Central Administrative Tribunal - Bangalore
B Arulappa vs D/O Revenue on 5 June, 2023
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OA.No.1184/2019/CAT/Bangalore Bench
CENTRAL ADMINISTRATIVE TRIBUNAL
BANGALORE BENCH, BENGALURU
ORIGINAL APPLICATION NO.170/01184/2019
ORDER RESERVED ON: 25.04.2023
DATE OF ORDER: 05.06.2023
CORAM:
HON'BLE MS. JUSTICE S. SUJATHA, MEMBER (J)
HON'BLE SHRI RAKESH KUMAR GUPTA, MEMBER (A)
B. Arulappa,
S/o P. Balasubramanian,
Aged about 55 years,
Commissioner of Income Tax (Retd),
R/a No. 75, 2nd Cross,
Kalidasa Layout,
Yelahanka,
Bangalore 560 064 ....Applicant
(By Advocate Shri B.S. Venkatesh Kumar)
Vs.
1. Union of India
Represented by Secretary to Government,
Department of Revenue,
Ministry of Finance,
North Block, New Delhi 110 001
2. Central Board of Direct Taxes
Represented by its Chairman,
Ministry of Finance,
Department of Revenue,
North Block,
New Delhi 110 001 ....Respondents
(By Shri S. Prakash Shetty, Senior Panel Counsel for Respondent No. 1,
None for Respondent No. 2)
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ORDER
PER: RAKESH KUMAR GUPTA, MEMBER (A)
1. The applicant has filed the present Original Application under Section 19 of the Administrative Tribunals Act, 1985 seeking the following reliefs:
a) To quash the impugned order No. A. 152/2019 in No. A-
38012/34/2015-Ad.VI (A) dated 10.06.2019 (Annexure A1) vide which the applicant has been compulsorily retired under clause (j) of Rule 56 of the Fundamental Rules from the afternoon of 11.06.2019;
b) To quash the impugned order in F. No. A-38012/25/2019-Ad.VI (A) dated 19.08.2019 (Annexure-A3) vide which the Representation Committee after consideration of his representation have arrived at the conclusion that no interference is required to be made in the order passed by the Central Government. The Appropriate Authority has accepted the observations of the Representation Committee and disposed of the representation of the applicant dated 26.06.2019 accordingly.
c) Issue a consequent direction to the respondents to reinstate the applicant into service with effect from 11.06.2019, the date on which he was retired under FR 56 (j) with consequential benefits in full;
d) Issue a consequential direction to the respondents to implement the orders of this Tribunal dated 19.02.2019 in OA No. 380/2018 vide which the respondents had been directed to consider the application for VRS if any, applied for by the applicant on any date with effect from the date of these orders favourably.
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e) Grant such other relief/s as this Tribunal deems fit to grant to the applicant in the facts and circumstances of the case.
2. The facts of the case as averred by the applicant in his pleadings, are as follows:
a) The applicant qualified in the Indian Revenue Service and joined the Income Tax department on 16.09.1991. The applicant was posted and served in various capacities as Assistant Commissioner, Joint Commissioner and Commissioner of Income Tax. The applicant was promoted to the cadre of Commissioner of Income Tax in December, 2012.
b) Since his promotion to the cadre of Commissioner, he had not received any adverse remarks. For the years 2012-13 and 2013-14, the applicant was told by his Reporting Officer that he has given outstanding report as he had fulfilled all targets set out. The applicant could not submit self-appraisal for 2014-15 as he was transferred on leave and was also relieved during his leave period. For the year 2015-16, the applicant was on leave for the entire year and therefore, no APAR was written.
For the year 2016-17, the applicant was graded overall performance of 8.81 out of 10. This communication was received by the applicant only on 05.10.2019. For the year 2017-18, APAR was to be submitted only electronically with digital signature. However, as the applicant had opted for voluntary retirement under FR 56 (k) the digital signature was not obtained and his Reporting Officer had intimated the applicant that 4 OA.No.1184/2019/CAT/Bangalore Bench he had appraised his performance on the basis of statistics available on the network. As the applicant had achieved the targets given to him, the applicant was confident that there is nothing adverse in this APAR.
c) The applicant had accordingly continuously worked hard and had an unblemished record. When he was Additional Commissioner HQ, he had been instrumental in acquiring lands for office purpose, created office in new places, got buildings and quarters constructed in Thanjavur, Kumbakonam and Trichy. The applicant was solely involved in the planning and execution of the Salary Return Collection Mela in 2009 at levels which are still appreciated. This Mela had more than 5,00,000 footfalls. Even as Commissioner of Income Tax this zeal for infrastructure work and public service continued. During the last 3 years the applicant functioned as Commissioner of Income Tax- Appeals at Davangere, with no administrative work and having only two permanent staff.
d) The applicant had rendered a total of 26 years of service as on 29.09.2017 and he was aged 54 years when he submitted notice of voluntary retirement under FR 56 (k) (l) for personal reasons, with a further request that he would be retiring with effect from 28.12.2017. The department initiated action in the matter of the said notice as can be seen from the letter dated 13.10.2017 wherein preliminary verification of qualifying service as per Rule 32 of CCS Pension Rules had been taken.
