Central Administrative Tribunal - Delhi
P.K. Jain vs Union Of India Through on 28 July, 2008
Central Administrative Tribunal Principal Bench OA No.338/2008 New Delhi this the 28th day of July, 2008. Honble Mr. Shanker Raju, Member (J) Honble Mr. Shailendra Pandey, Member (A) P.K. Jain, Additional Chief Engineer, Dte of Works (E2 Army), Integrated HQs of MoD (Army), Kashmir House, Rajaji Marg, New Delhi-110011. -Applicant (By Advocate Shri O.P. Kalshian) -Versus- Union of India through: 1. The Secretary, Ministry of Defence, DHQ PO New Delhi-110011. 2. The Engineer-in-Chief, Integrated HQs of MoD (Army), Kashmir House, Rajaji Marg, New Delhi-110011. 3. The Secretary, Deptt. of Personnel & Training, Ministry of Personnel, Public Grievances & Pensions, North Block, New Delhi-110001. 4. The Secretary, Union Public Service Commission, Dholpur House, Shahjahan Road, New Delhi-110069. 5. Sh. K.P. Pillai, CE, Jt DGW (A) E-in-Cs Branch, Kashmir House, New Delhi-110011. 6. Shri Hari Om Singh, CE, Jt. DGW (Pers), HQ Chief Engineer, Southern Command, Pune. 7. Shri Kanwarjit Manipal, CE, Chief Engineer Chandigarh Zone, Chandigarh. 8. Shri Lalit Mohan Sarin, CE, Chief Engineer (Air Force), Udhampur. 9. Shri Ashok Kumar Rambani, CE, Chief Engineer Jabalpur Zone, Jabalpur. 10. Shri B.K. Garg, CE, Chief Engineer Pune Zone, Pune-1. -Respondents (By Advocates Shri R.P. Aggarwal and Shri Rajeev Manglik) O R D E R Mr. Shanker Raju, Honble Member (J):
Applicant, an Additional Chief Engineer in Military Engineering Services (MES) has impugned his non-empanelment as Chief Engineer in MES vide panel dated 27.6.2007 against the vacancies for the year 2007-08, whereby his name has not been included. Also assailed is an order passed on 7.1.2008, whereby his request for promotion has been turned down.
2. A brief factual matrix transpires that the next promotional post of the applicant is Chief Engineer as per the Indian Defence Service of Engineers (Recruitment and Conditions of Service) Rules, 2004. As no criteria for convening the DPC is contained in the statutory rules, Department of Personnel and Training OM dated 10.3.1989, by which general instructions have been issued by the Department of Personnel and Training as guidelines for holding DPC for Group A posts are applicable to the Ministry of Defence.
3. For 10 vacancies of the post of Chief Engineer for the year 2007-2008 a DPC was held for preparing the panel in Union Public Service Commission where the applicant on his eligibility was kept within the zone of consideration. However, on declaration of the panel his name was conspicuously missing from the approved panel for the post of Chief Engineer.
4. A representation preferred when not responded to by the respondents led to filing of OA-1262/2007, wherein a direction was issued to the respondents to dispose of the representation of the applicant vide order dated 11.10.2007. On extension of time upto 10.1.2008 to implement the directions respondents apprised the Tribunal as to involvement of Department of Personnel and Training and Union Public Service Commission and also the Appointments Committee of the Cabinet (ACC). An order passed on 7.1.2008 rejected the claim of the applicant stating that ACC being the appointing authority for the post of Chief Engineer did not approve the promotion of the applicant for empanelment.
5. An information under Right to Information Act (RTI) sought by the applicant transpires that though he has been declared fit by the DPC held on 29.3.2007, which was recommended by the Ministry of Defence and approved by the Minister of Defence, but the ACC has not empanelled the applicant.
6. Learned counsel of applicant while relying upon the decision of the Apex Court in Union of India v. N.P. Dhamania, 1995 (1) SLJ SC 193 contended that though the recommendations of the Union Public Service Commission is advisory but any disagreement by the ACC, the matter has to be referred back to the Union Public Service Commission and ACC shall consider the officer with reference to the relevant records. It is stated that once the panel of promotion where the name of applicant was included has been recommended by the Ministry of Defence and approved by the Defence Minister, deletion of the name of the applicant by the ACC without assigning any reason is arbitrary, discriminatory as well as illegal.
7. Learned counsel would further contend that the order passed by the respondents in compliance of the directions in OA-1262/2007 is not reasoned.
