A.K. Doshi (Dr.) vs Central Administrative Tribunal & Ors. on 20 December, 1999

[Cites 8, Cited by 2]

Delhi High Court

A.K. Doshi (Dr.) vs Central Administrative Tribunal & Ors. on 20 December, 1999

Equivalent citations: 2000IIAD(DELHI)107, 2000(52)DRJ569, 2000(3)SLJ208(DELHI)

2. Dr. A.K. Doshi felt aggrieved by the impugned order dated 3rd February, 1999 passed by the Central Administrative Tribunal (in short CAT) whereby his appointment as Member, Company Law Board has been quashed. His challenge is primarily based on the following grounds, namely: (i) CAT had no jurisdiction to entertain any petition against him after his selection as Member of the Company Law Board (in short the CLB). Being Member of the CLB he no longer held a civil post, therefore, was outside the purview and jurisdiction of the CAT. (ii) The recommendation of the Selection Committee qua respondent No. 3 Mr. S.B. Mathur was rejected by the Appointment Committee of the Cabinet i.e. the ACC on 4th December, 1997. Respondents No. 3 having not challenged his rejection for the appointment as Member of the CLB, had no locus standi to challenge the appointment of the petitioner to the said post of Member of CLB. Finally the Selection Committee prepared a select panel. The name of respondent No. 3 was at Serial No. 1 and that of the petitioner at Serial No. 2. According to petitioner after the ACC rejected the name of respondent No. 3, natural corollary to follow was to offer the appointment to the petitioner who was at Serial No. 2 in the select list. Having done so the Government followed correct procedure. The CAT, therefore, could not have, by the impugned order quashed the appoint-ment of the petitioner.

3. In order to appreciate the challenge raised by the petitioner, it would be expedient to know in brief the facts of this case. The Government of India framed Company Law Board (Qualifications, Experience and Other Conditions of Service of Members) Rules, 1993 (hereinafter called the Rules). These rules were notified on 28th April, 1993. The Company Law Board was constituted under Sub Section (1) of Section 10-E of the Companies Act, 1956. The recruitment of Members of CLB is governed by Rule 4(1). Rule 4 prescribes the method of recruitment of the Members. Sub Rule (1) of Rule 4 prescribes that the selection of Member shall be made by the Govern-ment of India in consultation with the Chief Justice of India or his nomi-nee. Chief Justice of India nominated Justice S.C. Aggarwal as his nominee. Justice S.C. Aggarwal became the Chairperson of the Selection Committee. The Selection Committee recommended a select list in which the name of respondent No. 3 appeared at Serial No. 1 to be appointed for the post of Member (Technical) CLB. The select list also consisted two other names i.e. of petitioner at Serial No. 2 and that of Shri R. Vasudevan at Serial No. 3 in order of priority. The name of the select person at Serial No. 1 i.e. of respondent No. 3 herein was sent for appointment to the ACC. The ACC in turn on the basis of information furnished by the Department declined to approve the name of the respondent No. 3 as Member (Technical) CLB. The ACC vide order dated 4th December, 1997 while rejecting the name of the re-spondent No. 3, directed the Ministry to submit a fresh proposal for the appointment of Member (Technical) CLB.

4. Proposal of the name of petitioner who was at Serial No. 2 in the select list could not have been proposed at that time because since 22nd September, 1997 departmental proceedings for major penalty had been pending against him. Allegations levelled against him were that he exhibited lack of integrity and acted mala fide. He acted in a manner unbecoming of a Government servant. Further he violated the provisions of Rule 3 of CCA (Conduct) Rules. Petitioner challenged the departmental proceedings before the CAT and also sought interim order for his appointment as Member (Tech-nical) CLB. CAT directed the respondent to complete the enquiry against the petitioner within six months. On his miscellaneous application CAT observed that pendency of disciplinary proceedings would not come in his way and further directed the Union of India to expedite his case. Union of India challenged the order of the CAT by way of writ petition in the High Court. This Court stayed the operation of the order of the CAT dated 21st January, 1998 whereby direction was given to process the case of the petitioner. While the writ petition was pending, the Disciplinary Authority exonerated the petitioner of all the charges on 1st April, 1998. Accordingly his name was proposed and recommended to the ACC. The ACC approved his name. Vide letter dated 22nd May, 1998 the offer of appointment as Member (Technical) CLB was made to the petitioner. He accepted the same on 25th May, 1998 and was appointed as Member (Technical) CLB on 27th May, 1998. It is hereafter the respondent No. 3 challenged the appointment of the petitioner by filing original application before the CAT which was listed OA. No. 1104/98. By the impugned order the same has been allowed.