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e) The first respondent rejected the notice of the applicant for retirement under 56(k) (l) vide office order dated 20.12.2017. Aggrieved by rejection of his request for voluntary retirement under FR 56 (k), the applicant approached this Tribunal in OA No. 380/2018. This Tribunal vide its order dated 19.02.2019 allowed the said OA and directed the respondents to consider the application for voluntary retirement filed by the applicant on any date favorably.
f) In the meanwhile, on 03.04.2018 the applicant was served with a Memorandum under Rule 16 of CCS (CCA) Rules proposing to initiate minor penalty proceedings. The applicant submitted his representation against the said memo and this Tribunal directed that the disciplinary proceedings may continue.
g) During the pendency of the above OA No. 380/2018, the respondents transferred the applicant from Davanagere to Kochi. The applicant, aggrieved by the said transfer, approached this Tribunal in OA No. 1664/2018. This Tribunal allowed the said OA by order dated 03.06.2019 duly noting that when the application for voluntary retirement was pending consideration there is no power resident in any authority to transfer such an employee for whatever reasons. Accordingly, the said transfer order was quashed.
h) Despite the orders of this Tribunal dated 19.02.2019 wherein the respondents had been directed to consider his case for voluntary retirement, and the order of this Tribunal dated 03.06.2019 vide which his transfer from Davanagere to Kochi had been quashed, for the reason 6 OA.No.1184/2019/CAT/Bangalore Bench that his application for voluntary retirement was pending consideration, the respondents issued the impugned order dated 10.06.2019 compulsorily retiring the applicant under FR 56 (j).
i) If the intention of the respondents was to retire the applicant, it was open to them to accept the voluntary retirement application and in fact there was a direction from this Tribunal in OA No. 380/2018 to accept the application under FR 56 (k) favorably. At any rate, the impugned order retiring him compulsorily under FR 56 (j) was an arbitrary order and aimed at inflicting punishment for no fault of his.
j) After receipt of the impugned order at Annexure-A1, the applicant submitted his appeal/representation as per Annexure-A2 explaining in detail that he had been discharging his duties with utmost dedication and that he was not visited with any civil consequences except the one for minor penalty after submission of his voluntary retirement application and that too where the CVC had opined that there is no vigilance angle involved. He further submitted that the impugned order is punitive in nature and it has caused him great prejudice. In the said appeal/representation (Annexure-A2) the applicant contended that -
1. The disciplinary proceedings initiated against me are frivolous and I have reasons to believe that I have been framed. I have brought out the reasons for the same in my narration.
2. Instead of bringing the disciplinary proceedings to a close, the authorities have kept it pending to mischievously harm my character and prevent me from opting for VRS.
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3. By not accepting my valid VRS application but resorting to an order under 56J I am being unfairly punished for reasons more elaborately explained above.
4. Considering how my VRS application, disciplinary proceedings and transfer order have been approached the unmistakable opinion would be that the decision is arbitrary, whimsical, without facts as well as mala fide and punitive.
k) The representation of the applicant was rejected by the Representation Committee with the following observations:
5.6.2 The Committee considered the representations of Shri B. Arulappa, and noted that main issue raised in his representation is that periodical review for the purposes of 56 (J) is done to ascertain whether the Government Servant should be retained in service or retired from service in public service. The officer had further submitted, that there is no case for reviewing his case as he had opted to VRS and he is still continuing only because the same came to be wrongfully rejected.
The Committee found that the VRS application of the officer was rejected on the ground that he was not clear from vigilance angle. 5.6.3 The Representation Committee observed that
(a) The major facts that have been brought by the officer in his representation has already been considered by the Review Committee.
(b) The Review Committee took into consideration the entire service records of the officer which includes his ACRs/APARs, Charge Sheets issued etc. and reached its conclusion to retire the officer.
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(c) The Review Committee had laid out detailed reasons and grounds on which decisions had been taken in public interest. The records suggest that the decision has been taken in reasoned manner and do not suggest prejudice or arbitrariness.
(d) Keeping in view of above observation in each case, this Committee does not find any need or reason to interfere in the decision of appropriate authority to prematurely retire Sh. B. Arulappa, in public interest. Considering overall facts and circumstances involved in the case, this committee is of the view that action taken under 56 (j) is fully justified.
l) The applicant has contended that there is nothing on record to suggest that the performance of the applicant had dropped substantially or there is any material to come to the conclusion that his integrity is doubtful. Even assuming for a moment, that the opinion of the appropriate authority was that the applicant is to be retired, then the first option would have been to accept the VRS submitted, particularly, when the said VRS came to be wrongly rejected after this Tribunal had issued orders dated 19.02.2019 to consider his request for VRS. These orders have deliberately not been implemented. The impugned order retiring him compulsorily under FR 56 (j) was an arbitrary order and aimed at inflicting punishment for no fault of his.
m) The applicant has relied upon the judgment of the Hon'ble Supreme Court in the case of State of Gujarat vs. Umedbhai M. Patel reported in AIR 2001 SC 1109 wherein the Hon'ble Supreme Court has laid down 9 OA.No.1184/2019/CAT/Bangalore Bench the circumstances under which power can be exercised by the Government to impose an order of compulsory retirement.
n) The applicant has also relied on the judgment of Hon'ble Gujarat High Court in the case of Union of India vs. Ravindra Vittal Parmar passed in C/SCS/8649/2019 dated 09.05.2019.
