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Pradip Kumar claiming the relief of reinstatement and for the grant of consequential benefits including full back wages. Although, the High Court had allowed the writ petition of the respondent only on the ground that there had been a violation of Rule 9(2), we have come to a conclusion that the order of discharge was vitiated being colourable exercise of power, stigmatic and punitive in nature and such order cannot be sustained in law. In our opinion, the order of discharge is arbitrary and therefore violates Article 14 of the Constitution. Consequently, we hold that the appellant – Pradip Kumar is entitled to be reinstated in service. He shall be entitled to full back wages during the period he has been compelled to remain out of service. Union of India is directed to release all consequential benefits to the said Pradip Kumar within a period of two months of the receipt of a certified copy of this order.

IN THE SUPREME COURT OF INDIA

English: The supreme court of india. Taken abo...

English: The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)

CIVIL APPELLATE JURISDICTION

 
CIVIL APPEAL NO. 9082 OF 2012
(Arising out of S.L.P.[C] 27821 of 2012)
Pradip Kumar
… Appellant
VERSUS
Union of India and Ors.
… Respondents
WITH
CIVIL APPEAL NO. 9089 OF 2012
(Arising out of S.L.P.[C] No.34671 of 2012)

 

 

 

 
J U D G M E N T

 
SURINDER SINGH NIJJAR,J.

 

1. Leave granted in both the special leave petitions.

2. By this common order, we propose to dispose of the aforesaid two
appeals as they are both directed against the same judgment delivered by
the High Court of Delhi in Writ Petition [C] No.98 of 2011 decided on 27th
July, 2012. Appeal arising out of Special Leave Petition No.34671 of 2012
has been filed by the Union of India challenging the judgment on various
legal grounds. By the aforesaid judgment the High Court has set aside the
order passed by the Central Administrative Tribunal [hereinafter referred
to as the “CAT’] Principal Bench, New Delhi, dismissing OA No.3544 of 2009
on 9th December, 2010 whereby the respondent was discharged from service.
Appeal arising out of Special Leave Petition No.27821 of 2012 has been
filed by Pradip Kumar challenging the judgment of the High Court, in so far
as the said judgment limits the relief granted to him only to the extent of
quashing of the order passed by the CAT and the order dated 20th November,
2009, whereby he was discharged from service as Member [Judicial] in the
Customs Excise and Service Tax Appellate Tribunal [“the CESTAT”].

3. We will firstly take up the Civil Appeal No………. of 2012 arising out
of Special Leave Petition No.34671 of 2012, filed by Union of India, for
consideration.

4. The respondent was a practising Advocate in the Calcutta High Court
as well as before the CESTAT for over twenty years mainly dealing with the
customs, excise and service tax matters. On 22nd April, 2006 he appeared
for an interview before the Selection Committee for the post of Member
[Judicial] in CESTAT. On being duly selected, he assumed charge as Member
[Judicial] in the CESTAT on 22nd November, 2006. Service conditions of the
Member of the CESTAT are governed by Customs, Excise and [Service Tax]
Appellate Tribunal Members [Recruitment and Conditions of Service] Rules
1987 [hereinafter referred to as the “Rules”]. The controversy in the
present proceedings is limited to the interpretation of Rule 8 and Rule 9
[2] of the aforesaid Rules. The said Rules are as under:
“Rule 8. Probation – [1] Every person appointed as a
member shall be on probation for a period of one year.
[2] The Central Government may extend the period of
probation for a further period of one year at a time so
that the period of probation in aggregate may not exceed
three years.
[3] A member may be discharged from service at any time
during the period of probation without assigning him any
reason.
Rule 9. Reversion or termination of the service of members.
– [1] In case of a person appointed as a technical or a
judicial member from any post under the Union or a State,
unless such a person is confirmed, the Central Government
may at any time revert him to his parent post without
assigning any reason, after giving him one month’s notice
of such reversion and in case a technical or a judicial
member wishes to revert to his parent post, he shall be
required to give one month’s notice to the Central
Government:
Provided that in case such technical or judicial member has
already superannuated according to the relevant rules of
his parent post, the appointment may be terminated by the
Central Government at any time without assigning any reason
after giving him one month’s notice of such termination and
in case such technical or judicial member wishes to resign,
he shall be required to give one month’s notice to the
Central Government.
[2] In case of a person appointed as a judicial member
directly from the Bar, unless he is confirmed, the
appointment may be terminated by the Central Government at
any time without assigning any reason after giving him one
month’s notice of such termination and in case such
judicial member wishes to resign, he shall be required to
give one month’s notice to the Central Government.”