5. Regarding the first point raised by the petitioner, we have first to see what does the expression "civil post" stand for. This expression ap-pears in Section 14 of the Central Administrative Tribunal Act, 1985 (hereinafter called he Act). Similar expression appears in Article 311 of the Constitution of India. Lets glance through the provision of Section 14 the Act as well as Article 311 of the Constitution of India which are reproduced as under :

Jurisdiction, powers and authority of the Central Administrative Tribunal - (1) Save as otherwise expressly provided in this Act, the Central Administrative Tribunal shall exercise, on and from the appointed day, all the jurisdiction, powers and authority exercisable immediately, before that day all Courts except the Supreme Court in relation to -

(a) recruitment, and matters concerning recruitment, to any All India Service or to any civil service of the Union or a civil post under the Union or to a post connected with defense or in the defense services, being, 1 in either case, a post filled by a civilian;

(b) all service matters concerning -

(i) member of any All India Service;

(ii) a person (not being a member of an All India Service or a person referred to in clause (c) appointed to any civil service of the Union or any civil post under the Union; or

(iii) a civilian (not being a member of an All India Service or a person referred to in clause (c) appointed to any defense serv- ices or a post connected with defense, and pertaining to the service of such member, person or civilian, in connection with the affairs of the Union or of any State or of any local or other authority within the territory of India or under the control of the Government of India or of any corpora- tion (or society) owned or controlled by the Government;

(c) all service matters pertaining to service in connection with the affairs of the Union concerning a person appointed to any service or post referred to in sub-clause (ii) or sub-clause (iii) of clause (b), being a person whose services have been placed by a State Government or any local or other authority or any corporation (or society) or other body, at the disposal of the Central Government for such appointment.

311. Dismissal, removal or reduction in rank of persons employed in civil capacities under the Union or a State - (i) No person who is a member of a civil service of the Union or an all India service or a civil service of a Stage or holds a civil post under the Union or a State shall be dismissed or removed by an authori- ty subordinate to that by which he was appointed.

(2) No such person as aforesaid shall be dismissed or removed or reduced in rank except after an inquiry in which he has been informed of the charges against him and given a reasonable oppor- tunity of being heard in respect of those charges.

Provided that where it is proposed after such inquiry, to impose upon him any such penalty, such penalty may be imposed on the basis of the evidence adduced during such inquiry and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed:

Provided further that this clause shall not apply:-

(a) where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a crimi- nal charge; or

(b) where the authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing, it is not reasonably practicable to hold such inquiry; or

(c) where the President or the Governor, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to hold such inquiry.

(3) If, in respect of any such person as aforesaid, a question arises whether it is reasonably practicable to hold such inquiry as is referred to in Clause (2), the decision thereon of the authority empowered to dismiss or remove such person or to reduce him in rank shall be final.

6. The expression "civil post" came up for interpretation before various Courts but while trying to define "civil post", Courts considered it desirable to leave it free to be decided by the concerned Court on the facts of each case. In fact in the context of this case the word "civil post" assumes significance. Therefore, the relevant and crucial factor to see is the nature of the control which the Government exercises. However, such control by itself may not be decisive. In fact no doctrinaire attitude can be adopted. In each case it is a question of fact. Any attempt to evolve rigid uniform formula would fail. A certain amount of flexibility in interpreting and applying the word "civil post" in the facts of each case is necessary. The one or the other test will not determine the question and status of the post. In fact status of the post has to be decided on its own merits. Keeping the above in view, we have to see whether the post of Member of the CLB is a "civil post".

7. To arrive at the answer, rules which govern the service conditions of the Member CLB assumes importance. These Rules are called Company Law Board (Qualifications, Experience and other Conditions of Service of Members) Rules, 1993 (hereinafter called the Rules). Some of the rules, which are relevant for our purpose, are reproduced as under:

4. Method of recruitment - (1) The selection of Members shall be made by the Government of India in consultation with the Chief Justice of India or his nominee.

(2) Nothing in this rule shall apply to the appointment of Chairman or any Member of the Company Law Board functioning as such immediately before the commencement of these rules.

6. Resignation by a Member. - A Member may, by writing under his hand addressed to the Central Government, resign his office at any time:

Provided that the Member, shall, unless he is permitted by the Central Government to relinquish office sooner, continue to hold office until the expiry of there months from the date of receipt of such notice or until a person duly appointed as a successor enters upon his office or until the expiry of his term of office, whichever is earliest.