3. The respondents have filed their reply statement wherein they have averred as follows:
a) There were complaints containing allegations of corruption against the applicant and two others viz., Shri V. Nandakumar, JCIT (05081) and Shri R. Ramakrishan, ITO. These were received at the O/o Pr. CCIT, Chennai, ADG (V), SZ, Chennai. It was found that CAG had raised three major audit objections in September, 2013 against the firm M/s Vasan Healthcare Pvt. Ltd., Trichy in the case of Income Tax Assessment for the year 2009-10.
b) The assessment of M/s Vasan Healthcare Pvt. Ltd. For assessment year 2009-10 was reopened u/s 147 of the I.T. Act for carrying out the necessary remedial action with the approval of CIT-II, Trichy. This assessment was completed by the ITO, Ward 3 (3), Trichy on 31.03.2015 accepting the income returned and without discussing any of the issues raised in the audit objections which remained unanswered and unsettled.
c) The applicant while holding the charge as CIT, Trichy-2, Trichy without applying his mind notified the case of M/s Vasan Healthcare 10 OA.No.1184/2019/CAT/Bangalore Bench Pvt. Ltd. for the A.Y. 2009-10 which involved potential tax effect of more than Rs. 15,69,26,955/- to a junior most ITO. The ITO without understanding the complexities involved in the case completed the assessment accepting the returned income. Besides notifying a sensitive and high potential tax effect case to the junior most officer, the applicant failed to follow up or monitor even once whether the assessment involving major RAP objection is completed to its logical conclusion as mandated in the Manual of Office Procedure and Audit Manual.
d) In view of the above facts, minor penalty proceedings u/r 16 of the CCS (CCA) Rules, 1965 vide Memorandum dated 26.03.2018 were initiated against CO after obtaining first stage advice from CVC vide their OM dated 22.02.2018 with two Articles of charges against the applicant. The disciplinary proceedings in the matter are under progress.
e) The Review Committee considered the following facts and circumstances of the case while deciding the issue of compulsory retirement:
i. The applicant proved to be ineffective as a supervisory officer as he failed to ensure assignment of important cases having large tax implication to senior and experienced officers. ii. That the applicant proved to be ineffective as a supervisory officer as he failed to ensure that pending major audit objections are duly answered and settled.
iii. The applicant proved to be ineffective as a supervisory officer as he failed to monitor whether the re-opened assessment involving 11 OA.No.1184/2019/CAT/Bangalore Bench major RAP objection is completed to its logical conclusion as mandated in the Manual of Office Procedure and Audit Manual. iv. That the Assessment completed by the ITO, Ward 3 (3), Trichy on 31.03.2015 in the case of M/s Vasan Healthcare Pvt. Ltd. for assessment year 2009-10 (which was reopened u/s 147 of the Income Tax Act, 1961) by accepting the income returned and without discussing any of the issues raised in the audit objections raises serious doubts about the integrity of the applicant for assigning the case to the junior most officer in his charge.
f) The Review Committee had passed a reasoned order after considering the entire service record of the applicant. Before passing the order under FR 56 (j) the Review Committee took into consideration the entire service records of the officer which includes his ACRs/APARs, Charge Sheets issued etc. and reached its conclusion to retire the officer.
g) With this background and sensitivity of the post held by the applicant, the review committee considered it to be inappropriate and not in public interest to continue the applicant in employment.
h) Employment contracts entail that an employee discharge his duties in good faith and if reasonable doubts exist regarding the integrity and conduct of an employee, the employer is entitled to compulsory retire such employee particularly at the fag end of his career. Such retirement in public employment would build public confidence and incentivise transparency, higher codes of ethics, integrity and good conduct. 12
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i) It is also now well settled by catena of judicial precedents that compulsory retirement after the employee has put in a sufficient number of years of service having qualified for full pension is neither a punishment nor a stigma so as to attract provisions of Art. 311 (2) of the Constitution. In fact, after an employee has served for 25 to 30 years and is retired on full pensionary benefits, it cannot be said that he suffers any real prejudice. The object of the rule is to weed out the dead wood and persons of doubtful integrity/credentials in order to maintain a high standard of ethics, value, efficiency and initiative in the State Services.
j) The applicant occupied a very senior and sensitive position in the Indian Revenue Services. Continuing him on such position in circumstances where his integrity is in question would not have been conducive to public interest and general administration.
k) The issue here is whether during the pendency of such cases involving serious charges and complaints, an officer with such dubious conduct should be continued in public service or should be compulsorily retired under FR 56 (j) from the public service in the interest of public and better administration.
l) The Review Committee took note of the aforesaid principles and passed a reasoned order after taking into consideration the entire service records of the applicant including his charge sheets etc. In this regard, it is also noteworthy that contracts of employment are to be performed in good faith. In the present case, it is absolutely clear that the officer making representation is engrossed in several allegations of 13 OA.No.1184/2019/CAT/Bangalore Bench misconduct. Now, the applicant has already completed substantial part of his service. It would be prudent and in larger public interest to retire the officer making representation and instead give opportunity to other officer(s) with better integrity and credentials.