8. On the ground of minor penalty it is stated that the minor penalty is not a bar for assessing suitability of officer for promotion as per the CAG circular dated 30.8.1990 but also a person undergoing a minor penalty is not to be denied promotion as per Department of Personnel and Training OM dated 15.12.2004. In the above backdrop learned counsel states that once the Union Public Service Commission while holding DPC has considered the circumstances leading to the minor penalty, which is represented against, found the applicant fit as per the benchmark, simple reliance in disagreement by the ACC on this minor penalty, oblivious of the guidelines issued by the DoP&T for conduct of DPC, which is in absence of rules is mandatory, establishes the legal malafides and arbitrary decision by the ACC, which is within the scope of judicial review, as per the decision of the Apex Court in Dr. H. Mukherjee v. Union of India, AIR 1994 SC 495.
9. On the other hand, learned counsel of respondents Shri R.P. Aggarwal vehemently opposed the contentions. Though in the earlier reply filed on 7.4.2008 there has been a reference to the decision of the Apex Court in Union of India v. S.K. Goel, 2007 (3) SCALE 5 to contend that the applicant was awarded a punishment of censure on 27.11.2006. The Court shall not interfere with any decision of the DPC. It is also stated that the DPC is conducted as per norms and the procedure laid down in OM dated 10.4.1989.
10. However, in the amended reply it is stated that the applicant was considered in the DPC held on 29.7.2003 by the Union Public Service Commission and as per the Department of Personnel and Training OM of 16.10.1997 and 12.1.1998 the recommendations have to be sent to the appointing authority, which is ACC in the present case the name of the applicant was not approved on the ground of mind penalty of censure. Accordingly, it is stated that the appointing authority was apprised of the dossiers of all the candidates, including applicant and as the recommendations of the Union Public Service Commission were advisory, no injustice has been caused to the applicant. Learned counsel has relied upon the decision of the Apex Court in Jai Naryan Mishra v. State of Bihar, AIR 1971 SC 1318 to contend that on the question of suitability the decision of the Government cannot be interfered with.
11. Learned counsel has also relied upon a letter written by the Ministry of Defence to the Union Public Service Commission where the reasons for disagreement have been sought to be communicated to the Union Public Service Commission and also holding of supplementary DPC for the year 2007-08. It was stated that if it is decided to carry-forward the vacancies for the revised proposal for 2008-09 the reasons for non-acceptance of recommendations of the Union Public Service Commission by the ACC should be communicated, which were accordingly communicated to the respondents in April 2008.
12. We have carefully considered the rival contentions of the parties and perused the material on record.
13. At the outset, as a trite law, promotion itself may not be a fundamental right but right to be considered on fair and equal basis without discrimination is a fundamental right of a Government servant, as held by the Apex Court in Dwarka Prasad v. Union of India, 2004 (1) ATC SC 591. Further the Apex Court in Union of India v. Sangram Keshari Nayak, 2007 (2) SCC (L&S) 587 held as follows:
11. Promotion is not a fundamental right. Right to be considered for promotion, however, is a fundamental right. Such a right brings within its purview an effective, purposeful and meaningful consideration. Suitability or otherwise of the candidate concerned, however, must be left at the hands of the DPC, but the same has to be determined in terms of the rules applicable therefor. Indisputably, the DPC recommended the case of the respondent for promotion. On the day on which, it is accepted at the Bar, the DPC held its meeting, no vigilance enquiry was pending. No decision was taken by the employer that a departmental proceeding should be initiated against him.
14. Also held in S.B. Bhattacharjee v. S.D. Majumdar, 2008 (1) SCC (L&S) 21:-
13. Although a person has no fundamental right of promotion in terms of Article 16 of the Constitution of India, he has a fundamental right to be considered therefor. An effective and meaningful consideration is postulated thereby. The terms and conditions of service of an employee including his right to be considered for promotion indisputably are governed by the rules framed under the proviso appended to Article 309 of the Constitution of India. In a given case, and in absence of rule, the Courtmight have been justified to hold that the DPC must take into consideration the merit and merit only. However, in a case of this nature, where the State lays down the procedures as to how and in what manner the merit and suitability is to judged, it was obligatory on the part of the Commission to follow the same in its letter and spirit. The case at hand shows that it can in a situation of this nature prove to be disastrous to an employee, if any other construction is given.