 
5. Under the aforesaid Rules, Member of the CESTAT is put on probation
for a period of one year [Rule 8(1)]. Furthermore, under Rule 8(2), the
period of probation may be extended for a further period of one year at a
time. However, the total period of probation cannot exceed three years.
Under Rule 8(3) a Member may be discharged from service at any time during
the period of probation without assigning any reason. This rule makes a
general provision regulating the period of probation of members Technical
or Judicial, irrespective of their source of recruitment. Rule 9 (1) and
(2), on the other hand, deals with Technical or Judicial Members, recruited
from two different sources. Rule 9(1) deals with members, who have been
appointed whilst already in the service of the Central Government. In the
case of such Members a provision is made in Rule 9(1) to enable the Central
Government to revert him to his parent post without assigning any reason,
unless such a person is confirmed. Such Member can be reverted to his
parent post after giving one month’s notice of such reversion. If such a
Member wishes to revert to his parent post, he is required to give one
month’s notice to the Central Government. Under the proviso, services of
such member can be terminated by giving one month’s notice, without
assigning any reason, if he has already superannuated under the relevant
rules of his parent post. Such member has a corresponding right to resign
by giving one month’s notice. We are, however, concerned only with Rule
9(2) which provides that in the case of a person appointed as Judicial
Member directly from the Bar, unless he is confirmed, his appointment may
be terminated by the Central Government at any time without assigning any
reason after giving him one month’s notice. Similarly in case the Judicial
Member wishes to resign, he is required to give one month’s notice to the
Central Government. Rule 8 clearly operates within the period of the three
years, during which a member can be continued on probation. Rule 9(2)
would apply only in cases where the Judicial Member is still not confirmed
even after the maximum period of three years, on probation. Rule 9(2)
would have no application within the period of three years. Rule 8
provides for discharge of probationer. Rule 9(2) talks of termination of
service. In such circumstances, it provides that notice of one month shall
be given before termination. But this procedure would become applicable
only if the Judicial Member has been in service for three years or more.
Otherwise, provision of one month notice would have been made in Rule 8
itself. Rationale underlying the provision in Rule 9(1) is to enable the
member recruited from a Central Government post to be reverted to his
parent post. To put Judicial member recruited directly from the Bar at par
with those recruited from Central Government posts, the necessary provision
of one month notice has been made in Rule 9(2). No such notice would be
required if the Judicial Member is discharged within a period of three
years, if not confirmed.

6. Keeping in view the aforesaid interpretation of Rules 8 and 9, let
us now examine the facts. It appears that no order extending the period of
probation of the respondent was passed at the end of the mandatory period
of probation on 21st November, 2007 or soon
thereafter. The respondent, therefore, continued to work as Member
[Judicial]. However, he received an order dated 19th November, 2009
extending his period of probation; first upto 21st November, 2008 and then
upto 21st November, 2009. Receipt of the letter dated 19th November, 2009
resulted in the respondent tendering his resignation from the post of
Member [Judicial] CESTAT on 20th November, 2009. On that
very date an order was issued whereby the respondent was discharged from
service on the post of Member [Judicial] CESTAT. The said order is
reproduced below:
“F.No.26/8/2006-Ad.IC.
Government of India
Ministry of Finance
Department of Revenue
New Delhi the 20th Nov. 2009
ORDER NO.5 OF 2009
In pursuance of rule 8(3) of the Customs, Excise and
Service Tax Appellate Tribunal Members (Recruitment and
Conditions of Service) Rules 1987, the President hereby
discharges forthwith Sh. P.K. Das, Member (Judicial) in
Customs Excise & Service Tax Appellate Tribunal from
service.
2. By order and in the name of the President.
Sd/-
( Victor James )
Under Secretary to the Govt. of India
To,
Sh. P.K. Das, Member (Judicial)
CESTAT, West Block No.2
R.K. Puram, New Delhi
Copy to:
1. President, Customs, Excise & Service Tax Appellate
Tribunal, New Delhi.
2. Registrar, Customs Excise & Service Tax Appellate
Tribunal, New Delhi.
3. Establishment Officer, Department of Personnel &
Training North Block.
4. Pay and Accounts Officer, Department of Revenue
5. Notification Folder
Sd/-
( Victor James )
Under Secretary to the Govt. of India”
It appears that thereafter by letter dated 23rd October, 2009 the
respondent withdrew his resignation under Rule 9(2), which was well within
the prescribed period of one month.