4. The applicant has filed a rejoinder wherein he has averred as follows:
a) It is pertinent to submit the voluntary retirement application under FR 56(k) was submitted by the Applicant on 29.09.2017. This application was rejected and the applicant had to seek the interference of this Tribunal through OA No: 380/2018. This O.A. No.380/2018 was allowed on 19.02.2019. As the respondents transferred the applicant from Bangalore to Kochi during the pendency of the aforesaid OA the applicant was compelled to file O.A. No. 1664/2018. Even this OA was allowed on 3.06.2019, and in both the O.As this Hon'ble Tribunal directed the respondents to dispose of the voluntary retirement application within one month. All these events were much before the screening committee could even consider the applicant's case. In these circumstances, the applicant was not available to the department to even consider whether he should be retained or not.
b) It can be seen that Rule 56(j) can be invoked only under two circumstances i. Ineffective performance and ii. Integrity 14 OA.No.1184/2019/CAT/Bangalore Bench That any one of the above circumstances exists, should be a decision made by the committee based on verification of all records and the decision should be made bona fide and in public interest.
c) In the present case, the basis for the decision is not ineffective performance. What is sought to be invoked is integrity. This is based only on a charge sheet issued on the appellant relating to a case four years back. It appears the screening committee and the review committee had perused the charge sheet but not the written statement submitted by the applicant. The entire issue was discussed in detail by this Tribunal during the proceedings in O.A No.380/2018 and O.A. No. 1664/2018 and the Tribunal found that the charges were not serious enough to withhold vigilance clearance and directed the respondents to reconsider the decision within a timeframe. This decision of the Tribunal had become final as the department had accepted the decision.
d) Though in the reply it is stated that there are serious allegations against the applicant, they have not produced any details of such allegations or any details of the proceedings of the screening committee or the review committee. What is given in the reply is only one case, for which a charge sheet for minor penalty has already been issued, after obtaining first stage advice of the CVC. The CVC has clearly held that if at all there is a lapse that is only a technical default and administration may deal with it accordingly. After obtaining the advice of the CVC in the case and still ascribing doubtful integrity is like questioning the integrity of the CVC itself.15
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e) There were two charges issued in the case:-
Charge 1. This relates to work done by the applicant after promotion as Commissioner, as Administrative Commissioner where he was given many additional charges located at different cities, it is pertinent to point out that at present only Principal Commissioners are eligible and the applicant was still not a Principal Commissioner. The charge relates to notification of a case in exercise of statutory powers. This was done on the request and advice of the Range Head. On the same day 300 cases were notified and one of the cases was in regard to M/s Vasan Healthcare Pvt. Ltd. It is also relevant to note here that the charge of CIT-II, Trichy was held by the applicant as one of the many additional charges. He was on camp when this incident occurred. It would not be out of place that before the notification, this charge was held by his predecessor for more than one year and during the period he had written one letter to the Joint Commissioner directing that the assessment should be completed within September 2014. The applicant took charge only in the month of December. No handing over notes were given. This is all acceptable to the administration. Anyways, the proposal received by the applicant was immediately disposed of as these assessments were getting barred by limitation in a short span of time. At the time of notification an undertaking from the Joint Commissioner regarding timely completion of assessment, with quality and quantity was taken. This was also followed with a written direction. Given the circumstances, all precautions normally called for were taken. All these are matter of record. This exercise was immediately after cadre restructuring and a lot of executive and administrative work needed to be done and that too on a timeframe. Exemption and audit work which the field Commissioners were doing were centralized and all these files needed to be transferred from the CIT's office in all the charges, that the applicant held. It was a very hectic period. How an action under these circumstances could be termed as doubtful integrity is beyond anyone's guess. This is not something which a normal person of normal mind can think of and is therefore bound to be rejected. Charge 2. The second charge was that the applicant had not supervised effectively the completion of a reopened assessment, in which a major audit objection was pending. As already stated, the applicant had number of charges. These charges were located in different cities. The assessment was to be completed by the Assessing 16 OA.No.1184/2019/CAT/Bangalore Bench Officer and is to be supervised by the Range Head. The allegations have been elaborately narrated in para 5 of the reply of the respondents. The imputation of the allegation is that the applicant should have exercised supervision by interfering in Quasi-Judicial exercise of power. In the charge sheet, the words and phrases have been picked selectively to make it appear that there is a lapse. This was amply made clear in the written statement submitted by the applicant. As suggested in the reply to the petition, there is no violation of any Manual as suggested. This was amply dealt in the written statement to the charge sheet. As the charges levelled could not be proved, no decision had been taken on the pending disciplinary proceedings. In fact, the minimal requirement available in the Manual has been done way with in the new set of instructions issued, clearly proves that such requirements never existed at all. This was pointed out very clearly in the reply to the charge sheet.
f) Further, the applicant had submitted his reply without access to the file and other material in May 2018 itself. There is no development in connection with the disciplinary proceeding. The respondents are bound by the DOPT guidelines which mandate that the proceedings should be completed within two months from the date of obtaining written statement.
g) From the facts reproduced in gist, it would be abundantly clear that no normal person would come to the same conclusion as the committee, therefore, the same cannot be considered in public interest. The order is perverse as it suffers from mala fide and bias.