7. Removal of Members from office in certain circumstances. - The Central Government in consultation with Chief Justice of India may remove from office any Member, who -

(a) has been adjudged an insolvent: or

(b) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or

(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a member; or

(e) has so abused his position as to render his continuance in office prejudicial to the public interest :

Provided that nothing contained in this rule shall apply to a Chairman who is a Judge of a High Court :

Provided further that where a Member is proposed to be removed on any of the grounds specified in Clauses (b) to (e), the Member shall be informed of the charges against him and given a reasona- ble opportunity of being heard in respect of those charges.

10. Interpretation - If any question arises relating to the interpretation of these rules, the same shall be referred to the Central Government for its decision.

13. Other conditions of service. - The conditions of service of a Member in respect of matters for which no provision is made in these rules shall be the same as may for the time being be applicable to other employees of the Government of India of a corresponding status.

8. Perusal of Rule 4 leaves no manner of doubt that Member CLB's appoint-ment is by the Central Government by constituting a Selection Committee of which one of the Member is nominee of the Chief Justice of India. Rule 6 deals with the power of the Central Government to permit the Member to resign his post as Member by submitting his resignation to the Central Government prior to expiry of his term of office. Acceptance of the same is subject to the condition that there has to be a prior approval of the Central Government permitting the Member to relinquish his post earlier. Rule 7 empowers Central Government to remove the Member for which notice would be issued by the Central Government affording him opportunity to represent. The decision on his representation would be that of the Central Government. Rule 10 again vests powers with the Government to decide any question relating to the interpretation of these rules.

9. From the conjoint reading of the Rules i.e. 4, 6, 7 and 10 one can conclude that the appointment of a Member of CLB is by the Central Govern-ment. Rule 13 in fact envisages that condition of service of a Member in respect of matters for which no provisions are made in these rules relating to his service conditions shall be governed by the rules which are applica-ble to other employees of the Government of India of a corresponding sta-tus. The status of the Member of the CLB as such has been put and treated at par with corresponding status employees of the Central Government. It, therefore, cannot be said that the post of Member of CLB is not a "civil post". The petitioner cannot take aid of the rules as framed under the Administrative Tribunals Act, 1985 to contend that Member of CLB like Member of CAT is not holder of civil post. As per the Rules framed under the CAT Act, the tenure of the Member is secured by providing his removal only by the President of India. Salaries of the Chairman, Vice-Chairman and the Member of the Administrative Tribunals is regulated by their rules which cannot be varied to their disadvantage. In the case of All India Judges Association and Ors. Vs. Union of India & Ors., , Apex Court observed that :

"The judicial service is not service in the sense of employment. The Judges are not employees. As members of the judiciary they exercise the sovereign judicial power of the State. The members of the other services, therefore, cannot be placed on par with the members of the judiciary, either constitutionally or func- tionally."

10. Reading of CLB Rules, 1993 on the other hand show that for his service conditions Member CLB has been equated with the corresponding status employee of the Central Government. He is not even permitted to relinquish his office as Member at his will except with the prior permission of the Central Government. The Member's tenure of service is not secured by remov-al by the President of India. It is by the Central Government. Even his appointment is by the Central Government.

11. It may also be mentioned that Section 10E(1A) of the Companies Act, 1956 provides that the Company Law Board shall "also exercise and discharge such other powers and functions of the Central Government under this Act or any other law as may be conferred on it by the Central Government...." This clearly shows that the Members of the Board may also be required to perform purely executive functions as in the case of other Government servants. Hence, it can safely be concluded that the Member of CLB is a holder of a "civil post" under the Government of India. Hence, his service condition squarely come under the jurisdiction of Central Administrative Tribunal.

12. Even the Standing Counsel for the Government of India, Mr. Neeraj Kaul stated at the Bar that the stand of the Government of India is also that the post of the Member of the CLB is a "civil post". For the above said reasons, we find no substance in the objection of the petitioner vis-a-vis the jurisdiction of the CAT.