7. During the period of his service the respondent had served under
three Presidents, CESTAT, namely, Justice Abichandanani, Justice S.N. Jha
and Justice R.M. Khandparkar. It is the case of the respondent that he
never received any adverse comments from any of the Presidents during his
tenure of service as a Member [Judicial], CESTAT. In fact, he was given
the annual increments in the years 2007 and 2008. Since, he had received
no adverse reports, the respondent assumed that he would be confirmed on
the post of Member [Judicial] CESTAT. But to his utter shock and dismay,
he received the order dated 19th November, 2009 which
extended his period of probation; first upto 21st November, 2008 and then
further upto 21st November, 2009. It is further the
case of the respondent, on the basis of the information obtained under the
Right to Information Act 2005, that there is a note dated
26th November, 2007 in File No.27/22/2005-AD.IC in which it has
been mentioned that the action for initiation of the process of
confirmation of the respondent, which was due on 22nd November, 2007, would
be initiated in a new file. There is further noting on 23rd January, 2008
calling for the ACRs of the respondent and two other Members. On 6th June,
2008 Justice S.N. Jha, President, CESTAT, wrote to the Secretary,
Department of Revenue, requesting him to take steps for the confirmation of
some of the Members of the CESTAT including the respondent. The Vigilance
Cell had also conveyed its clearance from its own angle, in so far as the
respondent was concerned.

8. However, the circumstances did a complete about turn when, like a
bolt out of the blue, on 14th September, 2009, the respondent received a
note from the President of the CESTAT annexing therewith a copy of the
complaint from the members of the Bar about an incident which was alleged
to have occurred in the respondent’s Court on 9th September, 2009 and
requesting for a report about the incident. The President of the CESTAT
prepared a report on 18th November, 2009 regarding the incident, which
inter alia, contained the following observations regarding the conduct of
the respondent:
“15. It must be noted that whenever any act of misbehavior
on the part of the parties or their representatives takes
place in the court, it is essentially for the Presiding
Officer to administer proper control and to try to defuse
the tension if any caused on that count and not to retire
immediately to the chamber. Abstaining from and abandoning
the court in such a situation and leaving it open and free
for all court result is encouraging indiscipline in the
court. Merely because some of the representatives of the
parties start raising voice or make allegations against the
Bench, it would not be proper to abandon the court
functioning and to retire to chamber. Rather the Presiding
Officer has to try to control such situation by use of
administrative acumen. In the case in hand, there does not
appear any efforts made by the Presiding Officer in that
regard.”
The respondent claims that his services were terminated as a direct
consequence of the complaint made by the representatives of the Bar and the
report of the President, CESTAT.

9. Aggrieved by the aforesaid order, the respondent challenged the same
before the CAT by way of OA No.3544 of 2009 on 7th December, 2009. On 9th
December, 2009, the OA was dismissed by the CAT. The CAT rejected the
submission that the respondent was deemed to be confirmed upon completion
of one year period of probation. In any event it seems respondent had
dropped the contention regarding the deemed confirmation after some
arguments initially and upon considering the judgment of the CAT in OA
No.1895 of 2009 – Dr. Vineet Sodhi Vs Union of India decided on 6th
December, 2010. CAT also rejected the submission of the respondent that
the order of discharge from service was punitive in nature. It was held by
CAT that even though report had been received from the President, CESTAT
regarding the complaint made by the Members of the Bar, ultimately the
discharge of the respondent was on the basis of his unsuitability of the
job and unsatisfactory performance of duty. It was also observed by the
CAT that there was no full scale formal inquiry, but only facts have been
brought to the notice of the competent authority about the unsatisfactory
performance of the respondent. With these observations, the OA was
dismissed.