5. Heard learned counsels for the parties and perused the pleadings made by them.
6. In the present case, the applicant has challenged his compulsory retirement under FR 56 (j) passed on 10.06.2019. He has submitted that prior to passing 17 OA.No.1184/2019/CAT/Bangalore Bench of this order, he had already requested for voluntary retirement under FR 56
(k) vide his request dated 29.09.2017. However, that request had been rejected by the respondents on the ground that vigilance clearance had been withheld in his case vide order dated 20.12.2017.
7. Subsequently, the applicant was served with charge memo on 03.04.2018 proposing to initiate minor penalty proceedings against him. The applicant had approached this Tribunal in OA No. 380/2018 challenging the rejection of his notice for retirement under FR 56 (k) by the respondents. The Tribunal after hearing the matter had disposed of his application vide a detailed order on 19.02.2019. In this order, this Tribunal had specifically observed as follows:
"7. We have had the advantage of looking at the vigilance report based on which the request was rejected by the respondents. The case in brief against the applicant is that while the applicant was in charge of Commissioner of Income Tax, Trichy-2, he had by notifying a re-opened assessment case involving potential tax effect of more than Rs.15.69 crores to a junior most Income Tax Officer, who completed the assessments accepting the returned income without any verification, conferring undue benefits to the assessee company and thereby failed to exercise his Supervisory role as administrative CIT. The charge has been issued as a minor penalty proceedings under Rule 20 of the CCS (Conduct) Rules, 1964. Two other officers have been charged in the same issue, one the Assessing Officer at the level of ITO and the Range Head at the level of Joint Commissioner of Income Tax. The notification of the case to be handled by a junior most officer was approved by the applicant based on the recommendation made by the range head, the Joint Commissioner of Income Tax. In his version on the allegation made, the ITO claims that the related files were kept by the Joint 18 OA.No.1184/2019/CAT/Bangalore Bench Commissioner of Income Tax till the last date depriving the ITO of any opportunity to pass appropriate assessment orders based on the receipt of audit objections from the office of the Accountant General. The Joint Commissioner in turn has refuted this allegation citing lack of documentary evidence to prove that the file was with him only as alleged. In the same vigilance report after notifying the case to be handled by the junior most ITO, the applicant in the present OA apparently had communicated on 13.1.2015 as follows:
"JCIT - to look into all files and keep track of the potential of each case and closely monitor the assessment including the order."
However, the range head, the JCIT has claimed that he was on election duty during this period and therefore only the other officer holding additional charge was responsible for acting on the communication sent by the applicant. In view of the completion of the assessment on the re-opened case by the ITO, the department had been left with no alternative and had not been able to proceed further. A writ petition is also said to be pending in the Madras High Court on this issue. Having taken note of all the facts of the case, the Central Vigilance Commission vide its letter No.017/ ITX/ 047/ 371964 dtd.22.2.2018 has recommended for minor penalty proceedings against the applicant and major disciplinary proceedings against the ITO and JCIT based on which the disciplinary proceedings have been initiated against the applicant vide Annexure-R1. The applicant has stated that he is cooperating with the inquiry since it is for finding out the facts and has also not challenged the same in the present application. From the vigilance report, it also transpires that he had once again given a voluntary retirement application dtd.30.5.2018 to be allowed to retire w.e.f. 1.9.2018 which has also not been given vigilance clearance. Any specific order issued in this regard is not available in the vigilance report. It can be safely presumed that this application has once 19 OA.No.1184/2019/CAT/Bangalore Bench again been rejected in view of the withholding of vigilance clearance.
8. From the above, it is clear that as per the rule position, the applicant's application for voluntary retirement w.e.f. 28.12.2017 should have been accepted by the respondents. It is also true that the department was contemplating major disciplinary proceedings against the applicant on the same date when they rejected his application for voluntary retirement. Only subsequent to the CVC recommendations in February 2018, the proceedings are undertaken now as minor disciplinary proceedings. It is obvious that considering the facts and circumstances of the case, the respondents do not contemplate either removal or dismissal from service of the applicant as they have agreed to go ahead with the minor disciplinary proceedings. Even taking note of the case ordered by the Principal Bench and the DOPT instructions in this regard, it is clear that the respondents can take a favourable decision with regard to the application for voluntary retirement given by the applicant. Since the period in question has already elapsed, we direct the respondents to consider the application for VR if any filed by the applicant on any date with effect from the date of these orders favourably. It is always open for the respondents to continue the proceedings after retirement as per rules if they deem fit unless, of course, the proceedings have already reached a finality.
9. The OA is therefore allowed. No costs."
8. This Tribunal in its order dated 19.2.2019 had also noted that the applicant had again approached the respondents with another application on 30.05.2018 in which he had requested for voluntary retirement with effect from 01.09.2018. This had also been denied apparently on grounds of lack of vigilance clearance.
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9. However, keeping all these points in view, this Tribunal had noted that, as per the rule position, the applicant's application for voluntary retirement with effect from 28.12.2017 should have been accepted by the respondents. Proceedings now being undertaken are only minor disciplinary proceedings. Keeping these facts and circumstances of the case, the respondents do not contemplate either removal or dismissal from service of the applicant as they had agreed to go ahead with minor disciplinary proceedings. Therefore, taking note of the above facts, the Tribunal had come to the conclusion that the respondents can take a favourable decision with regard to the application for voluntary retirement given by the applicant. They had subsequently directed the respondents to consider the application for voluntary retirement if any, filed by the applicant on any date with effect from the date of these orders favourably. The orders of this Tribunal have reached finality since these were not challenged by the respondents.