13. So far as the question of locus-standi of the respondent No. 3 to challenge the appointment of petitioner, we find no substance in this objection. Even though respondent No. 3 did not challenge rejection of his name by the ACC, yet he can challenge the appointment of the petitioner which according to him had been done in violations of the rules. Name of respondent No. 3 was rejected by the ACC because of some allegation against him. After rejection of his name the ACC directed the Ministry to submit fresh proposal. The Ministry instead of referring the case back to the Selection Committee forwarded the name of the petitioner. It is this action of the respondent which has given cause of action to the respondent No. 3. Because if he succeeds in proving his point, there will be fresh selection but if petitioner's appointment is upheld, the respondent No. 3 would loose the chance of reconsideration by the Selection Committee. Viewed from this angle it can be said that respondent No. 3 has locus standi to challenge the appointment of the petitioner as Member CLB.

14. Now turning to an important question as to whether the Administrative Ministry was under obligation to refer back matter to the Selection Commit-tee after the name of respondent No. 3 was rejected. The question which arises is whether the direction of the ACC to submit a fresh proposal meant to send the case back to the Selection Committee. The Select Committee had selected the respondent No. 3 and placed him at Serial No. 1 and that of the petitioner against whom charges were pending when the ACC vide order dated 4th December, 1997 asked for fresh proposal. Secondly, was it obligatory on the part of Department to refer the name of respondent No. 3 also back to the Selection Committee for filling up the post of Member (Techni-cal) CLB. When the file of respondent No. 3 was put up before the ACC it was informed by the officer of the Establishment Office to the ACC that penalty of reduction of his pay by one step in the pay-scale for a period of one year with subsequent restoration to original stage on the expiry of the period was imposed. Secondly, he got published a brief analysis on the report of the Working Group on Companies Act through Bharat Law House Private Limited, New Delhi. He had requested for permission to accept Rs. 10,000/- as honorarium from the publisher. On this the Department issued him a warning for not obtaining the prior approval and directed him to credit to the Government the entire amount received by him from the publisher in the account of the Government. He complied with the directions, hence no fine was imposed. Thirdly there was a complaint pertaining to publication of an advertisement for shifting of the office of Regional Director, Kanpur to Ghaziabad or NOIDA on which Rs. 1,000/- was spent. Department observed that respondent No. 3 herein acted without any direc-tion from the Department. He was accordingly warned to be careful but no fine was imposed. So far as the first allegation is concerned the same was brought to the notice of the Selection Committee. The Selection Committee after considering the above allegation levelled against respondent No. 3 observed that there were not such which could debar respondent No. 3 from being appointed as Members, CLB.

15. Mr. Mukul Rohtagi, Senior Advocate appearing for respondent No. 3 contended that the Administrative Ministry in order to prejudice the ACC indicated and highlighted two other allegations against respondent No. 3, though these allegations were not brought to the notice of the Selection Committee nor those were relied by the Department. Because when the office of the Establishment Officer called for clarification as to whether allega-tions against Mr. S.B. Mathur were brought to the notice of the Selection Committee, it was informed by the Ministry that since in both the cases recorded at Serial No. (ii) and (iii) of the allegations only warnings were given which had not been recorded in the Confidential Rolls of the respond-ent No. 3 and as such those did not have any bearing to the appointment of higher post. There were accordingly not brought to the notice of Selection Committee. Mr. Rohtagi contended that having got this clarification the Establishment Officer could not have put up these two cases to the ACC and got the name of respondent No. 3 rejected. If the ACC was considering these allegations against respondent No. 3 then the matter ought to have been referred back to the Selection Committee for reconsideration in view of the new facts pointed out by the Establishment Officer.

16. Arguments of Mr. Mukul Rohtagi, Senior Advocate appearing for respond-ent No. 3 at the first blush may look attractive and convinced but we cannot go into the merits of the same because respondent No. 3 never challenged his rejection. Therefore, we cannot deal objection of respondent No. 3 on merits regarding his rejection to the post.

17. We are, however, concerned with the selection of the petitioner. Mr. J.P. Verghese, counsel for the petitioner contends that when the name of the petitioner was approved by the ACC no departmental proceedings were pending against him. Therefore, it was not necessary for the Ministry to refer back the case to the Selection Committee. Admittedly, petitioner's name was appearing at Serial No. 2 of the Select List. Once the name of respondent No. 3 was rejected by the ACC, natural corollary was to offer the post to the petitioner who was at serial number two in the select list. Having followed this procedure the Government cannot be at fault. Rather the action of the Government is in consonance with the decision of Supreme Court in the case of R.S. Mittal Vs. Union of India, . The Apex Court in Mittal's case was interpreting Rule 4 of Income Tax Appellate Tribunal (Recruitment and Conditions of Service) Rules, 1963. Rule 4 lays down the method of recruitment of judicial member, particularly in reference to select panel. The Court observed that no doubt the person selected may not have a vested right to be appointed but has a right to be considered for appointment. It was observed that :-

"It is no doubt correct that a person on select panel has no vested right to be appointed to the posted for which he has been selected. He, however, has a right to be considered for appoint- ment. The Appointing Authority cannot ignore the select panel or decline to make the appointment on its whims.... There has to be a justifiable reason to decline to appoint a person who is on the select panel."

