2008 (1) TMI 216 - HC - Central Excise

Disciplinary proceedings - it was alleged that Superintendent of Central Ex.(respondent) failed to issue SCN for short levy of duty required to be paid by the assessee on revision of prices not proved that superintendent had acted negligently - Tribunal had correctly found that there was no mala fide motive on the part of the first respondent in passing the order and that a Government servant cannot be punished for a wrong interpretation of law - order of recovery against respondent set aside

Summary

Issues Involved:
1. Legality of disciplinary action against a quasi-judicial officer for alleged negligence.
2. Applicability of Supreme Court precedents regarding disciplinary actions against quasi-judicial officers.
3. Interpretation of relevant Service Rules and the principles of natural justice.

Comprehensive, Issue-Wise Detailed Analysis:

1. Legality of Disciplinary Action Against a Quasi-Judicial Officer for Alleged Negligence:

The first respondent, a Superintendent of Central Excise, was alleged to have failed in issuing a show cause notice for short levy of duty, resulting in a considerable loss to the Department. Disciplinary proceedings were initiated under Rule 16 of the CCS (CCA) Rules, imposing a minor penalty. The CAT set aside the order, stating that the officer was discharging quasi-judicial functions and no disciplinary action can be taken for a wrong interpretation of law unless there is evidence of mala fide intention or recklessness. The CAT relied on the Supreme Court judgment in Zunjarrao Bhikaji Nagarkar v. Union of India, which held that wrong interpretation of law cannot be a ground for misconduct unless it is deliberate and actuated by mala fides.

2. Applicability of Supreme Court Precedents Regarding Disciplinary Actions Against Quasi-Judicial Officers:

The CAT's decision was based on the Nagarkar case, which was later found to be contrary to the view expressed in Union of India v. K.K. Dhawan by a subsequent three Judges Bench in Union of India v. Duli Chand. The Duli Chand case emphasized that disciplinary action could be taken against officers exercising judicial or quasi-judicial powers if they acted negligently or recklessly. The Court listed six instances where such action could be taken, including acting in a manner reflecting poorly on integrity, recklessness, acting unbecoming of a government servant, negligence, undue favor to a party, and corrupt motives.

3. Interpretation of Relevant Service Rules and the Principles of Natural Justice:

The High Court noted that the CAT's order was based on the Nagarkar case, which was subsequently considered in Ramesh Chander Singh v. High Court of Allahabad and another. The Supreme Court in Ramesh Chander Singh reiterated that disciplinary proceedings should not be initiated merely because judgments/orders are wrong, emphasizing the need for fearlessness and maintenance of judicial independence. The High Court concluded that the CAT correctly applied the principles of judicial review, finding no mala fide motive on the part of the first respondent and holding that a government servant cannot be punished for a wrong interpretation of law.

Conclusion:

The High Court dismissed the writ petition, upholding the CAT's decision. The Court emphasized that before initiating disciplinary action, there must be prima facie material showing recklessness, negligence, undue favor to a party, or corrupt motive. The CAT correctly found no mala fide motive in the first respondent's actions and set aside the recovery order. The High Court directed that any recoveries made from the first respondent's salary should be refunded within eight weeks. No order as to costs was made, and connected miscellaneous petitions were closed.