10. During the pendency of the OA No. 380/2018, the respondents had transferred the applicant from Davanagere to Kochi. The applicant had challenged this transfer order in OA No. 1664/2018. This Tribunal had allowed the said OA vide orders dated 03.06.2019 duly noting that the application for voluntary retirement made by the applicant was pending consideration and therefore at this stage there is no power resident in any authority to transfer such an employee for whatever reasons. The transfer order was accordingly quashed.
11. The original record pertaining to the applicant relating to his compulsory retirement under FR 56 (j), his application for voluntary retirement, as well 21 OA.No.1184/2019/CAT/Bangalore Bench as matters relating to his leave applications was summoned from the respondents and perused.
12. The original record indicates the following:
a) The applicant was transferred from Salem in Tamil Nadu to Bihar and Jharkhand region vide orders No. 86/2015 dated 15.06.2015. The applicant did not join the said office on various personal grounds and requested for posting at Bangalore. He remained absent from duty between 27.6.2015 to 26.10.2016. Subsequently, the applicant was transferred to Davangere in Karnataka and his period of absence from 27.06.2015 to 26.10.2016 was sanctioned in terms of 273 days of Earned Leave and Half Pay Leave of 215 days.
b) The applicant submitted request for voluntary retirement under FR 56
(k) vide his letter dated 29.09.2017. This application was rejected on the ground that vigilance clearance had been withheld in his case. The applicant was served with a charge sheet dated 26.03.2018. The applicant sought for grant of 1096 days of Extraordinary Leave with effect from 16.04.2018 to 15.04.2021 on medical grounds. This leave was not sanctioned to him since he had not submitted any supporting documents. Subsequent to denial of his leave for 1096 days, the officer applied for Extraordinary Leave of 179 days from 19.12.2018 in which he gave the following reasons for request for Extraordinary Leave:
"I. He stated that he would like to take a break at least for six months, as he is no shape, both physically and spiritually to carry out his duties and responsibilities.
II. He further stated that he submitted his VRS application on 29.09.2017 w.e.f. 28.12.2017, due to various reasons, particularly to maintain a balance between career and family life and the same was rejected. He again applied for VRS on 30.05.2018 which was again rejected.22
OA.No.1184/2019/CAT/Bangalore Bench III. He also added that a charge sheet was issued to him under Rule 16 and he was punished without enquiry for nearly a year as a result of withholding his VRS application.
IV. Further he stated that, he was transferred to Kochi, though he was not due for transfer and he feels victimised, harassed and unable to do work."
c) At the time when the application for Extraordinary Leave for 179 days was being examined, the recommendations of Pr. CCIT, Bangalore were also sought for. The Pr. CCIT had also informed that as the applicant has stated that he is exhausted physically and lack of interest in performing his duties, the officer's request for EOL upto 15.06.2019 is recommended by the Pr.CCIT, Karnataka & Goa region, since the officer would not be in a position to carry out his duties, in this frame of mind.
d) At this stage the file noting indicates that a decision was taken, keeping in view the opinion provided by the Pr.CCIT, that his case may be referred to Internal Committee to review his case under FR 56 (j) for compulsory retirement.
e) The Internal Committee considered the case of the applicant for compulsory retirement under FR 56(j). The record of the proceedings of the Review Committee indicated as follows:
"a. Shri B. Arulappa proved to be ineffective as a Supervisory officer as he failed to ensure assignment of important cases having large tax implication to senior and experienced officers. b. Shri B. Arulappa proved to be ineffective as a Supervisory officer as he failed to ensure that pending major audit objections are duly answered and settled.
c. Shri B. Arulappa proved to be ineffective as a Supervisory officer as he failed to monitor whether the re-opened assessment involving major 23 OA.No.1184/2019/CAT/Bangalore Bench RAP objection is completed to its logical conclusion as mandated in the Manual of Office Procedure and Audit Manual.
d. Assessment completed by the ITO, Ward 3 (3), Trichy on 31.03.2015 in the case of M/s Vasan Healthcare Pvt. Ltd. for assessment year 2009-10 (which was reopened u/s 147 of the Income Tax Act, 1961) by accepting the income returned and without discussing any of the issues raised in the audit objections raises serious doubts about the integrity of Shri B. Arulappa for assigning the case to the junior most officer in his charge.
5. Though the above cases/charges against him, which are extremely serious, may not yet have been proved as they may be pending at various stages in the departmental or criminal proceedings, the issue here is whether during the pendency of such cases involving serious charges and complaints, an officer with such dubious conduct should be continued in public service or should be compulsorily retired under FR 56 (j) from the public service in the interest of public and better administration. The committee took note of the judgments of the Hon'ble Supreme Court in State of UP vs Vijay Kumar Jain ((2002) 3 SCC 641) and Shyam Lal vs State of UP wherein it was held that '...It is true that this power of compulsory retirement may be used when the authority exercising this power cannot substantiate the misconduct which may be the real cause for taking the action but what is important to note is that the directions in the last sentence of Note 1 to Article 465-A make it abundantly clear that an imputation or charge is not in terms made a condition for the exercise of the power.' Further, it was held by Hon'ble Supreme Court in S. Ramachandra Raju vs. State of Orissa that "...In an appropriate case, there may not be sufficient evidence to take punitive disciplinary action of removal from service. But his conduct and reputation is such his continuance in service would be a menace to public service and injurious to public interest."