15. A discerned reading of the aforesaid ratio as a binding precedent and trite position of law establishes that when a Government servant is considered for promotion, such consideration should be meaningful and effective. The aforesaid would leave no doubt in our mind that when an administrative authority considers a person for promotion, including the appointing authority, such a consideration being creature of Statute bestows upon the statutory authority to act in accordance with rules and the norms laid down for such a consideration for promotion. The Apex Court in Devender Singh v. State of Punjab, 2007 (2) SCALE 496 held that when a statutory authority acts, it is bound by the procedure of Statute.
16. In the aforesaid background of trite law the recruitment rules for the posts of Chief Engineer does not lay down methodology for consideration of an employee in the feeder category for promotion. However, supplementing the rules and not being inconsistent Department of Personnel and Training from time to time under the delegated authority issued consolidated instructions for holding of the DPC and methodology adopted. Such an administrative instruction is with a view to fill up the gaps and for want of rules is permissible, as ruled by the Apex Court with the following observations in M. Srinivasa Prasad & Ors. v. Contorller and Auditor Geenral of India & Ors.., 2008 (1) SLJ SC 229:
16. In Union of India vs. H.R. Patankar, 1984 (supp.) SCC 359, a similar view was taken by this Court. It was held that even if there are no statutory rules in force for determining seniority in a Service or even if there are statutory rules but they are silent on any particular subject, it is competent to the Government by an executive order to make appropriate Seniority Rules or to fill in the lacuna in the statutory rules by making an appropriate seniority rule in regard to the subject on which the statutory rules are silent.
17. In the above backdrop the instructions issued by the Department of Personnel and Training on 10.4.1989 and 23.7.1998 with certain decisions taken in 2004 are the only set of norms and procedure laid down for holding DPC for Group A at the level of Union Public Service Commission and also methodology to the appointing authority as in the instant case ACC to act upon. These instructions with the passage of time and on being consistently followed have assumed the status of statutory instructions binding on the DPC and the appointing authority as well.
18. The record of the ACC was also produced and the privilege is claimed not to show it to the opposite side. We have perused the record as well. No privilege is claimed against the Court. Even in the RTI filed by the applicant the record of the DPC has been apprised to the applicant.
19. As per Department of Personnel and Training OM of 10.11.1995 methodology has been laid down in a case where on consultation with the Union Public Service Commission the advice has been disagreed. In a case where approval of ACC as an appointing authority is required in case of a disagreement with the advice of the Union Public Service Commission or the DPC in which Union Public Service Commission is associated the decision of the ACC has to be intimated to the Ministry concerned by the Union Public Service Commission by endorsing a copy of the order issued in pursuance of the ACC decision. As the pay scale in the grade of Chief Engineer is Rs.18400-22400 and the promotion is by selection on merits as per recruitment rules SRO 95 as per Department of Personnel and Training OM of 12.1.1998 recommendations of the ACC were to be sent to the Department of Personnel and Training for approval of the appointing authority, i.e., ACC. As per the revised guidelines for promotion in the pay scale (Grade of Rs.12000-16500 and above) as substituted by the OM/letter dated 8.2.2002 the mode of promotion is to be selection with a benchmark of very good, the DPC shall grade the persons as fit or unfit and only those who are graded as fit shall be included in the select panel in the order of their inter-se-seniority in the feeder grade.
20. Department of Personnel and Training OM of 16.2.2005 in the light of the Department of Personnel and Training OM of 8.2.2005 ruled out any supersession in the matter of promotion.
21. Insofar as Department of Personnel and Training guidelines for assessing suitability for promotion, Department of Personnel and Training OM dated 15.12.2004 provides as under:
13. Punishment no bar in assessing suitability for promotion-An officer whose increments have been withheld or who has been reduced to a lower stage in the time-scale, cannot be considered on that account to be ineligible for promotion to the higher grade as the specific penalty of withholding promotion has not been imposed on him. The suitability of the officer for promotion should be assessed by the DPC as and when occasions arise for such assessment. In assessing the suitability, the DPC will take into account the circumstances leading to the imposition of the penalty and decide whether ion the light of the general service record of the officer and the fact of the imposition of the penalty he should be considered suitable for promotion. However, even where the DPC considers that despite the penalty the officer is suitable for promotion, the officer should not be actually promoted during the currency of the penalty.