18. Mr. Verghese says that the Government committed illegality in not submitting the complete select list to the ACC for approval. When the name of respondent No. 3 was rejected the ACC had directed the Administrative Ministry to submit the proposal afresh. It is pursuance to this direction of the ACC that the Ministry submitted the name of the petitioner. This action of the respondent-Government was in accordance to the observation of the Apex Court in Mittal's case (supra). Therefore, there was no question of referring the case back to the Selection Committee for making fresh recommendation. Even otherwise in the case of any interpretation of the rules the decision of the Government is final. Moreover, respondent No. 3 whose name had been rejected by the ACC and who till date has not challenged his rejection, has no vested right to get appointed as Member of the CLB, he had only a right to be considered which in fact he had been considered and, therefore, cannot challenge the appointment of the petitioner. He accepted his fate at the hands of the ACC, hence lost all rights on the post of Member, CLB.

19. In R.S. Mittal's case (supra) the Apex Court opined that the penal selected by the Selection Committee headed by sitting Judge of the Supreme Court must be adhered to expeditiously and preferably within two months. Therefore, so far as considering the name of petitioner who figured at Serial No. 2 of the select panel, there could not have been any objection in submitting the proposal containing petitioner's name. But it was not possible because of the fact that the petitioner was facing charge-sheet for major penalty. His name could not have been processed nor proposal of his name could be put up by the concerned Ministry. Charge-sheet for major penalty was served on him on 22nd September, 1997. The ACC's direction to submit fresh proposal was passed on 4th December, 1997. From 4th December, 1997 till April, 1998 when he was exonerated of the charges, petitioner's name could not have been considered because he was facing departmental proceedings. Therefore, pursuance to the observations of the Supreme Court in R.S. Mittal's case (supra) fresh proposal could have been only of Mr. R. Vasudevan, person at Serial No. 3 of the select list. But Government did not like to do so. Hence, instead of putting up the proposal of Mr. R. Vasudevan, kept on waiting for the decision of the petitioner's departmen-tal proceedings and thus dragged on the submission of fresh proposal. We do not know what were the facts of Mr. R. Vasudevan and why his name was not submitted. In these circumstances, proper course for the Government was to refer the matter back to the Selection Committee indicating the reasons for the non-acceptance of the names recommended by the Selection Committee because on one hand ACC rejected the person at Serial No. 1 of the select list and on the other hand person at Serial No. 2 was facing enquiry for major penalty. Case of person at Serial No. 3 is not known. Under these circumstances, we are of the considered view that the Administrative Minis-try ought to have obtained fresh recommendation of the Selection Committee. Having not done so it can be said that the Administrative Ministry acted mala fide. The petitioner who was facing departmental proceedings since September, 1997 has been favoured. Fresh proposal as directed by the ACC was deliberately withheld by the Ministry till such time the petitioner was exonerated from the major penalty charge-sheet and dragged the recommenda-tion for a period of over six months. The Ministry thus favoured the petitioner. As soon as the petitioner got exonerated of the major penalty charge-sheet the Ministry immediately without any loss of time submitted the proposal recommending his name to the ACC for appointment as Member (Technical) CLB. Beside these facts we are also in agreement with the reasons given by the Tribunal in coming to the conclusion that after the ACC rejected the name of respondent No. 3, matter ought to have been re-ferred back to the Selection Committee. Selection Committee should have also been apprised of the major penalty charge-sheet against the petitioner so that it could r econsider its recommendations.

20. It is in this background we feel that appointment made of the petiStioner was liable to be quashed. In fact in view of the non-availability of petitioner and respondent No. 3 on 4th December, 1997, matter ought to have been referred back to the Selection Committee with all the facts and then get a fresh proposal for submission to the ACC. Having not done so the action of the Government in appointing the petitioner was neither legal nor justified. The Tribunal, therefore, was justified in quashing the appoint-ment of the petitioner and we see no reason to interfere with the same. Dismissed.

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