6. Therefore, after considering all the material available on record (inter-alia including those relating to the charge sheets in 24 OA.No.1184/2019/CAT/Bangalore Bench departmental inquiries and records of prosecution sanction of criminal proceeding lodged by CBI) as above against Shri B. Arulappa, and taking holistic view of the record of the officer, the committee concluded that his conduct is such that his continuance in service would be a menace to public service and injurious to public interest and the services of Shri B. Arulappa are no longer useful to the general administration. Also, the conduct of Shri B. Arulappa is unbecoming to public interest and obstructs the efficiency in public services. Further, the Government of India have an absolute right to retire any government servant in public interest. Therefore, in the light of the aforesaid, the committee recommended that Shri B. Arulappa be compulsorily retired in public interest under FR 56 (j). The committee also clarified that this premature retirement of Shri B. Arulappa is not being recommended to be imposed as a punitive measure and therefore it will not be a substitute of or bar on the initiation or continuation of the departmental enquiries. The committee also clarified that the order of compulsory retirement is not to be treated as a punishment coming under Article 311 of the Constitution. Notwithstanding the order of the compulsory retirement, the departmental inquiries and criminal proceedings otherwise will continue and as and when the charges are proved in the departmental inquiries or criminal proceedings, the appropriate action may be taken by the disciplinary authority."
f) Against this order of the Review Committee, the applicant filed a detailed representation which was subsequently examined by the Representation Committee. The Representation Committee noted the reasons given by the Review Committee for which the applicant had been retired under 56 (j) and further observed as follows:
"5.6.2 The Committee considered the representations of Shri B. Arulappa, and noted that main issue raised in his representation is that periodical review for the purposes of 56 (j) is done to ascertain whether the Government Servant should be retained in service or retired from service in public service. The officer had further submitted, that there 25 OA.No.1184/2019/CAT/Bangalore Bench is no case for reviewing his case as he had opted to VRS and he is still continuing only because the same came to be wrongfully rejected. The Committee found that the VRS application of the officer was rejected on the ground that he was not clear from vigilance angle. 5.6.3 The Representation Committee observed that:
(a) The major facts that have been brought by the officer in his representation has already been considered by the Review Committee.
(b) The Review Committee took into consideration the entire service records of the officer which includes his ACRs/APARs, Charge Sheets issued etc. and reached its conclusion to retire the officer.
(c) The Review Committee had laid out detailed reasons and grounds on which decisions had been taken in public interest. The records suggest that the decision has been taken in reasoned manner and do not suggest prejudice or arbitrariness.
(d) Keeping in view of above observation in each case, this Committee does not find any need or reason to interfere in the decision of appropriate authority to prematurely retire Sh. B. Arulappa, in public interest. Considering overall facts and circumstances involved in the case, this committee is of the view that action taken under 56 (j) is fully justified."
13. A perusal of the original records clearly indicates that the applicant had been suffering from personal problems and health issues right from the year 2015. Subsequent to his transfer from Salem to Patna, he had been on long leaves including unauthorized leave. He had also requested for Extraordinary Leave for 3 years citing personal issues and health reasons. In this background, he had applied for voluntary retirement since, as per his own statement, he had lost interest in work which is also confirmed by the noting of his superior, Principal Chief Commissioner of Income Tax, Bangalore. 26
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14. The denial of voluntary retirement to the applicant was apparently made on grounds of denial of vigilance clearance to the applicant. This ground had been found to be unsustainable in law as per the observations made by this Tribunal in its orders dated 19.02.2019 in OA No. 380/2018. There was a specific direction by this Tribunal to the respondents to consider the application for VR if any filed by the applicant on any date with effect from the date of these orders favourably. In pursuance of the orders of this Tribunal the applicant has averred that he had again applied for VR vide his application dated 19.3.2019 which was not considered by the respondents.
15. Instead of considering the case of application for voluntary retirement of the applicant as directed by this Tribunal, the respondents chose to initiate 56 (j) proceedings against him. A perusal of the 56 (j) proceedings also indicate that the respondents have relied only on the charges in the pending minor penalty proceedings against him which alleges supervisory lapses. The stand taken by the respondents, that the charges against him are extremely serious, are not borne out by the facts, since the disciplinary proceedings only envisage minor penalty against the applicant. The conclusion reached by the Review Committee that the charges against him are serious, is not substantiated from the record. The committee in its order is referring to "all the material available on record (inter-alia including those relating to the charge sheets in departmental inquiries and records of prosecution sanction of criminal proceeding lodged by CBI)". However, on record, there are no other disciplinary proceedings or criminal proceedings 27 OA.No.1184/2019/CAT/Bangalore Bench indicated as pending against the applicant, except for these minor penalty proceedings.
16. There is nothing in the orders to suggest that the committee had taken any holistic view of the entire service record of the officer. It had not even taken into account the fact that the applicant had been on long leave in the last few years, and that he had indicated in writing about his lack of interest and commitment to work and requested for voluntary retirement. He had applied for VRS three times prior to the orders of his compulsory retirement on 10.06.2019. There is no mention or consideration of any of these facts in the orders of the Review Committee. Even the directions issued by this Tribunal on 19.2.2019 to consider his case for VRS under 56 (k) were never taken into consideration by the Review Committee.