[Clarification-It has now been decided in consultation with the Department of Personnel and Training that a Government servant, who is found fit for promotion by the DPC held after the imposition of the penalty, need not be considered again for promotion by the subsequent DPCs merely because he could not be promoted during the life of panel due to currency of the penalty. After the expiry of period of penalty, the official concerned will be promoted from the same panel in which he was originally empanelled. On his promotion, his pay and seniority in the higher post will be fixed according to his position in the panel from which he is promoted. But the monetary benefit in the higher post will be admissible only from the date of actual promotion.
As an illustration, an officer is undergoing a penalty of withholding of next increment for two years which will expire on 30-6-1992. The DPC which meets after the imposition of the above penalty for considering promotions dur9ing the Panel Year 1990 finds him fit for promotion in spite of the penalty and places him at position No.2 in the panel for 1990. As the officer is undergoing penalty up to 30-6-1992, he can be promoted only thereafter. But on his promotion his pay and seniority in the higher post will be fixed according to his position in the panel for 1990 from which he stands promoted.] Promotion of persons undergoing a penalty The undersigned is directed to refer to DoP&T O(.M. No. 21/570-Estt. (A) dated 15-5-1971 (reiterated vide O.M. No.22011/2/78-Estt. (A), dated 16-2-1979) and to say that in terms of the provisions of these Office Memoranda, a Government servant, on whom a minor penalty of withholding of increment, etc., has been imposed should be considered for promotion by the Department Promotion Committee which meets after the imposition of the said penalty and after due consideration of full facts leading to imposition of the penalty, if he is still considered fit for promotion, the promotion may be given effect after the expiry of the currency of the penalty. It has, however, been separately clarified vide Office Memorandum No. 22011/2/92-Estt. (D), dated 30-11-1995 that in such cases, the seniority would be fixed according to the position of the officer in the panel on the basis of which he is promoted on expiry of the period of currency of the penalty.
2. Doubts have been expressed regarding the pay fixation and date of commencement of the eligibility service in such cases. It is clarified that since the promotion is to take effect only from a date subsequent to the expiry of the currency of the penalty, the officer would be entitled to pay fixation in the promotional grade with effect from the date of actual promotion only. Even if a person junior to him in the panel is promoted earlier, it will have no bearing on the pay to be allowed on promotion to the officer on whom a penalty was imposed, and there shall be no stepping up of his pay.
3. Similarly, as the officer undergoing penalty is not to be promoted during the currency of the penalty, the eligibility service in the promotional grade for further promotion shall be commence only from the date of actual promotion and in no case, it may be related, even notionally, to the date of promotion of the junior in the panel.
[G.I., Dept. of Per. & Trg., O.M. No. 22034/5/2004-Estt. (D), dated the 15th December, 2004.]
22. As the above instructions are the only norms laid down are binding on the DPC as well as the appointing authority. What discerns on a co-joint reading is that even if a minor penalty has been inflicted upon a Government servant the DPC would look into the circumstances leading to imposition of penalty and once the decision is taken to declare a candidate suitable for promotion he should be originally empanelled in the same panel but would be actually promoted after the currency of the minor penalty is over. However, seniority and pay shall be fixed as per the original position in the panel but the monetary benefits would be accorded only from the date of actual promotion. It is also provided that when after the minor penalty was imposed upon a Government servant if DPC meets it has to consider the full facts leading to imposition of penalty and yet if one is considered fit for promotion, the promotion has to be given after the expiry of the currency of the penalty period.
23. The aforesaid leaves no doubt in our mind that imposition of a minor penalty, which has not been found to be an impediment for promotion and despite taking cognizance of the facts and circumstances in which the punishment has been imposed the decision of the DPC to declare a person fit is a final decision, which if at all to be disagreed, is to be on cogent and justifiable reasons by the appointing authority.
24. Paragraphs 16.4.1 to 16.4.3 in certain situations when appointing authority disagrees with the recommendations of the DPC, nothing precludes the appointing authority to vary or disagree with the recommendations of the Union Public Service Commission but the prescribed procedure for overruling the recommendations has to be adopted, i.e., sending the case back to the Government and on recording of the reasons on file the matter be sent to the Union Public Service Commission. If DPC (UPSC) reiterates its earlier recommendations, reasons are to be given, which shall be placed before the appointing authority.