10. The respondent being aggrieved challenged the order before the High
Court of Delhi by way of Writ Petition [C] No.98 of 2011. The High Court
allowed the writ petition only on the interpretation of Rule 8(3) and Rule
9(2) of the Rules, although the respondent had raised four specific points
for the consideration of the High Court. It was submitted that the order
of discharge could not be sustained as it had been passed in arbitrary
exercise of power. It was said to be a product of malice in law. Secondly
it was submitted that the discharge order was punitive in nature inasmuch
as it was stigmatic and, therefore, it was essential that inquiry under
Article 311(2) of the Constitution of India ought to have been conducted.
Thirdly, it was submitted that the relevant rules and in this case Rule
9(2) of the said Rules, requires giving of one month’s notice prior to
termination. That notice was admittedly not given and, therefore, the
termination was bad. Fourthly, it was submitted that by virtue of Rule 8
of the Rules the respondent could be deemed to have been confirmed. The
High Court on interpretation of Rules 8 and 9 of the Rules has held that
since the respondent had completed more than three years service and he was
a Judicial Member, under Rule 9(2) his services could not be terminated
without serving upon him one month’s notice. In our view, the
interpretation given by the High Court on Rule 9(2) is not correct. In
the case of Judicial Member directly recruited from the Bar, the procedure
prescribed under Rule 9(2) is required to be followed only if such member
without being confirmed continues for three years or more.

11. Nonetheless the order of discharge cannot be upheld, as it is
stigmatic and punitive in nature. It is a matter of record that during
three years of service no order was issued extending the period of
probation of the respondent. He completed the mandatory period of probation
on 21st November, 2007, therefore, it was expected of the department to
take a decision about the performance of the respondent within a reasonable
period from the expiry of one year. It is also a matter of record that the
respondent continued in service without receiving any formal or informal
notice about the defects in his work or any deficiency in his performance.
This Court, in the case of Sumati P. Shere Dr. Vs. Union of India &
Ors.[1], emphasised the importance of timely communication of defects and
deficiencies in performance to a probationer, so that he could make the
necessary efforts to improve his work. Non-communication of his
deficiencies in work would render any movement order of such an employee on
the ground of unsuitability arbitrary. In Paragraph 5 of the judgment, it
is observed:-
“5. We must emphasise that in the relationship of master
and servant there is a moral obligation to act fairly. An
informal, if not formal, give-and-take, on the assessment
of work of the employee should be there. The employee
should be made aware of the defect in his work and
deficiency in his performance. Defects or deficiencies;
indifference or indiscretion may be with the employee by
inadvertence and not by incapacity to work. Timely
communication of the assessment of work in such cases may
put the employee on the right track. Without any such
communication, in our opinion, it would be arbitrary to
give a movement order to the employee on the ground of
unsuitability.”
In our opinion, the aforesaid observations are fully applicable in the
facts and circumstances of this case.

12. It is also a matter of record that the procedure for confirmation of
the respondent had been initiated on 26th November, 2007. It
is also not disputed that vigilance report for his confirmation had also
been received. Therefore, it is difficult to accept the submission of
learned counsel for the Union of India, that the discharge of the
respondent is not founded on the complaint made by some of the advocates.
The report prepared by the President, CESTAT on 18th November, 2009,
clearly indicated that the only reason for issuing the order of discharge
was contained in the aforesaid report. In our opinion the order of
discharge passed by the Union of India was clearly vitiated by the legal
malice. It was clearly founded upon the report submitted by the President,
CESTAT. In our opinion the controversy herein is squarely covered by a
number of earlier judgments of this Court, which have been considered and
reaffirmed in the case of Union of India and Ors. Vs. Mahaveer C. Singhvi
[2]. Considering the similar circumstances this Court observed as follows:
“25. In the facts of the case the High Court came to the
conclusion that a one-sided inquiry had been conducted at
different levels. Opinions were expressed and definite
conclusions relating to the respondent’s culpability were
reached by key officials who had convinced themselves in
that regard. The impugned decision to discharge the
respondent from service was not based on mere suspicion
alone. However, it was all done behind the back of the
respondent and accordingly the alleged misconduct for which
the services of the respondent were brought to and end was
not merely the motive for the said decision but was clearly
the foundation of the same.”

 
13. In our opinion, there is clearly a live nexus between the
decision to discharge the respondent vide order dated
19th November, 2009; the disturbance caused by the
members of the Bar in the Court of the respondent and his
leaving the Bench and retiring to his Chamber. The report of
the President leaves no manner of doubt that the respondent had
been condemned unheard on the basis of the aforesaid incident
and the report of the Chairman, CESTAT dated 18th November,
2009. The order of discharge, being based upon the report of
the President, is clearly stigmatic and could not have been
passed without giving an opportunity to the respondent to meet
the allegations contained in the report of the President,
CESTAT. We may notice here the observations made by this court
in the case of Mahaveer C. Singhvi [supra]:
“46. As has been held in some of the cases cited before
us, if a finding against a probationer is arrived at behind
his back on the basis of the enquiry conducted into the
allegations made against him/her and if the same formed the
foundation of the order of discharge, the same would be bad
and liable to be set aside. On the other hand, if no
enquiry was held or contemplated and the allegations were
merely a motive for the passing of an order of discharge of
a probationer without giving him a hearing, the same would
be valid. However, the latter view is not attracted to the
facts of this case.”