17. This indicates that the Review Committee had not applied its mind nor carefully examined the entire service record of the applicant. It had only relied upon the pending disciplinary proceedings against him, which were only minor penalty proceedings. The conclusion drawn by the review committee that "Though the above cases/charges against him, which are extremely serious, may not yet have been proved as they may be pending at various stages in the departmental or criminal proceedings, the issue here is whether during the pendency of such cases involving serious charges and complaints, an officer with such dubious conduct should be continued in public service or should be compulsorily retired under FR 56 (j) from the public service in the interest of public and better administration" are not based on the facts on record, and are wholly arbitrary. 28
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18. Learned counsel for the respondents filed an MA No. 172/2023 dated 01.06.2023 seeking leave of this Tribunal to file the following documents:-
(i) Copy of the VRS application under section FR 56 (k) (1) dated 29.09.2017 (Annexure R-3).
(ii) Order dated 20.12.2017 disposing the VRS application dated 29.09.2017 filed by the applicant (Annexure R-4).
(iii) Charge memo dated 26.03.2018 (Annexure R-5).
(iv) Copy of the VRS application under Section FR 56(k) (1) dated 30.05.2018 (Annexure R-6).
(v) Order dated 27.08.2018 disposing the VRS application dated 30.05.2018 filed by the applicant (Annexure R-7).
(vi) Copy of the VRS application under section FR 56(k) (1) dated 27.02.2019 (Annexure R-8).
19. This MA has been filed on 1.06.2023, after the matter had been finally heard and reserved by this Tribunal on 25.04.2023. A perusal of the documents sought to be filed by this MA do not reveal any significant new fact which would have any impact in the case. The facts revealed in these documents have already been considered by this Tribunal during the course of its hearing and examination of the original records of the case submitted by the respondents. The only fact which is different is the date of the VRS application filed for the third time by the applicant which is indicated as 27.02.2019 (Annexure R-8) as against the date of 19.03.2019 as averred by the applicant in para 5.2 of the OA. However, this variation in the date does not make any material difference in the merits of the case. 29
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20. These documents, now sought to be filed, do not add anything of significance which could merit any reconsideration of the case. The MA No. 172/2023 dated 01.06.2023, seeking to file these additional documents after the case has been heard and reserved on 25.04.2023, is accordingly disposed of, being of no consequence, whatsoever, at this stage.
21. Keeping the points as discussed from para 6 to para 17 above in view, this Tribunal finds no plausible reason for the respondents to compulsorily retire the applicant under the provisions of 56 (j). The applicant, had himself indicated a number of times that he was not willing to continue on the job and had requested for voluntary retirement under FR 56 (k). There was no lawful reason for the respondents to deny him voluntary retirement as asked for, and proceed for compulsory retirement under 56(j), since only minor penalty proceedings had been initiated against him, that too after the receipt of his first request for voluntary retirement. There were specific directions issued by the Tribunal in OA No: 308/2018 dated 19.2.2019 to the respondents to consider his request for voluntary requirement, which were ignored by the respondents.
22. Admittedly, compulsory retirement under Rule 56 (j) is not supposed to be punitive in nature. However, there is no denying the fact that such an order carries a great stigma against the officer, particularly if he is retired on grounds of having lack of integrity.
23. In the present case, a plain reading of the orders of the Review Committee indicates that the sole ground which has been relied upon for retiring the applicant under Rule 56 (j) is lack of integrity. The reasons for drawing this 30 OA.No.1184/2019/CAT/Bangalore Bench conclusion by the committee are identical to the charges mentioned in the charge sheet served on him which envisage only minor penalty proceedings. In such a situation, the applicant has been needlessly proceeded against under the provisions of Rule 56 (j) whereas, as is evident from the records, the applicant should have been granted voluntary retirement as asked for in the initial stage itself, which had been further allowed by this Tribunal in OA 380/2018 vide its orders dated 19.2.2019.
24. Keeping in view the above facts and circumstances, the OA has merit and is allowed with the following directions:
a) The impugned order No. A-38012/34/2015-Ad.VI (A) dated 10.06.2019 (Annexure-A1) vide which the applicant has been compulsorily retired under clause (j) of Rule 56 of the Fundamental Rules is quashed. The impugned order No. A-38012/25/2019-Ad.VI (A) dated 19.08.2019 (Annexure-A3) vide which the Appropriate Authority has accepted the observations of the Representation Committee and disposed of the representation of the applicant dated 26.06.2019 is also quashed.
b) The respondents are further directed to implement the orders of this Tribunal dated 19.02.2019 in OA No. 380/2018 vide which respondents had been directed to consider the application filed by the applicant for Voluntary Retirement on any date with effect from the date of the said orders favourably. The application seeking VR, filed by the applicant, subsequent to the orders passed by this Tribunal on 31 OA.No.1184/2019/CAT/Bangalore Bench 19.02.2019 in OA No: 380/2018, shall be considered and disposed of by the respondents within a period of six weeks from the date of receipt of a certified copy of this order.
25. However, there shall be no orders so as to costs.
(RAKESH KUMAR GUPTA) (JUSTICE S SUJATHA)
MEMBER (A) MEMBER (J)
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