25. A situation has arisen before the Apex Court in H. Mukherjees case (supra) where the recommendations for promotion made by the Union Public Service Commission were not accepted by the appointing authority. Taking cognizance of Article 323 of the Constitution of India it is held that the reasons are to be assigned by the ACC in a memorandum along with the report of the Commission only before the concerned legislature. It is not necessary to communicate the reasons for departing with the recommendations of the Union Public Service Commission to the concerned candidate. The following observations have been made:
8. Counsel for respondent No. 1 then placed reliance on two decisions, namely Mrs. Asha Kaul v. State of Jammu and Kashmir (1993)2 JT (SC) 688 : (1993 AIR SCW 2314) and Jagtar Singh v. The Director, Central Bureau of Investigation (1993) 2JT (SC) 703 (1993 AIR SCW 1468). In our view both these decisions do not assist respondent No. 1. The former was a case pertaining to the approval and publication of the select list of District Munsifs prepared by the J & K Public Service Commission. Several complaints were received in regard to the select lists prepared by the Commission and forwarded to the Government. The Government found prima facie substance in the complaints and, therefore, kept the lists pending. However, the High Court kept on pressing for approval as it was keen to fill in the existing vacancies. The Government, therefore, approved thirteen names and published the list. Those persons were duly appointed but in the meanwhile a writ petition was filed for a mandamus to command the Government to approve the lists prepared by the Commission. On the Advocate General's statement that the matter was under the active consideration of the Government, the petition was dismissed. Since the Government did not accord approval a fresh writ petition was filed which came to be allowed against which decision the appeals by special leave came to this Court. In the backdrop of these facts, this Court, while repelling the extreme submission that the Government as the appointing authority wields absolute power to approve or disapprove of the list at its sweet-will, observed, that where the Government is satisfied after due enquiry that the selection has been vitiated on account of violation of rules or for the reason that it smacks of corruption, favouritism, nepotism or the like, it may refuse to approve the list in which case it must record the reasons for its action and produce the same in court, if and when called upon, besides placing the same before the legislature as required by Art. 323 of the Constitution. This decision is not an authority for the proposition that the Government must make an order disapproving the list along with the reasons therefor and convey the same to the High Court or the Commission. All that it says is that the Government must record its reasons for the disapproval on the file and if its action is questioned in court it must disclose the same to the court if called upon to do so. That requiremnt has been satisfied in the present case. The High Court, however, wrongly thought that subsequent events could not be taken into consideration and that is why it directed the ACC to reconsider its decision without noticing the adverse entry as well as the contents of the CBI report. In fact to satisfy ourselves we perused the file and found that the reason for disapproval was stated on the file. The subsequent decision turned on its own facts as the court came to the conclusion that the material placed before the Court did not justify Government's refusal to make the appointment. Therefore, neither of the two decisions on which reliance is placed come to the rescue of respondent No. 1. It seems well settled that the function of the Public Service Commission being advisory, the Government may for valid reasons to be recorded on the file, disapprove of the advice or recommendation tendered by the Commission, which decision can, if at all, be tested on the limited ground of it being thoroughly arbitrary, mala fide or capricious.
26. In the light of the above, though the function of the Union Public Service Commission being advisory but the Government, i.e., appointing authority (as in the present case ACC) is obligated to record valid reasons on the file disapproving the advice of the Union Public Service Commission. The aforesaid decision is to be interfered with only on a limited ground being arbitrary, malafide and capricious. Though it is trite law that DPC enjoys full discretion to devise its own method and procedure for objective assessment of the merits of the candidates being considered by it and it is not to be interfered with by the Court. However, the exception is when DPC has acted malafide or in derogation of the laid down rules and norms. The Apex Court crystallized the aforesaid decision of law in S.K. Goel (supra). However, in a recent decision by the Apex Court in M.V. Thimmaiah and others v. Union Public Service Commission and others, 2008 (1) SCC (L&S) 409 non-interference by the Court in the recommendations of the selection committee has been ruled, but an exception is carved out with the following observations:
Now comes the question with regard to the selection of the candidates. Normally the recommendation of the selection committee cannot be challenged, except on the ground of malafide or serious violation of the statutory rules.
27. A Division Bench of the High Court speaking through Honble Chief Justice Shri S.B. Sinha in A.Verma Reddy v. Controller General of Defence Accounts, New Delhi and others, 2002 (1) ATJ 342 ruled that when promotion is based like in the instant case when fitness is established on seniority a minor penalty of censure cannot affect the promotion. Though minor penalty of censure when inflicted in a disciplinary proceedings for a major penalty and specially when sealed cover is resorted to, may be an impediment because the Government servant has not been exonerated on merits, as ruled by the Apex Court in Collector of Thanjavur Distt. V. S. Rajagopalan, 2000 (9) SCC 145 but would have application only to a situation where sealed cover is resorted to.