 
14. This apart, we are also of the opinion that the order of discharge
has been passed in order to avoid the procedure of giving one month’s
notice as required under Rule 9(2). The aforesaid Rule has made a
distinction between the members of the CESTAT who were working in the
Central Government prior to their recruitment as Members of the CESTAT and
the Judicial Member directly recruited from the Bar. In the case of
members recruited from the various services of the Central Government, a
provision has been made for their reversion to the parent department. In
their case a provision has also been made for them to be reverted to the
parent department without assigning any reason. However, the same can only
be upon giving one month’s notice. In the case of Judicial Member,
directly recruited, it has been specifically provided [Rule 9(2)] that upon
completion of three years if the Judicial Member has not been confirmed,
his services can only be terminated upon being given one month’s notice.
To avoid this provision, an order was passed on 19th November, 2009,
extending the respondent’s period of probation from 21st November, 2007 to
21st November, 2008 and further upto 21st November, 2009. This was clearly
done with an oblique motive of issuing the order of discharge on the very
next day, i.e., 20th November, 2009. The action of the Union of India is
undoubtedly a colourable exercise of power. The order of discharge is in
utter violation of Article 14 of the Constitution of India, rendering the
same void. In view of the above, we have no hesitation in holding that the
special leave petition No. 34671 of 2012 filed by the Union of India is
wholly devoid of merit and has to be dismissed.

15. This now brings us to the appeal arising out of Special Leave
Petition No. 27821 of 2012 filed by Pradip Kumar claiming the relief of
reinstatement and for the grant of consequential benefits including full
back wages. Although, the High Court had allowed the writ petition of the
respondent only on the ground that there had been a violation of Rule 9(2),
we have come to a conclusion that the order of discharge was vitiated being
colourable exercise of power, stigmatic and punitive in nature and such
order cannot be sustained in law. In our opinion, the order of discharge
is arbitrary and therefore violates Article 14 of the Constitution.
Consequently, we hold that the appellant – Pradip Kumar is entitled to be
reinstated in service. He shall be entitled to full back wages during the
period he has been compelled to remain out of service. Union of India is
directed to release all consequential benefits to the said Pradip Kumar
within a period of two months of the receipt of a certified copy of this
order.

16. With these observations, the appeal filed by Union of India being
Civil Appeal No. 9089 of 2012 arising out of Special Leave Petition [C]
No. 34671 of 2012 is dismissed and Civil Appeal No. 9082 of 2012 arising
out of Special Leave Petition [C] No. 27821 of 2012 filed by the Pradip
Kumar is allowed.
.….…………………………CJI
[ALTAMAS KABIR]

 
….……………………………J.
[SURINDER SINGH NIJJAR]

 
…….…………………………J
[J. CHELAMESWAR]

New Delhi;
December 14, 2012.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
ITEM NO.1A COURT NO.12 SECTION XIV
(For Judgment)
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

CIVIL APPEAL NO. 9082 OF 2012
(Arising out of SLP(C) No.27821/2012)

PRADIP KUMAR Appellant(s)

VERSUS

UNION OF INDIA & ORS. Respondent(s)
WITH

CIVIL APPEAL NO. 9089 OF 2012
(Arising out of SLP(C) No.34671/2012)
Date: 14/12/2012 These matters were called on for
pronouncement of judgment today.

 

For Petitioner(s) Mr. Nikhil Jain,Adv.
For Respondent(s) Mr. B. Krishna Prasad,Adv.
Hon’ble Mr. Justice Surinder Singh Nijjar pronounced the
Judgment of the Bench comprising of Hon’ble the Chief Justice of
India, Hon’ble Mr. Justice Surinder Singh Nijjar and Hon’ble Mr.
Justice J. Chelameswar.
Leave granted in both the petitions.
Civil Appeal No.9089 arising out of SLP(C) No.34671/2012
is dismissed and Civil Appeal No.9082/2012 arising out of SLP(C)
No.27821/2012 is allowed in terms of the signed judgment.
(A.S. BISHT) (INDU BALA KAPUR)
COURT MASTER COURT MASTER
(Signed reportable judgment is placed on the file)
———————–
[1] (1989) 3 SCC 311
[2] [2010] 8 SCC 220

———————–
17

 

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