2023 (3) TMI 384 - SC - Indian Laws

Compulsorily Retirement of Members of Income Tax Appellate Tribunal (ITAT) - Various unproven allegation of different kinds - An allegation made by the appellant s ex-wife for bigamy - Wilful disobedience of the order - Communication of decision of the President of India to compulsorily retire him in exercise of powers conferred under Rule 56(j) of the Fundamental Rules - HELD 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. In Ram Ekbal Sharma v. State of Bihar and Another 1990 (4) TMI 309 - SUPREME COURT 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. In Nand Kumar Verma v. State of Jharkhand and Others 2012 (2) TMI 727 - SUPREME COURT 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. In a recent judgment in the case of Nisha Priya Bhatia v. Union of India 2020 (4) TMI 890 - SUPREME COURT 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 . In the present case 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. 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 - 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. It is noticed that though FR 56(j) contemplates that the respondents have an absolute right to retire a 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 - 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. 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 - Appeal allowed.

Summary

Issues Involved:
1. Bias and participation of officials in the decision-making process.
2. Nature of the compulsory retirement order.
3. Appellant's service record and performance.
4. Validity and impact of complaints against the appellant.
5. Withholding of vigilance clearance.
6. Compliance with judicial orders.
7. Examination of disciplinary proceedings and charges.
8. Allegations of institutional bias and malice.
9. Examination of the public interest doctrine under FR 56(j).

Detailed Analysis:

1. Bias and Participation of Officials:
The appellant argued that the participation of the Additional Director General (Vigilance) and the Chairman of the CBDT in the decision-making process was biased due to pending contempt notices against them. The court acknowledged the allegations but noted that the officials were not made parties to the proceedings, hence these allegations could not be examined further.

2. Nature of the Compulsory Retirement Order:
The appellant contended that the compulsory retirement order was punitive and intended to prevent his appointment as a Member of ITAT. The court found that the order was punitive, aimed at short-circuiting disciplinary proceedings, and ensuring the appellant's immediate removal, failing the test of serving public interest.

3. Appellant's Service Record and Performance:
The court highlighted that the appellant's Annual Performance Assessment Reports (APARs) over the past decade were blemishless, consistently grading him as "Outstanding" with integrity assessed as "Beyond Doubt." This impeccable service record contradicted the decision to compulsorily retire him.

4. Validity and Impact of Complaints Against the Appellant:
The court examined nine complaints against the appellant, noting that several were closed, and others lacked substantial evidence. The complaints did not justify the compulsory retirement, especially given the appellant's unblemished service record.

5. Withholding of Vigilance Clearance:
The court found that the respondents initially granted vigilance clearance but later withheld it based on an adverse IB report and an inspection report. The adverse IB report stemmed from a settled matrimonial dispute. The court noted the respondents' contradictory actions, granting clearance and then withholding it without valid reasons.

6. Compliance with Judicial Orders:
The court observed that the respondents failed to comply with multiple judicial orders directing them to reconsider the appellant's vigilance clearance and forward his name for appointment. This non-compliance led to contempt petitions against the officials.

7. Examination of Disciplinary Proceedings and Charges:
The respondents initiated disciplinary proceedings against the appellant but did not conclude them, opting instead to compulsorily retire him. The court found the charges, including allegations of bigamy and attending court hearings without leave, unsubstantiated and noted the respondents' cognizance of the settled matrimonial dispute.

8. Allegations of Institutional Bias and Malice:
The court acknowledged the appellant's allegations of institutional bias and malice but could not examine them due to the absence of the concerned officials as parties in the proceedings.

9. Examination of the Public Interest Doctrine under FR 56(j):
The court emphasized that FR 56(j) allows the government to retire an employee in public interest after attaining the age of 50 years. However, the appellant's consistent "Outstanding" grading and integrity assessment contradicted the decision to retire him just months before his superannuation. The court concluded that the order was not in public interest but punitive, aimed at short-circuiting disciplinary proceedings.

Conclusion:
The court quashed the compulsory retirement order dated 27th September 2019, reversing the High Court's judgment and setting aside adverse consequences. The appeal was allowed, with each party bearing their own costs.