28. The Apex Court ruled in Coal India Ltd. v. Saroj Kumar, 2007 (5) SCALE 724 that State action must satisfy the test of reasonableness and valuable fundamental right to be considered for promotion should not be withheld except in terms of valid rules.
29. Applying the above ratio to the conspectus of the present case, what we find from the record is that the Union Public Service Commission while considering the candidature of the applicant for promotion to the post of Chief Engineer had his dossiers. Even the factum of imposition of a minor penalty on 27.11.2006 was before it, yet after examining the facts and circumstances of the case the Union Public Service Commission has found the applicant fit and empanelled him for promotion. However, when the proposal for Department of Defence has been placed along with the recommendations made by the DPC (Union Public Service Commission) before the appointing authority, i.e., ACC, on approval by the Defence Minister as per the record on the basis of penalty of censure without recording any other reasons as to how the penalty of censure has been found to be an impediment or any reasons as to the disagreement from the Union Public Service Commission, as to its conclusion of fitness of the applicant for promotion despite censure has been recorded. A bald observation as to infliction of minor penalty is in nutshell disagreement by the appointing authority. The aforesaid recommendation has been further processed as per the laid down methodology. Though the dicta in H. Mukherjee (supra) case clearly ruled non-communication of the reasons on disagreement by the appointing authority to the concerned, but nothing precludes the Court or the Tribunal in a judicial review to examine and test the decision of disapproval and in the context of its being malafide, arbitrary or capricious. However, there cannot be a denial to the fact that the recommendations of the Union Public Service Commission are only advisory.
30. The appointing authority whether it is ACC is not beyond the purview of law. The discretion enjoined upon ACC as a statutory authority is not unfettered. When the appointing authority, being a creature of the statute, is bound by that Statute. If such an authority is required to do a thing in a particular manner, the same has to be done in that manner or not at all. The matter is to be confined within the four corners of the guidelines and the rules, as ruled by a three-Judge Bench of the Apex Court in Bhavnagar University v. Palitana Sugar Mills, 2003 (2) SCC 111. If the statutory authority is vested with a discretion it is obligatory to have been discharged in consonance with the norms, rules and keeping in light the paramount right of fair and impartial consideration for promotion, as declared as a fundamental right of a Government servant. The aforesaid dicta of obligatory discharge of discretion in a judicious manner has been held by a Constitution Bench of the Apex Court in Harish Uppal (Ex-Capt.) v. Union of India, 2003 (2) SCC 45.
31. In the light of the above, without recording justifiable reasons, it is not on the ipsi dixit of the ACC to disagree even on an advisory by the Union Public Service Commission in the matter of promotion. As we have found that Union Public Service Commission while acting as a DPC in the instant case adhered to the statutory norms laid down by the Department of Personnel and Training to declare the applicant fit on examination of the facts and circumstances of minor penalty imposed upon applicant for promotion, it is not permissible in law to the appointing authority (ACC) without recording reasons to disapprove such a definite finding arrived at in consonance with the guidelines to disapprove it.
32. Reasons are essence of fair play. In exercise of statutory power Government is a statutory authority. Reasons give transparency to an order and indicate application of mind and consideration thereof. Reasons by an administrative authority or a quasi-judicial authority are obligated to have been recorded in the decision, whether in case of communication in the order on in case when the order is not communicated in the file. Unless reasons are by implication excluded to have been recorded, no administrative authority, including appointing authority can afford in law not to record reasons. The Apex Court in a Constitution Bench decision in S.N. Mukherjee v. Union of India, 1990 (4) SCC 594, ruled as under:
39. The object underlying the rules of natural justice "is to prevent miscarriage of justice" and secure "fair play in action." As pointed out earlier the requirement about recording of reasons for its decision by an administrative authority exercising quasijudicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decision-making. Keeping in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi-judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that effect as those contained in the Administrative Procedure Act, 1946 of U. S. A. and the Administrative Decisions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public interest underlying such a provision would outweigh the salutary purpose served by the requirement to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case.
33. Moreover, as per the dicta of the Apex Court in H. Mukherjee (supra) it is imperative upon the ACC being an appointing authority to record valid reasons on the file, disapproving the recommendations of the Commission.
