondents on the order of compulsory retirement being passed against him
in less than three months reckoned therefrom, on 27th September, 2019.
Page 24 of 27
Civil Appeal No. 6161 of 2022
38. The appellant has made allegations of institutional bias and malice against the
respondents on the plea that the Chairman, CBDT who was a Member of the Review Committee,
was facing three contempt proceedings relating to the appellant’s service dispute, wherein notices
had been issued by the High Court as well as the Tribunal. There is no doubt that rule of law is the
very foundation of a well-governed society and the presence of bias or malafides in the system of
governance would strike at the very foundation of the values of a regulated social order. The law
relating to mala fide exercise of power has been the subject matter of a catena of decisions
[Refer: S. Pratap Singh v. State of Punjab23; Jaichand Lal Sethia v. State of W.B24; J.D.
Srivastava v. State of M.P And Others25; and Express Newspapers Pvt. Ltd. And Others v.
Union of India And Others26]. It has been repeatedly held that any exercise of power that
exceeds the parameters prescribed by law or is motivated on account of extraneous or irrelevant
factors or is driven by malicious intent or is on the face of it, so patently arbitrary that it cannot
withstand judicial scrutiny, must be struck down. In the instant case, though the appellant has
levelled allegations of institutional bias and prejudice against the respondents, particularly against
the then Chairman, CBDT who was a Member of the Review Committee, the said officer was not
joined by the appellant as a party before the Tribunal or the High Court, for him to have had an
opportunity to clarify his stand by filing a counter affidavit. Hence, these allegations cannot be
looked into by this Court.
39. Dehors the aforesaid allegations of institutional bias and malice, having perused the
material placed on record, we find merit in the other grounds taken by the appellant. It is noticed
that though FR 56(j) contemplates that the respondents have an absolute right to retire a
23 AIR 1964 SC 72
24 AIR 1967 SC 483
25 (1984) 2 SCC 8
26 (1986) 1 SCC 133
Page 25 of 27
Civil Appeal No. 6161 of 2022
government servant in public interest and such an order could have been passed against the
appellant any time after he had attained the age of fifty years, the respondents did not take any
such decision till the very fag end of his career. The impugned order of compulsory retirement was
passed in this case on 27th September, 2019 whereas the appellant was to superannuate in
ordinary course in January, 2020. There appears an apparent contradiction in the approach of the
respondents who had till as late as in July, 2019 continued to grade the appellant as ‘Outstanding’
and had assessed his integrity as ‘Beyond doubt’. But in less than three months reckoned
therefrom, the respondents had turned turtle to arrive at the conclusion that he deserved to be
compulsorily retired. If the appellant was worthy of being continued in service for little short of a
decade after he had attained the age of 50 years and of being granted an overall grade of 9 on
the scale of 1 - 10 on 31st July, 2019 it has not been shown as to what had transpired thereafter
that made the respondents resort to FR 56(j) and invoke the public interest doctrine to
compulsorily retire him with just three months of service left for his retirement, in routine. In such
a case, this Court is inclined to pierce the smoke screen and on doing so, we are of the firm view
that the order of compulsory retirement in the given facts and circumstances of the case cannot
be sustained. The said order is punitive in nature and was passed to short-circuit the disciplinary
proceedings pending against the appellant and ensure his immediate removal. The impugned
order passed by the respondents does not pass muster as it fails to satisfy the underlying test of
serving the interest of the public.
Page 26 of 27
Civil Appeal No. 6161 of 2022
40. In view of the above discussion, it is deemed appropriate to reverse the impugned
judgment dated 31st May, 2022 and quash and set aside the order dated 27th September, 2019
passed by the respondents, compulsorily retiring the appellant. Resultantly, the adverse
consequences if any, flowing from the said order of compulsory retirement imposed on the
appellant, are also set aside. The appeal is allowed and disposed of on the aforesaid terms while
leaving the parties to bear their own costs. .
…………….................................. J
[A.S. Bopanna]
………..........................................J
[Hima Kohli]
NEW DELHI,
MARCH 03, 2023
Page 27 of 27
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