34. The only reason, which is as per the record produced before us, recorded by the ACC to disprove the Union Public Service Commission advice is imposition of a minor penalty upon applicant. As the guidelines of Department of Personnel and Training do not debar a person to be considered and declared fit for promotion even after imposition of minor penalty. The only impediment is actual promotion after the currency of the penalty with all benefits from the original panel. It appears that the ACC in oblivion of the guidelines without recording any credible and justifiable reasons disproved and disagreed with the advice of the Union Public Service Commission, which is itself a violation to the dicta laid down in H. Mukherjee (supra). We do not find any whisper as to the reasons when the Union Public Service Commission after examining the circumstances of the minor penalty upon the applicant, yet found him fit. The reasons for taking a different view or deviating from the view taken by the Union Public Service Commission it may be right that Union Public Service Commission advice is not binding but when a conscious decision to deny promotion, consideration of which is a fundamental right cannot be done without following the rules in an unfair manner. The ACC decision to this effect certainly is in contravention of the guidelines, which does not deny promotion on a minor penalty on examination of the circumstances by the DPC. We also do not find any examination of the circumstances by the ACC, as to the imposition of minor penalty upon applicant or any reasons why the Union Public Service Commission has wrongly declared the applicant as fit for promotion.
35. In a decision of larger coram in Dhamanias case (supra), which is subsequent to the decision in H. Mukherjees case (supra) an identical issue was raised. The Apex Court taking cognizance of all the relevant provisions of the Union Public Service Commission advice being directory and the methodology for disagreement held as follows:
13. Notwithstanding the fact that it is open to AAC which alone is the appointing authority and not the Minister concerned, as urged by the respondent to differ from the recommendations of the DPC, it must give reasons for so differing to ward off any attack of arbitrariness. Those reasons will have to be recorded in the file. It requires to be stated at this stage that we have perused the file in the instant case. We find no reasons have been recorded for differing from the recommendations of the DPC. That is why the Tribunal also inter alia observes in the impugned judgment as under :
"However, the counsel for the respondent felt helpless in the matter and he failed to provide us any inkling of what prevailed with the ACC in dropping the petitioner and four others out of the select panel of 59 officers."
If the file had contained reasons something could be said in favour of the appellant. But, that is not the case here. Then the question would be whether the reasons recorded are required to be communicated to the officer concerned. Our answer is in the negative. There is no need to communicate those reasons. When challenged it is always open to the authority concerned to produce the necessary records before the Court
36. Applying the aforesaid ratio to the present case, we do not find any reason recorded for differing from the recommendations of the DPC.
37. As per H. Mukherjees case (supra) the interference by the appointing authority, i.e., ACC on disagreement with the recommendations of the Union Public Service Commission it has to be tested on a limited ground of being malafide. Malice can be inferred and malice in law has been ruled by the Apex Court as an exercise of option for an unauthorized purpose in T. Mohanan v. State of Kerala, 2007 (2) SCC (L&S) 542.
38. Though in case of malafide heavy burden is cast upon one who alleges it, but it has to be established from the surrounding circumstances preceding the order, as ruled by the Apex Court in Indian Railway Construction Co. Ltd. v. Ajay Kumar, 2004 (1) ATJ SC 169.
39. If an authority is expected in law to act in a particular manner, i.e., adherence of rules and norms in furtherance of the fundamental right of the Government servant of consideration in the matter of promotion, any deviation or non-consideration of the norms, which prescribe as per Department of Personnel and Training OM of 2004, non-impediment of a minor penalty in empanelment and promotion we can safely conclude that the decision of the ACC has been actuated with malice in law.
40. Resultantly, for the foregoing reasons, denial of promotion to the applicant, in our considered view, is not in pursuance to meaningful consideration. This has infringed the fundamental right of the applicant. We cannot question the prerogative of the ACC to disagree but the decision-making process is vitiated in law. Accordingly, this OA is allowed. Non-empanelment of the applicant in the panel dated 27.6.2007 for the post of Chief Engineer is declared illegal. The order passed on 7.1.2008 is set aside. We direct the respondents to consider the case of the applicant for promotion to the grade of Chief Engineer by holding a review DPC for the year 2007-08. In the event of promotion of applicant he shall be entitled to all consequential benefits from the date(s) others have been empanelled. This shall be done within a period of one month from the date of receipt of a copy of this order. No costs.
(Shailendra Pandey) (Shanker Raju) Member (A) Member (J) San.